Nik Cremo: Hi, congrats on the strong results, and thanks for taking my question. First, I just wanted to ask about what drove the strong revenue growth in the core segment. And if there was anything one – more of one time in nature, such as the convert merge revenue or license sales that we should be aware of for FY ’24?
Mimi Carsley: I can take that question. Thanks, Nik. So, no, I would say, overall, it’s a continuation of a strong product lineup as Dave mentioned, a robust pipeline there was if anything lower convert merge activity in our space. But overall, it was just continuing to be driven by cloud strong being continue to be driven by just implementation timing and the size of those kind of clients. So it is a little variable from quarter to quarter but overall, core had strong quarters throughout the year of FY ’23.
Nik Cremo: Okay, thanks. And then for my follow-up, would it be possible to provide ’24 guidance at the segment level for non-GAAP revenue growth?
Mimi Carsley: We don’t provide at the segment level guidance, but we can kind of follow-up that I would say, it’s consistent with both the growth algorithm and the revenue growth for FY ’23, we would say is consistent for ’24 trends.
Nik Cremo: Thank you.
Operator: Our next question will come from Rayna Kumar with UBS. You may now go ahead.
Rayna Kumar: Good morning. Thanks for taking my question. I just want to dig into deeper on the non-GAAP operating margin guide – for FY ’24. Mimi, you gave some good detail on if you adjust for Payrailz in both years, margins would be up 20 basis points, but should we think of the 20 bps has been more as then more normalized margin trajectory here and maybe just talk a little bit about the puts and takes of the 20 basis points? Thank you.
Mimi Carsley: Thank you, Rayna. So, we tried to clarify both the impact for short-term guidance as well as long-term sustainability of guidance. So, for FY ’24, you’re correct. We’re giving guidance about 20 basis points to 25 basis points. There’s a little bit of a headwind from the bonus because the bonus was lower in 2023 restarting the clock at 100% accruals. There is a bit of a headwind, about a $6 million headwind from just both the growth and the refilling if you will of that bonus pool. There’s also some third-party renewals and continued investment in areas like cyber and security compensation. So all of those are drivers to both 2024, but longer-term, we definitely see the sustainability of 20 bps to 40 bps of margin.
Rayna Kumar: Got it. That’s really helpful. And then just on free cash flow, I noticed it was down for the quarter. What were the drivers of that? And would you anticipate improvement in free cash flow in FY ’24?
Mimi Carsley: Yes. So on free cash flow, Rayna, I’d really recommend looking on an annual basis versus quarterly, because there can just be some, like, seasonality bids and, you know, with prepaid changing and just the timing of when we – even sometimes impacting annual based on the annual maintenance bills that go out in the summer-time, sometimes people pay in June, sometimes they pay in July, and so sometimes that can have a year-over-year impact, but we did have some noteworthy kind of headwind in 2023 from a free cash flow and free cash flow conversion. In particular, the largest being that change in the tax legislation around the deductibility of development-related expenses led to a $90 million cash tax payment. Now that doesn’t go away in ’24, that will still stay at a somewhat elevated level.
