Marc Riddick: Okay. That’s helpful. Thank you. And I was wondering if you could talk a little bit in prepared remarks, this commentary around efforts to look to reduce SG&A and I was wondering if you could provide a little greater commentary around those efforts and maybe potential timing that we could — that we might end up seeing that. Thank you.
Vivek Gupta: Sure Marc. So actually, controlling the SG&A is really back to the basics. And looking at every line item in the SG&A to see if we can eliminate or defer spend and the obvious target is the discretionary spend in this. So we’ve looked at that and we’ve been doing this every quarter. In fact, this is probably the third quarter in a row that we’ve been looking at that and seeing how we can sharpen it. And we have done a pretty decent job there. We’ve deferred merit increases, we had frozen almost all hiring, barring the exceptional one, which is needed from time to time. We have actually eliminated a lot of our non-performers or low performers, controlled travel, renegotiated contracts with some of our suppliers, eliminated internal company events. And then bonus and commission accruals have also come down. So it’s a lot of that and diligently looking at every element on a continuous basis, and we’ve come to this point as a result of that focus.
Marc Riddick: Okay. Thank you. And I was wondering if you could share if you had any thoughts on any particular call-outs among your customer base, whether there’s any particular industry verticals that are maybe showing better signs of improvement than others? Or are there any particular things that we should be thinking about as far as like any differentiated behavior among customer bases? Thank you.
Vivek Gupta: So yeah, that’s a very good question, Marc. And we are constantly looking at all the industry verticals to see if we are picking up any signs in any one of them. And obviously, that would be the focus to see how we can capitalize on that. But unfortunately, right now, almost all industry verticals seem to be evenly balanced. Financial Services, of course, was much more impacted than the others. And as a result of that, I guess, our concentration of revenues from that industry vertical has shrunk a little bit, which is good and bad, which is, of course, bad due to its — anything whenever it shrinks its bad news. But it’s good because it’s reducing that concentration as well. So that’s where we are. But if you’re looking for positive signs, the only thing I can tell you is that after 15 months of virtually losing head count, billable head count month after month, we’ve had a decent October.
And for the first month, we’ve had actually no net loss. We’ve actually not lost any billable consultant and we’ve had a marginal increase. Now we all know that one month does not make a trend, but we are hanging on to this positive news we can see a slight uptick in the demand and let’s see how the rest of the quarter turns out, but that’s a positive thing that we have seen.
Jack Cronin: Yeah. Another positive in Q3. In the first half of the year, a lot of our headcount decline — global headcount decline happened in financial services. I mean we had a lot of financial services clients ending projects and delaying starts on other projects? And maybe it was because of some of the banking issues that happened in the first half of the year. But in third quarter, while we did have financial services as a net decline in headcount, it wasn’t nearly as pronounced. So that was something that was positive. And one of the reasons that we made a significant improvement in third quarter with respect to our head count loss compared to the last two quarters or the previous two quarters.
Marc Riddick: Great. Thank you.
Vivek Gupta: Thank you, Marc.
Operator: Thank you. [Operator Instructions]. Our next question comes from the line of [Ross Davison with Battenton Capital] (ph) Please proceed with your question.
Unidentified Analyst: Hi, good morning. I had a question probably for Michael. The bookings in Q3 was down quite a bit from Q2. And even with the $3.5 million if I have that right, that was booked sort of post the quarter end, I think you’re still down sequentially. And I was hoping you could just speak to a little bit of kind of what you’re seeing and why you think — anything you can say about why you’re seeing a decline and kind of what gives you confidence about going forward?
Michael Fleishman: Sure. Thanks, Ross. As we’re making this transformation this year and to focusing on more data modernization services versus a very siloed MDM business, which is traditionally what we’ve been focusing on we are building and creating pipeline almost from scratch. And in our business with a nine-month sales cycle, it takes average 9 to 12 months to build up that pipeline. The weakness that we saw in our bookings was for two primary reasons. One, as I mentioned before, due to some increased economic constraints that customers have applied to their approval processes internally on contract signatures on deals that are in excess of $500,000 we had several deals slip, not all of which closed in October. The other reason is, to be perfectly blunt with you, is we didn’t have enough pipeline because we’re still building that pipeline from a data modernization perspective, which is why when the deal slipped out, we had weakness or you saw weakness in our Q3 bookings performance.
The good news is, as I mentioned before, approximately $3.5 million have already closed in October. That does not represent all of the deals that slipped into Q4 from Q3. And we continue to see growth in our pipeline around data modernization services, as I also mentioned in my prepared remarks. Does that answer your question?
Unidentified Analyst: Yeah, it’s super helpful. And then I guess, with respect to MDM, is that business declining in the sense that — I mean, I understand you’re broadening your focus, which makes a lot of sense. And then with the existing business that you had, is it falling off at any — is it falling off at a more precipitous rate? And I guess, is that just mostly in your view, just the reality of the economic situation? Or do you think that there is another dynamic here at work?
Michael Fleishman: Yeah. So no, I don’t feel that it’s falling off at a precipitous rate at all. As a matter of fact, I don’t really feel that it’s falling off. The problem with only focusing on MDM and one of the major reasons why we’re transforming into a much broader data modernization services company is because your — your cap at MDM, if you look at the total digital transformation space and the total digital transformation spend that’s forecasted now through 2026, which far exceeds $3 trillion by the way, by 2026. When you look at that, the percentage of it, that is MDM. It’s a very, very, very small sliver of spend versus a much larger sliver of spend around digital transformation, which is app mod and data modernization.
And so it’s not that MDM is falling off or declining or even decreasing in any way, shape or form. It’s more that we’re basically saturated in the MDM market for our existing customer base. The other thing that we were doing that I didn’t mention in the prepared remarks is we’re expanding our partnership base within the MDM space. Traditionally, we’ve been incredibly strong with IBM. We continue to remain very good IBM partners, but we’re also broadening out into other partnerships within MDM, strong partnership with Informatica. We just made platinum status this year as well as Reltio and a few others in addition to broadening out our capabilities across data modernization. So not only are we focusing on doing more in data monetization, we’re not giving up on MDM either.
We are continuing to focus on growing that area, too.
Unidentified Analyst: Got it. Okay. Thanks, Mike. Appreciate it.
Michael Fleishman: No worries.
Operator: There are no further questions at this time. I’d like to turn the floor back over to Mr. Gupta for closing comments.
Vivek Gupta: Thank you, operator. So if there are no further questions, I would like to thank you for joining our call today, and we look forward to sharing our fourth quarter 2023 results with you in early February. Thank you.
Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day
