Joe Meares: Thanks again.
Jason Blessing: Thanks Joe.
Operator: Our next question comes from the line of Ryan MacDonald with Needham & Company. Please proceed with your question.
Ryan MacDonald: Thanks for taking my questions and congrats on a nice quarter. Jason, you talked about the AbbVie-Allergan deal in the quarter, and also in the Q&A about sort of the excitement you have sort of with the opportunity within the existing base. Just curious, given all the M&A that we’ve seen over the past few years here, what the expansion opportunity looks like from just purely M&A deals, and what you’ve historically seen in terms of when that opportunity comes to the table post an acquisition. Thanks.
Jason Blessing: That’s a good question, Ryan. On the balance, we have benefited from M&A and a typical pattern that we will see, and this is the case with Allergan and AbbVie and we’ve seen this with others as well, that the two companies will not have the exact same footprint of Model N, and so the M&A transaction is a catalyst for us to get in, in the combined company, expand product footprint, potentially usage, potentially geographies. So M&A has been good for us. Again, a catalyst to get in front of customers and has, generally speaking, been a nice cross-sell and upsell opportunity for us.
Ryan MacDonald: That’s helpful. And then maybe one for John. John, on the updated guidance, you talked about some of the moving parts in terms of seasonality within the business and maybe some higher payroll taxes. As we look at that adjusted EBITDA guide for second quarter, is that the €“ I guess, the step down in second quarter, is that primarily being covered by the additional tax payments? Or is there other incremental investments that you’re perhaps pulling forward into the second quarter that’s going to hit then versus the back half? Thanks.
John Ederer: Sure. Yes. No, maybe a couple of different threads in there. So first, just with €“ reflect to the guidance itself, it’s really two factors. One is actually on the revenue side of things. We have two fewer days of subscription revenue, so that cost us in round numbers about $1 million of subscription revenue. The second piece is related to the expenses, and that’s due to Q1 €“ or, pardon me, Q2 being the first calendar quarter of the year. And so we have higher payroll taxes and other benefits compared to the December quarter. So it’s really those two factors that are rolling into that. And then just in terms of operating expenses more generally, we have been making select investments in the business. And I think if you go back and look at our results over the last couple of quarters, probably starting in fiscal Q3 last year and then looking sequentially in Q4 and Q1, you’ll see that we’ve been making investments in R&D and sales and marketing in particular.
So we continue to focus on the product and sales capacity, and those are underlying our model as well.
Ryan MacDonald: Excellent. I appreciate the clarification there.
Operator: Our next question comes from the line of Joe Goodwin with JMP Securities. Please proceed with your question.
Joe Goodwin: Great, thanks so much for taking my questions. John, did you disclose the amount of maintenance revenue you had in the first quarter? I apologize if I missed that.
John Ederer: We did not update that, so we’ll just do that on an annual basis. And so at the end of fiscal 2022, I believe we had $17.5 million in maintenance revenue. And we did indicate on our last call that we thought maintenance revenue would be down 30% or more this year, but we’re not going to update that quarterly. That will just be an annual metric.
Joe Goodwin: Understood. Okay. Yes. Okay. And then I believe you still have about $20 million or so of term license revenue in the subscription line. Can you just talk about the stability of that term license revenue stream and maybe how we should think about that going forward?
John Ederer: Yes. I’m not sure where your $20 million number comes from. That’s not something that we’ve disclosed in the past. But what I would say is that we do still have some term license activity in the subscription line. It’s gotten down to a pretty small level, frankly, and not overly material.
Joe Goodwin: Okay. And then I guess last question for me is in the State of Revenue Report that came out today, nearly half of company’s share €“ captured in the survey show that they leverage different revenue management systems across different regions. I guess as these companies are looking to become more cohesive with maybe things that they’ve acquired globally, are you seeing and reaching and finding more additional efficiencies in their businesses? Are those type of conversations having more frequently, people are actually trying to expand, kind of, or standardize on a single platform?
Jason Blessing: Yes, Joe, this is Jason. I’ll take that one. I mean the simple answer is yes. I mean there’s definitely economy of scale of having 1 vendor, and then we do provide some consolidated unified reporting for companies that are, for example, using our tenders product in Europe and the full suite of products here in the U.S. And that analytics layer that will sit on top of the global products will continue to expand over time. So yes, I mean, we €“ as I talked about with Moderna specifically on this call, customers are increasingly looking for 1 vendor who can fit their needs across different geographies and keep up with the fluid regulatory environment. So that’s definitely a tailwind for us.
Joe Goodwin: Great, thank you.
