Operator: Next question comes from Steve Enders of Citigroup.
Steve Enders: I guess I just want to dig into a little bit more on the outlook for next year and particularly on the margin side. I think you talked about in the past that if we think about float income flowing through that, that some of that would flow down to the bottom line. So just trying to think about how you’re thinking about that layering in for ’23 and kind of where are the biggest areas of incremental investments are coming and that’s lead into the EBITDA, slight guide down from where we were in ’22.
Craig Boelte : Yes. Primarily, we’ve continued to invest in sales and marketing, and that’s what we said on the prepared remarks. We’re going to continue to invest there and assuming it’s going to continue to work. So that’s really the area where we’re going to continue to invest. Also in the R&D, I mean, we have a lot of projects in the works, and we’ll continue to hire aggressively in the R&D side as well.
Steve Enders: Okay. And I guess on the marketing spend that you’re putting out there, I know it’s been a more recent initiative for you all, I guess, what’s kind of been the ROI on those dollars that you have seen? And how has that kind of changed the top of funnel activity or conversion rates that you’ve seen as kind of the brand awareness campaigns have gotten out there more?
Chad Richison: Yes. I mean marketing, we started in 2020. That was also the year that we added 4 inside sales teams. And then in 2021, we added another 6 inside sales teams. I believe one of those years, our unit count went up about 17% with 72% growth. Marketing drove that as we do our marketing and spend money on advertising we have clients of all size call us. And so marketing is directly responsible for any business that’s coming in below 50 employees. And you have some direct responsibility for it above 50 employees, but it provides more support at that level as our go-to-market’s different, above 50 employees than what we experience below. Growth first prize, as Craig has talked about. And as we look at guidance into this year, we expect to spend healthy marketing. But also, we expect for it to work, which would return itself with highly profitable revenue, which we did see throughout 2022, which produced a healthy adjusted EBITDA margins.
Operator: The next question comes from Siti Panigrahi of Mizuho.
Siti Panigrahi : Chad, if I look at your clients’ growth in 2022, 8%, that’s kind of slowing down versus pre-COVID level, which used to be more in teens. I’m sure there’s a factor of like you’re moving up markets or client size, but is there anything else we should — anything that impact it? And how should we think about the client growth rate going forward?
Chad Richison: Yes, I would say the comp had a little bit to do with it. Prior to 2020, we had 5 sales reps that sold inside sales. In 2020, we added 40. And then in 2022, we added roughly another 50, 60. So we started selling small business, emerging business in a much stronger way as the advertising was working. So — and I don’t want to say that our unit count was inflated prior, but it was different because we did add a lot of small business units and it contributed to a 17% growth in units. I think we’ve had — and again, it did that in the year where we did 25% revenue growth. So I think as we look last year, you could deduct that we had a lot of success selling in midrange and above midrange in clients. And I would say our small business adds were somewhat more normalized because we didn’t really add any small business teams last year like we had in 2020 and 2021.
