Siti Panigrahi : And then as a follow-up, into your guidance, what sort of conservatism have you baked into your guidance. I know this is definitely going to help floating come this year, but what sort of macro environment you’re factored in into your guidance?
Chad Richison: Yes. I mean, we continue to guide in the $2 million range. So we have quite a bit of visibility as we go quarter-to-quarter. I will say that in — we started our guide last year for 2022, we started it at 25%, and we were comping over a year where we had done 25% growth. This year, we’re starting our guide at 24% comping over a year where we had done 30% growth. And so we haven’t changed our approach to guidance. We guide what we can see and achievement matters throughout the year. And so that’s what we’re focused on as we move throughout the year. And so I’m trying to answer your conservatism. I mean, we guide to what we can see each time, and we look to unload the musket throughout the quarter.
Operator: The next question comes from Bryan Bergin with Cowen.
Bryan Bergin: I wanted to follow up on retention first. So I heard the comments about Beti clients being higher and the relative stability from prior years. But just as we think about the year-on-year downtick here, can you talk about — is this larger client churn? Or is it a lot of turn among smaller clients? Just trying to understand that dynamic.
Chad Richison: Well, we’re definitely — from a smaller client perspective, and of course, they contribute smaller revenue amounts. But from a smaller client perspective, I do think that you’re sending more — you’re seeing more of a trend — like maybe what you saw more pre-pandemic, I mean there’s less prop up for them in the market. For most new businesses, I believe, about 75% of them fell within the first 3 years. So all that’s at play when you’re working with smaller business. As I just mentioned, we started adding — really started adding those small business units in 2020 and then continue throughout 2021 and even added more obviously in 2022. And so that definitely plays into it. I would also say that it’s a revenue retention number.
So you have a dividing number that you start with. I’ve been talking for quite some time about the efficiencies that clients are using Beti and what they’re gaining. In fact, we’re just — we’re not having the same hiccups with them that we would often charge them for at a lower margin and then have to fix. And now those are really being prevented with Beti. So you’ve got a couple of things at play. And then also, you’ve got some rounding at play, but all that’s to say is 93% from what I’ve seen still up there an industry-leading number. And I do expect, again, with clients that have Beti, I mean we’re running at a 99% type retention rate with them. So it’s a little bit different there. And as we continue to convert our current client base over to Beti, we expect to have some gains in that.
I will mention that we always have some uncontrolled losses, your bot sold merge type businesses. So getting to 100% isn’t achievable. But I believe that we continue to have an opportunity to bump up retention, and that’s going to come through usage — appropriate usage of our product.
Bryan Bergin: Okay. Understood. And then a follow-up on margin here. So Craig, I may have missed it, but did you say where you expect gross margin to land in 2023? And I hear your message on increased efficiency in sales and marketing, and you’ve also mentioned increased, I guess, new product development. Should we expect that the explanation around EBITDA downtick year-on-year, more about R&D ramping? Or is it both R&D and S&M?
