So there certainly is a little bit of learning at scale that’s going on here. But I would reiterate the fact that we’ve had a lot of success. It’s been a tailwind for us over the last couple of years, a little bumpier here on the first half of this year, but the pipeline looks pretty rich and strong. And we think we know what we have to do to continue to get success in that market going forward.
Samad Samana: Great. And maybe just a follow-up for Ryan. Just as I think about the guidance, how much of it was maybe the sluggishness that you’ve seen upmarket versus the trend in employment in the base coming in differently than expectations? And as I think about the exit rate and what that implies, is that kind of a fair way to think about the growth rate going forward, at least for the short-term?
Ryan Glenn: Yes. I think when you think about the revised guidance for this fiscal year, I think it’s absolutely a combination of what Steve and Toby have referenced relative to sales execution. So that’s certainly part of it. And I think an equal part of it has been some of the challenges we’ve seen from a macro standpoint, both year-to-date as well as the fact that we factored in some further moderation in the back half of the year. So I think both of those contributed fairly equally to the revised guidance. Relative to what that implies for Q4, obviously, as I referenced, we had some further moderation in employment levels. That puts you in the sort of 13% or so range for exit of Q4, and I think we’ll see how the back half of the year goes before we guide more specifically into 2025.
Samad Samana: Great. As always, appreciate the time. Thank you.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of Pat Walravens with JMP Securities. Your line is open.
Patrick Walravens: Great. Thanks very much. Steve and Toby, I’m wondering how deeply do you analyze the trend of the employees that are on the system? I mean do you break it out internally for yourselves by industry? Do you break it out by geo and you break it out by segment? And because UKG started disclosing that and they’re private, so they can do it, right? But I assume you guys have that level of detail, too. And I’m just wondering, so where was the weakness?
Steve Beauchamp: So we do all of those things, and we look at it a variety of different ways. I would tell you that not – there wasn’t a big spike in a specific geo or a specific vertical market. I think your higher hourly employee segments when you think of vertical markets, we saw a little bit higher decline in those segments if you think of vertical markets. Geos, there really wasn’t much, a call out at all. And so it was generally kind of across the board just a little bit of weakness. But when you add that up across all the customers that we have and you factor that in, it starts to have an impact, especially when it’s happened month after month this fiscal year.
Patrick Walravens: And so this is a tough follow-up, I know, but – so this is two quarters in a row, you think it happens again?
Steve Beauchamp: We factored into our guidance that the trend that we’ve seen in the last two quarters would continue through the back half of the year.
Patrick Walravens: Okay. Great. Thank you.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of Terry Tillman with Truist Securities. Your line is open.
Terrell Tillman: Yes. Thanks for taking my questions. I had a question and a follow-up. Just kind of building on the last couple of questions. I think you guys are articulating that there might be some macro stuff here, but also execution stuff. Can you share a little bit more how you’re thinking about with a couple of quarters left, what you can do on the execution side, whether it’s org or leadership changes? And then the second question, maybe if I could just go ahead and ask it, and I can repeat it if you all forget is, have you all maybe over-indexed on the upmarket activity? Because there is lots of smaller employers under 500 employees. Is there any way – I know it’s easier said than done, a bit of a pivot to that market? Or is that market just less active? Thank you.
Steve Beauchamp: So I think what I would say is I don’t think we need any major structural changes. I think we’ve got the team in place. When we look at what we’ve got from a pipeline perspective and we look at all of our internal metrics, we feel pretty confident that the ability to execute sits in front of us, big market, great product in terms of receptivity. And so we feel pretty good about that. We have grown pretty fast to your second question, in upmarket. Maybe hindsight’s 20/20, it’s hard to say that’s been a great tailwind for us over the last two or three fiscal years. So hard to actually say that wasn’t successful. Did it create some bumps in the road maybe early on in this fiscal year, yes. But the product is being received really well in the marketplace.
The pipeline is really, really strong. We’ve got a great group of people that we feel like have been productive and will continue to be productive, and we’ve got to focus on execution in terms of what’s in front of us.
Terrell Tillman: Got it. But just Steve, just a real quick kind of follow-up because one thing you did note is the pipeline. I mean, if these deals are closing, that they just stay in the pipeline. I’m just curious, do these folks though at some point just kind of slow down or just cut it off and then you have to kind of get in the new sales cycle with them into next year? Or could some of these larger deals actually play out in the next couple of quarters? I’m just trying to understand how some of these larger deals could potentially play out because this is a newer business for you. So maybe you don’t have pattern recognition? Thank you.
