Samad Samana: Great. And I’m going to ask a sales-related question. I’ve never worked in sales, so please indulge me if this is a bad one. But I’m curious when you think about just the unit count growth of sales reps. Does it — does the number of heads matter as much if you’re targeting larger deals? Do more reps work on a larger deal? Or is it still the same number assigned, just how should we think about targeting larger customers and sales rep count?
Steven Beauchamp: Yes. So we have consistently quoted sales reps based off annual recurring revenue and new annual recurring revenue. Now sales reps’ natural behavior is they will go for the larger customers because there’s more employees there and that give them more new revenue. But the reality is, we also get a significant business through broker referrals. So that’s over 25% of our business. So you’ve kind of got to follow those leads wherever you can find them. You get client referrals, so you kind of follow wherever you go. So you can’t purely just target the larger customers. You’ve really got to go after what’s available to you. And frankly, some of our best reps, they’ve got great productivity when you look at the unit volume as well as the amount of product that they sell.
And the last thing I would say, we also talked about the fact that some of our most experienced reps, we’ve specialized and having them focus upmarket. So that’s another way that we don’t get everybody chasing the bigger deals, but we focus on the best and most experienced people to go after those larger customers. And that’s been a good formula for success for us.
Operator: Our next question comes from the line of Mark Marcon with Baird.
Mark Marcon: I’ve got two questions. The first one is basically, can you talk a little bit about the pipeline that you’re currently seeing? How does that compare to a year ago? How active is it? Any reason to think that sales force productivity and conversions wouldn’t be as good as they have historically been?
Steven Beauchamp: That’s a good question, Mark. I would say there’s no real big call-out when we look at the pipeline. The pipeline is growing nicely as we add reps, and they continue to put more opportunities in top of funnel. It’s a little challenging from a history perspective. You think of COVID and all the environment that you came — you came out of COVID, you had a little bit of a bounce out of COVID in terms of people not having done things for a while. We’re now kind of getting back into a more normalized environment. And so I think as we continue to see the pipeline build and we look at that almost from a pre-COVID level, we feel really good about the activity levels that we’re seeing and how we’re ramping new reps.
Mark Marcon: Great. And really appreciate the updated financial targets. You’re targeting roughly 120 basis points of margin improvement for this year. How should we think about the cadence of the margin improvement towards — going towards the top end of the target range, when we strip out the impact of float in terms of the interest income?
Ryan Glenn: Mark, it’s Ryan. I think if you step back and probably think about the journey we’ve been on since we set those initial targets 5 years ago in August of ’18, I referenced a few data points in the prepared remarks on adjusted EBITDA and free cash flow leverage that you’ve seen over that period of time. And as you said, we sit here well into the previous targets, and I think continue to have a lot of confidence in our ability to drive leverage, particularly in gross margin and G&A at the same time, as we have historically invested in sales and marketing in R&D. And I think when you pull that forward to the initial ’24 guide on the backs of significant leverage we saw across adjusted EBITDA and free cash flow in ’23, setting out that initial guide, as you said, of north of 100 basis points of adjusted EBITDA leverage, and I think that is certainly something that is reasonably close to what our target would be annually.
I think we’ve had years where we started closer to 50 basis points of leverage and through over performance have been able to take the guide up. But I think we feel good being able to start the year at that 20% revenue growth number, at the same time continue to make progress there on adjusted EBITDA.
Operator: Our next question comes from the line of Alex Zukin with Wolfe Research.
