In Q3, our CP came in higher, which originally a piece of what we were expecting in Q4. And that’s all happening as we are diversifying more. So this diversification is not only giving us scale, but it’s slightly also modifying our previous trends we have observed. Hence, quarterly forecasting at this point, I think using the last trends would be similar, but please be aware that our diversification might slightly change from what we have seen in the past.
Dave Koning: Yes. Got it. Okay, thanks for that. And maybe just my follow-up, for many quarters in a row, network fees have been like 59% to 60% gross revenue other than Q1 this year, which you called out to the high utility inflation, etcetera, but it’s very steady 59% to 60%. You’re guiding, I think at the midpoint, you like 61% in Q4. And just maybe thinking through utility inflation has come down a ton, how should that number be going forward or why is it maybe up sequentially in Q4?
Dushyant Sharma: Yes, Dave, again, I’ll say, contribution profit, which basically is the revenue less the network fees. That’s – I mean, there are a lot of variables outside our control, which go into contribution profit or you can say it goes into network fees, such as increase in the average payment amount, changes in the payment mix, builder mix, and CPI, card network fees. So it’s not – it’s the only metric which is, I would say, the most difficult to forecast. And especially talking about the trends, what you would see there, they could vary. And as we are adding more billers, the large-size billers, especially, that also is adding a little bit more complexity, if I say, to estimating the network fee. But if you take a step back and look overall, what’s happening.
Our transactions overall are growing. If the macro starts helping us the way it has helped us in Q3, I think overall, you will see the trend which you are expecting, i.e., the network fees overall per transaction to go down. But again, that is the expectation based on what we are seeing. I still always point to these various which are outside of our control, which could impact quarter-over-quarter variability. Hence, we are very comfortable talking about how the whole year would shape up, which is exactly what I just mentioned to John. And that’s the way we think about our long-term model, the top line and the bottom line EBITDA. Now, when you go inside the P&L, i.e., the network fees, the contribution profit, the operating expenses, all these can be managed, and I would say, calibrated in a manner so that they do not impact our primary metrics, which is the top line and EBITDA.
So, for example, let me just share, if the network fee starts coming in higher, we could manage the OpEx in a way so that our EBITDA dollars is not affected. Vice versa also works. If the network is coming low and we are seeing more benefit, we can start spending more money on the right objectives, for example, sales and marketing. So, it’s all the right financial planning and the strategic direction of the company, which we are trying to achieve. But managing a single metric and understanding that and forecasting that is becoming a little difficult, I would say, given the business is scaling and diversifying. I hope that helps to provide some color to your answer.
Sanjay Kalra: And if I may add that – if I may add to that, actually, we might be approaching our 20th anniversary here and we have been operating the business for a while. I think contribution profit is a very important element of the business. But as you have seen this year, and my message to the investors would be, look at the top line as the parameter, if you will, of our – how fast we are capturing the market share, which is the growth of the business and our EBITDA margins. And we as a team, as we have done for over a decade now, we know how to manage the business to still deliver the shareholder value and drop to the bottom line. As we see things changing and as we have demonstrated that we can raise pricing and so on if the macro requires us to. So, I just wanted to put that out there.
Dave Koning: Yes. Thanks guys. Appreciate it.
Operator: [Operator Instructions] Our next question comes from Will Nance with Goldman Sachs. Please proceed.
Will Nance: Hey guys. Good evening. I guess I just wanted to follow-up a little bit on some of the seasonality impacts that you were talking about. It sounds like some stuff kind of moved around between Q4 and Q3. It does sound like it’s kind of impacting – the prior question, like the outlook between revenue and contribution profit in the fourth quarter as well. Maybe could you double click a little bit on what it was that got pulled forward into this quarter, or what was the – it sounded like it was a new vertical. And I guess, is there a gross versus net dynamic there, because it does seem like there is a pretty big divergence between gross and contribution profit as we look out into the fourth quarter. And so maybe it’s worth double-clicking a little bit on some of those seasonality things that you have been alluding to.
Sanjay Kalra: Sure, Will. Great question. I would say that there was a cohort of billers which went live earlier this year, and they are from a few mixed verticals, I would say, primarily from the government. But they were live earlier this year, went live, and then we were not exactly sure that, that seasonality would come in Q3 or in Q4. And when we were guiding just three months ago, we guided for both the quarters, Q3 and Q4. And we took a prudent approach that most likely, these billers seasonality impact, mainly for the net contribution profit would be beneficial to us only in Q4, not in Q3. There was some likely chance, but not material. What actually happened was we saw the seasonality pick up more in Q3. And so I think we are actually glad it happened because for the entire year, that removes the risk of Q4, and we already have it in Q3, and that’s behind us.
Hence, you see a $1 million move from Q4 to Q3 at midpoint of our contribution profit. But that said, regardless of this move, I would say, for the full year, contribution profit is up by 60 basis points from the previous guidance versus now. And even regardless of that move, I would highlight that adjusted EBITDA dollars are up by 18% in Q4 now versus what we guided earlier and 17% for the whole year. And so – but to answer your question specifically, from a profit standpoint, yes, that shifted more from Q4 to Q3. But if you look at the top line from a revenue standpoint, you won’t see that very clearly because in revenue, we also saw some softness as we came at midpoint. And that was primarily because the CPI Index, like CPI Index benefited on contribution profit, but not so much on the revenue.
And there are some variable billers, i.e., the billers whom we charge them with variable costs or interchange, if that goes down, that reduces the revenue a little bit. Although that was forecasted it was a part of our guidance. But just to explain the difference between gross and net to your specific question.
Will Nance: Got it. That’s super helpful. I appreciate all that detail. And Dushyant, I think you mentioned in the press release and in the prior remarks about the confidence and the visibility you guys have into next year that stands out. I don’t know a lot of other management teams talking about the visibility that they have that kind of speaks to the model. But just I guess how does this kind of inform your desire to kind of lean into investments in the platform? And obviously, EBITDA this year, I think it’s up like 90% this quarter. So, it’s growing a lot faster than 25% right now. So, just how are you thinking about opportunities to invest given the degree of visibility you have?
