So these are phenomenal opportunities, even with the bigger picture outside of the personalized homework which is a huge opportunity, for coaching for teachers. We are — these are all going to be add-on with multimillion-dollar product lines over the next couple of years and you will start seeing monetization of that similar to how we monetize our other products, a couple of dollars per student. And on top of that is the data strategy. As I talked about, our Connected Intelligence is becoming the choice of platform for districts for their AI strategy. So we’re supporting a broader AI marketplace of how any PreK [ph] district or who’s a PowerSchool district wants to use another AI tool, they will use our platform on data as a way to enable their strategy.
So we’ll be able to monetize that whole Connected Intelligence at these districts as well.
Operator: The next question is from Joe Vruwink with Baird.
Joe Vruwink: I wanted to follow up on the big talent management deal in Florida. I think recently, PowerSchool and some of your peers have mentioned the back office solutions like human capital and ERP that’s maybe been an area put on the back burner in 2023 but you see it in your pipeline that there’s pent-up demand. Would you say the activity in 3Q is an indication maybe the pent-up demand is starting to unlock? Or is it too soon to make that declaration?
Hardeep Gulati: Good question. So I think some time back, we do club both the talent piece and ERP because that’s typically sold to the HR and the CFO. So they kind of — from a buying perspective, that’s a common buyer. So when we group them, our solutions and cloud by buyers, you kind of see them grouped up. But when you look at the talent by itself, this is recruiting teachers, onboarding them, professional development of teachers, substitute teachers, those product lines actually have been growing double digit consistently. In fact, I shared that if you look at year-to-date of new business, that has grown more than 20%. So we have been able to see double-digit growth on our talent product consistently. Even prior to pandemic, during pandemic, even in post-pandemic, that continues to be very healthy.
Some of the innovation we have put actually is now allowing us to even displace our nearest competitor like in the case of Florida. And we’re actually seeing good traction on that, that we are becoming a clear leader for talent products in the market in K-12. Now ERP is a market which still has been slow. And post — while we saw good traction pre-pandemic, post-pandemic, it has really gone slow. And that continues to track to be in the low single digits. We do expect that 70% of the market being still legacy. As districts come out of their overall and get to a normal cadence, we are seeing some opportunities. And I think it will be a couple of years before we start drilling the growth there. But we do see pockets within there that could be very interesting for us for immediate — in the near future which we are tracking.
Joe Vruwink: Okay. And then I wanted to ask, it’s 2 big quarters in a row of license strength. I know this is really a strategic emphasis. But just the sheer magnitude of some of these deals? I mean with license, you do get follow-on support contracts typically. So there is a recurring component that comes. I’m just wondering if you’re seeing any decided shift in kind of buying preference where licenses might be in vogue for a period of time and as it gives you a good relationship at a strategic account, we could actually see more license activity over the next year.
Eric Shander: Yes. So Joe, it’s Eric. I’ll take that. So I think you guys know, obviously, in this quarter, there was about $4.5 or so million related to Puerto Rico that we’ve previously been talking about. But aside from that, there are deals such as LAUSD, where it was a strategic discussion with the customer. And it was more or less their desire in terms of how they wanted to utilize the software. I think what I would say, I’m not sure it’s going to be an emerging trend, if you will. But from our standpoint, we always will take the customers’ consideration in. And if there’s a deal that’s most appropriately structured where it’s more of a point-in-time type transaction, we’ll absolutely do it. But L&O even internally is probably the hardest number for us to forecast because these items can be from any one quarter, can be a little bit higher or lower depending upon when they actually happen in the quarter.
So we’re going to continue to monitor it but I wouldn’t necessarily leave the call thinking that, hey, there’s going to be a tremendous amount of L&O next year because I just — we just don’t see it. There’s going to be one-off deals from time to time and we absolutely will be very transparent with the Street in terms of what those deals are and why they happen. But we don’t necessarily see it as more of a pervasive trend.
Operator: The next question is from Brett Knoblauch with Cantor Fitzgerald.
Brett Knoblauch: Just curious as to the historic — or I guess maybe historical acquisitions you guys have made, how they played out from a growth perspective. I know the main focus is going to be on integrating. But I guess when do you normally begin to turn on the upsell motion to existing customers? Is that something we should expect to happen maybe come 3Q of next year, that’s when most renewals occur?
Eric Shander: Yes. So Brett, I think it’s a good question. And what I would say is it will depend on the type of acquisition we make. So where we make smaller technical tuck-ins, whether it’s like a K-involved [ph] or Kickboard or a Chalk, those pretty much happened in the next quarter. And putting those into our sales distribution engine, we get an immediate pop on those. When you’re talking about a strategic asset like SchoolMessenger, we’re absolutely focused, first and foremost, on integrating the product and getting the team settled. It’s a sizable team that we’ve acquired as well. Making sure that all of the operational elements are in place. Meanwhile, our sales team is certainly building their plans in the pipeline and all of that.
So I would say that the business momentum will continue. You’ll start to probably see an uptick in that particular space most likely in the second half of next year, as you mentioned, when we start seeing the renewals activity and a lot of the integration work is behind us.
