Unidentified Analyst: Hey, thanks so much. This is David [Technical Difficulty] on for Brent. I wanted to ask around there was increased commentary, I think, versus prior quarter was around some of the companies and what they’re doing around AI. Just if you could just give us an update on the BARDA AI strategy? And if you guys are charging for any of these AI products, any color there would be helpful on how AI could possibly help with the organic growth of some of your assets in the long term, that would be helpful. Thanks.
Neil Hunn: Yes. We’ll certainly give you an update on that. So we continue to grind away at this. So we have done a lot of work engaging with all 28 of our businesses, both on the internal productivity-based applications around R&D, customer for live customer support go-to-market, admin, HR, finance, regulatory, et cetera, have a call at lunch with a large group of our leaders today on just that topic. We’re starting to see some early wins on productivity, like most are and code assistance, marketing content generation, things like that. So cautiously optimistic about productivity enhancements. As it relates more directly to your question around products and the market and monetization. This is going to be a slow and steady rates about how do you use these tools to create incremental value for our customers.
Again, you know, we compete on intimacy. That intimacy leads us to know very specific problems and very specific questions that need to be addressed. We have a new technology set to be able to do that. Companies that have products in the market today using Generative AI, Aderant, Deltek, DAT, ConstructConnect and Foundry by our account, there may be a few others. Two quarters ago, I think that the count was zero. And so we like the momentum in that regard. In terms of monetization, it’s still early days. Our belief — like for the moment at least, we’re monetizing the Generative AI investments by having — by adding that tool set and capability to our existing products in unique ways, and then that is creating more value in the products, which is driving in almost all cases, bookings acceleration with those products, and in some cases, higher price points, because of the value that’s achieved through the tools.
So that’s where I leave it. Happy to follow-up, say, if you want to add, Jason.
Unidentified Analyst: Okay.
Operator: Your next question comes from Terry Tillman with Truist Securities. Your line is now open.
Terry Tillman: Yes, hey Neil, Jason and Zack thanks for taking my question and then follow-up as well. Maybe just the first question because it is the most recent addition to the portfolio, and I think you all called the opportunity here maybe to continue buying high-quality assets, but maybe even some better growth profiles, good valuations. I’m curious, just an update on where you see kind of on a go-forward basis, the Procare Solutions revenue compounding growth rate where you see that? And then as you’ve had a little bit of time here, where do you see 1 of the most untapped growth engines for that? And then I had a quick follow-up for Jason. Thank you.
Neil Hunn: Yes. So on Procare when we announced the deal, we talked about how we believe this is going to be a mid-teens organic growth business. The market is growing 10% or a little north of that. Procare is about 1.5 times relative market share. And so with that leadership position and market growth broker has the right to win to being share and grow above market. In terms of your question, Terry, is bolt-on activity inside of Procare, there’s a couple of areas that Janet and her team with the leadership team at Procare are exploring we tuck in a couple of bolt-on type products that sell into the network. But I think at Procare, the bolt-ons are going to be modest on a go-forward basis.
Terrell Tillman: Got it. Okay, and then just a quick follow-up. I think it was 5% to 6% organic growth and now you’ve firmly set 6%, so that’s good to see. Jason, if you had to think about like what is the biggest driver or maybe it’s just a bunch of little things. What is the biggest swing factor in just tightening that and effectively raising the organic?
Jason Conley: Yes. I mean, obviously, we had a really strong Q1. So part of that is just carrying that through and a lot of that was at TEP and then we had some various small beats across software. So I think it’s mainly what we saw in Q1 and then just the confidence that we’re going to be able to sort of maintain our prior guidance for the out quarters.
Terrell Tillman: Okay thank you.
Operator: Your next question comes from Joe Giordano with TD Cowen. Your line is now open.
Joe Giordano: Hey guys good Morning.
Jason Conley: Good morning.
Neil Hunn: Hey, good morning.
Joe Giordano: Just curious on the jobs in the country, like you look at the jobs data and they’re pretty good, but it’s generally been like a erosion of white collar type jobs replaced by like part-time blue-collar jobs. And I’m just curious like on a longer term, what are the implications on some of your software businesses that are more headcount driven? Is that trend? I know you won’t see it like immediately, but is that — are you starting to see the implications of that on like an outlook basis?
Neil Hunn: So I would say no, but perhaps the reason is Barry — there’s some, but very little of our revenue is seat-based pricing. There’s some, like I said, — and where that exists, we’re transitioning to a different metric. So as you get more disruption with NAI or the knowledge workers sort of get more productive, we certainly want to benefit by that, not be penalized by that. But it’s not been something that’s been brought up by any of our companies in any of our operating or strategy reduce.
Joe Giordano: Interesting. Okay, and then just to follow-up on the AI discussion in terms of like deployments and the products you’re launching here. Has that been like table stakes now? Or is your competition doing the same? Or do you feel like deploying these tools has been a differentiation for your businesses?
Neil Hunn: So far, it’s been very differential. I think the expectation is the competitors will have their response for sure. I’ll just double-click on that a bit, though, which is we tend — we are across all 20 of our businesses, we operate in these very small markets, and we are the largest player in the small market. So we have that advantage around scale in these small markets to be able to do more product development, do more research and development, do more — invest more and go to market to get these tools there. And so that is a long-term advantage that we have and why we select the businesses we do to be part of the portfolio. The other thing is when you compete on intimacy with generative AI, all these verticals that we have.
