Sheldon McMeans: Great. Thank you.
Operator: Thank you. Our next question comes from Raj Sharma with B. Riley. Please state your question.
Raj Sharma: Hi. Thank you for taking my question. Just going back to the Generative AI coursework and how that relates to the upskilling. Firstly, is it a part of the programs and the coursework are part of Codecademy integrated into Percipio or are they the ILT part of the business? And how do they impact retention and business and sort of growth in your customers.
Jeff Tarr: So the answer that’s all of the above. We have Codecademy courses that are focused on Generative AI. We have content within the core of our platform and content business that is focused on Generative AI, including very complete learning journeys focused on Generative AI. And also we have ILT courses, a large suite of ILT courses that has been generating growth at contributing to growth in sales in the ILT business. So we’re still early and seeing the P&L impact, but we are seeing results and we’re seeing uptick and growth and customer conversations and conversions and usage and that’s all very encouraging.
Raj Sharma: Got it. So not a material impact on revenues yet or profits, obviously, but where do you how do you see the impact is in terms of new customers or a greater engagement on the platform and a better retention?
Jeff Tarr: All of the above. We have new customer conversations where a Generative AI offering is a differentiator and a conversation starter. Our ILT business has won some significant new accounts because of the breadth of our ILT offering and Generative AI. We’re very excited about CAISY. CAISY isn’t about teaching Generative AI, but it’s about leveraging the technology to do something new and important in the learning space. So we’re very excited about what we see. We see this as a significant tailwind. Rich has something to add.
Rich Walker: Yeah, quick one, Raj, building on Jeff’s comments in terms of what we anticipate, it isn’t only about the technology, it will also benefit our leadership from business skills, CAISY being one example, but it will also become an important compliance area for companies going forward and they’re going to look to us to ensure safe, responsible ethical use of the technology through our compliance offerings.
Raj Sharma: Got it. That’s very helpful. Thank you. And then just finally can you give more color on certain customers or groups of customers and certain areas that are getting impacted by any sort of slowdown you see versus areas that are stronger because of the upskilling? So are there are parts of your customer base that are particularly strong or where you can see upskilling a lot and parts where the any slowdown in the economy or geographically so are impacting the business?
Jeff Tarr: The way we look at our customer base is two broad categories. We have the category of customers who have acute workforce transformation challenges and very real skills gaps. For them, our offering is critical to their business. And then there’s another category of customers for whom online learning is something that’s an employee benefit that it’s a nice to have. And that’s a smaller and slower growing part of our business. So where we see the opportunity is with those customers who have the most complex workforce transformation needs. That’s the largest portion of our customer base. It’s the largest portion of our market. It’s growing the fastest and that’s where we’re pointing the vast majority of our resources.
Raj Sharma: Got it. Thank you. Thank you for taking my questions and good job. Congratulations on reporting steady eddy results.
Jeff Tarr: Thank you.
Operator: Thank you. [Operator Instructions] Our next question comes from Ken Wong with Oppenheimer and Company. Please state your question.
Kenneth Wong: Fantastic. Thanks for taking my question. The first one for you, Jeff. I think in the past you guys had touched on how new business perhaps has seen a little lengthening of the sales cycle. I realize total business doesn’t depend too much on that, but just wondering if you started to see that that stabilize or improve at all?
Jeff Tarr: You know I would say that new business has been pretty consistent where we’ve been seeing a big step up and improvement is on the growth of our existing customer base. I’d say on new business, which for us is a smaller part of our business, you know, still is seeing a lengthening of sales cycles and it’s a little slower, but it’s such a small contributor to the business overall that it’s less of an impact on our business than perhaps elsewhere. I do see opportunity to improve our new business growth and we are investing in our sales force and a thoughtful way to, as I mentioned before, move up higher in sales inside our customer organizations and also engaged in a more consultative sales process. And I think that will yield results on the new business side over time.
Kenneth Wong: Got it. Got it. Super helpful. And then, Rich, just on the — on EBITDA, any anything we should be thinking about in terms of back half seasonality of EBITDA? Just so we kind of make sure we have our models properly tuned.
Rich Walker: Yeah. Thanks for the question. I think first I’d highlight that the EBITDA growth from sequentially from the first quarter was an important achievement finding and striking that balance of investing in the business and still giving some back to the results. As you think about the full year, we were obviously comfortable and reaffirming our outlook for the full year. The margin profile that we enjoyed in the second quarter is consistent with what we expect for the full year and I think the expense base will continue to grow to support some of that growth, but the margin profiles not going to materially change. We have about 40% of the bookings in the fourth quarter. It’s probably not unreasonable to expect that our second half growth rate quarter-over-quarter will be in line what we enjoyed sequentially in the second quarter and sales and marketing, which we are continuing to invest in is going to drive some of that bookings growth.
