Rajiv Sharma: Hi. Thank you for taking my questions. I wanted to address a few things just in terms of the Global Knowledge uptick sequentially that you see. Do you expect to see that continuing stabilization/increase in the next several quarters? And then I have a similar question on Codecademy, just in terms of the growth and the metrics and the product uptake if you could give some color on that.
Jeff Tarr: Sure. Raj, thanks. So we are really pleased that we’ve been able to stabilize the Global Knowledge business, and we also have a much better understanding of that business with each passing quarter. So I feel good about continued stabilization for the foreseeable future. Now keep in mind, it’s a transactional business. So we don’t have €“ our visibility on that business is more limited than our subscription business. But with that said, from what I can see today, it is stable, and that’s good news. To understand why it’s stable, a couple of key points. First of all, the entirety of the year-over-year decline in that business can be attributed to two partners on a year-to-date basis and one partner in the quarter.
Those partners reduced their subsidies. In other words, they subsidized the customer in purchasing training. And when they changed their subsidy model, that reduced consumption. That is largely behind us, and we understand it very deeply today. The rest of the business has actually been growing. So that’s good news, and that’s where we get our confidence that this business is stable at this point in time.
Rajiv Sharma: Great. And then on Codecademy, the growth metrics and product uptake, any color on that? And whether you’re expecting to reach a breakeven in the following 12 months as you had expected earlier?
Jeff Tarr: Yes, certainly. So let’s talk about Codecademy through the lens of code B2C and code B2B. Code B2C is growing. It got a slow start in the quarter, but then reaccelerated as the quarter progressed and into the current quarter. So we feel good about the B2C business as sort of, at this point, a high single-digit, low double-digit grower on a constant currency basis. If we look €“ and by the way, I’ll point out, while that is below what we thought when we acquired the business, it’s above where we believe most of our competitors are performing. So we believe that we’re taking share in code B2C. If we look at the B2B side of the business, we’re getting good traction with some very sophisticated customers. I’m talking Fortune 50 customers of real scale and sophistication taking Codecademy.
That’s the good news. Sales cycles have been a little longer than we expected, and I believe that’s largely due to just caution that is with all customers in this economy. But we are seeing uptick. We are talking to more than 100 customers, most of them very large companies about code, and feel very good about our ability over time to achieve the original expectations we set on the B2B side of things.
Rajiv Sharma: Got it. And then I just wanted to clarify on the Skillsoft, the Content business. Am I understanding this correctly that you expect a good bookings quarter? And that’s largely obviously the new customers. But in terms of this one downgrade you had from a large enterprise, you don’t expect €“ that is a one-off event in your minds, and we shouldn’t expect to see that occurring consistently, especially since you say the large enterprises are going to perform better than the SMBs despite a potentially shaky economy. Is that…
Jeff Tarr: We have very few customers of that size, and so we have no reason to believe there’s anything like that hanging out in the foreseeable future. I’d also say our organization has learned from that experience, and that’s another reason why I feel that we’re well positioned going forward to not have that kind of event, again, anywhere in the foreseeable future. If you look through that one event, the metrics in the business in the quarter were pretty consistent with our LTM metrics. So that’s another way to look at the business and really get some confidence around Q4.
Rajiv Sharma: Okay. Thank you. Thank you for answering my questions. I’ll take this offline. Thanks.
Jeff Tarr: Thank you.
Operator: Thank you. Next question today is coming from Ken Wong from Oppenheimer. Your line is now live.
Nancy Liu: Hi. This is Nancy Liu on for Ken. Thanks for taking our questions. I have two. The first one, as you focus a bit more on cost savings here, do you see more areas or levers you can pull to further reduce the OpEx going forward and have the full effect of prior cost savings with the P&L yet?
Jeff Tarr: So why don’t I start and then Rich may add something. We’re taking a very disciplined approach to our cost structure going into Q4 and next year. I’m really pleased with how the team is approaching that. And our headcount, we’ve been managing that very tightly. Actually, headcount was down sequentially. We’ve been focused on offshoring talent where that makes sense, and I expect that discipline to continue. Rich, anything to add?
Rich Walker: I’d maybe add only the context. We did in the first 15 months bring four companies together and divest of another. So we’re constantly on a journey, on a continuum of degrees of integration. And as we continue to do that, we’ll drive further efficiencies out of the business. And great companies do this all the time. And part of our culture is continually and unrelentingly to look at how we’re organized, spans and layers. And I think the quick response around our ILT business is evidence of organizing smartly and driving efficiencies in the process.
Nancy Liu: Got it. That makes sense. Very helpful. Thank you. And then my second question, I believe you mentioned previously you were increasing your inside sales capacity for Global Knowledge specifically. Can we get an update on that? Are those reps fully productive now? Or is there some more to go?
Jeff Tarr: The organization is largely staffed. Now that’s a continuous effort because there’s always turnover in functions like that. And in terms of fully productive, the answer is no. I mean people that are hired take generally 12 to 24 months to be fully productive. It’s one of the reasons we feel good about the future of this business. We made a lot of changes to our salesforce, not just within our Instructor-Led Training business, at Global Knowledge, but the Subscription business, too. And we hired a lot of great talent, and we expect that for that talent to be fully productive will take 12 to 24 months. So we won’t achieve full productivity on those hires until next year.
Nancy Liu: Thank you.
