Mike Cotoia: Yes. What I’ll say on the enterprise accounts, we’ve talked about over the last several quarters some of the key acquisitions and investments we made with Enterprise Strategy Group and BrightTALK and Xtelligent to create this end-to-end go-to-market strategy and product offering to help our customers. So in terms of enterprise accounts, we have more entry points now with our product portfolio position and our capability set to get in there from research, intelligence and advisory to creating strategic content to put into programs and then activate against the right accounts. And so we’re actually seeing great momentum in terms of penetrating different budget stakeholders across the entire go-to-market strategy. And that makes a lot of sense in terms of the larger the account, the more pockets and the more end-to-end that we can get involved in.
In terms of the smaller accounts, I think this market is absolutely putting some headwinds against the smaller accounts. But again, I go back to our product offerings that we have today versus what we had 2 years ago, where we had different area points and different entry points to drive value for our customers. And what I mean by that, if a customer, an SMB or smaller account isn’t ready to do intent or leverage a Priority Engine subscription, they might have a need for lower end-of-the-funnel confirmed projects. They might need some help with their positioning so we leveraged the ESG capabilities with our BrightTALK Studios and our content creation. They might want to do demand over a quarter versus a year as they navigate through this environment.
Again, it’s only been 14 months since the collapse of Silicon Valley Bank. A lot of these smaller accounts are looking to rightsize their budgets to make sure they’re managing expenses and were looking for true value propositions to meet their, whether it’s content, whether it’s their brand positioning, demand or intent. So we feel we’re in a pretty good position in terms of engaging and providing value for those SMB customers as well.
Operator: The next question is from the line of Joshua Reilly with Needham.
Joshua Reilly: So as we’re looking at the June quarter guidance here, I believe typically, historically, you guys have talked about how some new product releases by your customers can drive this typical seasonality with the sequential increase in revenues. Just wanted to understand, is that what, the normal seasonality, is that what is driving the improved revenues? Or is there some other maybe factor at play there that we should be aware of?
Mike Cotoia: I think it’s a couple of things, Josh. I think first of all, it’s the breadth of the product offerings that we have that can really, when you work with customers who might not be ready to do annual or multiyear deals, they still need to help support their sales targets, pipeline, revenue forecasts. And as we’ve said before, even in a down market, when that market recovers, there’s going to be a flight back to quality, and that quality is going to be driven by first-party purchase intent data and permission-based audiences. But our conversations with those customers started in the middle of last year. We’re starting to see some normalization of some, things starting to stabilize, is really understanding how we can serve their needs based on what our customers are really focused on today.
That’s paying off right now. So as we came into 2024, the portfolio is well-architected, well positioned and being able to accommodate what our customers need, again, whether it’s around content strategy or brand to demand to intent, so well, yes, bottom-of-the-funnel confirmed projects and qualified sales opportunities, the quality of our data and the quality of our investments are paying off. Now we just launched and announced we’re running a multiple beta/early adopter program around Account Insights Feed. So it’s a new Priority Engine offering that was announced. That really won’t have any revenue impact in Q2. But it’s a different use case from our prospect-level Priority Engine offerings. This new offering is account insights-only, will be used for our customers against their programmatic ABM initiatives and propensity scoring.
So again, I go back and say, first-party data is where the gold is, and not only at the prospect level but also at the account level. And we believe with the future of Google announcing that they are, the deprecation of third-party cookies, we’re going to sunset that now in 2025, will create another revenue stream that’s going to be very impactful for our customers with new buyers and new case studies that we weren’t able to get into the mix before. So that’s what we’re focused on. But in terms of the June revenue, I mean, we guided to this, projected this 2 quarters ago. I said we expect Q1 to be down around 10%. Q2, we’re going to be closing the gap. Q3 will be relatively up, and then Q4, we see an increase in the revenue year-over-year. So we’re on track with what we laid out and we’re pleased with the performance of the business.
Joshua Reilly: Got it. That’s very helpful. And then how should we think about the gross margin leverage moving into Q2? As we know your margins are sensitive to the overall levels of revenue, but then you also have a lot of other investments you’re making here. Are there any other considerations that we should be thinking about as we kind of model our Q2 gross margin and going forward?
Mike Cotoia: Yes. Thanks, Josh. So again, we plan to make the right investments to help the business feel and to drive margin expansion. So some areas that we’ve done this year is we’re currently implementing a workflow management solution so it provides end-to-end visibility from contracts to execution to close to billing. And we feel that this is the right investment so we can streamline the visibility and the information across all of our product fulfillment sets, our sales, our sales operation teams and our customer success teams. So we’re in the middle of implementing a workflow solution on that. We expand the scope a little bit. But at the end, what that will do for us is provide better visibility and be able to create a more efficient cost of sales as we head into Q4 of 2024.
So we’re in the middle of doing that right now. It’s something that we knew we needed to get done. We made the right investments on that so you see a little bit of cost on that. But at the end, that will make a cost of sales that is still more efficient and continue to help expand margins.
Operator: The next question is from the line of Bruce Goldfarb with Lake Street Capital Markets.
Bruce Goldfarb: Greg, Michael, Dan, congrats on the results. Just a question on long-term revenue, where do you expect long-term revenue as a percent of total revenue to be at the end of 2024?
