Roberto Cuca: So we’re still in process of putting together our budget right now and that includes the revenue budget. I think that off of the prior Street numbers, the growth rate was probably on the lower end of a reasonable range. But given the new numbers that we could be coming out of the year with that number might be on track. We think a bit more about the growth rate than the actual — single number. But we’re digging into that and, as Tony said, one of the things about what we’ve just done is we put in place a sales force that, as of today, we have 79 sales reps in place of whom 55 have been with us for six months or more and then by the first quarter of next year, that should be much closer to the full complement of 79 being at that six month mark with some additional hires between now and then.
Tony Koblish: Yeah, I mean, to give you to give you a feel, Caitlin, we’re running a week long sales school right now and I think we have 35 attendees, five or six new regional managers, and the rest are all reps. And I think it’s by far the strongest, best pedigreed group that I’ve ever seen, right. So things are just getting better and better and better, which reduces your tolerance for decent performance, mediocre performance coupled with stagnation. As Roberto said, this is about growth, right, and next year will be about efficient growth. Holding our infrastructure as solid as possible, absence of sales force and customer facing but we’re going to — we basically have the infrastructure to drive that growth and attract that talent pool and we were going to take advantage of it. So that
Caitlin Cronin: Awesome. Thanks for taking the questions.
Roberto Cuca: Thanks, Caitlin.
Tony Koblish: Thanks.
Operator: And thank you. And one moment for our next question. And our next question comes from Matthew O’Brien from Piper Sandler. Your line is now open this.
Matthew O’Brien: Afternoon, thanks for taking the questions. A – Roberto Cuca Hi, Matt.
Matthew O’Brien: Sorry to harp — hey, sorry to harp so much on Q4. But two months ago you guys are talking about a midpoint of 62.5 and now we’re about 58.5, so it’s down about 4 million bucks for the back half of the year alone over the last two months, so it just seems pretty significant as far as is that drop goes. And I just love to hear a little bit more about that specifically. I mean, I don’t know if there was like 10 or 15 people that were doing tons and tons of revenue that you lost or you moved on from or how that works. And then the bump from Q3 to Q4 in absolute dollars is the biggest bump, as far as the midpoint of the range goes that the company has seen, actually much more than the company has ever seen. So just again, the comfort level on that, what bridges you to get that extra revenue in Q4, as you have a third of the reps that are still pretty junior.
Roberto Cuca: Sure. So let me start with the bump question first. So as I mentioned on a prior question, one of the ways we analyze our thinking about the quarters in the year is we take a look at what we’ve achieved in the quarter-to-date and the rough way to do that is the first month of the quarter, and then how that measures up against what we are hoping to do for the full quarter and then how that ratio compares to historical achievement in prior quarters, and in the prior year’s quarters, so the seasonalized quarters. So based on what we’ve seen in October revenues, and comparing that to what we expect to see at the midpoint of the range for the quarter, that’s right in line with what the historical average is for achievement, the first month to full quarter.
So on that data point, and then on the initiatives that we put in place to incentivize the reps to close the gap from the performance we had in the third quarter, we feel comfortable about hitting those numbers. And again, that’s a series of training and then some incremental incentive plans. As far as Q4 and the reduction of approximately $4 million from the midpoint of the prior year’s guidance range to the current, in that $4 million impact on the second half of the year, the turnover in the sales reps that occurred largely in the second quarter is what drove that. So, as Tony mentioned, on the last earnings call, we had 75 reps, of those a third had less than six months tenure. So that was a bit more turnover than we had initially budgeted.
We thought it was the right thing to do based on the analysis of the RMs, we believe it puts us in the best place for continued significant growth, our goal being to grow the best company we can as quickly as possible. And we put in place some steps to make sure that we get back to the growth rates that we had previously planned for as quickly as possible.
Tony Koblish: And Matt also something to consider is, given where we are in our development stage and our growth, a lot of the usage of our product is based on rep presence, right. So if we were bigger, more established, bigger market share player, you might just have natural momentum more of it. We have some of that, certainly, but it’s the presence thing, right. So when you do that transition, you tend to dip. So even though we had stagnation or mediocre performance in some of these territories, likely those went down, but now they’re filled with stronger talent and we should start to see that move. The other factor to consider is the PRS LTR product, right, we did a soft launch of that around August or so and it’s well over 2 million, 2.5 or so, probably 50% of that is new business.
So that’s going to be a superb driver for us over the next 24 months, and it’s just warming up, it’s not even in everyone’s hands yet. So from a timing perspective, we feel very good about where we are over the next six months, and again, like I said, focusing really hard on the start of next year and continuing to drive that, that stronger growth rate next year.
Matthew O’Brien: Got it. And then maybe just as kind of a follow up to that, Tony, how much did it cost you, you think this transition of these things? It sounds like, I don’t know, 15 or 20 reps or maybe less than that, maybe eight to 10 reps. How much did it cost you in Q3? Do you estimate? And then how productive were those?
Tony Koblish: From a revenue perspective?
Matthew O’Brien: Yeah, I mean, how productive — sorry, just real quick, how productive were those remaining reps? It seems like the remaining reps did an unbelievable job in Q3 even get to this kind of growth.
