Pat Walravens : Great and let me add my congratulations on the Q4 results, fabulous. So, David, and part of this comes from questions I’ve gotten from investors. But prior to Pagero, I would not have expected Vertex to be willing to pay nearly $600 million for an asset and to partner with someone like Silver Lake to get the financing. So how should we think about Vertex’s future appetite for M&A? How big a transaction are you willing to do? And should you maybe have more cash on the balance sheet to provide more flexibility around those kinds of things in the future?
David DeStefano: Thanks, Pat. I think one of the things I enjoy with our Board is willing to do what’s necessary to support the long-term strategy of the company and the confidence they have in management to execute on that. And I think what happened over the last three years is the company has continued to perform better than expected, beating our own budget and guidance expectations. We’ve completed that investment cycle. And the Board was supportive that there was an opportunity. And then at the right price, we would do what was necessary to make it happen. And so, I don’t think that philosophy will change at all given the strength of our execution and the strength of the organization’s performance. If the right opportunity presents itself and it serves our customers’ long-term needs, our Board will support doing what’s necessary to make it happen.
What that is, the world will be informed as we go forward, but rest assured, there’s strong confidence across from the board down through management on that.
Pat Walravens : Great. And I think everyone does appreciate how you stay disciplined on that.
David DeStefano: Thank you.
Operator: [Operator Instructions]. Our next question comes from Brad Reback of Stifel. Please go ahead.
Brad Reback : Great. Thanks, very much. Gentlemen, can you remind us with the true-ups how that impacts ARR both in the quarter and going forward?
John Schwab: Yes. Thanks for the question, Brad. The true-ups. The way that it works is the true-up is really periods that have passed. So, it’s a direct impact to revenue for the prior overages that took place. But what’s typically happening at the same time, Brad, is those same customers are renewing for a new contract going forward. And typically, that’s coming in at a higher tier. So, you are getting — you are getting benefit from that customer renewing at a higher tier. So, it’s very similar to the amount that goes backwards, but ARR is the forward look. And so, the forward look typically has an increase in it when you come out of a customer entitlement upgrade like that.
Brad Reback : Great. And then as the cloud business gets bigger and bigger, can you also remind us sort of what the impact is on gross margin longer term? Thanks.
John Schwab: Yes, that’s a great question, Brad. Thank you. Now over time, what we have seen is that customers are moving. There is a migration toward the cloud. We have mentioned that our cloud revenue and our cloud margins, if you will, were a little bit lower than our on-prem margins. But a lot of that had to do with some of the leverage that we got. And as more uptake in the multi-tenant cloud starts to take place, we are seeing those margins increase. So, we feel very good about that. We feel that the margins, again, with the volume that we’re getting that the margins will find themselves just under where the on-prem margins were, obviously, there’s a cost there to host and keep the cloud costs going. But we feel very good that those margins will be able to kind of stay in that range of where they are right now.
Brad Reback : Awesome. Thanks, very much.
David DeStefano: Thank you, Brad.
John Schwab: Thanks, Brad.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Joe Crivelli for any closing remarks.
Joe Crivelli : Thanks, everybody, for joining us today. If you have any follow-up questions or if you’d like to schedule additional time with the team, please send me an e-mail at investors.vertex.com — I’m sorry, investors@vertexinc.com. Have a great rest of your day, and we look forward to speaking with you in the coming weeks.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
