Zach Cummins: Yes. Thanks. Good morning. And also congrats on the inflection to positive adjusted EBITDA in the quarter. In terms of I know, you’re not giving formal 22024 guidance, but just given the updated run-rate revenue outlook, is that sort of a good baseline to start from once we think about setting expectations for 2024.
Jon Slabaugh: Thanks for question, Zach. Yes, that’s why we give the run-rate guidance, I think it’s a good way to kind of start your modeling for the beginning of the year, and then kind of look at any updates we give further in years, as we see how we’re gaining traction or other events that would drive the number north of that level.
Zach Cummins: Got it. And in terms of the cash balance, I mean, Jon, can you give an update on is there any one time items impacting overall cash burn in this quarter? And any sort of update you can give on expectations for cash burn in Q4?
Jon Slabaugh: So our interest expense and CapEx tend to be around $7 million per quarter. I think that’s kind of when we think about beyond the adjusted EBITDA how to think about that. The fourth quarter tends to be the lowest point of our year in terms of cash, we’re not giving specific guidance around what we think the yearend cash balance will be. And then we begin to see very strong cash collections going into the first quarter of each year. So we expect to see the bounce kind of building back up as we move into the first quarter. But we model it, we plan around it that the actions we’ve taken to date have all been done in light of cash requirements and maintaining the liquidity. We need to keep the business where it needs to be.
Zach Cummins: Got it. And final question is really around, I believe you’re expecting a bounce back and the cash balance in Q1 of next year. Is that assuming that you’re going to start consistently generating positive cash flow from Q1 and beyond next year? Or is it more of just the strong collections to start the year and maybe it’ll take a little more time to get to a consistent free cash flow generation.
Jon Slabaugh: So there is a seasonality to our business and Zach, where we generate significant kind of positive cash flow in the first quarter because of the amount of sales activity that takes place in the fourth quarter and the billing and collection cycle off of that. From a from an income statement standpoint, we will be moving towards free cash flow from EBITDA standpoint relative to our fixed charges, but haven’t given guidance as to when we cross over that, but it’s certainly a focus of ours as we move forward to get to that level.
Operator: Your next question comes from the line of Rudy Kessinger with D.A. Davidson.
Rudy Kessinger: Hey guys, thanks for taking my questions. So the trend the last few quarters has been revenue come in below the midpoint of guidance and the forward revenue outlook being lowered. And Jon, I know last quarter, you said you guys were assuming similar close rates in the second half of this year, as you’ve seen in prior years. And so with this lowered revenue outlook, just could you comment specifically on your assumptions for Q4, as relates to close rates, renewals, expansions, et cetera, relative to past years?
Josh Resnik : Hey, Rudy. This is Josh, I can tell you, and I’ll reiterate that the biggest impact came from lower non-subscription revenue where typically we would have expected better results seasonally in the second half, and we didn’t see that come through, largely due to budget uncertainty, some underperforming products. And then on the ARR side, it’s been slower pipeline conversion than we typically see. And so like I said, as we move to larger enterprise deals in Tennessee, longer sales cycles, which is fine. But we saw an impact largely due to the macro in the second half and conditions worsening in the second half.
Jon Slabaugh: Sure. And, Rudy, as it relates to guidance for the remainder of the year, we’ve taken into consideration the close rates that Josh referenced in the slower pacing into that guidance. And that’s why we adjusted the revenue figure down for the quarter, we’ve reviewed the pipeline and looked at it in light of the conversion rates that we’re actually seeing, and that’s why we took the adjustment that we did.
Rudy Kessinger: Okay, and then I hear, I guess what you’re saying on the Q1 cash bounce back given changes in net working capital, but with, I think, roughly $7 million a quarter in cash interest expense. I guess just what level of annualized EBITDA do you need to get to be free cash flow, breakeven to positive on an annual basis.
