Jack Abuhoff: So I think the way we would guide people in terms of building up models is to think about an adjusted gross margin, meaning gross margin less severance, G&A and stock option costs. Think about an adjusted gross margin as we scale between 40% and 45%. In terms of SG&A, we’ve got a tremendous market opportunity in front of us to exploit that we’re probably going to be adding a bit more in sales and a bit more in terms of program execution, but not a ton more. Our business is not tremendously capital intensive. So I think you can kind of drag that out and predict what kind of cash flow we’re going to be able to drive.
Tim Clarkson: Should be at least 10% to 15% pre-tax once you get above $30 million that’s what I’m thinking.
Jack Abuhoff: Yes, I think that that’s absolutely right. I think that there’s potential to improve on that.
Tim Clarkson: Sure, sure. Okay. Well, I mean, everything is going great, obviously. I’m just thrilled and it’s still so early. I think that’s the exciting part of it. So I’ll let other people ask questions. Great quarter. Thanks.
Jack Abuhoff: Thank you, Tim.
Operator: Thank you. Your next question is coming from Dana Buska from Feltl and Company. Your line is live.
Dana Buska: Hi, Jack.
Jack Abuhoff: Hey, Dana.
Dana Buska: How are you this evening?
Jack Abuhoff: We’re doing great. Thank you.
Dana Buska: You’re welcome. Everything sounds like it’s going pretty good. I have a couple questions around your white label program. Could you explain a little bit about what exactly you mean by white label?
Jack Abuhoff: Sure. What I mean is that we’re going to be performing data engineering services standing behind the brand of one of our large customers. And again, we see this potentially expanding to other customers, but right now it’s one of them. So it’s a customer that that markets compute, storage foundation models, database and will be marketing now in addition to that data services. So a customer of theirs that is looking to create or build or fine tune generative AI models will find – we believe, will find it attractive to be able to obtain all of that in one place. When they obtain data services, we’re going to be providing some of that.
Dana Buska: Okay. Excellent. Around that, are you going to be relying on their salesforce to do that, or is it you are having your salesforce team be involved with those type of projects?
Jack Abuhoff: No, primarily we’re relying on their salesforce, certainly in this first iteration. And again, that’s what’s so attractive about it for us, that we have the opportunity to scale independent of the limitations that our sales and market reach impose upon us and our brand recognition imposes upon us. This is a very highly regarded brand with tens of thousands of customers. And I think potentially this program and perhaps others, like it will enable us to achieve an escape velocity that otherwise wouldn’t be possible just working through our own brand and our own sales marketing.
Dana Buska: Okay. That sounds pretty impressive. And along those lines then will, like price negotiation, that will be all done through your client and you guys won’t have to deal with that, or will you be more subject – how – well, let me ask, how do you see the pricing going with the project?
Jack Abuhoff: So we are able to provide pricing upfront to the customer who is then able to represent that pricing in discussions with the Zen customer.
Dana Buska: Okay. And then you didn’t really talk much about or at all about Synodex or Agility. Those two seemed to have had nice quarters. Could you elaborate a little bit on those two businesses?
