Steve Daly: Yeah. That’s — you hit it spot on, Terry, as usual. The opportunity here is to make — we had a customer interaction that was sales heavy when we won a deal and then we’d hand it off to CX and they would go run with it. This allows us to have relationships that kind of span. There aren’t these awkward handoffs. And then sales is engaged throughout helping our customers understand not only how to get the most out of what they just bought from us, but also what else we can do for them. So, we do believe this will ultimately be an accelerant to our business. It will allow us to better cross-sell, better up-sell into our existing customer base. And it’s not something that we said oh, this is — the sales process is broken, we got to make a change. This was really a strategic move to do something that we thought would actually improve our — the durability of our revenue growth over the next five to 10 years.
Terry Tillman: Okay. Got it. And thanks for the kindness. I don’t think I’ve been spot on in anything in years, but thank you, that sound nice. And then just a follow-up question. Maybe just relates to 9.7% growth is the mid-point, roughly speaking. Is there anything you can share just at a high level on relative growth rates across the three major kind of segments? Thank you.
Steve Daly: Yeah. We continue to see that kind of the domestic market between K-12 and higher ed will be kind of that high single digit grower for us. There’s — it’s a — those are good markets. They’re solid growers in higher ed. We do have more opportunity in K-12 from a cross-sell perspective. And then international, international will still be our fastest growing. We are seeing some headwinds from currency in there. So, we included in our guidance is that this should be a grower in kind of the low-teens on an as reported basis. It would be high-teens in a constant currency basis. So, we will see a little bit of that headwind from a currency basis that we didn’t really see in 2022, it will hit us in 2023.
Terry Tillman: That’s great color. Thank you.
Operator: And our next question will come from Matt VanVliet with BTIG. Please go ahead.
Matthew VanVliet: Good afternoon and thanks for taking my question. Obviously, a lot of talk about cross-sell success and a nice large opportunity ahead of you. Curious on how you’re thinking about that impacting the seasonality of the model? Should we think about a little more of that potentially coming sort of throughout the year, a little less reliant on the second quarter? Or does it just kind of make deals bigger when you do get those larger deals closed at the end of the school year?
Steve Daly: Yeah. Yeah. I wish the cross-sell would have an impact on seasonality. But it will — I don’t know that it will have a big impact on seasonality. We may align more of the cross-sell to our renewals, which the majority happened in Q3. So, kind of Q2, Q3 will still be our biggest quarters. What will change our — over time, what will change the seasonality is our international business, because it tends to be more heavily weighted towards Q4. So, we may see some kind of normalizing of that across — from a seasonality perspective, but don’t expect cross-sell to drive that change in seasonality.
Matthew VanVliet: Okay. Helpful. And then, thinking about the channel program, obviously, only about a year old. But are you looking to potentially push that into any newer markets that you haven’t addressed quite yet? Or conversely, maybe in addition, do you need some additional leadership as that continues to grow, maybe people with significant channel experience elsewhere whether or not inside the education room?
Steve Daly: Yeah. We have — we did bring — when we started this investment, we brought in a seasoned exec Jack Jackson just won an award, by the way, for Channel Chief. But — so, we brought him in specifically to help us craft this strategy. As of right now, Matt, we have — we are targeting the right geos for our channel. And as you know, when it comes to channel, there’s a lot of kind of enablement, there’s ramping, there’s — and so most of our focus right now is on making sure that those partners that we brought in over the last nine to 12 months are enabled — are ready to sell, are able to deploy, are able to support the products in the countries that we’ve targeted. So, that’s where most of our investment is going right now.
Matthew VanVliet: All right. Great. Thank you.
Operator: And our next question will come from Stephen Sheldon with William Blair. Please go ahead.
Stephen Sheldon: Thank you. Just one for me guess, on Canvas credentials, you gave some good commentary there, but just curious of a priority does it seem like universities are kind of placing now on including some type of credential in decrease pathways, especially as they think more about the eventual employability of graduatory, it seems like we’re still in the very early innings there. And do you think it will become a much bigger priority by universities as we think about the next few years?
Steve Daly: Yeah. That’s a great question, Stephen. And very much the top of mind of the educators that we’re talking to within our existing as well as new customers that we talk to. It’s in every conversation that we have. I would say in the traditional university environment, not everybody is the same, but there’s definitely pockets that are very, very much leaning into it. I’m thinking of community colleges, some of the — some of those types of educational institutions are leaning in. But everybody is looking at what their strategy is going to be, how they’re going to do this, how they’re going to implement this over time. I think the other thing that we’re seeing is we — it’s opening up a lot of conversations with non-traditional like City and Guilds, right, which is not your traditional university, but is — or PeopleCert that we announced last year, right, that’s doing a lot of retraining, certification, that kind of work.
So, it does — there are a lot of conversations going on. And when you combine this with the investments we’ve made in our catalog product, when you look at the things that we’ve done with our portfolio set of products around portfolios, it creates this whole product solution that allows us to — allow the university to build, to issue, to store and verify their credentials in a way that one, attracts new students to them, but also provides a currency for finding new jobs as you mentioned. So, yeah, it’s very good. It’s early days, but great signal.
Stephen Sheldon: Makes a lot of sense. Thank you.
Steve Daly: Yeah.
Dale Bowen: Thanks Steve.
Operator: And our next question will come from Brent Thill with Jefferies. Please go ahead.
David Lustberg: This is David Lustberg for Brent. Thanks for taking the question. I wanted to double-click on the cross-sell comment, I believe you guys said 43% of your customers are on two plus products. Maybe if we could dig in a little bit on that. I’ll ask a few questions and add to which have one big sense. But is there any watermark you think compared to last year 2021? What was more than one product, maybe talk about the dynamics of two plus products in K-12 versus higher? And if there’s any differential there? And then, just thinking forward, on the cross-sell opportunity. Obviously, you guys are bigger in higher ed, but if you just think about from the product standpoint, is there more cross-sell from a product standpoint in higher ed versus K-12? I appreciate if you could just touch on any of the dynamics.
Steve Daly: Sure, David. So, year-over-year, our attach rate was for two or more products in 2020 — as we left 2021 was about in the high 30s percent attach rates. So, we’re up five or six points, 600 basis points from attach rate perspective. The other statistic I think that Dale shared was that 60% of our new deals had more than one product. So, we’re seeing that. We’re landing bigger. We continue to land bigger when they get a new logo. And so — and then as we think about how we look at the cross-sell opportunity between higher ed and K-12, the ARPU stacks are about the same for each of those. We land bigger in higher ed. And we have about a 50% ARPU uplift from the LMS. And in K-12, we land smaller on the LMS, but we have two to three times cross-sell opportunity. So, the absolute dollars are bigger in K-12 for cross-sell, but the overall opportunity is similar from a revenue per student perspective.
David Lustberg: Got it. That’s really helpful color. I appreciate it. And one more, if I can. Just as you guys think about your conversations with K-12 and higher ed institutions, has there been any commentary around the budget around them and maybe if they’re getting more constrained? I think most folks, I think, probably K-12 is pretty defensible, especially with what they have going with the ESSER funding that continues to aid growth there. But maybe any commentary just around what you’re hearing from customers around their budgets?
