Unidentified Analyst: Got it. That makes sense. And then, maybe one more from me, as we think about your sales focus on regulated industries. I think you said those are low-single digit percentages of ARR today, but where do you think that could go over time as you lean into sort of that motion and are you seeing better sales efficiency yet as you reorient your sales strategy towards those?
Sharat Sharan: I want to make one clarification and I’ll answer the sales productivity question. The regulated industries, we talked about healthcare professional engagement, life professional certification, and member enrollment and broker enablement. Those are about a quarter of our total ARR. Okay, what we talked about, we talked about the growth on a year-to-year basis in aggregate of that ARR cohort was in the single digits. So, I just wanted to make sure that. And yes, that has been a part of our focus to control what we can control in the environment where companies like technology and manufacturing companies have been under pressure. And with our focus, we expect that to continue to improve. Now, related to the question of sales productivity across the board, with our focus on the regulated industries, sales productivity improved in the second-half of 2023.
Actually in Q4, it was the best in the year and was broad based across our go-to-market segments. It is still not as high as I would like to be, but it’s trending in the right direction. And as I mentioned, we have reallocated sales resources and adjusted the size of our sales teams, especially as it relates to pointing people in the direction of those highly regulated industries.
Unidentified Analyst: Thank you.
Operator: Our next question comes from the line of Tom Blakey with KeyBanc. Please proceed with your question.
Thomas Blakey: Hi, guys. Thanks for taking my question. Sharat, I was just wondering with the improvement, I think it’s been asked maybe a couple of times, I’ll just try it another way. The improvements you’re seeing exiting the year, it sounds really positive. What are the may be top one or two, maybe it’s by vertical, maybe there’s some big contracts coming due, maybe stragglers in the beginning of ’24. What are the top one or two items that are probably leading you to be maybe a little bit overly prudent here with this guide in terms of your negative 15% exit rate here in 4Q with all the improving metrics? And then, secondly, when you talk with the initial C-suite folks that you’re talking to about ACE, what are the top maybe one or two use cases that are different from the typical insights that your large customers were already gleaning from your platform with all the first-party data they’ve been collecting for years anyway?
That’d be very helpful, I think. Thank you so much.
Sharat Sharan: Yes, I think your first question about we saw good strength and why are you being overly prudent in what you are saying. As I just talked about, I think one of the things that we saw from a linearity point of view that December was very strong, but October and November were okay. We saw pipeline build, especially pipeline for AI-powered ACE built, but December was stronger than we had expected. As we have come into Q1, we are still seeing a choppy environment for marketing budgets. We are beginning to ramp up the building of our pipeline as Q1 generally tends to be a little more seasonally softer too and we have just launched AI-powered ACE only a month back, so we had two or three months behind us, we’d be able to kind of give a little better sense, but that is what is making us be prudent for the year as we move forward.
And if there’s an uptick in the macro, if the marketing budgets improve, they come back stronger, it will be very good for our business. So, that’s the thing on how we are thinking about the business, but we are, as we look at 2024, are factoring in an improvement in the install base from the point of view of retention and improvement in churn and downsell for the year. We expect that to improve as we move forward. Now, your specific question about AI-powered ACE and how that is different, let me give you just two examples how it is different. Within the same webinar experience, now you can do two different things. You can have different content for — and you can target your customers separately from your prospects. You can have different calls-to-action, you may have different kind of surveys, you can have different things for people to add.
So, you are spending less money but getting more signals within the same webinar experience. That’s the hyper-personalization and segmentation. That’s one part. The other part is you’re going beyond the webinar. It’s not just an event, which is for 60 minutes. You’re going to be able to figure out two, three different clips out of that, that are the key highlights, and you can send them to people who did not join and say, “Hey, you didn’t join, here are the key highlights.” Those people engage with those bite-sized amounts of content, there’s more data that they will basically bring and those can be monetized. So, just to give you a sense, going beyond the webinar and allowing people to do more with less with things like segmentation and personalization.
So, those are some of the additions that we are doing, and we’re going to keep adding there. Tom, you’re going to keep adding there in AI-powered ACE to make it more valuable for our customers.
Thomas Blakey: You’re sitting on top of a lot of data. That’s great. Thank you. It’s very helpful, Sharat.
Operator: Ladies and gentlemen, this does conclude our question-and-answer session. This also does conclude our conference. Thank you all for your participation. You may disconnect your lines at this time, and have a wonderful day.
