Jason Dies: Yes. Look, I will say we are a very different business going forward, right? If you think about the size and scale, if you think about moving to digital and SaaS. And certainly, the needs of the business will be different, and that’s why I want the business unit leaders to be so integral into thinking about how we take that cost out.
Peter Sakon: Thanks. And tending to SendTech, can you talk about the headwinds you’re expecting later this year in the noncompliant folks, if you will, to be shut off? Can you elaborate? Is it something that will show up in the first quarter of 2025 or is it something that we’ll see throughout the rest of the year?
Jason Dies: Yes. So that’s a good question, Peter. So let me just take a step back and just remind everyone that there is a forced migration in the industry as the USPS has mandated that you move from a technology that’s called IBI for the mailing meters to IMI. That’s really a security standard primarily. It has some other pieces to it. We’ve been very public that every client on the low and middle range product set for us has to migrate by the end of this year. The top of the line clients have additional time. I think it’s through 2027 to migrate before they have to be off. Overall, from an overall portfolio perspective, we’re up to about 77% of our clients have migrated to that IBI category. That’s up from about 72% in first quarter.
If you look under the covers on the middle of the line, the bottom line, we’re up to about 82%, which is up four points quarter-over-quarter. So we are making very good progress on moving clients to that new technology. We have been very clear that any time that you do a forced migration of this population we do tend to see increased cancellation rates. But if I look at the number of where we are of 82% of that bottom of the line, already migrated with three quarters to go, I think we’re in a very good position. I’m not going to speculate as to what I think the cancellation rate will be, but we’ve made great progress. At the end of the day, those machines do get cut off and that will force additional clients to reach out to us to get the new technology.
And so we’re going to have to see how that plays out over the next three quarters.
Peter Sakon: Thank you. Follow-up question in revenue. You mentioned it grew 40% in the quarter, and I think you said [indiscernible] has 60%. What is the number [indiscernible] that you’re referring to?
Jason Dies: Peter, you broke up. I think to your question, just let me kind of restate it, as I said, our SaaS revenue in SendTech grew 40%, and our SaaS revenue in the enterprise space grew 61%. I think your question was what comprises that?
Peter Sakon: No. My question was the amount. What is the dollar amount?
Jason Dies: I’m sorry, I didn’t get that, say it one more time?
Peter Sakon: I said what is the dollar amount? I’m trying to get context as to is this growing 40% is that up $50 million, $10 million? I’m trying to get a better feel for the impact to your financials.
Jason Dies: Yes. Listen, what I will say is our shipping revenue overall grew 8% in the quarter. And if you look at the SaaS component of that shipping revenue, it makes up about 25% of the total shipping revenue for us. I’m not going to get into specific dollar amounts on products.
Peter Sakon: Okay. Thank you.
Jason Dies: Thank you, Peter.
Operator: And at this time, there are no further questions. I’d now like to turn the call back to Mr. Dies for any additional remarks.
Jason Dies: Yes. Thank you, Greg. I appreciate it. So look, I’ll just close the call by saying this. Again, I think we are making very significant progress against our strategic and financial objectives. I’m very happy with the performance that you’ve seen over the past two quarters. I think we now have two data points of real progress both – against both our business and cost priorities. First quarter was, I think, a good start to the year for us as we look forward. As John and I both said, we see continued strength as we look forward throughout the remainder of the year and I look forward to talking to you all on the next call about continued progress that we’re making against our transformation priorities. So thank you very much for joining.
Operator: Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T teleconference. You may now disconnect.
