Matt VanVilet: All right. Very helpful. And then, David, when you look at kind of what the growth outlook is in the pipeline over the next couple years, it seems pretty robust, and you’re talking about a pretty big backlog of ARR not yet live. Where do you stand at in terms of headcount investments, whether it’s around the implementation teams or the go-to-market team? Where are we at in terms of the team that’s on the field now, ready to capture all the opportunity versus needing to add headcount? And then sort of wrapped in that, any change in philosophy around using outside partners for some of the blocking and tackling type situations on the implementations?
David Mehok: Hey, Matt. Yeah. First and foremost, I think we still feel strongly about our ability to scale our cost relative to our revenue growth, so full stop on that. Having said that, on implementation, that’s certainly one that we are going to continue to invest in headcount there while investing in efficiencies. We’re doing things more efficiently with our customers. We’re utilizing our global resources more effectively to lower the overall cost of an average implementation, but we still have to add resources given all the momentum we’ve seen on the booking side of things. Sales and marketing, we’ve gotten a lot more efficient there as well, and I talked in the prepared remarks about our ability from a CAC standpoint to continue to get much more efficient, and we think we have more opportunities for efficiency.
Now, it doesn’t mean we don’t have to add some resources as we continue to grow the number of accounts that we’re supporting. Matt talked a lot about the expansion opportunity in the call earlier. We need to have resources that are able to reach out and work with those customers to identify those opportunities and ultimately book them. On utilizing partners more effectively, we’re constantly looking at ways to get more efficient. Partner utilization could be one of those. It’s not something that we’re committed to as of yet, but that’s certainly one of the efficiency drivers that we’re exploring going forward to improve the cost structure relative to the revenue that we’re driving from a delivery standpoint.
Matt VanVilet: Great. Thank you.
David Mehok: Thanks, Matt.
Operator: Your next question comes from the line of Andrew Schmidt [Citi]. Please go ahead.
Andrew Schmidt: Hey, guys. Thanks for taking my questions. Good results here. Apologies, I jumped on a little bit late. Sorry if this has been asked, but could you just talk a little bit more about what’s driving the Tier 2 resurgence? Really good to see. Obviously, there’s probably platform development, environmental things going on, but if you could talk about what’s going on at that size of FI, that’d be helpful. Thanks a lot.
Matt Flake: Yeah, Andrew. I think to some extent we had solid Tier 2, Tier 3 performance last year. It was maybe a little overshadowed by some of the larger Tier 1s we got. We had a solid quarter of a quarter with the Tier 2s and Tier 3s last year, but the performance I would say is a lot of these financial institutions, just the time where they are on the pipe and coming up, but it’s been building in the momentum. The momentum we have with them has been building, and so they have the same challenges that the larger banks do. It’s just a matter of our solution for them. It’s a little bit bigger of a decision. As I was talking about earlier, the larger ones will do retail or commercial or small business. These guys usually take the entire platform, so the conversion for them is converting retail customers, small business customers, and commercial customers, so it’s a little bit — it takes a little more time for them to get organized, make that decision, but we sign more Tier 2s than we do Tier 3s.
We signed Tier 2s and Tier 3s this quarter than we signed in any quarter in last year, and what they’re beginning to realize is not only do they have the advantages of being local, their rates are going to be just as competitive as the Big Four, but they’re able to walk out there and use our technology as a way to compete with Bank of America, Wells, Chase, and Citi and their products, and we’re hearing stories about WINS, taking large accounts from them, whether it’s municipalities, healthcare systems, larger companies, and they’re going out and picking up this business because they have those advantages. Being local, being there to solve the problem for them, and also being competitive on rates. So I think it’s just a matter of — they have to become more efficient, and technology is going to be how they’re going to compete, and they go look at the systems, and we’re the only single platform out there.
We have more customers running on our commercial solutions, which work on mobile phones and tablets and desktops, and that’s what you have to do to win the business, and so that’s what’s driving the demand environment. It’s about acquiring, retaining, and growing deposits, and we’ve shifted from a lending environment to get the deposits, and we’ve been in this business for, it’ll be 20 years in August. We have a great reputation in taking care of our customers and building great products and being there for them, and so that’s ultimately what’s driving the demand.
Andrew Schmidt: Got it. Well said. Thank you, Matt. I think the commercial platform is certainly a differentiator. If you could just touch on the pipeline for a second, I think a quarter ago, it seemed like the pipeline was a little bit more balanced from a size perspective versus last year, and to some extent, I think we see that coming through here. But maybe you could talk about the composition. Is that still the case? And if it is the case from an evenly balanced perspective, does that imply more visibility in terms of timing of field close and bookings and things like that versus maybe the larger wins that can be longer and have more uncertainty? Thanks a lot, guys.
Matt Flake: Yeah. I would say it was probably out of balance last year with the size of the deals we did in the back half of the year, Andrew. I mean, it was steady eddy in that Tier 2, 3, and then this quarter, I don’t want to gloss over, we signed four Tier 1s in the quarter, so it was still a great quarter, but the Tier 2, Tier 3 make up. And you’ve got to remember, a $4 billion bank is not that different than an $8 billion bank from an economic perspective. So, yeah, I mean, I think David can comment on whether we’re going to see some of these go live faster, but like I said earlier, a bank that’s doing a retail small business and corporate conversion that’s a $4 billion or $4.5 billion bank could end up being a nine or 12 month go-live, but I think that you’ll see with the expansion, some of this stuff coming to revenue.
We’re seeing things come to revenue a little quicker, been happy with the results so far. I don’t want to get ahead of us in a guide. David looks at me funny when I do that, but I think we have a lot of opportunity in the pipe as well as in that Tier 2 space and Tier 3 to win deals and get them live a little faster than the largest deal in the history of the company that we signed last quarter, the big four bank for precision lender that we signed last year. So it should come to revenue faster, but David, do you want to comment on that at all?
David Mehok: Yeah. Look, there’s maybe one or two months for some of these deals that we’ll see at the end of this year in terms of revenue recognition, but for the most part, the majority of this revenue is going to start coming through starting next year. And as I said — and I don’t know if you were on yet, Andrew, I know you said you joined a little bit late, but we did talk a little bit earlier about sort of the shape of the bookings and how we see some of that manifest to revenue, particularly on the cross side. So some of the cross bookings or expansion bookings that we have, we’ll see some revenue later in the year for those. And again, we were expecting some of that coming into the year. And then we have some immediate time to revenue like license expansion where we saw a lot of strength during the course of the quarter.
Matt mentioned the growth in Centrix specifically, but that’s one of those areas where we get fairly immediate revenue recognition on that. So feel good about the mix of expansion as well as net new and most of that net new you’re going to see coming online in ’25.
Andrew Schmidt: Got it. Thank you very much. Appreciate the comments.
Matt Flake: Thanks, Andrew.
End of Q&A:
Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.
