So they’re are a couple of the areas that I would say that we feel good about leverage. Again, R&D is one we’re always going to be very mindful of because that’s kind of the key to our future success. And so we’ll continue to monitor that and determine kind of what the right spend area is there. But again, I always hate to put a little bit of a governor on that just given the opportunities that are out there with our blue chip customer base.
Operator: And we’ll proceed with the question from Steve Enders from Citi. Steve, go ahead.
Steve Enders: Okay. Great. Thanks for taking the question this morning. I guess I want to ask a little bit about the Shopify partnership that was announced recently. I guess how does this — I guess how does this relationship kind of come together and evolve? And how are you thinking about where — how this changes the customer base and how you kind of go after and attack the mid-market moving forward here?
David DeStefano: Yeah. Super excited, Steve about this new opportunity. The team has worked incredibly hard. It started because we had a number of customers that were in the — that had made acquisitions over the years or whatever and suddenly had a division that was using Shopify. And they were not comfortable with the answers they were getting in tax, relative to what they were getting in ERP. And so our customers and our team went to Shopify and talked about new opportunities, we could work together if they would open up their API. As they were aligning their strategy to move upmarket to the enterprise space, they saw it as the natural adjacency of what they want to do in tax was to work with us. And so it really has played out perfectly. And I see it as opening up as you know both the middle market and the enterprise market for — to align well with Shopify strategy.
Steve Enders: Okay. Great to hear. And then John, I guess I just want to get a better sense for now that we’re through the ERP implementation, did that have any impact on billings or cash collection in the quarter? And I guess what kind of recovery did you see from 2Q on that front and 3Q? And how should we think about that going into Q4 as well?
John Schwab : Yes, Steve, good call-out. On the last call, I did mention that we did see a little bit of a slowdown in some of the collections at the end of the second quarter. I think as mentioned we started to see that come back in the third quarter and feel very good about that Now as I think about look to the fourth quarter fourth quarters are typically our largest kind of cash generation quarter. A lot of the billings go out a lot of those year-end customers. And so we feel very good about the processes and where we stand with respect to the new ERP system. And so I don’t know that there’s any significant change with respect to what we should think from a result standpoint because of any of that because of the move to the new system.
Steve Enders: Okay. Perfect. Thanks for taking the questions this morning.
John Schwab : Thanks very much, Steve.
Operator: From Adam Hotchkiss from Goldman Sachs. Please go ahead.
Adam Hotchkiss : Great. Thanks for taking the question. David I just wanted to follow-up on the partner front a lot new here with SAP Microsoft Workday and now Pagero and Shopify. I recognize there are idiosyncratic drivers of all of these. But if we take a step back is there any commonality in what is giving you guys the edge in each of these ecosystems and why things are inflecting now?
David DeStefano : I think the market we play in is the most desirable market the enterprise and upper mid-market and that’s where these players all want to align. And given our brand and reputation our partner ecosystem with the SIs and Big 4 and the influencers that are so critical to winning these deals I think they see they can — there’s a real symbiotic — back to Shopify is a great example. We’re going to help them win deals in the enterprise space. I mean that’s part of their rationale for working with us in that opportunity is we can actually help them grow their base as well. And so I think that’s the symbiotic whether you look at a Pagero, which sees itself already as an enterprise and mid-market player they’re going to get access to a much broader customer base with a much larger invoice volume which they see as very attractive for their growth opportunity and it works perfectly with what we need to do to support our end-to-end compliance needs for our customers.
So I think that’s the reason you see the magnet being drawn our way.
Adam Hotchkiss : Okay. That’s really helpful. And then I noticed you added Chirag Patel as CSO intra-quarter. Just what was the driver of making the change for that role? And what gaps are you looking to fill there?
David DeStefano : Yes. Chirag brings an incredible resume is a serial entrepreneur was at EY has had his own start-up businesses over the years successfully transitioning those. Grew up his legacy in Oracle so he understands our space incredibly well. And as we think about innovation John was highlighting R&D spend and the importance of that we still see a lot of frontiers so there’s opportunities. And I think Chirag’s going to bring a keen eye and a discipline that will help us be even more efficient and effective at driving new opportunities in the market. So I’m really excited about bringing that kind of talent into Vertex.
Adam Hotchkiss : Really helpful. Thanks David.
David DeStefano : Yes. Good talking, yes.
Operator: And our next question comes from Alex Sklar from Raymond James. Alex, please proceed.
Alex Sklar : Great. Thank you. Dave on the e-invoicing partnership with Pagero, can you just help frame what percentage of your 4,300 customers have international operations that e-invoicing is going to be relevant to. And then any rough range in terms of what an ACV for that solution might look like given you’re working with the partner there?
David DeStefano: Yes. I can’t — I mean I can — all I can say is the predominance of large multinationals by nature at the enterprise space and upper mid-market space operate in more than one country. So it’s certainly a unique opportunity that our base is seeing as a problem set that they’ve been solving with point solutions and they’re not happy. And it was a key driver to the whole strategy was to bring together a global solution with a global provider. And we really see it as a great win. I’m not — we haven’t gotten into any of the pricing on a public basis. But fundamentally, if you think about the invoice volume that the types of customers we work with running through these countries, it’s certainly a — we see it as a very sizable opportunity as we think about our revenue growth rate looking forward in ’24, ’25 and beyond as customers start to move to more of a global solution for their e-invoicing.
Alex Sklar: Okay. That’s great color. John just following up on Steve’s question regarding free cash flow. Outside of the billing timing and that’s snapping back there, can you just give some added color on the right way to think about EBITDA to cash flow conversion? And if there’s any way to quantify what may have been a nonrecurring component of CapEx this year as we think about 2024?
