Jay Fulcher

The couple hundred million dollars that we had to work with was going to really serve us over the course of the next several years.

Yeah, the initial transition of what we call our book of business, which was the insurance business that we had, and that was a very large business at the time.

Can you quantify it?

Yeah, that's a business that was coming up on $100 million in revenue.

That was a substantial kind of transition as you shift that to third parties.

And so for some of the customers who potentially wanted to work with any and whatever broker they wanted, or if, in fact, they really preferred to work with Zenevitz as their broker, it

gave them an opportunity to think about for the first time well what brokerage relationship do i really want and so there's some breakage that occurs in that kind of a transition which is exactly what we what we expected we were really excited that not only in all of the modeling that we did in that process um we actually lost a lot fewer customers than we sort of expected to but the most exciting part of this is that when we moved uh everyone um off of our brokerage

We also basically moved from a freemium model where people got our software for free in exchange for the brokerage commissions that we received to a subscription pay model.

And, you know, the thing that was clearly a huge point of validation for me that I was excited about is more than 70 percent of our customers moved with us.

That's right, we don't have margins in the 85% range, and I know that in the past I've heard you say that you talk to a lot of companies that claim that.

I'm actually dubious about that, but the reality is that- Do you think they're lying?

I think that there is a lot of interpretation around COGS.

Well, I think rather than going through sort of an accounting tutorial, I think it's more of a situation where there's a certain amount of fixed costs that are sort of at a floor.

We're sort of at the 65% gross margin place right now today.

Over time, by the way, each incremental dollar I put on top of that floor causes that 65% to start to get into the 85% range.

So I do believe

that we have some targets that get us into the 80% plus gross margin range.

My view is I believe that we're sort of somewhere between 12 to 18 to potentially 24 months away from that.

We're a pure play subscription software company and we're basically focused on HR payroll and we think really importantly benefits.

So it's on a single platform and