Paul Lalljie: Yes. And Ryan, we refer to these as capital light, meaning very little from a launch perspective in comparison to the traditional launches that we had. From a CapEx perspective it’s almost non-existent. And then from a total cumulative cash to launch, we’re looking somewhere between $500,000 and $1 million depending on the program. It’s closer to $500,000 for some and closer to $1 million for others. But the bottom line is it is not something that put a constraint in our resources as we think of launching a large number of these programs in any calendar year. It is something that we can definitely afford to do in the calendar year in large volumes, like, for example, 25 as we are targeting here.
Ryan MacDonald: That’s super helpful color. I really appreciate it. Maybe just one more for me, Chip, on the Emeritus announcement, really interesting opportunities obviously drive new revenue streams outside the U.S. Just curious where you’re at in terms of getting the content on the edX platform? And how should we think about potential contributions to 2023 revenues from that relationship? Thanks.
Chip Paucek: We’re excited about it. Ashwin and his team have built a great company with infrastructure in that market that we don’t have. And while in the past, we might have thought of launching actual sort of folks in that country, partnering with a company like Emeritus that has great payment options for learners and infrastructure makes a ton of sense for us. Now Ryan, everything takes time. So we do think this will build into something more meaningful as we go throughout the year and notable that as we bring in that revenue, we think it creates an opportunity for an improvement in margins. So we also have a couple of relationships like that, that are in play right now. And our plan is to talk about that strategy in a little bit more detail at Investor Day where we have more time to give you a greater amount of the story.
Ryan MacDonald: Thanks. Congrats again.
Chip Paucek: Thanks, Ryan.
Operator: We will take our next question from George Tong with Goldman Sachs. Your line is open.
George Tong: Hi, thanks. Good afternoon.
Chip Paucek: Hi, George.
George Tong: Hello. You mentioned that the cash to launch a flex program to range from about $500,000 to $1 million. How much would you estimate full degree programs would cost to launch at this point? And how would that compare to prior launches before you embark on your overall restructuring and platform strategy.
Paul Lalljie: Yes. So currently, George, somewhere between $2.5 million to $5 million is our cumulative cash to launch a regular program. Of course, size matters when it comes to those, but $2.5 million to $5 million is a good ballpark at this time.
Chip Paucek: And the two variables there, George, would be the content and some programs are more expensive than others. But the bigger variable interestingly is the marketing because as the program grows more quickly, it actually consumes more cash in the early stages, but it therefore generates a bigger number at steady state. So when we have something launched, it does really well. Now we do think, over time, edX probably changes that, too. So like the domain authority of edX allows us to generate high-quality content from an SEO perspective in a way that we just didn’t have access to anything like that before. So we think that, that’s a meaningful lever when you start thinking about the next 5 years. SEO takes time but over the next 3 to 5 years, we should be able to see a great opportunity to drive that down.
But the faster a program scales the more cash it will burn in the short period. We’re pretty excited about the response to the AI degree. We’ve never really seen anything quite like it, to be honest, it outpacing anything that we’ve done in the past, including our Morehouse undergrad program.
