Charles Rhyee: Yes. It seems like you have a lot more first-time downloads. Just trying to see are there any hurdles in getting someone to fully — to subscribe to the product. Or like when you’re seeing your funnel, where do you see people drop off and not follow through?
Matt Franklin: Yes, I understand. We haven’t provided a detailed breakdown of sort of the top of the funnel, all the stages in the process. Overall, conversion, as you mentioned, from sort of initial download to paid subscription is healthy. It’s actually quite good compared to the benchmarks in the health and fitness space. So again, we’re very pleased given the early stages. For us, the key steps, the key moments that we focus on as we download, we do offer a 7-day free trial period. So optimizing that first download to free trial experience and then making sure that, that trial experience results in that paid subscription. So those are the kind of the key moments that we’re focused on improving that overall conversion.
Charles Rhyee: Okay. And then maybe one last for Santosh. If we think about sort of the OpEx reduction expected next year versus this year, how should we think about that mix between R&D, SG&A and, I guess, gross margin?
Santosh Shanbhag: Yes, that’s a great question, Charles. So remember, in 2023, a large part of our operating expenses included the costs incurred with the sales force as well as market access. So with the reduction that we announced earlier this quarter, those costs will not continue to exist in next year’s operating expenses. But we do expect our marketing expenses to go up compared to where we were earlier this year, so you should anticipate that. On the R&D side, as you can imagine, clinical trials will not — we will not have any more clinical trials per se next year other than the registry that Scott talked about. We will invest in product and product development, that will be a key part of our investments next year. At a higher level, I would say the operating expenses really are to help us get a much better understanding and make the customer acquisition cost a lot more efficient.
So our focus next year will be on the unit economics and that’s where our investments will be.
Operator: Your next question comes from Rahul Rakhit from LifeSci Capital.
Rahul Rakhit: I wanted to ask this before but I was just wondering if — since I last asked if you any additional learnings kind of around the pricing strategy. And if there’s been any kind of early trends on users opting for 1 month versus 2 months versus full year subscription.
Matt Franklin: Yes. Thanks, Rahul, it’s Matt. So from that perspective, we continue along the lines of optimizing. We continue to experiment. There haven’t been significant shifts from previous quarter and we do offer that annual subscription of around $130, a monthly subscription at $25 per month. That’s remained stable. The mix between annual and monthly has also remained fairly consistent in the last several months. So that’s settling into sort of a steady state there as well. We will continue to experiment and offer different value propositions to different user segments over time. And it’s just kind of a core part of our focus in the unit economics for next year.
Rahul Rakhit: Got it. Okay. And I was just wondering, you mentioned that Shionogi is going to be looking to submit PMDA later. Is that going to trigger a milestone payment as well or even just broadly, if you can just help us understand potential for milestone payments through this Shionogi partnership would be helpful.
Santosh Shanbhag: Yes. The Shionogi milestone is not triggered by the submission but more by the outcome of the review by the NDA. So that’s where the milestone gets triggered, Rahul.
Rahul Rakhit: Got it. And do you have an idea typically how long that PMDA submission review process last?
Santosh Shanbhag: It would be a wild guess. I mean it’s a regulatory body. They do have a reasonable process. I think it’s — I would say it’s similar to what you would see in the U.S. but there are no specific dates or milestones that they march towards unfortunately.
