Gavin Michael: Sure. So, so let’s just start with Silvergate. Our exposure to Silvergate is limited to the consumer funds that we hold as part of the app and the use of their ACH services to sort of facilitate customer flows in and out. We’ve obviously as many we’ve been anticipating issues with where Silvergate is for some time. We’ve been working with multiple other providers to minimize any sort of service disruption we’ve accelerated that work with the recent news regarding liquidation. We’re taking rapid action really to fully migrate off Silvergate entirely. Ensure that, that any of the consumer funds are protected and minimal service disruptions to those that will continue to be part of our app through a web-based experience as we’ve spoken about before.
With respect to Apex, I mean, the €“ again that’s a reinforcement of our B2B2C model, it’s where we embed our services into those of others. Clearly, what we’re seeing across the across the market is dislocation. And through that dislocation we see opportunity and we’ll continue to chase those market growth opportunities where we think we can be effective, efficient and scale and using the platform as a point of leverage.
Jeff Cantwell: Got it. And if I could squeeze one last one in, I just want to make sure that I’m understanding your 2023 guidance; and so what you’re saying is that your revenue guidance, the range you’re giving does not include Apex. And I’m also curious if there has been any moving of expectations in terms of the accretion from that deal over the past few months since you’ve last spoken with us? Thanks very much.
Karen Alexander: Yes, and I can take that. You are correct in your €“ how you followed our guidance. So you’ve given that the deal has not yet closed. At the moment, we’re giving guidance on the organic performance of that. We would expect to update that guidance with a view on Apex after the Apex acquisition closes. I think in terms of, can you remind me the other part of your question?
Jeff Cantwell: Yes. I’m just trying to figure out, sorry, sorry to take up so much of your cue, but I wanted to figure out if your prior commentary on the accretion from the deal is still relevant or if there may be any change in and how you guys are thinking about the deal? Thank you.
Karen Alexander: Yes. And so we provided guidance last year or our clarification last year based on the underwriting that we did on the deal. So we are €“ our plan at this point is to update that guidance once the acquisition closes.
Jeff Cantwell: Got it. Thank you very much.
Ann DeVries: Thank you. The next question comes from the line of Trevor Williams with Jefferies. Please proceed.
Yvonne Jeng: Hi, this is Yvonne Jeng on for Trevor. Thanks for taking my question. Just a quick-one on expenses; can you give us a sense for how the focus on expenses will translate into the pace of OpEx growth in 2023 and how we should think about the quarterly run rate for expenses? Thank you.
Karen Alexander: Yes. So I mean, clearly with the actions that we’re taking and the focus on capital allocation decisions, our operating expenses will definitely decrease relative to where we were in 2022. So to think about what we did in terms of guidance, we have a range of revenue guidance that then builds into where we think will be on a free cash flow basis. And then from there you can see the, basically the usage of cash from an operating expense perspective is going down roughly from a cash operating expense perspective is going down roughly $40 million from where we were in 2022 on at the mid-point.
Yvonne Jeng: Thank you.
Ann DeVries: Thank you. The next question comes from the line of Pete Christian with Citi. Please proceed.
Pete Christian: Thank you. Good evening. Gavin, I was wondering if you could talk a little bit €“ dig a little bit more into, I guess one of the priorities for investment this year is in Custody. Just wanted to dig a little further into that, what areas are you investing within Custody. And generally how are you seeing Custody pricing kind of evolve? I guess there’s a bit of a notion that you’ve seen some commoditization in the space and pricing has kind of come down. Just your thinking on how you could differentiate there in the Custody side, and then I have a follow up?
Gavin Michael: Yes. Sure. Look, I think when I look at Custody; obviously we see it as a core offering to what we do. We’re upgrading our work to be on a more modern architecture, that’ll help increase our agility to meet both B2B2C partner needs and institutional needs. So think about things like automated hot wallets to enable consumer deposits and withdrawals. The ability for us to be able to support an increased range of tokens and protocols including things like stablecoin and yield generating offerings as well. In consideration for things like Staking, we see custody as a growth area. There are more and more of our partners are looking to work with custodial operations like ours. We’ve spoken before about the fact that we run the trust.
We are a QC in that respect. The trust is run as a, as an independent legal entity within our framework. It has its own board of managers as we spoke about during the presentation. In terms of pricing, we’re still seeing the ability for us to be able to take an aggressive approach there just given the specialized features that we think we’re able to offer as we move forward. And the fact that we’re not just providing the technology that underpins it, it’s the risk management practices, it’s for compliance, the cyber, it’s everything that goes around it to build that custody opportunity and operation out.
Pete Christian: Thank you. That’s helpful. And then just curious, we’ve noticed other crypto players; the average crypto consumer is just an extremely passive in the last several months, given the environment. And I was just curious if what you’re seeing on the, on demand for like things like crypto rewards and whether or not, you’re seeing a focus groups and the appeal to for that feature is as strong as it’s holding up relative to what we’re seeing in the broader market.
Gavin Michael: Yes, Pete, I look I think it is holding up. I think the announcement we made today with Caesars is testament to that. I think the ability for Caesars Rewards customers to be able to use those rewards to purchase crypto and that gives us access to millions of customers is a good example of this passive acquisition, this new way to earn as something that is still showing relevance in the market. We continue to work with a number of partners on what the rewards value proposition could look like. Many are interested in it because it allows them to build new engagement with their consumers in their everyday lives. And so we feel that the demand is still there and we think it’s an offering that is somewhat unique by the way we are taking it to market. And we think it’s something that again continues to differentiate us with other players in the space.
Pete Christian: Thank you. And last one for me, Karen I was just curious earn out for Apex. Is that still applicable for 1Q if the deal is not completed by then?
Karen Alexander: Yes. If you recall how we structured the purchase price, we had a earn out of up to $45 million related to Q4 2022 performance, and then there is an additional earn out of an up to another a $100 million of stock-based on 2023, 2024 and a little bit into 2025 performance. So that’ll be measured over time, but the Q4 window where they earned relative to the $45, that is just based on Q4 performance.
Pete Christian: Okay. That’s helpful. Thank you.
Operator: Thank you. The next question comes from the line of John Roy with Water Tower Research. Please proceed.
