Nathan Schultz: Thanks, Josh. It’s just two questions. As you would imagine, the first steps in our path to get back to a place where we’ve got durable programs around new acquisitions, total subscribers and positive revenue growth starts with our engagement on our platform, just in the fact that we’re seeing more questions that is coming from more students being engaged on the platform and those students asking more questions themselves, which is driving up total time on the platform. So, overall, encourage. We think that next step around the conversational component is the one that really starts to elongate those sessions even more and starts to generate more value for the student. So today, we’re really driving a use of what we are known best for, which is writing high-quality learning solutions that are tailored to the student.
That’s the flywheel we were built off of. That’s the flywheel that’s spinning faster than ever. That’s the flywheel we’re very encouraged by and we’re going to continue to see that engagement elongated with students’ usage.
Operator: Our next question is from Brent Thill with Jefferies. Please proceed.
Brent Thill: Thanks. I guess, Dan, the question of why now? And I guess just as a quick follow-up, having covered tech for a long time, given the deceleration of revenue growth, few companies are preserving margins. Maybe at the same level, why not choose to make some more investments in broadening the platform and adding additional modules on, rather than focus on just margins?
Nathan Schultz: Hey, Brent. Great question. This is Nathan. I’ll take it. We’re going to actually — we’re continuing to invest in our platform. I want to make sure that that’s all understood. We’ve built into our financials already the investments that we’re making in AI, that’s already been built into it, and we’re going to continue to expand those with the traction we’re seeing, we’re looking to go even faster with the rollout of our personalization platform. So, no one’s taking — no one’s putting the brakes on. What we’re — all we’re seeing in our prepared remarks is that we understand that this is a transition we’re going through. We understand that we’re on a multi-year path to regrow the company, and that takes time. And during that time, we want to be prudent in aligning our expenses with our current performance.
Dan Rosensweig: And, Brent, hi, it’s Dan. I just want to again congratulate both David and Nathan. The why now is pretty easy. The company is ready. The company is ready for this transition, which is Nathan and I have been working together for a long time with the board on a — on a really well prepared transition. With David stepping into the role as a CFO and with the hiring of all the senior leadership team, now is the right time. In addition to that, the company has gone through a series of transformations since we’ve been here for the last 14 years, from almost going bankrupt several times to a point where we’re profitable and generate free cash flow. The AI opportunity is so powerful and has the chance to be so big that having this new team in place to drive it for the next five, 10 years is exactly what we want to have happen, because the TAM should expand, the margins can expand, and so we want this new team to really take this and drive it.
And after 14 years, I thought this was the exact right time, so did the Board, and I just couldn’t be more proud of Nathan. I mean, I’m really excited about the company’s future, and I will be remaining — involved with Nathan, and so let’s go.
Operator: Our next question is from Devin Au with KeyBanc Capital Markets. Please proceed.
Devin Au: Great. Thanks for taking my question. David, with the second quarter EBITDA margin guide implying, I think, 24% at the midpoint, and in your remarks, you kind of talked about the expectations of second half margins to be stronger through accelerating efficiency efforts. Could you just elaborate on what these efforts are? And without the top-line leverage, what’s giving you the confidence that you can protect your margins in the second half? Thanks.
David Longo: Sure. Thanks, Devin. We believe we’ve always been efficient with our spend. If you look at our spend Q1 this year versus last year, we were $10 million better this year than last year. The full year 2023 was better than the full year of 2022. We expect that we’re going to look under every rock we can find and keep being efficient so that we keep driving EBITDA and cash flow to create shareholder value. And I look forward to continuing to report that later this year.
Operator: Our next question is from Alex Sklar with Raymond James. Please proceed.
Alex Sklar: Thank you. I want to follow up on Ryan’s question around the pricing and packaging tests internationally. It sounds like you found the right balance there. And I was just hoping you could elaborate a little bit more on how that average pricing and conversion rates look like now relative to a year ago? And you also talked about seven markets. Any new countries you’re investing behind or pulling back on relative to a year ago as well? Thank you.
Nathan Schultz: I appreciate the question, Alex. Let me start off on the markets. No, there are no new markets here. The ones that we have identified, we see a lot of leverage in, we see a lot of similarities between the student experiment — experience, I apologize, a lot of leverage between what we need to build for each country as we begin to local — even though some of them will be in different languages, the actual student’s job to be done and why they’re coming to the Chegg platform allows us to get a lot of leverage with the technology we’re building. I don’t want to have you walk away and say we are done on the pricing and packaging side. We have found a lot of — we have some goodness there, obviously, with new customer growth up 2.3% year-over-year. But we are not done on the pricing and packaging side internationally. We’re going to continue to optimize that to make sure we can capitalize net with customers as possible.
Operator: Our final question is from Alex Fuhrman with Craig-Hallum Capital Group. Please proceed.
Alex Fuhrman: Hey guys, thanks for taking my question. Just wanted to kind of drill into the target for 30% EBITDA margins a little bit more. How exactly should we expect to get there, as we think about potentially pulling back on sales and marketing or G&A or research and development? Is there some level of growth internationally or elsewhere, that you would need to hit that target for next year? And then I think you alluded to seeing some cost cuts in the back half of this year that should get the margins going. Are we going to see kind of a path to that 30% by the end of this year, or is that really more something that we’ll see when we get farther into next year?
