Mario Marte: And then when it comes to top line, active customers NSPAC, Nat, we are not assuming any material impact for those from the launch at this point.
Sumit Singh: Yes. Any impact — we’re not assuming any impact to core as well. Yes.
Operator: The next question is from Anna Andreeva with Needham. You may proceed.
Anna Andreeva: Great. Two questions. In the past, I think you talked about international growth and margin expansion simultaneously. So could you talk about the specific buckets of investments in ’23? And international typically takes a while to scale to domestic profitability. So does this change your longer-term goal for high single-digit EBITDA margin? That’s my first question. And then secondly, you mentioned net adds improving in the back half. Are you seeing any improvements in the business quarter-to-date to give you any confidence for that back half improvement?
Mario Marte: Anna, this is Mario. I’ll take the first question, and Sumit will answer the second one. But when it comes to the investments in international, most of that you’re going to see in SG&A and marketing. As we said, the 50 to 75 basis points, you’ll hear us say that a few times. The largest portion of that is going to be international. No real material impact top line, gross margin, et cetera, in terms of investment for international launch.
Sumit Singh: The only thing to add, Anna, there is as we ramp up demand, we’re going to view the market opportunistically. And if there is an opportunity to invest at the top — to drive top line, there may be some gross margin impact there, but all of that is built into our guidance today. And then your second question — go ahead.
Anna Andreeva: Okay. That’s helpful. On the net add improvements in the back half. Just curious, if you’re seeing any improvements in the business quarter-to-date to give you confidence there?
Mario Marte: Well, what we said on the early remarks was that we expect net adds to begin to improve in the second half of the year for that active customer base to grow in the second half of the year. We’re stepping into it carefully into the first half. We still have the long tail attrition from the 2020, ’21 cohorts to work through. And of course, there’s still some somewhat subdued demand for — in the discretionary categories, hard goods. So we expect there will be more in the second half of the year.
Sumit Singh: And, Anna, our gross adds rate continues at mid- to high single digit higher than pre-pandemic and our reactivations also continue to be strong. So to the extent that those could be considered signals, I think you could take that into account, and then Mario’s answer kind of rounds out the perspective.
Mario Marte: Yes. I would add to that, Sumit, the retention for those cohorts is basically in line with what we have said in the past. So that’s also a good indicator for us that things are stable on that end.
Operator: The next question is from the line of Mark Mahaney with Evercore ISI. You may proceed.
Jian Li: Great. This is Jian Li for Mark Mahaney. First, I want to just ask on — I guess, higher-level question on the international. If you can just talk through what is kind of the TAM opportunity you see for international market? And how are you going about — like what’s the game plan for expansion? Are you thinking about it mostly — it sounds like it’s going to be organic expansion. Are you considering inorganic? And if you can kind of talk through the key regions? That’s my first.
