And we’ve been – in other words, we’ve been able to export some of the great innovation we see in Print Group and to a lesser extent, but a growing extent PrintBrothers into other parts of Cimpress. And that CapEx required for that has prevented CapEx in other parts of Cimpress. So we’re very happy with the returns we’ve seen so far. And then finally, we’re confident that all of this CapEx we’re talking about, if you look at it as an overall portfolio is high return, it’s also behind our growth and it’s improving our competitive advantage. So we’re pretty comfortable with what we’re doing there.
Meredith Burns: Great. Thank you, Robert. All right. We’re going to switch from CapEx to cap software. This one is going to be for Sean. The amount of capitalized software in National Pen and all other businesses seems very high relative to their contribution to Cimpress overall. Why are they so elevated? And how are these investments expected to evolve moving forward? And I’ll just say the reason why the person who asked this question knows this is because they’re reading our financial and operating metrics spreadsheet, which we post on our website every quarter. So a way to go to the person who asked this question looking at all of the documents that we provide.
Sean Quinn: I’m sure whoever asked this appreciates that, Meredith. Yes, so National Pen’s capitalized software has been pretty consistently 1% of revenue for the last, I think, four or five years. BuildASign for that same time period has been about 2%, and that’s been consistent as well. We don’t talk about it as much as we did the Vista tech transformation. But each of these businesses has done a lot in terms of rearchitecting their e-commerce front-end, but also building additional services on top of that, that also leverage MCP. And so that’s very much been in play for – yes, for the last four or five years. And we’re through a lot of the heavy lifting on that. So we should see leverage out of that as we look to the future.
But that’s why these capitalized software levels are where they are. And I think if you look at National Pen, for example, is 1% of revenue, but where their growth is coming from is in the e-commerce segment, Pens.com, and that’s been very strong growth that is becoming more and more of the mix. And so I think that the – if you look at the capitalized software relative to the absolute growth there and just the size of that channel now, which is going beyond $100 million and growing high teens, low 20s percentage. If you look at it from that perspective, I would say that capitalized software investment has been productive.
Meredith Burns: That’s great. Thanks, Sean. All right. I think I’m going to switch gears now. We’re going to talk about cap structure, capital allocation, fun stuff like that. So Sean, I’ll stick with you for this next question. What is the timeline for refinancing your high-yield notes? Is there still a place for them in your future cap structure given your new leverage policy with a lower target?
Sean Quinn: We haven’t made decisions on either when or how we’ll refinance the bonds. And we have time before we need to make those decisions. We do like having both secured and unsecured debt in our capital structure. And so yes, we do think that remains a place for unsecured debt in the future. And the reasons for that are – there are a few, but diversification of the capital base is a good thing. Keeping secured capacity is a good thing. And also, over time, gives us some optionality because we do expect that our base of profitability is going to grow and therefore, we’ll need to access some of these markets in the future. As I said, we don’t have a specific timeline. We still have a little more than two years before our high-yield notes mature.
And starting in just a few months here, we can call the bonds at par. And so we’ll keep a close eye on where the market is at. I think for us, we’re going to just continue to focus on consistent execution and what we’ve outlined even for our leverage expectations between that and the continued strong results should position us to have further credit rating upgrades as well. And all of that should be favorable when we eventually do come to market. So feel like we’re in a good spot there.
Meredith Burns: Thanks, Sean. Great. Okay. I’m going to ask Robert this next question. So Robert, it was great to read that we repurchased 5% of the float at what – at what we believe to be an attractive price to IVPS GAAP. What IRR do we typically target with our repurchases so that we can objectively say that repurchasing $1 of stock is better or worse use of capital than investing $1 in automating process X, Y, Z?
Robert Keane: Okay. Let me just quickly answer your specific question and then give some context. I’d say 15%, and then I’ll come back to talk about that in a little bit more detail. So I share – we share your point of view that it was an attractive price relative to our intrinsic value per share. And if you look at it via other metrics, it was roughly 8x trailing 12-month EBITDA, and you can do the multiples of unlevered free cash flow or free cash flow or steady state free cash flow. And again, those are all indications that it was also an attractive price. Now there’s a few ways we look at returns on our share repurchases. Again, as you point out, your question, the most important thing is what our estimate of intrinsic value per share is relative to the price we can buy the shares at, which drives that.
But we also look at cash flow yield, what we expect that cash flow to grow over time relative to what we pay per share. And of course, alternative investments, what can we do to improve the customer value to drive our competitive advantage. We believe we should be targeting an IRR on these in excess of 15%, which we believe is happening when we look at the purchases we’ve made based on the information we have. And so we think that they also will have a very attractive free cash flow per share return over time. So going back to alternative investments, that is a really important question. We look at other opportunities where, in general, all things being equal, we’d be biased towards organic investments, be that OpEx or CapEx first. When we are sticking within the leverage guidance we just provided last night and the policy we just described and where the returns and the profitability justify those investments organically on the individual projects.
