Deborah Belevan: Next question comes from Chris at UBS.
Chris Kuntarich: Great, thanks for taking the question. Can maybe just going back to the max tier, are there any markets that as of right now, as we just kind of think about the cost of Gen AI, where it’s just simply too restricted to be rolling out, rolling out the max tier? And can you maybe kind of give us a sense for what that scale is?
Luis von Ahn: Yes, there are markets where we do not plan to roll it out given the current cost. These are usually very low monetizing markets. It’s markets like India where we have a lot of users, but not a lot of payers. Generally, we expect that in the markets that monetize pretty well, Western Europe, the English speaking world, Japan, Korea, that we’ll be able to roll out max because it’s fine. Now, that said, we expect that the cost of generative AI, the cost of large language models will go down. So over time, we’ll probably be able to roll out everywhere. That’s my hope. But for now, our intent is for the rest of the year, you’ll probably see us in kind of higher GDP countries.
Chris Kuntarich: Okay. That’s very helpful. And just kind of curious about how you guys are thinking about that LTV to CAC for Max. I think you touched on a little bit earlier, but just as we think about it across the various plans, how does that kind of compare the core super subscription family plan versus Max? And then then just a quick follow up on another question, Matt, you had mentioned kind of thinking about 60% DAU growth going forward. Is that also the right framework to kind of be thinking about 2Q? Thanks.
Matt Skaruppa: Yes. So on the LTV side, we primarily because most of our acquisition comes from organic word of mouth. We mainly focus on the LTV side of that equation. And so it’s basically right now that the family plan has a higher LTV than the super plan because it has a higher price and higher retention. Max right now could have a higher LTV depending on a bunch of variables that go into it, but mainly what price we end up settling at and what feature set goes in there. So that’ll remain to be seen. Right now, if I had to put pen to paper on it, the LTV of Max is higher or expected to be higher over the medium term as we both refine the pricing and then the costs of the Gen AI features come down. So but we’ll have to see. We have to we have to experiment with it over time. And then the — what was the second part of your question? Can you remind me?
Chris Kuntarich: Yes, just on the 2Q DAUs, you comment about 60%. Is that kind of the right framework for 2Q?
Matt Skaruppa: Yes, I think that was Luis’s comment around the fact that, we accelerated up over ten quarters from, 40 some odd percent to about mid-50s. And then from the mid-50s up to the mid-60s, it kind of ticked up, not a ton over the course of several quarters. And so, you know, right now we’re feeling very good about being in that range for a while. As Luis said, and I’ll steal from him, it’s hard to say how long a while is, but we feel good for definitely for Q2 and for most 2024.
Chris Kuntarich: Understood. Thank you so much.
Deborah Belevan: Thanks, Chris. And the next question comes from Alex Sklar of Raymond James.
Alex Sklar: Great, thank you. Maybe just sticking on that LTV topic that you just kind of hit on, but on LTVs and retention broadly after maybe family plans, which seems like that’s been the most successful newer development to date. What are some of the biggest tests you’re still looking at to kind of further move the needle in LTV and retention metrics?
Matt Skaruppa: Probably in terms of tests, continuing improvements of family plan and family plan, it was it was very good, but it was just it’s kind of a bare bones feature. So we expect that that that will have that there will be a higher shift to family plan, which should increase LTV. And then the other big group of tests is Max. Like Matt said, our expectation is that Max will end up having higher LTV, but it’s hard to say. But we are that’s what we’re working on. And hopefully that we’ll be able to find a set of kind of where each feature goes so that Max is actually a big win on LTV. But it’s very hard to guarantee that right now.
Luis von Ahn: Yes. And Alex, I would just emphasize that the LTV of our annual subscription product is very good and we have plenty of free users to go convert to paid. So I think there’s a big amount of LTV to still go get in our in our free users as well. So just don’t want to skip over that. But family plan is great. Max is going to be great. But the normal course of more users converting more of those to super even produces a ton of LTV. And that’s core to our strategy this year and in the near term.
Alex Sklar: Yes, that’s super helpful context. It’s a very fair point on the on the big MAU base. The AU base will go get Matt. You’ve Matt, maybe this one’s for you. You’ve talked about tracking kind of at risk paid subscribers in the past. I’m curious if there’s been anything from a macro standpoint just in terms of consumer health that you’re picking up in the numbers behind the scenes right now.
Matt Skaruppa: Yes, we haven’t seen anything. You know, we track that metric and a bunch of others to see how our subscriber base is doing. And, it looks pretty consistent with 2023. So not to say that that couldn’t develop, but we haven’t seen anything so far this year.
Alex Sklar: All right. Great. Thank you both for the time.
Deborah Belevan: Next up, we’ve got Ross Sandler from Barclays.
Ross Sandler: Hey, guys. Thanks for taking my question. Awesome. So the DAU was already answered. So I appreciate that 60% comment. But I guess as we go back to converting DAU or MAU TTM to payers, that conversion rate’s moving around a bit. So with the I guess what explains the variation we’re seeing there between geo language corridor or like product changes that you guys are doing to kind of have that payer ratio fluctuate as it is.
Matt Skaruppa: Ross, what metric are you keying in on? Are you’re looking at any subs per MAU or what’s the metric you’re saying is moving around?
Ross Sandler: Yes. So, well, the DAU decel,[ph] I was going to ask why is that happening in the March quarter, first of all, but I think you kind of answered it. And then it’s going to reaccelerate to 60 in the June quarter. But your bookings guide is kind of decoupling a little bit. So these types of variations, that would be the key. The question is that stuff that you guys are doing with the product or is it something else with these corridors that we need to understand? That’s all. Thank you.
Matt Skaruppa: No, no, I appreciate it. And I appreciate you giving us a chance to clarify. So for Q2, I don’t think Luis was saying that Q2 was expecting to be exactly at 60. I think he was saying April was faster than the 54. And so we feel good about being in the range there. I don’t think that was meant to be. It’s going to be 60. It’s around there, plus or minus. It’s just the normal course variation that comes from a great organic growth story that you don’t have a point operated lever on that. So you can’t dial that into 57.2 if you wanted it. Right. So it’s varying. It’s 55, 60. It’s going to be in the range. On the payer side and the bookings, what I would say is that Q2 is typically a slower quarter for us. You can see that in the seasonality.
There’s nothing all that interesting in that because it doesn’t have any of the onetime things that we do throughout the year. So it doesn’t have New Year’s promo, which is in the Q4, Q1. It doesn’t have back to school, which is Q3. Q2 has got just kind of a normal course order. And it’s historically been one that just kind of goes with the flow. So I don’t think you’re seeing anything that we’re doing necessarily with the product driving a bunch of volatility. It’s just kind of normal course stuff.
Ross Sandler: Thank you.
Deborah Belevan: And next question comes from Arvind Ramnani at Piper Sandler. Arvind, you’re on mute.
Arvind Ramnani: Yes. Can you hear me now?
Matt Skaruppa: Hi, Arvind.
Luis von Ahn: Hey, Arvind.
Deborah Belevan: And you just went back on mute.
Arvind Ramnani: Can you hear me now?
Luis von Ahn: Yes.
Arvind Ramnani: Sorry. I’m on the road. So sorry for any background noise. I want to ask about your India kind of business. Right. I mean, you indicated like those are kind of markets that don’t really have a kind of high tolerance to pay for or they have a higher tolerance for advertising. And maybe that’s kind of the market. But is there a different price point that will make them an interesting market from a subscription, pay subscription basis?
