Jon Kessler: I mean, that’s the core point, we’re forecasting in this thing, give or take, depending on what midpoint whatever, somewhere between 200 and 300-point expansion in EBITDA margins. And that doesn’t seem shabby. It’s obviously the case that we €“ our view is that we’re going to look at how we do this fourth quarter, and that will have some impact on our €“ on any guidance revisions as well ultimately unit sales and all that kind of stuff. But similar to Stephanie’s question, it seems like a good start.
Glen Santangelo: Yes. I think I get it. I just make sure that I wasn’t missing anything. And Jon, just one other wanted to ask you was, for better or worse, many investors are just looking at the stock as a rate trade. I was wondering if you could maybe take a step back and give us some thoughts around these CDB businesses. Clearly, maybe they’ve been a little bit slower to recover than what you maybe would have thought. I’m just trying to get your sense for how we think about that on a go-forward basis and how those CDB businesses should impact the growth algorithm in 2024 and beyond?
Jon Kessler: Yes. Let me first say, I think that while I understand why investors may do that, particularly if they’re modeling out many years, whatever rate you apply times corpus of zero, equal zero. And mostly what this company has done over the course of time, is it has managed to grow the underlying asset base that it manages of what are ultimately a large number of very small accounts and then in terms of the cash. And so I do think that the sort of underlying €“ the first underlying point before you get to CDBs and all of that, is the underlying growth in what you might think of as units. In this case, units are accounts, HSAs and dollars. And those as we reported today, I think, over time, consistently grown pretty well, both just on their own terms and then relative to market.
Specific to the CDB business, we said at the beginning €“ first of all, we said at the beginning of the year that we were going to see softness in this business. And we talked about basically trying to grow the HSA component of the business to get to a place where by the end of the year, it was through 60% of total revenue. We’re basically there through €“ into this third quarter, and that growth will continue into the fourth. So the first point I want to make on this one is, is that we are very focused on growing the HSA business, which is our core and where we’re a market leader. What I think we are on CDB is €“ and I tried to allude to this in the commentary is €“ we wanted to get this to a place where it was sort of stable where we weren’t talking about this legislative thing or that transition thing or that platform thing causing a $5 million surprise here or there.
And I think that that’s the way I would look at the performance thus far. And the next step in this, in my mind, will be to see what actually we get out of consumer enrollment in the CDB products, particularly the FSA, which is the biggest component of all of that, right, in the current open enrollment season. The assumption underlying our current look at 2024 is I’m going to say €“ I don’t want to say conservative, that’s not the right word, but it reflects what we’ve seen to date and €“ but we’ll see what we actually get. And we’ll be able to talk about it at JPM in a few weeks and then ultimately refine our guidance accordingly. But I think that’s the next step is to see enrollment growth at the consumer level. And we’ve done some things this year that really should help us there around how we engage with consumers that kind of maybe their egg got scrambled a little bit on this one during the pandemic, but €“ and we’re hoping to see real benefits from that, but I want to actually see them first before I project them.
Glen Santangelo: Okay. Thanks for all the details.
Jon Kessler: Thank you.
Operator: Our next question comes from Scott Schoenhaus with KeyBanc. Please go ahead.
Scott Schoenhaus: Hi, Jon and team. Apologies, I’m fighting cold here. So apologies for the nasal voice.
Jon Kessler: To say it’s a cold, but you never know. Like that’s the problem. Everyone says it’s a cold or allergy or something. So you’re on the phone, so I guess it’s okay.
Scott Schoenhaus: I tested negative so far. We’ll see what it develops into.
Jon Kessler: We want to see it. I’m kidding.
Tyson Murdock: By the way, at this point.
Jon Kessler: Yes, you want a full battery of tests.
Tyson Murdock: All right. Go ahead.
