Scott Schoenhaus: And I did pick this up from my daughter at daycare so it might be RSV. But anyway, so I’m not going to ask you a question about rate. I just wanted to talk about the interchange revenue. It came down 12% sequentially. I think that’s more than normal trends. What’s driving that? What are you seeing so far in November and December? I’m just trying to kind of extrapolate the spending behavior from customers on the healthcare system. Obviously, it’s a broader talking point in healthcare, weaker or better-than-expected volumes heading into this 4Q €“ calendar 4Q. So any color would be appreciated.
Jon Kessler: Yes. It’s €“ we’re up €“ let me just say we’re up, I want to say, 16% or 17%, something like that year-on-year. Thank you. And so that’s good. But I think typically, Q3 is seasonally our softest quarter for interchange revenue. And that was true here. We saw a little €“ if you look at the different account types, there was a little more softness on the FSA side than in the HSA world. But your €“ this is a tough one to predict, and it does bounce around just a little bit to the tune of a couple of hundred thousand dollars here and we’re there in either direction in a given month. So that’s kind of my thought about it. I mean ultimately, what’s going to drive interchange over the long-term is having more accounts and having people comfortable contributing to those accounts €“ and that’s what ultimately they’re spending, if that makes any sense. But Tyson, anything to really add to that.
Tyson Murdock: I don’t really have anything to add other than to say I think you’re doing some math on that. I don’t think it exceeded my expectations by any means. And I think it was maybe a little lighter, but I think it was well within the window of how I think about forecasting and thinks like that, Scott. So I didn’t see anything particularly other than what Jon mentioned there. I mean the commuter stuff continue to increase a little bit. So that’s always a positive sign that, that continues to kind of be a tailwind. That’s probably the last comment I’d make on it.
Scott Schoenhaus: Okay. Great. Nothing to call up. Just my last follow-up, I wanted to go into kind of the self-help story of your margins. Is the further acquisition now complete as we enter the one-year anniversary? Are there any costs that are taking the guidance at this point? And then secondly, are you still consolidating more real estate? Thanks.
Tyson Murdock: Yes. On the further one, just to go back to other comments we’ve made, we still have €“ the bulk of the synergies are out a couple of years. So when we think about 2024 and 2025 and getting our arms around what they did with technology and getting that migrated over onto our platforms and some of those things landed where we really get the synergies out of it. Those things remain to be seen. And you can see us kind of spending our way through the $55 million of M&A costs that we said would be there as well as we kind of put that in order. But there will be more synergy out in the future relative to that business. That kind of was different, it usually might see more upfront. This was more of a tail because it’s on the technological side.
Jon Kessler: And then second question was, I think was about the real estate we
Scott Schoenhaus: When I was visiting you guys out first in December, I saw a lot of consolidation. I was wondering if there was more plans for condensing office space.
Tyson Murdock: I mean I think we’re in a good spot with what we have. We’ve got a beautiful building here in Draper and some space down in Texas and largely gotten out of most of the other of it, the stuff you see being back to EBITDA is really the stuff that relates to WageWorks, right? It’s not everything. And so you’ll see our €“ you can see also in our financials and you look through there that really fixed asset costs, capitalized are coming down. And we’re going to run the business in a much more vertical way and less capital is always better.
Jon Kessler: But if you’re interested, we do have some if you like to come out and check it out again, we can do a full tour. Actually, if anyone listening to this call, so there is some opportunity there.
Scott Schoenhaus: Appreciate that Jon.
Jon Kessler: We will see it.
Tyson Murdock: Thanks, Scott.
Operator: Our next question comes from Stan Berenshteyn with Wells Fargo. Please go ahead.
Stanislav Berenshteyn: Hi. Thanks for taking my questions. Appreciate the preliminary guidance you provided. Can you perhaps share with us where are you in the process of actually rolling over into new custodial terms? And when do you expect to be sufficiently completed with that process? And then I have a follow-up.
Tyson Murdock: Yes. I mean it’s a good question. When we do this throughout Q4, right, but the majority of the assets come in and that into December, January time frame when they’re actually placed. So when you think about them going into for example, our enhanced rate program and actually starting to drive revenue off of that, it’s in the January timeframe that, that occurs. And then, of course, we’re signing FDIC type contracts over the course of those €“ the last part of December, first part of January timeframe. So we kind of get through that by the end of January when we’ve got all those assets placed and generating revenue.
Stanislav Berenshteyn: Got it. And then for my follow-up, so short-term rates are at 15-year highs, debatable whether we’ve seen peak rates at this point. But I’m sure Jon has opinions on that. But I’m just curious, are you inclined at all to increase the duration of your custodial deposits given where rates are versus prior 10, 15 years of history?
Jon Kessler: No.
