Operator: Our next question comes from the line of Darren Aftahi with ROTH MKM. Please go ahead.
Darren Aftahi: Hey, guys. Thanks for taking my questions. Nice job on the progress. Jon, so I just want to make sure I heard you correctly on your last comment that responding to Eric’s question. So if you were to strip out political a year ago, you actually grew year-over-year. Is that correct?
Jon Niermann: Yes. For the core business, yes.
Darren Aftahi: Got it. Okay. That’s helpful. And then maybe another question on the attrition of the players. So there’s always the attrition of a unit and then there’s revenue attrition. So it sounds like a lot of the players didn’t get upgrade cycles with technology, et cetera, or maybe weren’t efficient in yielding any kind of revenue. So I guess my question, is there a way to quantify what kind of revenue impact attrition there was with those 3,200 players?
Jon Niermann: Just based on those 3,000, it’s, I think, a little difficult, Darren, to say exactly what that would be. But we know not as meaningful in the sense that we’ve still maintained a majority of the players that are generating the revenue. So put it this way, it’s not like those that we lost were generating a ton of revenue and then they’re gone. So if that’s kind of your question. It’s basically is very, very minimal. So those that were coming off are off for a reason, primarily. And they’re either not using a player like they should or they’re not the ideal location or demographics. So for us, it’s not a bad thing. It’s really just kind of part of the natural growth process and evolution.
Darren Aftahi: Great. And on your gross margin, it looks like that improved. I’m more curious on two things that relates to that. One, with bringing on a large partners you did in the last quarter, this is sort of the first full quarter of having that partner on and whatever, 42,000, 43,000 screens. One would assume based on the initial deal you did with your first partner; gross margins maybe would have been lower. So I guess my question is, is your second partner having a different gross margin profile than your first and then have an over-index impact on gross profit in the quarter?
Jon Niermann: Yes. As we continue to grow distribution, our leverage grows and the opportunity to do better deals certainly happens. So any historic deal that we might have done 1.5 years ago, a deal that we would do today wouldn’t look the same. But I think, yes, we see a better impact on the bottom line, a better share for us.
Neil Watanabe: Darren, even though we talked about expansion on the partner platform, it still carries a lower margin, but less operating expense than our Loop Players. So as we add that on, pace is higher in the quarter than what our Loop Players is from a sales standpoint, we’re always going to have some of that rate percentage difference that will bring the rate down. But again, the profitability, as we’ve talked about is very similar to the partner platforms of the Loop Players. But mix that we talked about on the discussion or in the press release is part of the reason for where that rate can sometimes be compressed a bit.
Jon Niermann: But it is a better rev share back to Loop, Darren, which I think is the key thing.
Darren Aftahi: Got it. That’s helpful. And just if I could sneak one more in. Local, I know you guys launched that. I think it was sort of piloted in the quarter we were in. I don’t think any local revenue contributed to the quarter, maybe correct me if I’m wrong. But I’m just kind of curious about your aspiration, thoughts and prospects for local as we go into calendar ’24. Thanks.
Jon Niermann: You’re right. For the quarter, nothing meaningful to kind of really full beta through the quarter, kicking in now, again, towards the latter half of the year. So I think you’ll start to see it more in the second half. But we’re certainly still very optimistic about it. We just want to make sure that it’s working right, and it’s being tested, which it is, and everything from the type of images that they use. Is it video? Is it still? There’s just a lot of learnings that we’re pulling out of the beta that will make it easier for us. And we’ll be able to then, I think, monetize it much better as we’re going along.
Operator: Our next question comes from the line of David Marsh with Singular Research. Please go ahead.
David Marsh: Yes. Hi. Thanks, guys, for taking the questions and congrats on the quarter. I mean, it seems like some real improvement here. First, quick housekeeping. What is the nonrecurring expense of 257k and how long do we expect that to be popping up in the financials?
Neil Watanabe: David, that isn’t expected to continue. We had some expenses that were related to some capital raise activities that didn’t consummate. So we recorded that as a sort of a onetime expense that we added back in that nonrecurring transaction line, but at this point, as you can go back marching through our historics, we haven’t had much of the nonrecurring. So it’s, I think, an isolated situation, at least for that one quarter.
