Liz Coddington: Yes, so a little bit about FAS. So in terms of the impact on gross margin in Q1, FAS was less than 10 basis points impact on our overall gross margin. So relative to the size of FAS compared to the overall size of our business, it’s a bit of a drag, but not a huge drag on gross margins. The reason that FAS impacts our gross margins is because of maybe because of the fact when people join FAS, they pay a fee for the delivery and we are cost to deliver that hardware is more expensive than the actual delivery charge that we charge the customer. And so as we grow that part of the business, you see that impact to gross margin in the first month of the FAS subscription.
Aneesha Sherman: Really helpful. Thank you.
Operator: Thank you. One moment for questions. Our next question comes from Eric Sheridan with Goldman Sachs. You may proceed.
Eric Sheridan: Thanks so much for taking the questions, maybe two if I could. In terms of FAS, has there anything you’ve learned so far on the subscription side that we might see you extend out subscription options into other connected fitness hardware products over time? I’m thinking around, elements of relaunching, Tread and trying to come back to market with that with maybe a new messaging. That would be number one. And then I just want to make sure we understand the messages on the app strategy and what you’re seeing. In terms of applying marketing dollars and ROI, how would you characterize the success you’ve had in terms of the free tier of the application layer versus the paid tier and elements of how the conversion funnel continues to sort of evolve for the application strategy? Thanks so much.
Barry McCarthy: Let me jump in on FAS and I’ll say a few words about app strategy and then ask Leslie to join. And I think it’s unlikely that we will extend FAS at least to treads and treadmills because that installation is more complex than bike. Is it possible that we might extend it to row possibly, but it’s still quite early in the life cycle of that product and I think we have more to learn before we would consider doing that. So I think that — and then lastly, I would say, we have our hands full with the growth opportunity that FAS currently presents at 90 plus percent year-over-year and having just opened up Germany where it right out of the box, very small numbers, but right out of the box going really fast, much faster than we were forecasting.
So there’s plenty for us to chew on FAS with just the current business model, I think is the macro point. As it relates to the app strategy, the marketing team was enormously successful in driving huge volumes into free. We were not successful at seeing conversion of those free into the paid funnel, which is why we pivoted in the quarter back to focusing on the paid app and the on ramp there is free trial and there we have had terrific success. And we’re seeing higher price points. Then, we were forecast to significantly higher take rates of the app plus, so that 24 bucks and then we were — and we were expecting a heavier mix of the 1299.
Leslie Berland: Yes. And I’ll just jump in a little bit to provide context on the strategy and some of the interesting data points that we saw. So again, the goal, including the app is to energize our core member base and to attract new and under penetrated demographic that has historically not been, as I said, as penetrated for Peloton and app gave us an amazing opportunity in the free app message gave us an amazing opportunity when we rebranded the company and relaunch the brand. What we thought to Barry’s point was obviously a massive volume of downloads. And what’s interesting about that tied to the objective is we brought in new demographics. So we brought in lots of people who represented what you would consider our core member base, but you saw movement and significant uptake both in free and paid for demos including men Gen Z plus and others.
