Rakesh Sehgal: I think I take that in two parts, Mark. One is that when we’re comparing first quarter this year to first quarter last year, you need to factor in that through the latter half of 2023, we took the perspective of repricing a number of our forward flows, both short-term and medium-term forward flows. So you’re seeing the impact of those pricing changes flowing through in our results. And secondly, as I think we reiterated through our conversations in 2023, we have ensured that we have a dynamic pricing framework and that we reflect the appropriate market conditions as we sort of renew or enter into new forward flows and that perspective is continuing into 2024. So we see with expanded supply, the demand in terms of the debt buyer universe in the U.S. is fairly constant and that provides us the opportunity to make sure that our pricing is appropriately reflective of market competition and market conditions.
Vik Atal: Yeah. And Mark, if I could just add to that, like I just mentioned earlier, that the multiples we’re seeing in Americas Core was 2.11, and as you know, that the U.S. is more of a forward flow market. And if you go back just to 2023 and last quarter, that 2.11 is higher than what we saw in the previous couple of quarters. So continued improvement as we move in through 2024.
Mark Hughes: And then the wage garnishments. Can you talk a little bit more about that? Does it present any kind of regulatory risk perhaps? Are these — I assume these garnishments are pretty standard or well-established. Is there any reason to be concerned on that front?
Rakesh Sehgal: No. There’s nothing, no regulatory concern on that. It’s a standard, well-established element of the U.S. legal process and we’ve just been working hard on that, as well as other cash initiatives to ensure that we are optimizing where we need to be optimizing. So no, no issues on that.
Mark Hughes: Yeah. And one final question, the 60% efficiency target. I hear you that it sounds like there’s maybe $7 million, or I’m sorry, $6 million that I think you described as outsized in nature, perhaps not recurring. Given that we started at 58% and I think the goal is 60% for the full year back end loaded, would one then say that the trajectory of the run rate when we get into 2025 is going to be above that 60%, and therefore, one would think about 2025 as being improved off of a 60% level?
Rakesh Sehgal: I want to be careful, Mark, that we don’t get ahead of ourselves with regard to outlining a particular ratio for 2025. I think candidly myself and the entire team is very focused on making sure we are delivering against the operational financial targets we sort of signal to the market for 2024, and as we get through the rest of this year, we will certainly come back to you as soon as we have a view on 2025. But we feel at this point quite comfortable with regard to what we’ve signaled on the improvement in cash efficiency as a metric through the balance of this year.
Mark Hughes: Very good. Thank you.
Rakesh Sehgal: Thank you.
Operator: Thank you. [Operator Instructions] And your next question comes from the line of Robert Dodd from Raymond James. Please go ahead.
Robert Dodd: Hi, guys. Congrats on the quarter. On the legal, I mean, you spelled it out on the call. It’s in the press release. I mean, you spend — there’s a higher number of lawsuits in Europe and it can be front-end, right? So should we read that a lot of catching up, so to speak, was done in Q1 and legal expenses also might not stay at that level or is this kind of the new base number in terms of how much you’re willing to invest in legal on kind of a quarterly basis?
Vik Atal: Yeah. Look, I would say that in Europe, there was a little bit of a catch up to do because we had some of the courts that were closed last quarter, Robert. So that’s why we had the European commentary around higher volume this quarter in Europe. But look, other than that, I think you should look at the fact that in the U.S., we continue to invest more in the legal channel. But I want to be cautious in how we portray that, because as we said, the cash comes in over a longer period of time. The way we run it is, we look at that legal cost investment and that cash efficiency really is an output of the investments we’re making to drive higher cash. And so we’re going to reiterate what we mentioned last quarter and this quarter, which is the way to think about our business and where we’re headed in 2024 with our target is double-digit growth in cash collections with a modest growth in our cost space resulting in just a marginal increase in our cost.
So you should then deliver that significant improvement into that net income line item that we’ve been talking about driving to that 6% to 8% ROATE. And so I just want to make sure not to get caught up in one line item but that’s how we think about our business.
Robert Dodd: Understood. Understood. Thank you. Oh! Flipping back, you kind of addressed this at the beginning of the Q&A. In Europe, I mean, the volumes are low. I think you said pretty clearly that competition is still pretty aggressive. Should we expect Europe to remain de-emphasized somewhat? I mean, if volumes, even in Q2, if they’re off, they’re probably going to be down still pretty substantially year-over-year. And it kind of sounds like the competition is still as aggressive, if not more so, if supply is a little tight. Is that just something where the ROE — the ROICs, even with all your initiatives, is it a more marginal market than you would have thought a couple of years ago?
Rakesh Sehgal: Not at all, Robert. Not at all. Europe is a very attractive market for us. We have great seller relationships across the region. We have talked about our business in different markets in the past. It — really the first quarter was purely a result of a very muted level of market supply and we believe over the balance of the second quarter, hopefully for the rest of the year, but going forward, we see it as a very attractive market space for us, notwithstanding challenges that might be faced by other participants in the market.
Robert Dodd: Got it.
Vik Atal: Yeah. And Robert…
Robert Dodd: Yeah.
Vik Atal: …the question…
Robert Dodd: Go ahead.
