And then to your last one on Medicaid, again, you’ll see some redetermination effect on that pool, but we are hoping that we capture those lives back in the Commercial bucket over time. And then in the MA book, we’ll continue to, as we’ve noted in our prepared remarks, take – thoughtfully increase the level of risk we are taking on that book of business. There’s a lot of embedded opportunity, but you need to do it very thoughtfully as we have been doing, with a focus on maximizing the earnings power for the level of risk we take.
Operator: Thank you. Our next question comes from Jamie Perse from Goldman Sachs
Jamie Perse: Hey, thanks. Good morning. Two quick financial questions. First, can you help us with the bridge on care management fees from 1Q to 2Q? It seems like a bigger step-up than usual, so I’m wondering if there’s incremental services being offered or new partnerships there that are driving that. And then just on second half guidance, I mean, it feels like there’s a lot of momentum coming out of the second quarter. Your implied second half really isn’t changing too much across most metrics. So, I’m wondering if there’s any incremental headwinds you’re assuming for the second half or just any specific assumptions we should be thinking about. Thank you.
Parth Mehrotra: Thanks, Jamie. So, on the first question, look, again, you see the great operating leverage in our business where if we get great topline growth and perform well in value-based arrangements, there’s embedded operating leverage that you can see flow through into EBITDA and then free cash flow. So, I think there are quarters where you see that play out very significantly. We also saw that in all of 2022, where we grew topline close to 50%, EBITDA close to 50%, free cashflow close to 50%. So, I think, again, we differentiate from that perspective in our book of business and with the unit economics working, and you’re seeing some of that play out in Q2. And for the rest of the year, look, we’ll try to be prudent with our guidance.
We see a lot of good momentum. We are also investing in five new markets, as David noted. So, I think it’s a balance between continuing to invest in and get future growth versus profitability in the current year. So, I think we feel really good about the guidance we’ve given, and as the year goes, we’ll update guidance going into Q3 and Q4.
Operator: Thank you. Our next question comes from Jeff Garro.
Jeff Garro: Yes, good morning, and thanks for taking the questions. So, I want to ask about investments in new markets, and you’ve mentioned the success ramping markets like North Carolina, Ohio, and Connecticut. So, curious how new market investments spend is tracking year-to-date. And then maybe also you could help us think about growth in new market investments going forward versus what you’ve detailed for the current year, and specifically how the types of markets and agreements like what you’ve disclosed in Washington and whatever else is in the pipeline might impact that. Thanks.
David Mountcastle: Yes. So, I would say as we’ve been tracking with our results in those markets, so have the investments in those markets. So, I would say the investments are on track and maybe even a little bit ahead of schedule for the ones that we’ve done in the past. On a go-forward basis, obviously, we have an expectation of investment each time we enter one of these markets. And so, we’re expecting to invest in Washington starting obviously as soon as we close. We’ll have some of that impact this year. But obviously, that’s reflected in our increased guidance that we provided for the year. And again, on a go-forward basis as we continue to new markets, we expect those operating costs as we get into those markets not to really be much different from that in the past being, the larger the market, maybe a little bit larger cost, the smaller the market, maybe a little bit smaller.
But at the end of the day, we are going to need to make an investment in any of those markets as we enter them. But we see great long-term results from making those investments.
Operator: Thank you. Our next question comes from Andrew Mok from UBS.
Andrew Mok: Hi. Just wanted to follow up on the utilization conversation. You held the midpoint of your Practice Collections outlook constant despite strong performance in the quarter, the low attrition rate you cited, and your comments around strong trends in the ambulatory segment. Can you help quantify the impact of the paused capitated contract and expectations for this year? And is there anything else you would call out why the higher utilization isn’t necessarily flowing through to higher Practice Collections revenue? Thanks.
