Kyle Joseph: Great. That congrats on a good quarter.
Steve Michaels: Thanks, Kyle.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Jason Haas from Bank of America.
Jason Haas: So it seems like the guidance implies a worsening of margins in the second half of the year, both versus the first half and also for Loon a year-over-year basis. You talked about it a little bit in the prepared remarks, but can you just walk through why gross margins would soften in the second half? And then also what’s driving that step up in SG&A spending as well?
Brian Garner: Yes, Kyle. This is Brian. Sorry, Jason. This is Brian. The dynamic that’s playing out is effectively — we’re starting with a lower GLA balance our gross lease asset balance entering the back half. And so that’s going to put pressure on total dollars of revenue, first and foremost. So you’ve got a fix — you got some fixed costs within the SG&A structure, you’ve got a lower revenue stream coming in the back half. So that’s going to put some pressure on margins. The other dynamic that is happening is SG&A expected to step up. And that has to do with some technology initiatives, some back-end office initiatives that we are pursuing and also on the sales and marketing front. I think as we look forward to the end of the year and into next, we want to grow the gross lease asset balances or put on a trajectory towards a higher balance as we exit the year.
So we can be at a good footing entering into next year. So — that’s the primary reason for the margin pressures in Q3 and Q4. And it’s not unexpected from what we communicated in our previous outlook. We’d anticipated this SG&A ramp and some of the revenue pressures from a declining GLA at this point in the year.
Jason Haas: That’s great. And then for my follow-up, are the margins that you’re expecting in 2023? Is that a good framework to use for like 2024 and beyond. I think historically, you’ve talked about for the Progressive segment. The goal is to be in that 11% to 13% range for EBITDA margins. I think you should be well within that range this year based on the guidance? And then is the expectation just to be able to grow revenue from there and maintain that margin rate? Or is there any — do you have any goals to grow margins from here?
Brian Garner: Yes. I’m not going to get specific on 2024, but I do think from a long-term margin expectation, where we’re at this year and where we’ve been trending, I think, is within a comfortable range for us. And it’s not happened on its own. It’s been actively managed through portfolio management and watching SG&A and aligning SG&A with our top line performance. And so I think that 11% to 13% that you highlighted for Progressive Leasing remains unchanged. I think it’s — here in the quarter, progressive leasing was about 13.5% for Q2, and that’s obviously a very strong quarterly result. I don’t expect it to remain that high on a quarter-to-quarter basis. But we had a great quarter. And I think that 11%, 13% is a good guideline for long term.
Jason Haas: Congratulations on the strong results.
Operator: [Operator Instructions] And our next question comes from the line of Brad Thomas from KeyBanc Capital Markets.
Bradley Thomas: I wanted to follow up on the GMV a bit. I was wondering if you could talk a little bit more about how you’re thinking about the cadence of GMV in the second half of the year, does seem like in the end market, what we’re hearing out of retailers is kind of getting less bad and in some cases, even retailers moving to positive territory more recently. So again, curious a little bit more how you’re thinking about GMV growth in the second half. And then if you could also just remind us how much of a headwind the underwriting has been as we think about maybe what the more organic run rate trends have been?
