Steve Michaels: Yeah, Anthony, I mean, we have a lot of things going on internally with our existing retail partners. I think we highlighted an e-com card integration with a long-time top 5 partner. Those types of things can help us overcome an otherwise soft demand environment. And we have a number of those things on the roadmap and many of those — one of the things that the current difficult retail environment has done while we hasn’t resulted in a large enterprise pipeline conversion, it has resulted in increased prioritization of projects from existing retailers. And so, our internal objectives, including PROG Marketplace, our direct-to-consumer motion that I mentioned in the prepared remarks as well as our cross-sell marketing motions from our other products, can kind of manufacture GMV in the face of a tough environment.
And while we’re working day and night on large pipeline conversions, we can place small ball and hit singles and doubles and really inflect that or overcome hopefully, that soft environment. So those are the things we’re working on. And we mentioned in the — that we expect the progress on those things, certainly as the year progresses and look forward to continuing to report out to you guys on that.
Anthony Chukumba: That’s helpful. Thank you.
Operator: One moment for our next question. Our next question comes from Bobby Griffin with Raymond James. Your line is open.
Alessandra Jimenez: Good morning. This is Alessandra Jimenez on for Bobby Griffin. Thank you for taking our questions. Maybe first, just a follow-up on GMV. My apologies if I missed it in the prepared remarks. But what is the full year 2024 sales guidance apply for the full year GMV outlook?
Steve Michaels: Yeah. We don’t actually guide the GMV for the year. So obviously, everybody has their models. And you can kind of back into revenue, although disposition types and those revenue composition will have a big factor in that. So, what we did last year and what we intend to do this year is give a little bit of view on what our — what we think GMV will be for the quarter as we’re reporting on it — the next quarter in front of us as we’re reporting on the last one, but we have not given a full guide for GMV for 2024.
Alessandra Jimenez: Okay. Understood. And then maybe just on 2024 profitability guidance. What are the building blocks to kind of get us to the low end versus the high end of that range? Is it just revenue-dependent? Or are there some other puts and takes there?
Brian Garner: Yeah. I think what I’d point you to in terms of some of the variability that exists within the model, obviously, there’s the revenue dynamics, which you pointed to in a challenging environment. I would also just highlight the gross profit and the gross margin dynamic. I think if we’ve explored different scenarios, there’s — the potential for variability there. I think we’re confident in our ability to manage the portfolio, like we said. But if the Goldilocks scenario that we saw in 2023 persist for any duration here in 2024, that’s obviously upside to the model, and we’ll continue to protect against the downside. So, I think the gross margin and gross profit is outside of revenue is the other single biggest factor. From an SG&A perspective, I think those cost dynamics remain well within our control, and [indiscernible] we manage and align those with what we’re seeing on top-line. Yeah, it’s really revenue and the gross margin dynamic.
Alessandra Jimenez: Okay. That’s very helpful. And then lastly for me. We’re pleased to see the dividend announcement and then regards to upping the share repurchase. Just given the strong cash flow generation of the business, what is the implied free cash flow off of the guide? Should we expect a similar adjusted EBITDA to cash flow conversion in 2023 and 2024?
Brian Garner: Yeah. I mean I think that’s fair. There’s a cash tax dynamic where you might have a little more in cash taxes. But I think the relationship between EBITDA and free cash flow is relatively consistent. The big variable in that is GMV as you’re putting working capital out on the street. So, what I’d pay attention to there is obviously, if we start to exceed our GMV plan or GMV starts to come later in the year, that can be a pretty significant usage of free cash flow. So that’s the variability I point you towards. But otherwise, you’re thinking about it right. The consistency between EBITDA and free cash flow, absent those dynamics.
Alessandra Jimenez: Thank you so much. Best of luck in 2024.
Steve Michaels: Thank you.
Operator: That concludes the question-and-answer session. At this time, I would like to turn the call back to Steve Michaels, President and Chief Executive Officer, for closing remarks.
Steve Michaels: Yeah. I’d like to, again, thank you guys for joining us this morning and for your continued interest in PROG Holdings. Our teams did a great job and delivered a strong 2023. We feel good about the positioning of our portfolio and we’re making the right investments in people and technology to further our three-pillared strategy of Grow, Enhance, Expand. We look forward to updating you on our progress on 2024’s initiatives during our Q1 call in late April. Hope you have a great day.
Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.
