The first layer of margin is media efficiency. Second layer of margin is you then take the people in that business out. And after media costs and after people cost you have contribution margin. We’re pushing Home Services kind of as fast as we can execute and to grow those markets and it’s still one of our highest contributing businesses in terms of percentage and dollars. So it’s not limited financially in what we’re doing in Home Services.
Jim Goss: All right. Thanks very much. Appreciate it.
Doug Valenti: Thank you, Jim.
Operator: Our next question comes from Chris Sakai with Singular Research. Please state your question.
Chris Sakai: Hi, Doug and Greg.
Doug Valenti: Hey, Chris.
Chris Sakai: Sounds like a great quarter. Just wanted to ask about insurance, I know you’ve talked about Q3 and Q4. Just wanted to get your feeling and color on how it would continue into Q1 of next year?
Doug Valenti: Yes. It’s a good question. We would expect it to continue to ramp. We think we’re in a very — in a multi-quarter ramp as these carriers are getting their legs back under economically with the rate increases. And as they get the products and states aligned with those rate increases to get their portfolios where they want them they’ve got a lot to come back from as they had to really close down a lot of their efforts in marketing and expansion over the past couple of years with the issues they had with combined ratios. So, every indication is a continued ramp. I think I said a few quarters ago about that we might be entering a super cycle. I think we are likely to have a good long multi-year cycle in insurance, because the rate increases have been very healthy.
They’ve been very smart. And the carriers are just going to keep making those economics and reflecting them in their market activities in the market presence. So we expect a good long trend up into the right for insurance. And that’s again driven quite simply by the fact that they now have rates that are more reflective of the new cost environment, both on the catastrophe side as well as on the repair side.
Chris Sakai: Okay. Thanks, and then, can you help me understand more about the increase in product development expense. Is this going to occur basically as long as insurance continues to ramp. Can you help me understand that?
Doug Valenti: I think we won’t keep increasing it. I think we’re kind of at the level we’re going to be at for a while. And then what’s going to happen is, it won’t grow like it’s been growing or like it grew this past couple of years, but revenue will. And so that’s how you get the margin expansion, right? You get more revenue driving more incremental variable margin on top of a semi-fixed, relatively fixed product development and other cost base, which is why you’re going to see that margin continue to expand and why you’re seeing the jump like it did like we expected to in the March quarter from, again, breakeven to 5% already in adjusted EBITDA in the March quarter and more than that in the June quarter. As you run your numbers, you’ll see our assumptions there that they’re going to expand another point or two in June.
Chris Sakai: Okay. Okay. Thanks for the answers.
Doug Valenti: You’re welcome, Chris.
Operator: Thank you. And there are no further questions at this time today. Thank you everyone for taking the time to join QuinStreet’s earnings call. For a replay of this call, please dial 844-512-2921 domestic or 412-317-6671 international and use the passcode 13735822. Once again that passcode is 13735822. This replay information is also available on the earnings press release issued this afternoon. This concludes today’s call. Thank you.
