Ryan McKeveny: Oh, I’m sorry. Hopefully you can hear me now. I was on mute. Sorry about that. Thank you, guys, for taking the question. On the capital allocation side of things longer term obviously, near term kind of a rebuild of cash mentality. Maybe for Karri, is there a level at which you want to see the cash balance get to you before thinking — rethinking about things like share repurchases or dividends. Just any framework on if there’s any certain level you’re targeting getting back to before reintroducing that or just general thoughts on that. Thank you.
Karri Callahan: Sure. Good morning, Ryan. Great question. As you said, right now there is just a fair amount of uncertainty from a macro perspective and we’re obviously laser-focused on getting the settlement behind us. In terms of the things that we’re focused on, we’re really focused on leveraging over the long-term, the strong economic and cash flow characteristics of the business. And we’ve got our eyes focused on a couple of different leverage levels that are stipulated in our in our credit agreement. The good news is the franchise model, the strong economics, the earnings to free cash flow characteristics are ex the settlement. We’re still looking it 45% to 50% conversion of our cash earnings to free cash flow for 2024.
And so really focused on and getting the leverage level lower on and you know back in accordance with the levels that are stipulated in our credit facility. And then we’ll be — I’m definitely focused on those initiatives to help drive the company’s growth in the future because we do continue to believe that there are a lot of opportunities for us across the network.
Ryan McKeveny: Thanks Karri. And one more for you on — kind of a modeling one. On the broker fee revenue and I think year-over-year is down just slightly and kind of best on year-over-year performance in quite a bit. It was ahead of our estimate. I guess I’m just curious is that just macro kind of EHS related trends during the quarter, especially in February, but the pickup we all saw or have there been any kind of structural adjustments at all within the way broker fee revenues are being structured? Thank you.
Karri Callahan: Yes, I think it’s a great question Ryan. I think it really is macro related. But I do think some of that comes back to just the overall strength of the network right with the most productive agents. Even in a challenging macro environment, we stand to see and to perform their well and I think from both the top line perspective as well as from a margin perspective this quarter, we’re just really happy with the results. And I think it really highlights some of the differentiation in the financial model.
Ryan McKeveny: That’s great. Thank you very much.
Operator: Your next question comes from Ronald Kamdem with Morgan Stanley. Please go ahead.
Ronald Kamdem: Great. Hey, just a couple of quick ones from me. So, on the U.S. agent count continues to decline, I was just curious if you guys when you guys sort of slice and dice the data, if there is any sort of you know high-level semantics of the agents that are leaving. So, is it all part-time or is it just the most unprofitable? And the reason I ask is because is there a sense of how much more of that is there to go before you could start seeing a bottom?
Amy Lessinger: Hi Ronald. Foundationally, the industry has contracted which we’ve seen that historically in the past. And so we are not immune to that. But I think that you know what we expect moving forward is that professionalism and the ability to navigate given the industry changes is going to become even more important. And so we feel like we’re sitting in a great position to capture agents who truly need support during this time and who truly need to elevate their skill set because we’re ready with everything that they need to succeed. So, we would expect things — our ability to compete to be very, very high here.
Erik Carlson: This is — go ahead, Karri.
Karri Callahan: Yes, not only do you have the math just a little bit from a numbers perspective, especially as we look at kind of experience and tenure from a 10-year perspective, the cohort of agents that we’re seeing across our network continues to be pretty consistent with what we’ve seen historically. And from an experience perspective, I think the latest statistics I saw from an — perspective close to 20% of agents across the industry have zero to two years of experience whereas on the RE/MAX side, it’s closer to 10%. And so I think we continue to differentiate ourselves there both from an experience perspective and then our agents being more tenured than the industry. And that trend has continued and at least — and even strengthened a little bit over recent quarters.
Erik Carlson: And Ron this is Eric. I mean you know your question’s a good one and obviously there is insight and there’s actions that we can take. So, I mean we’re not necessarily satisfied with the agent decline either from a net or disconnect perspective and so I think that I wouldn’t be — it would be obvious if you think about it kind of what some of the reasons our employees leave managers versus companies usually and agents duly brokerages versus kind of the brand and so that’s one of the items there. And I do think that the industry based on the volume last year on home sales and the volume this year, it’s harder to be an agent. And so we are probably a little bit better protected. And we feel mitigated because of the full-time nature of our agents.
But that’s not to say that we don’t have work to increase agent satisfaction, broker satisfaction, and provide additional tools, support, and resources to help agents be more successful in a market, whether it’s a tough market or an easy market. So I think Karri’s perspective is a good one, but just know that we continue to try to turn over every rock here to understand what we can do to better support agents and brokers. And I certainly hope and think that we’ll be able to bend the trend.
Ronald Kamdem: Great. And then just my second one is just on the implication of the NAR ruling. It sounds like you guys have been sort of front footed on education, staying in front of agents and brokers and so forth. I guess my question is, when you think about the 20 states that have already sort of had those policies in place versus the ones that haven’t, is there anything sort of structurally, processes-wise, that needs to change on the broker and agent level as you sort of move forward?
