Edward Engel: Hi, thank you for taking my question. It looks like on the gross margin side, for the fourth quarter there is a really nice sequential uptick Q-on-Q and that’s kind of despite 4Q being a pretty big OSB quarter. What’s kind of driving that Q-on-Q increasing? And I guess, is that a kind of sustainable rate kind of in the mid ’30s for next year maybe excluding the first-quarter when there is some new market launches?
Richard Schwartz: Yeah. Thanks, Ed. So we talked about on our last call that we were expecting higher gross margins during the fourth quarter and there’s a lot of different things that can impact our margins from quarter to quarter. The geographic mix of business is a big one since we’ve got different margins and that can vary quite a bit from one market to the next. The product mix, I think you pointed out, between OSB and casino. But we can also have product mix within casino that can impact it. And then most of our costs are variable with revenue and — but we do have some fixed costs in that margin cost structure, so those can have an impact as well. Margins in total for 2022 were 30.1%. I would not extrapolate Q4 out into the full-year 2023 and what we had mentioned in the prepared remarks is, we expect full-year improvement in 2023 to get us a few 100 basis points over the full year 2022.
So more in the 33% range, maybe a little higher than that. Obviously, there’s going to be some variability. I’d also think about — as you pointed out, we’ve got a couple of new market launches early in the year or late last year and early this year. So I think our gross margins, while I gave you what I think full-year 2023 target should be for gross margins, it will probably build as the year goes on. So a little lower in the front half of the year and stronger in the back half of the year on the back of some economies of scale and pricing benefits that we’ve got throughout that cost structure
Edward Engel: Really helpful. Thanks. And then on the marketing costs, $218 million for the full year, is there a way to break out. I guess what percent of that is fixed marketing expense versus what percent is kind of your external more discretionary marketing expense? And I guess what I’m trying to get is, in a scenario where we’re entering a year, maybe not this year, but maybe next year and year after. There is no new states launching OSB or iGaming, I guess. How low could that go?
Kyle Sauers: Yes. So a very small percentage is fixed. Just to make sure I understand, when you say fixed you’re referring to multi-year commitments to — with sponsorships or endorses and things like that.
Edward Engel: Yeah. Even head count within your marketing department
Kyle Sauers: Got you. Okay. Yeah. So we certainly think about that as a pretty fixed costs, we’ve got a great marketing team here at RSI. So the team and long-term commitments makeup — it’s probably 10% to 15% of our total costs, something — now it’s not even that much. I’m sorry, it’s probably — yes, now it’s in that range, 10% to 15% is the right number. So we’ve got a lot of flexibility in that spend just to be able to be nimble and think about where we want to spend more because we’re getting good returns or back away.
Edward Engel: That said, and then I guess is there a kind of way to think about how low that marketing cost can go during the year where there is no new state launches
