The reason why that’s the case is because there’s a 12 month to 24 month payback on customer acquisition cost. So we absorb that cost upfront and then we recoup it over time. We’re finally to the point that we’re actually a positive variable profit margin for the financial services segment. That means, we’re actually covering all that customer acquisition cost. And the next step for us now that we’re positive on a variable profit basis is getting the total variable profit dollars to be greater than the fixed directed — fixed direct cost of financial services. And once we do that, all three segments will have positive contribution margin. So we’re just getting started with the type of leverage we can drive over time. We will dampen your expectations on where the margins will be in the intermediate term, because we also want to keep investing.
But we will hit the milestone that we’ve laid out as it relates to GAAP profitability and financial services, positive contribution margin unless there’s a huge dislocation that we can’t anticipate today.
Operator: Thank you. Our next question comes from the line of Robert Wildhack with Autonomous. Your line is now open.
Robert Wildhack: Good morning, guys. I wanted to ask one more about deposits. Anthony, it sounds like you’re talking about at least another quarter of really solid growth. So zooming out beyond that, what’s the current strategy in line of thought with respect to keeping the pedal down on deposit growth versus maybe giving up some of that growth rate, but possibly taking a lot of pressure off your deposit costs and deposit betas?
Anthony Noto: Well, the great thing about our company and our vertical integration is that, the cost that we’re currently have on our checking and savings account are lower than the cost that we’ve ever had in the business historically from a spread standpoint. So, it’s actually cheaper for us to fund via deposits than the way we’ve historically funded the warehouse lines. And so, that’s a huge competitive advantage. The reason we can offer the interest rate that we offer is because we actually make more money than we would with warehouse lines and without being a bank. And so the cost is completely acceptable and we continue to be aggressive with the interest rate. I think the bigger question is, what happens when rates start to get cut and go down.
I think we’ll be able to hold rate much longer and higher than our competitors and really gain even more market share. Our goal is to have as many direct deposit customers as we can. That’s a leading indicator of primary account and we — that’s our strategy. Direct deposit is one indicator of that, there are others that we’re using now and that will give people benefits from if they take those other actions outside of direct deposit. But the rate that we’re providing is very competitive, but it’s very attractive to us form a financial rewards — return standpoint.
Operator: Thank you. Our next question comes from the line of Arren Cyganovich with Citigroup. Your line is now open.
Arren Cyganovich: Thanks. Just a quick question on the technology segment. It looks like the revenue is down a little bit sequentially if you remove the client you lost kind of flattish. Do you expect any pull forwards of contract renewals there? And what do you expect in terms of revenue growth for that segment going forward?
