Carl Daikeler: As we mentioned, the reactivation campaign is slower than expected because we got to be careful not to violate can pan regulations. However, we do see it to be ongoing — it’s an ongoing productive channel. It just hasn’t hit the scale that we expect. The good news is that it doesn’t really have any cost of acquisition at all because we already own the names with the exception of just the efforts to put e-mail campaigns together and/or any discounts or promotions that we put in place to reactivate those customers. And we have seen those be pretty prolific for us and effective based on results in the first quarter. So we continue to expand the reactivation campaign. And in fact, with the new leadership that we put in place, they’ve started to do a really good job of what we would call a fast follow.
So somebody who cancels or doesn’t renew their membership. The team is contacting them very quickly where you have the best window, the best opportunity to keep that customer from actually going back into the prospect list. So they’re all over it. It’s just slower than expected.
Mark Goldston: Susan, I just might add an interesting data point. As we’re getting up to speed with this CRM recapture program, most of the things that we’ve been doing and that we’ve been testing have been digital fitness, as you can imagine. An interesting anecdote to that is that we have over $1 billion a former BODi nutritional supplement users in that CRM base. So if you look at the CRM base, there’s been over $1 billion of nutritional supplement purchases from BODi previously represented by that group. We have not, up to this point, attempted to remarket to them nutritional products ironically, even though there is a reservoir of $1 billion plus of form of revenue there. So as part of the new management that we brought in that group and our focus, as we scrub this list and keep ourselves off of the spam list, so to speak, having run one of the largest ISPs in the world, I’m uniquely confident that we’ll avoid that.
If there is a huge opportunity down the road here, to recapture a lot of these people with what we’re looking at in Nutrition in terms of package sizing, pricing, et cetera, that we could go back to those people is a very compelling offer. So just stay tuned on that in the second half of the year. I think you’ll see some stuff there that will impress you.
Operator: Our next question comes from BJ Cook with Singular Research.
BJ Cook: You talked real briefly about partnerships and announced one here about a week ago or so. Can you give us some, I guess, shed some light on that partnership and maybe what your strategy is there? Would you expect to be promoting those partnerships on your side and on the partner side? Would you expect that to be meaningful to revenue near term or long term?
Mark Goldston: Yes. The partnership that you’re referring to with Dr. B to allow our customers and subscribers to get reimbursement through their HSA and FSA accounts should be a meaningful contributor to help customers or people who might be on the fence about subscribing to a service like that now can realize that they can get reimbursed for it. And we actually have quite a solid pipeline of potential partnerships, particularly interesting with the advent of single digital program purchases versus a subscription offer. I’m not at liberty to make any announcements right now. We’re hoping to in the next several weeks. But this is part of the reason that the overall platform of solutions, both from a fitness perspective and a nutrition perspective, fits so perfectly in the current environment where you’ve got GLP-1 and other pharmaceuticals for weight loss, but lifestyle is still the primary an important decision that people make to complement those decisions.
That is a perfect scenario for partnership because it helps people succeed with those products. There’s certainly a lot of demand for them, but lifestyle is going to have to be a part of it, and we offer the most cost-effective and proven solution for that. So we do think we’re going to have some good announcements in the near future, and we think it’s going to be a decent contributor to the 2024 scenario.
BJ Cook: Fantastic. Appreciate it. You touched on the Q2 guidance here. So just quickly, I guess, the midpoint is down and so it would be sequentially as well. Could you just touch on how much is it just seasonality and also other factors?
Marc Suidan: This is Marc Suidan. Yes, there’s 3 factors contributing to this. One is obviously seasonality. If you look at prior years, similar midpoint occurred quarter-over-quarter. Number two, we did say we’re heavily focused on balance sheet fortification. So we’re looking at improving our liquidity so that before we get back into investment model to drive growth. And number three, listen, we’ve detailed out quite a few initiatives that are going to drive some healthy new revenues, but these initiatives just take time to implement. And that’s why we created a cost structure that gives us the runway to implement our initiatives.
Mark Goldston: This is Mark also. It’s really important BJ, to keep in mind because yes, we’ve had 2 consecutive quarters of positive adjusted EBITDA. Yes, we have the free cash flow positive this quarter. But we’re still in the turnaround. I mean we’re ahead of the schedule where we thought we’d be, but we’re still in the — maximize the balance sheet, maximize expense efficiency mode. We have these programs in the pipeline, and they will start to come to 4 in the second half of the year, third quarter and fourth quarter. But just keep in mind the fact that while we’ve been successful and we’re thrilled with where we are, we’re still in the turnaround. And so we’re going to continue to manage it that way as we move towards the second half of the year.
Operator: Thank you all for your questions. That will be all the questions we have in queue currently. So I will pass the conference back over to Carl for any closing remarks.
Carl Daikeler: Great. Yes. Thanks so much. I’ll just close by saying I’m so excited about our progress and what we’ve been learning about our current customer needs and our ability now to respond with exactly what they’re looking for, thanks to the launch of single digital program purchases plus special digital subscription offers and these refined supplement marketing bundles that Mark is talking about. I feel like we’re, frankly, back to our wheelhouse that served the company so well for the last 25 years and just extremely grateful to our stakeholders and to the team for all the support of our long-term objective of sustained profitability and helping more people achieve their goals and lead healthy fulfilling lives. Thanks for joining us, and we’ll talk to you next quarter.
Operator: That will conclude today’s conference call. Thank you all for your participation. You may now disconnect your lines.
