Simon Clinch: Okay, great. And just as a follow-up, on the $2.7 billion of capital that you have visibility in for the next 12 months, could you give us a sense of what level of upscaling you’ve seen that gives you that number? And I think you said as well that most of that is actually forward flow rather than that kind of long-term committed capital. So just clarify some of those things. Thank you so much.
Sanjay Datta: Yes, that is correct. I would say that the $2.7 billion number really is an expression or a result of the sort of continuation or elongation of existing relationships as well as some new ones. It doesn’t really contemplate any significant up-sizing in the existing relationships. Although, as we mentioned, I do think some of that is in play and we’re working on it, but we’re not including that in the numbers that we currently have line of sight to.
Operator: And we’ll take a question from Regi Smith with JPMorgan.
Regi Smith: Thank you. I’m sorry. I must have been on mute. I wanted to follow up on the last question. There might have been two questions ago where you were talking about, I guess, your prime exposure. And in the last quarter you talked about prime kind of deteriorating. And it sounds like, and I just want to make sure I’m hearing you right, when you speak of prime, you’re not talking about prime in the traditional sense, but you’re talking about more, like primer, but still net primer, maybe because you frame who is the prime customer you’re talking about, and I know you don’t use FICO scores, but like how would that customer translate to FICO? Just so that we’re all speaking the same language, then I have a few follow-ups. Thank you.
Sanjay Datta: Hey, Reggie. Thanks for the question. As you know, there’s a lot of different dimensions or ways to define prime, but for the sake of being reductive, I think you could think of the current stress as being somewhere north of 700 FICO score. And I think if you’re well below sort of 60, you’re probably currently on the path to improvement.
Regi Smith: Understood. And then I guess, so thinking about that prime customer. Is there a way to articulate, or how should we think about what the, I guess, current life of loan loss rate is for that borrower? Maybe how that has changed in the last, call it six months as you’ve seen, that kind of deteriorate. Just kind of curious, like what are you talking about there? And then thinking about that 36% cap, I think last quarter you talked about being able to raise prices. And so I’m assuming that they’re not that high, that there’s room to kind of price it. Maybe talk about the dynamics there, like how much you’ve been able to raise APRs versus what the loss increase has kind of been there.
Sanjay Datta: Let’s see, I mean, I think you’re asking a little bit about the sort of nature of loss rates in the primer end. Obviously, they’re much lower. I think that you could probably think of them in the sort of low to mid-single digits as an expected loss target. And they’re probably coming in high to the tune of, I don’t know, 50% plus or so. So that adds a couple of hundred basis points to the APR. It certainly does not push them out of or even anywhere near the 36% approval box. But when you get higher APRs, you get lower acceptance rates just due to elasticity. And so conversions are down, volumes are down, et cetera.
Regi Smith: Understood. Okay. And then I wanted to ask about, so appreciate the guidance of the back half of the year. And I guess when you do a simple average, you get to about $150 million on average in fees. And that’s about flat to what you did in the fourth quarter of ‘23. My guess is that there’s probably some cadence there and that you probably won’t be running it flat as you get to the fourth quarter and there may be some growth there. Can you talk a little bit about if there’s anything you can provide in terms of how 3Q and 4Q, should we assume kind of flat or is it more 4Q loaded?
Sanjay Datta: Sure, yes. I mean, I would say that I don’t, I think it’s safe to assume they won’t be flat. I mean, we’re going to have to regrow into that level by getting some conversion gains over time. So I think you could think of that as hopefully a steady-ish stream of conversion gain that will regrow us into that scale consistently.
Operator: And we’ll take a question from James Faucette with Morgan Stanley.
James Faucette: Thanks. Just a few quick follow-ups for me. In the assumption of what macro, does that assume, then, if we continue to see a bit the deterioration in primer borrowers that you’ve seen, that would be a headwind? Or are you expecting to be a loss that was max? I guess that was my first question.
Sanjay Datta: Hey, James. No, I think that I would maybe say sort of flat in aggregate. So if you see mild deterioration at the primer end and mild recovery at maybe the less prime end, that would sort of result in a relatively aggregate neutral macro under which we could sort of achieve, I think, the numbers that we have described.
James Faucette: Yes. Got it. And then just a quick couple of clarifications is that, as you’re looking to renew some of your long-term capital agreements that were entered into about a year ago, how should we be anticipating change in terms there? And then I’ll just tag it. As you’re adjusting your OpEx space, is there a level at which you’re thinking that you should be very clear in a way you keep OpEx relatively flat from there? Or can you or how do we think about, how you’re feeling about OpEx if and as you get back to breakeven on profitability? Thank you.
Sanjay Datta: Sure. Let’s see. I’ll just take the second question first on OpEx. So as we sort of said in our remarks, we’ve taken some cost actions since the end of the quarter, and those will get factored in to the back half of the year. I think that’s one component of our return to EBITDA breakeven. It won’t get us there alone, so we are expecting some growth as well. If that growth doesn’t materialize and it leaves us short of our EBITDA target, then we will sort of reconsider it at that time. And I think the first part of your question was about the renewal of the committed agreement and to what extent terms are changing. Look, these are sort of renewals of existing relationships. I think that any time you spend something like a year in an initial relationship, you have learnings on both sides of what works well and what doesn’t.
