Anthony Geisler: Yeah. I mean, the majority of those are the backlog of transition studios that we had that we talked about that we were going to refranchise and/or close. So it’s not — it’s heavier now than it normally will be normalizing going forward as we work through those studios. So it’s a shift in strategy. It’s not indicative of like a normal go-forward once we’re done getting through this kind of transition phase.
Korinne Wolfmeyer: Got it. Thank you.
Operator: The next question comes from Jonathan Komp with Baird. Please go ahead.
Jonathan Komp : Yeah. Hi. Good afternoon. Thank you. John, can I just follow up on the restructuring costs in the quarter. Could you just maybe share a little more detail? Are those all cash or non-cash? How much are you expecting in total? And just how should that flow going forward?
John Meloun: Yeah. So the restructuring charges in the quarter are reflective of the studios that Anthony just talked about. The ones that we’ve already closed and the ones that we are ceasing operations at, we take a charge or a liability for exiting the leases kind of back of the napkin, we kind of assume about 18 months to exit the leases is the way we’re approaching it. So any of the costs associated with shutting down studios, exiting leases in the quarter, it was roughly around $7 million. I think $6.6 million was the actual number. So that’s the majority of the cost we look at it as onetime just to get off the leases and get the studios completely closed down. As we continue to do that, it might take — we do expect to see it in Q3 some additional activity, as well as potentially into the first half of 2024 as we work with landlords to figure out exactly what we settle the leases for — but given our experience or my experience having done this in the past, and typically, it’s about 18 months’ worth of leases.
I think total benefit to the company by doing this, as I mentioned in the earnings script is it’s about a $10 million adjusted EBITDA benefit on an annualized basis roughly. So it does have very meaningful margin impacts in 2024 by us going through this restructuring.
Jonathan Komp: Okay. And then, just a separate question. But Anthony, I don’t know if you could discuss the lululemon relationship any further. I know that’s changed recently. But at the time a month or so ago, you highlighted opportunity to deepen and expand the relationship that’s remaining. So just any thoughts there. And then, John, are you willing to talk about just longer-term international, how much broad strokes revenue or EBITDA you might be able to generate from the international activity. Thanks, again.
Anthony Geisler: Yeah. So we continue to do great business with lululemon. I mean, the biggest part of our business with them was the actual collaboration on the retail that we sell across the studios globally. So that still remains intact, and we’re still doing great business with that. The digital studio business part was nice to have. And of course, we would love to keep that. But obviously, Mirror was not something that was a successful venture ultimately for Lulu. And so, it made sense for them to shut that down and give it over to Peloton and that was exactly what they did. And so, Lulu still paid us 100% of our money. And so, they did everything right, everything they were supposed to do by us. And so, we still have a really great relationship with them, and we work with them daily ultimately. So everything is great there.
John Meloun: And to answer your question in regards to international, as we talked about, I mean, we will see about 75%, 25% or between that and 80% to 20% growth over the next couple of years between domestic and international. You got to remember on the international side, though, it’s a rev share model, right? So we don’t get the same full 100% benefit of the revenue and adjusted EBITDA we get on the U.S. side and the fact that the U.S. is growing multiples faster than the international. Today, international, about 5% of the EBITDA contribution, given the growth of studios opening internationally, you will see the EBITDA double over the coming years. But as a percent of the total, it moves from 5% to 7%, right, because you’re just seeing so much accelerated growth on the U.S. side. So you will see dollar growth internationally, but percentage-wise as a total is only going to move 1% or 2% in the next two to three years.
Jonathan Komp: All right. Thanks again.
Operator: The next question comes from J.P. Wollam with ROTH Capital Partners. Please go ahead.
JP Wollam : Hi, everyone. Thanks for taking my question tonight. Maybe if I could first just follow up on the international side. If we talk about the new hire, the President of International, could you maybe just expand on sort of what is really the goal for his role there? Is there anything that was kind of just becoming too big or too cumbersome that it was necessary to put someone in that role? Or could you just expand on that a little bit?
Anthony Geisler: Yeah. I think it was both upside opportunity and downside risk inversion, right? Ultimately, we had about a team of five or six. So we’re doing an amazing job over there with a lot of international experience. So a lot of really great players, but not necessarily a great coach to kind of band everything together. And so, we really wanted to professionalize that department and make sure that it had a lot of infrastructure, so it could really operate like our domestic business, so that we can increase franchise sales, increase franchise openings, make sure that franchisee health internationally is doing very well. A lot of franchisors in the U.S. start off with great brand, great concept. And then, over time, they get some international interest, and it’s just kind of a nice to have.
