Q – John Hecht: Okay. And then thinking about like the originations, composition of new versus recurring customers and then for the new customers — yes, maybe is the tightening in other parts of the market giving you a different type of characteristic of new customers? Or is it pretty much what you’ve been SEEING over the past few years?
David Fisher: Yes, I don’t think we’ve seen a big change in the types of new customers that we’ve that we’ve seen and that the mix of new customers has been pretty steady. We don’t really talk about it as much as we used to, but it’s been pretty steady and meaningful for a really long time now. So, a really important part of building our franchise.
John Hecht: And then the maybe the last question would be how do you like them the marketing spend relative to originations is becoming a lot more efficient. And I know you guys have been optimizing your kind of the marketing tactics, but maybe can you give us an update on the channels of marketing and where you’re finding some of the you have the best efficacy of productivity?
David Fisher: Yes, it hasn’t changed a ton over the last kind of four or five years. The main channels for also what you would expect, we do a significant amount of direct mail, especially in the consumer business. I’m sure you’ve seen our TV both on the consumer SMB side, we’ve gotten heavier and heavier and TV. That’s been an area of success for us for sure relative to say five to seven years ago. And I think certainly relative to our competitors. And then digital I think has improved for us in ways that we probably wouldn’t have guessed a few years ago. And a lot of that growth I think is that some kind of taking share away from leads. I think leads has continued to shrink as the share of the total, which was fine, we’d like to control our own destiny.
We love our lead partners. We work really well with them or some of their biggest clients in the world. And this is a great fruitful partnership, but where we control our own destiny and we like that as well. I think one of — in terms of the efficiency that we’ve seen, part of it just experience and doing more and more of that we were kind of a leads only business eight, nine years ago. And so I’m kind of really hitting the sweet spot in terms of experience and being more multi-pronged in our marketing. I think it’s also a sign that the competitive environment is not super strong for us right now, which is I know a theme we’ve been talking about for a while. You certainly have certainly seen many of our competitors stumble over the last three, four years and we’ve just continued to execute and been beneficiaries of that.
John Hecht: Wonderful. Thanks very much guys.
David Fisher: Yes.
Operator: Next question comes from John Rowan with Janney. Please go ahead.
John Rowan: Good afternoon guys. You’ve got loan growth in the quarter, was there any benefit in there from the late refund season?
Steve Cunningham: It’s hard to say. Not a ton, I mean I think it helps if you look at it monthly, it would help January and March. I think mostly — I don’t think there’s any big carryover into — that you’re going to see in April. Q2 started off fine, kind of, right where we were expect it to. So, yes, intra-quarter, yes. But for the quarter as a total not much some.
John Rowan: Okay. And then I’m trying to square up the guidance for the second quarter. So, correct me if I’m wrong, but you said that earnings growth would be what is it 5% to 10% sequential earnings growth, correct?
Steve Cunningham: Yes, adjusted EPS 5% to 10% sequential.
John Rowan: Okay. I’m just trying to square that up because the O&T, the guidance for O&T and G&A seem very much in line with where they came in for this quarter. But the marketing guidance at 20% is higher than the 18% for this quarter. So, I guess what I’m trying to ask is what’s going to drive that 5% to 10%? Obviously revenue is going to be up slightly, but you do have some slightly higher more marketing expenses and the only other variable here to hone in on as to where there’s that 5% to 10% growth is gross profit and you said upper 50s and just trying to maybe narrow that down a little bit to make sure I can get to that operating EPS growth? I mean, are we talking high 50s north of where you are in the first quarter? Or is — would you consider the first quarter run rate high 50s. I know it was a long-winded question, but I’m just trying to triangulate correctly.
David Fisher: Yeah, John, thanks for the question. So here’s how to think about Q2 some. So I gave you we should see sequential growth, some slight sequential growth in revenue, which we don’t always see if you go back in time, which again gets back to some of our diversification and the blended portfolio that we have. We’re continuing our march up on the net revenue margin, which you should expect to see in Q2 as consumer gets a bit better with more originations and lower losses and SMB’s pretty steady. And then I think you typically see outside of the first quarter, we’ve been around 20% of marketing for — 20% of revenue for marketing for awhile. And then as you mentioned the O&T and G&A guide we continue to see some scaling there.
