Clark Lampen: That’s helpful. I appreciate the comments. Maybe one for Mike as a follow-up. I want to kind of pull out the thread that you dangled a moment ago with saying the back half of the year is going to be bigger than the first half traditionally. I think that sort of implies an acceleration or I guess, at the very least, steady growth into the back half of the year. Assuming that sort of persists, if not improves next year with product cycles that are unfolding and sort of improving, we talked about advertising already. Could you help us, I guess, think about ongoing rates of margin improvement with the business. You identified the sources, I guess, across OpEx, but maybe simplifying a lot of those things between COGS, ITS and R&D over time. Does that roughly speaking, translate to sort of 200 basis points to 300 basis points per year? Is it a little bit more or would you be willing to quantify at this point? Thanks.
Michael Guthrie: That was a long question, but a good question. That’s okay. We will see leverage against pretty much all of the cost areas over the next 12 months will, we think we’ll see a little bit of leverage in cost of goods sold because we’ve slowed down hiring, leverage against our compensation expenses because infra, trust and safety, we slowed down a little bit there. We’ve already close the gap pretty meaningfully on both of those two. Just to give you a few numbers. In the first quarter, infra, trust and safety was growing at about 33% year-over-year, bookings were growing at 23%. And then just last quarter, infra, trust and safety is growing at 24% and bookings were at 22%. So you can already see there’s a lot of leverage that we’ve already shown and obviously, well on the way to seeing leverage in Q3.
Same thing with personnel, the head count costs were growing far in excess of bookings in Q1, much less in Q2, and we’ve already taken steps so that we’ll see leverage in Q1 — Ss we — ’24. So we really feel like all the cost areas there is opportunity for leverage while we continue to invest in growing the top line. It will really depend on both a combination of how the costs roll out and how fast our top line grows, obviously. But I don’t really — we’re not giving guidance on what the year is going to end up. We’re just saying Q4 is — we’re a seasonal business. Q4 is back into double-digits, and we should be able to run double digits for 2024 as a whole.
David Baszucki: Yeah. And on the hire (ph), I just want to highlight. We continue to hire a lot of people. The year-on-year incremental head count compensation costs will go down slightly. We do expect bookings in Q1 2024, to be growing at a year-on-year rate higher than the head count compensation. And the final thing just to add, I said once again in my statement is, we do expect double-digit covenant adjusted EBITDA margins in Q4 in 2024 as a whole.
Operator: And your next question comes from the line of Brandon Ross from LightShed Partners. Your line is open.
Brandon Ross: Hey. Thanks for taking the questions. Your beta with Meta Quest actually opened a few questions in my mind. One of them is, while we’re on new platforms, is there any update on opening Roblox to other new devices and game platforms like PlayStation or switch? And then, I have a follow-up.
David Baszucki: It’s a great question. High level, we believe immersive 3D, human co-experience should be on every platform. We of course, have our eyes on those platforms and stay tuned.
Brandon Ross: Okay. And then, Dave, it seems like in the past, you haven’t shown all that much interest in VR. I could be wrong. But do you believe that VR now will become an important tool for accessing your platform? And does the Apple Vision Pro change our perception at all of how people will experience 3D interactive in the future? And then, maybe if you could talk a little bit about technically how much more complicated it is to build for VR and AR, and still create the same experience across all the platforms you work with.
David Baszucki: Yeah. I tweeted a few weeks ago that we had 1 million installs on Meta Quest. There’s a lot of good information in the comments there where people who haven’t used VR before are used to certain Roblox experiences on their phone or their computer. And they put on a VR headset like, oh my gosh, this same experience is all around, I’m deeply immersed in it, and it’s the same experience I’m used to. So we do believe it’s a really immersive experience. Our strategy has always been that immersive 3D should be everywhere. We want the highest quality experience everywhere. We want a creator to make once and run everywhere. We’ve done a lot of work on performance and on human interaction, so the same experiences out of the box work on Meta Quest.
A lot of that work of course, is the same work we would do on Apple vision, just as a lot of the work we’ve done on Xbox would be the same work for PlayStation. And we are really excited that some of the performance work we would do for Meta Quest reflects throughout our whole ecosystem. So we’re already pretty good at build once, run everywhere. And as you correctly note, there’s a lot of opportunity for both immersiveness on VR and more platforms.
