We think that continues to attract a higher price. And as Brad talked about, that upside for ’24 and beyond. I think the likelihood of somebody coming in and cutting price just would be destroying value or destroying capital.
Stephen Ferazani: That’s helpful. If I could just get one last one in. Just on maintenance CapEx came down this quarter. Is there much idle capacity left to make ready? Or what would you expect trends being that you’re going to have to maintain a larger fleet going forward theoretically into next year?
Bradley Childers: We still have about 100,000 horsepower that could be made ready and go to work over the right time frame. But we will not, and we do not expect to have the same level of Make Ready expense flowing through maintenance CapEx that we experienced in the first half of 2023.
Operator: [Operator Instructions]. Our next question goes to Selman Akyol of Stifel.
Selman Akyol: So let me just start with in terms of spot pricing, if you were to characterize it versus 6, 9 months ago, how is that trending?
Bradley Childers: No, let me expand on that a bit. We find that we are in a very aggressive pricing posture now for reasons we’ve already discussed on the call, so I won’t go into all of them, Selman. But just catching up with original equipment cost for new builds, catching up with parts, labor, lube and the fact that cost of capital has increased, has justified a significant amount of price reclamation in the energy space and in compression that we and you can see our competitors also are benefiting from. We do not see the ability to raise prices changing or abating. The slope of the curve may start to flatten a bit, but we still are very positive that we can see more pricing gains from our installed base in 2024, and that’s still ahead of us.
By the way, let me expand on one point that [indiscernible]. I wanted to expand on one point, which is that One of the really interesting aspects of this high inflation phase that we just went through, that is yet not fully appreciated, and you can see it in the pricing and returns that we’re going to achieve in the future. is the value of our investments that we made ahead of this inflationary period, the value of our fleet has gone up substantially and we expect to claim improved returns off of those great investments that we made before this high inflation environment kicked in.
Selman Akyol: Understood. And then if I think about how much of your fleet is left to reprice, how would you say that?
Bradley Childers: We estimate that still 2/3 of our fleet can be repriced over the next 12 months. Part of that comes in the form of units that roll-off term. Part of it comes in the form of units that are under a major strategic alliance with our customer base and has pricing mechanisms in there, some of which are indexed and some of which are just negotiated. So — but that allows us to keep the pricing fresh on our fleet, and it’s about 2/3 that will be repriced over the next 12 months.
Selman Akyol: Understood. And so this is ultimately where I wanted to get to. How — I guess, with your focus on costs, how does your gross margin not keep from expanding from here?
Bradley Childers: We are very ambitious about our ability to continue to improve our gross margin and the profitability of our business based upon both factors, price increases that we expect are ahead, as well as cost opportunities that we are attacking vigorously inside the company.
Douglas Aron: I think — well, well — we’re definitely not going to give you a 2024 guidance today, because we’re still in the process of putting that plan together. But look, I think we said 8 consecutive quarters of sequential revenue growth. From where we sit today, from the conversations we’re having with our customers, we certainly expect that streak to continue. And you got to leave us something exciting to talk to you about when we report Q4 early next year.
