Jeff Gardner: Yes. One other thing I’d like to add to that, given that we’re focusing on these full stack customers going forward, that’s going to really drive the margin profile and higher ARPUs. Today, in the first stage of our transformation, those conversions were moving our TSPs to a device management solution, which had a lower ARPU. So we had good ARPU growth there. We expect – we had good subscriber growth there. But now I think we’re searching and focusing on higher ARPU customers.
Operator: Thank you. Our next question comes from the line of Jerry Revich with Goldman Sachs. Please go ahead.
Jerry Revich: Hi, good afternoon, everyone. Hi, I’m wondering if you folks can just talk about when do you expect to turn free cash flow positive? And if you wouldn’t mind just bridging through the drivers of the working capital headwind to cash flow this quarter and how that resolves itself sequentially in the back half? Thanks.
Jikun Kim: Sure. So let me just take a look at the data here. Based on the prepared remarks, hold on a second. My apologies. Just give me a moment. Looking at some information. Okay. Yes. If you look at the current free cash flow, you will see that it was a negative $3 million in the quarter. But if you look at the working capital charges that attributed almost $7 million to it. So, core operations was positive $4 million. So operationally, we are generating cash. If you subtract out CapEx without working capital adjustments, you’ll see that it was a positive $2 million in the quarter. So good strong turnaround. Now having said that, we’ve got some working capital challenges. You’ll see that our accounts receivable. If you go back two 2 years, has increased $20 million.
A lot of this has to do with the conversion. And then if you look at our accounts payable, you will see that, that has also increased roughly $20 million over the last few quarters. We need to address both of these. We made some headway on accounts payable in the last quarter. We dropped it from $52 to $47 we’ll obviously continue to need to do that over the next few quarters. In terms of when we turn free cash flow positive, obviously, it’s going to take quite a few quarters.
Jerry Revich: And could you expand on that last point? If you don’t mind, is it the issue of until the receivables profile stabilizes with the new business model? Is that what’s driving that comment? It would take quite a few quarters, if you don’t mind, just more context on that point, please?
Jikun Kim: Yes. I mean basically, accounts receivable increases were funded by AP increases. So you can address the cash flow in two ways, pay down the payables. And hold your receivables flat or you can reduce the receivables and hold your payables flat. We’re trying to go the payables route.
Jerry Revich: Okay. And separately, can I ask a deferred revenue came down sequentially in the quarter. What was the driver? Is that normal seasonality or any other factors that are driving the sequential deferred revenue decline?
Jikun Kim: Yes. I think we discussed our K-12 revenues declining a bit, and that’s the primary driver. It should come back. It’s a seasonal thing.
Jerry Revich: Okay. Thank you.
Jeff Gardner: Jerry, thanks for joining. I did want to point out that we did after the quarter-end, we did convert our largest TSP to a subscription model by signing an MSA later in the quarter. So really happy about that turning all of our attention towards our growth segments and serving our TSP customers with a new device management solution.
Jerry Revich: And Jeff, how much was that contract? How much did that add to deferred revenue?
