So if we are ramping up and we’ll go to the $400 million revenue and maybe even exceed it, we might see the inventory rationalizing as a percentage of revenue. Definitely, if the part of the revenue that is associated with our hardware product is the one that is growing significantly. And the other thing is that sometimes I’m making decisions on a quarterly basis to get equipped with some level of inventory in advance, expecting some capacity or overcoming some capacity issues that may come because of deliveries that are specific for a specific order. So these are the two caveats. The bottom line is, yes, we do expect to continue rationalizing our inventory and we do expect to see further better results down the road.
Alex Henderson: In that context, obviously, you’ve got a very large order ramping for India and then second, you’ve got two new products that are ramping now and then another one that’s slated to launch late in the year. Should we be looking at some start-up costs associated with those or is that embedded in, in your thinking at this point? And what size of a cost is that that will eventually is that will eventually fall out as those products hit the normalized production level?
Doron Arazi: So these costs are already embedded in our projections. We took them into account. Usually, we try to rationalize these costs and to make these costs happen gradually so they don’t have a big impact on a specific quarter. If that happens, obviously, we’re going to disclose this kind of situation but we don’t expect that. So eventually, when we are talking about our gross margins for the rest of the year, we have taken into account the fact that we launched the two new products. I don’t think that the new, 100 gigabit event will have an impact on this year. But as for the other products, it’s taken into account and I do expect our gross margins from these products to improve almost by the quarter, as we’re able to improve our performance in terms of manufacturing and BOM cost.
Alex Henderson: Now what I was trying to calibrate was the — to what extent that abnormally large amount of startup costs in 2024, would then fall out in 2025 as the — as these products are normalized and whether that would then imply some further upside in the gross margin in the out year. I know you don’t want to give guidance for ’25, but conceptually, is that a logical conclusion?
Doron Arazi: Look, the startup cost that you would see are actually categorized into two. One is our investment in CapEx to build the testing equipment or to enhance the testing equipment to fit the new products, and that you will see in some investment in CapEx, but generally speaking, I don’t think that investment in CapEx is going to be that different from previous years. And the other set of course that are actually going to the expenses immediately. I would not give them more than, I don’t know, half a percent of the gross margin.
Operator: Our next question is from Jeff Rosenberg from Rail-Splitter Capital.
Jeff Rosenberg: I just wanted to ask if you could tell us what the contribution was from Siklu in the first quarter?
Doron Arazi: Look, we do not include and we don’t want to separate the Siklu contribution for a very simple reason. This is a tiny transaction and the integration is so fast and so to speak deep that it’s almost becoming impossible to separate the numbers. Yet just in a quality fashion, I can tell you that in the first quarter, the contribution to the gross margin of Siklu was even slightly higher than our expectation. And in terms of the business and the booking, it was also as strong as we were expecting. And I’ll just remind you that our projection for 2024 was that Siklu will contribute from their specific products between $25 million to $29 million in 2024. I think that we are on a path to achieve it. And if all stars align, maybe in the second part of the year, we’ll be able even to exceed this number.
Jeff Rosenberg: And the reason I was asking was just about looking at the year-over-year or even sequential growth because I think you got some contribution from Siklu in Q4. The growth looked a little slower, but I just I know it’s uneven and seasonality and so maybe the comparison against last year was difficult. So maybe just to kind of talk about the just overall strength in terms of revenue in the first quarter versus obviously very good bookings and building visibility for the year?
Doron Arazi: So Jeff, if you’re willing to sign an NDA and join our finance team next quarter, I would love to have you on board because you hit the nail on the head. There were a few moving factors that we thought that eventually if we start, we try to explain them, we just get everyone confused. First of all, usually Q1 is weaker and last year was a bit different for us to the good side primarily because of some delays in delivery of some of the products that were supposed to come or to be delivered in Q4 of 2022. So starting to put all these ingredients moving up and down and trying to give a more rationalized analysis of the growth, we thought that it will just confuse anyone. I think that the most important thing, especially after Alex’s comment about, okay, how rationalized and aligned the revenue growth between quarters that was indicating that we may see some fluctuations.
