Chuck Treadway: Yeah. I’d start by saying on the amplifier side, in terms of chips, we’re looking at the fourth quarter for being able to launch that FDX product, ESD a little bit sooner than that. And then related to where we’re going with the products and our business and the future ramp-up, I would say, in general, our customers just have too much inventory right now, and they’re trying to figure out where they want to go with HFC or do they want to go to DAA. And I mean we have a pretty large installed base. So we have some customers that just want to do more with their existing network and look at DOCSIS 3.1E for example. We’re ready to go with that as we talked about, that gets you 5 to 8 gigabits down speed just with software upgrades if you have the right hardware.
And then, of course, we have our virtual CMTS that’s in labs right now with the RPDs and R&Ds. There are some challenges with parts for the ESD side of those, but that’s getting worked out. I’m talking about the main chip. On the FDX side, those are pretty much ready to come in. So, hope that helps answer the question for you.
Simon Leopold: Yeah. Thank you very much.
Operator: One moment for our next question. Thank you. Our next question comes from the line of Steven Fox of Fox Advisors LLC. Your line is now open.
Steven Fox: Hi, good morning. I had two questions. First of all, Chuck, I understand that there’s a lot going on within the different businesses that makes you talk about limited visibility. But can you just dial in a little bit closer on your thinking for the CCS business for the full year? Some of your competitors have talked about improvements as you go throughout the year to varying degrees. I was wondering what you thought on that? And then secondly, Kyle, just on the cash flow statement, I just want to confirm that the cash flow for the quarter came in basically where you’re looking — what you were looking for 90 days ago or if there were any puts and takes we should know about? Thanks.
Kyle Lorentzen: Yeah. Let me answer the second one first, and then Chuck can answer the first question. Yeah, I mean, I think we said in our prepared remarks that the cash flow was sort of in line with what our expectation was. There weren’t any major puts or takes on the cash flow other than maybe a little bit of a bump just because of the better EBITDA. But in general, it came in line.
Steven Fox: Great.
Chuck Treadway: Yeah. So Steven, yes, I would say that as I shared, we are seeing a pickup in the order momentum that we are seeing, we do believe we’re going to have a sequential improvement in Q2 and a stronger second half than the first. So that would lead you to think that we would believe that Q1 would be our lowest quarter in CCS, and it would continue to build from there.
Steven Fox: So in general, it sounds like you’re in line with competition. There’s no areas where you’re lagging or leading in terms of end markets versus product areas?
Chuck Treadway: That’s correct.
Steven Fox: Okay, thank you.
Operator: One moment for our next question. Thank you. Our next question comes from the line of Samik Chatterjee of JPMorgan. Your line is now open.
Samik Chatterjee: Yeah. Thank you and thanks for taking my questions. Maybe for the first one, Kyle, I hear you on the loss of volume leverage in ANS and NICS as revenues come down there and that likely continues into 2Q is what I’m sensing from your tone here. But how should we think about your ability to sort of take cost out through the year in those two businesses, just to buffer some of the loss of volume leverage as you go sort of look at the lower order rate in those two businesses?
Kyle Lorentzen: So I guess what I would say on the cost side, we’ve mentioned we’re in the process of $100 million sort of fixed cost reduction. We’re in the middle of identifying projects and implementing projects. I would say that as we sort of get to the end of the year, that will be fully baked into our numbers. And what I would say on that is that although that’s across all of our segments, definitely the next business in ANS are part of that $100 million reduction. I think also with that said, in both of those businesses, we expect that there is going to be a recovery in that business — in those businesses, and we’re going to continue to make investments in those businesses as it relates to supporting our customers and generating new products. So I mean, I think there’s always the balance on the cost side, but we definitely continue to look at cost reduction. And I think we’ll definitely get some additional cost out as we work through the year.
Samik Chatterjee: Got it. And for my follow-up, if I can just go back to CCS and your commentary about what you’re seeing in terms of strength on the data center side of the business, can you just talk a bit more about what does your sort of overall customer footprint they look like across data center companies and sort of cloud companies, do you feel you have your fair share already? Or as you think about this investment cycle on the data center side, do you think there’s more opportunity for market share relative to where you stand today?
Chuck Treadway: Look, I believe this market is growing at really fast rates, and I think we’re holding share now. I think we obviously have an opportunity to gain share. We have some great partners as well as some great products. So I wouldn’t count us out on this in terms of gaining share, and I believe the market is very strong right now. And we’re definitely getting our fair share of it, and I believe we have an opportunity to do more.
Samik Chatterjee: Thank you.
Operator: One moment for our next question. Thank you. Our next question comes from line of Amit Daryanani of Evercore. Your line is open.
Amit Daryanani: Good morning. Thanks for taking my question. I have two as well. I guess, first on the free cash flow side, I think you folks talked about lower free cash flow expectation in ’24 versus ’23. And I think you called out working capital requirements is a big driver for that. Can you just help me think about — do you think free cash flow will be positive in Q2 and for calendar ’24?
Kyle Lorentzen: Yeah. I mean we’re not providing that level of guidance. I mean I think I’ll characterize it as we definitely won’t see the cash burn that we saw in Q1 but there’s probably some level of cash burn that happens in Q2. Historically, we’re building a lot of cash in the fourth quarter. And — so the profile is sort of burn cash early in the year and then build it back in Q4. I think that similar profile will be what we see in 2024.
