Andy Paul: Yes, that’s a good question. And both are true. The largest component is size and leverage. And so clearly, the $2-plus billion level is a lot. There’s a lot more overhead — less overhead in terms of percentage. So that drives it up. But there’s still a lot of margin enhancement going on in almost every product line. We still have some remnants of freight — high freight costs sitting in inventory. As Michael said, they go into the balance sheet. We still have some discounting going on, as I said. So we think if we got back to the normal situation that we were in — in 2019, in terms of market, we’d actually be substantially above 41 or 2 points higher in terms of EBITDA level.
Operator: Next question, Mario Lu with Barclays.
Mario Lu: Great. So the first one is just a high-level question. So now that the retail channel is normalizing, Curious if there’s any other areas of focus that you’ll be returning to or new initiatives this year? I know in the past, you mentioned kind of growing your DTC channels or growing your services segment, for example.
Andy Paul: Yes. Good question, Mario. Well, at the moment, the most important market we’re chasing after is — or trying to keep up with is a self-built PC component market. That has really researched with the new graphics cards coming out with from Nvidia. And in fact, it’s only really the high-end cars that have come out so far. So we still have which will probably end up being the most popular card that will drive most volume for us. So the first priority for us is to keep up with that demand is very strong, stronger than I think most people would expect given sort of a recessionary period, you would think it would be difficult for people to spend $2,000 or $3,000 on building the MPCs but that’s what everyone is doing at a very good rate, substantially above pre-pandemic levels.
So that is one area. We talked earlier about the fact that we still have a large market to go after in gaming peripherals, so that will continue to be a focus. Streaming and building out some of the streaming and content creator products such as Stream Deck. We’re trying to enhance that, so it’s more useful for people doing all sorts of work in business, whether it’s using Teams or Zoom or Adobe. So we’re going to do a lot of work there. And then yes, we are actually doing very well in our direct-to-consumer business, we had a record 15 total sales last quarter that was direct-to-consumer. So I think it’s important for us to continue to build that out.
Mario Lu: Great. And just a follow-up on the comment on seasonality. You mentioned that the second half will be stronger than the first half. Is there any , so that we can use, like for example, should we look back in 2019, where the second half was, call it, mid-50 percentage of total?
Michael Potter: It should be much more like pre-pandemic type of patterns down from Q4 into Q1. Q2 is the lowest and then it starts going back up. Second half is higher than the first half. Partially, it will be from new product releases during the year as well. We believe that expand the addressable TAM for us and that will give us more opportunity for more revenue throughout the year and then I’ll help our second half.
