We had said from 2022 when we started with the supply chain challenges that we expected to work through these challenges in our model and start showing the improvements in the back half of 2023. And you’re seeing this quarter gross margin made a step improvement as they — we started to work out through these expensive components, and we have been quite disciplined around price realization with the price increases that we drove last year. And you saw also that operating margins made a 600 basis point jump sequentially. And we expect to continue this operating leverage next year. So this is the — our plan on continuing to drive earnings growth.
Alexander Henderson: Okay. Thanks.
Operator: Thank you. Our next question is from Michael Ng with Goldman Sachs. Please proceed with your question.
Michael Ng: Hey. Good afternoon. I just have two questions. The first is on this trended software. It’s clear you had strength in renewals and true-forwards. I think last quarter, there was some weakness in new deals. I was just wondering if you were seeing some improvements there and whether you think software revenue can grow in the September quarter? And then I just have a quick follow-up.
Frank Pelzer: Sure, Michael. Thanks for the question. Yes, we did see an improvement in the new business activity, though it was still down from where we were a year ago. And so it was a positive sign to see, again, as Francois mentioned earlier, some of the irrationality come out of the buying behavior. Still many more deal approval levels than what we would have seen a year ago, but the deals are actually getting approved. So we’re really happy to see that come through. And we’re obviously not guiding to a mix on software versus hardware sequentially. But we do have a lot of faith in the software business. Obviously, last quarter was a challenging quarter. This quarter came back closer to the expectations that we have for the business. And we’ll talk more about the actual outcome next quarter.
Michael Ng: Great. And I just wanted to circle back on some of the double-digit earnings growth commentary. I think in the past, you guys have said you expect double-digit earnings growth for fiscal ’24 as well, more so on cost cuts, recognizing the uncertainty on the top line. Is that still the case? And do you still expect at least 300 basis points of margin expansion next year? Thank you.
Frank Pelzer: Absolutely. So yeah, Michael, when we made those comments, obviously, we had had an outlook of 7% to 11%. We’re higher now on EPS for where we’re going to be in FY ’23. We’re really happy about that. Some of that is coming from the tax benefit. And so when we take a look at our pretax income for FY ’24, it’s certainly our aspiration to be double-digit. How the things like tax and share repurchase and stock price as those share repurchases come into play, it’s just too early to give any specific guidance further than that on FY ’24. But we’re really, really happy with the progress that we made, the leverage that we’re seeing, particularly in our gross margins and operating margins. It’s exactly what we thought was going to happen, and more to come on FY ’24.
Francois Locoh-: If I go on the second part of the question around operating margins, look, we said we expected operating margins in 2024 to be around 33%. And we still feel that, that opportunity is there and we intend to drive to that.
Michael Ng: Thanks, Frank. Thanks, Francois.
Operator: Due to time constraints, our last question is from Sebastien Naji with William Blair. Please proceed with your question.
Sebastien Naji: Hi. Thanks for squeezing me in, guys. Can you maybe just talk a little bit about how competition for F5 has changed, particularly as you enter some of these new markets like API security, multi-cloud networking? And then maybe expand a little bit on some of the key points of differentiation as long to take share a few comments here.
