Operator: One moment. We have a question from Brian Lee with Goldman Sachs. Your line is open.
Brian Lee: Hey, guys. Good morning. Thanks for taking the questions.
Julian Nebreda: Good morning, Brian.
Brian Lee: Good morning. I had a couple around the margins. I guess, first off, maybe more of a clarifying question. At points in time during the script, I think, Julian, you said adjusted EBITDA breakeven target in fiscal ’24 but then being at or near breakeven for full year fiscal ’25. So I think what you’re saying is you’ll be adjusted breakeven for the full year in fiscal ’24 consolidated, but then at/or near breakeven for the full year fiscal ’25 just in the digital business. Is that the right characterization?
Julian Nebreda: Exactly. Exactly, right. We will be — will be breakeven in ’24 — to be break even ’24 and digital itself will be breakeven in ’25.
Brian Lee: Okay. I guess that kind of prompts the follow-up question, which is a lot of investors we speak to assume that kind of the digital software applications piece of your business model would be more profitable than the hardware-centric side. So why, I guess, is digital taking so long to get to profitability? It seems like some of your peers in the energy storage vertical, they’re well ahead in moving toward profitability and already positive gross margin on kind of the software digital platform segments of the business. So just trying to kind of understand where you guys are coming from and why that’s a little bit of a different dynamic for you.
Julian Nebreda: A very good question. I think that this is a capital sake, our bidding strategy. The ability to gain economies of scale requires expanding into a new market from — going from Australia to California . But we realize that it has it was very, very complicated and expensive tool and expansion. And that has made it a little bit more difficult to meet our growth objective. So what we’re doing now here is concentrating on grid platform in that solution to ensure that we can get into a higher speed growth. So that’s the rationale. That’s the reason for — or they will say be further down the road that what we expected to be at this stage, . This pair our APM, our asset management tool is going to in line with our portal.
And that way, that just essentially, we bought them but late last year, late last fiscal year, we are integrated into our system, into a sales channel and it’s going along to testing line with our , so we’re very confident. So I think those are two, — I’ll say that today, the main driver for our delay has been the need to pre-platform.
Manavendra Sial: And just one clarification on your first comment is we are positive or we expect to be positive gross margin in digital team 2023 as well. And then the only other thing I’d say is we’ve talked about margin rates between 80% to 90% in the digital business, that’s still hold true over the next several years. Julian’s comment was much more around the EBITDA.
Julian Nebreda: That’s right.
Brian Lee: Okay. No, that’s super helpful. I appreciate the color. I guess last question for me, and I’ll pass it on is, the EBITDA breakeven target for fiscal ’24, I think in the past, you had said, I think, two quarters ago, there’s a path to growth — gross margin sort of in the 10% range in fiscal ’24. Is that what’s embedded in the view to get to EBITDA breakeven in fiscal ’24? Just maybe any thoughts around the 24% gross margin trajectory?
