Operator: Thank you. [Operator instructions]. Our next question comes from Josh Nichols with D. Riley. Your light is open Josh.
Josh Nichols: Yes, thanks for taking my question. Great to see the margins come in better than expected for the quarter. In the vein of moving beyond this light vehicle production model you talked about at your investor today recently. If you could provide any kind of updates on, I think like driver and in cabin monitoring, maybe some of the earlier opportunities, I think you may be releasing something later with at least 1 o’clock and later this year. Any progress update on that? And also if you could just kind of touch on what the competitive dynamics of that type of offering look like?
Steve Downing: Yes, so you’re absolutely right. At our investor and analyst today we did talk about really having several awards in that space. It’s a very difficult product to manufacture and build given the content and what it looks like and how we’re trying to achieve it. So we’re in launch right now with our engineering teams. We feel very good about where we’re at. Obviously there’s a lot of learning that you do whenever you’re launching a product of that complexity. But when we move through the end of ’24 and into ’25, we expect to have several launches of those of that type of product. And so it’s exciting. in terms of how what the competitive set looks like on that product, if it’s a baseline version of DMS and CMS, especially on the DMS side, there’s quite a few players who could do it in different portions or geographies of the vehicle.
And so if you look at what we’ve been focused on over the last several years, most of the industry a couple of years ago was all focused on, kind of center stack or right behind the steering wheel kind of locations for cameras. We were pushing hard on obviously going higher up in the vehicle so you could get an increased feature set. And that’s the trend we’re starting to see in automotive now as OEMs are really starting to come to grips with where you could position cameras in a vehicle and what other feature sets you can get. So whenever you’re dealing with base DMS though, there’s going to be more competitors, lower margin profile, but great revenue generation. And so what we’re focused on these first few launches makes sure we execute flawlessly in terms of the technical aspects of the product.
Longer term, as we add additional functionality and features, that’s where we see opportunities for margin expansion and so that’s one of the reasons why we made the acquisition in Israel to really focus on full cabin monitoring beyond just driver monitoring because we believe there’s a feature set there that can help drive revenue and profitability, not only for ourselves, but for our OEM customers as well.
Operator: Thanks, Josh. [Operator instructions]. Our next question comes from John Murphy with BofA. Your line is open.
John Murphy: Good morning guys. Just one question on gross margin. I mean historically when you build a facility, there’s been some pressure on gross and total margin. But that doesn’t seem like that’s what’s happening this year. But sort of on the flip side when it’s done and starts to be filled up the margins expand. That’s not really part of the way you guys have kind of talked about margins more recently. I’m just curious is there potential is this facility near North Riley campus gets ramped up in ’25 and ’26 that we could see, upside to this. The rate of 35% or 36% gross at the end of this year.
Steve Downing: Yes, I think I think probably not at the end of this year, but throughout ’25 as that plant comes online and then start and it starts to drive revenue for the company. There is opportunity obviously for further expansion beyond that depending on what we fill it with what kind of products we’re getting sourced and what the total mix of the business is part of the reason there’s really two major reasons why adding a plant doesn’t have the negative impact that it used to have. Number one is just the law of large numbers. So as we’ve grown the incremental impact of adding a plan is less on an overall percentage basis of the business or able to absorb that easier. Number two is how we how we spend and how we bring plants on tends to be controlled over a better period.
Number three is how we can do that. So we’re actually able to do that in a more in a more likely time to revenue fashion. Instead of having this massive event where it’s a cliff event where you’re adding hundreds of people all at once. We tried it. We’re actually able to scale that much better by moving product out of existing buildings to help fill. And so usually we have portion of that revenue already flowing through once a plant comes online, which helps us kind of soften that beachhead of on ramping a new facility.
John Murphy: That’s incredibly helpful. And then just a second one on unit volume down 2% in the quarter. Quarter was good, but that was maybe a little bit lighter than we were expecting. As we think about the FY24 guidance, you definitely haven’t given us or at least I don’t recall you giving us unit volume forecast in that. Is that something you’d be comfortable giving us now? What are your kind of thoughts for unit volume growth in 24?
