Jessi Betjemann: Yes. And on the point about the strategic spend decreasing. At last quarter, we had $40 million and this quarter it’s some $33 million in total for the strategic initiatives. And a large driver of that is a shift around $5 million from spending from OpEx to CapEx. And then there was about $2 million overall savings as well. So that’s what’s driving that reduction. And that’s also why, because of that shift from OpEx to CapEx, you don’t necessarily see any of that uplift power flowing through to free cash flow.
Ric Prentiss: Fair. Okay. And then just one more on that 2024 guidance and the timing, if it does slip out from Q4 2024 into the early few months push into 2025, what items would be really affected on the on the guidance as it is at the equipment revenue, could it lead to service revenues, is it a margin on EBITDA? What line item would be watching the case?
Jessi Betjemann: Yeah. So actually, I think we noted this on the previous call to be conservative, we did not factor in any YG revenue in our guidance that we have provided, so revenue won’t be impacted. It really will be on the OpEx side will be a benefit because, there could be some push out of spending potentially, both for OpEx and CapEx.
Ric Prentiss: Which is not really a downside risk or distribution to valorize, even though, yes, even though the project moves out, the revenues weren’t expected anyway. Okay. That helps clarify that. And then also I want to go back to Simon’s question then also for my final one on the folks were the RPU, the price increase 4% price increase. February, you think most of the style, I think you said 80% of the DX were the hourly folks. So should we expect some normal course kind of deactivations as you’re upgrading people to the advanced product. Is that white? I think Jessi mentioned some maybe some dampening of US installs for a couple of quarters here.
Oakleigh Thorne: Well, you’re going to see a lot of conversions, and they don’t drive units online. They will drive some equipment revenue, but you’re getting a lot of people upgrading from classics this year to advanced platform as part of the LTE rip and replace program. So, you’ll see that. In terms of what’s going on in the dealers right now we’ve had good signs and bad signs. I mean, there’s — everybody’s sort of gotten used to managing in a somewhat screwed up supply chain world, and so I think the dealers are handling it better. Customers are handling it better. We had a lot of DACs in February. A lot of them have already come back, though, so that implies a little bit of shortening of the suspension periods, and though on the other side, there’s still a lot of engine problems and engine parts problems that are extending some suspension.
So, we’re not getting out of our skis on projecting any change in deactivation and reactivation at this point. But we’ll watch what happens here over the next couple of months and then decide whether there’s a permanent improvement or not.
Jessi Betjemann: Just to clarify the 80%, it was the 80% of the increase and deactivation had from quarter-to-quarter, not of the total deactivations.
Ric Prentiss: Got you. That’s helpful. Okay. Thanks, everybody. Stay well.
Oakleigh Thorne: All right. Thanks, Rick.
Operator: Thank you. Our next question comes from the line of Lance Vitanza of TD Cowen.
Oakleigh Thorne: Hey, Lance.
Lance Vitanza: Hi. Thanks for taking the questions, and congratulations on the quarter. I guess my question is with respect to AOL having ticked lower a little bit. Is this just sort of what we’d expect from — we’re in this prelaunch phase, whether it’s 5G or Galileo. I assume that new customers or new potential customers are waiting, right? And so, similar to the run-up to the launch of Advance a few years back, it’s tough to get new people over the goal line. And so, is that dynamic in play right now, or are we still seeing that happen, and do we expect it? Is that possibly an issue as we think about a further delay in 5G? Do we think that that could actually pressure equipment sales? Not related to 5G, but could that pressure your existing sales going forward?
Oakleigh Thorne: Yeah, I mean, I think for a couple quarters, we’ve been in a bit of a lull in the product cycle. And you see it in Apple Watches, et cetera, the same thing, where sales sort of slow down of the old products as you move into new, much better products. So, what we’ve tried to do is make Advance L5 a natural stepping stone to 5G and Galileo, and that’s working to some extent. I mean, we’ve obviously had great equipment sales of L5s this quarter, and all that has been — well, not all, but almost all of that has been people say, okay, great, I’ll be ready to go to Galileo or 5G if I install that box. Because if you go into Galileo, you don’t need to change the box. If you go into 5G, you just replace the L5 with an exact replica form factor called the LX5, which has the 5G functionality in it.
So, they’re both very easy upgrades, and that is working for us to some extent. And that was why we got the fleet pull through for NetJets, and that’s where we got this acceleration of OEM orders. So, we’ll see if that persists. It would be nice if it did, but we’re not counting on it right now, and we’re not factoring that into our guidance at all.
Lance Vitanza: Thanks. And then the last one for me is just on the share repurchases and looking ahead, you’ve got I guess most of the cash flow for the year has already come in. Does that suggest that we’re sort of done with your free cash — with your share repurchases for the time being or given that you have cash on the balance sheet, is that still something that we, at least in theory, could potentially see going forward as well?
Oakleigh Thorne: I think it’s I mean, you could potentially see going forward. We’ve got a $50 million repurchase program approved by the Board. We have an investment committee that takes a $10 million at a time. We’ve spent about $25 million at this point, you know.
Jessi Betjemann: And you know, I mean, as we’ve ever been a continuing to look at that, we’ll assess how the share price and that we’ll look at that opportunistically. And — but we also want to balance that with now with their hedge step down to an understanding whether or not we would pay down debt.
Oakleigh Thorne: Yeah. So you — and the Board will look at whatever they think is best for shareholders, and that’s know the way we’ll go.
Lance Vitanza: Thank you, Charles.
Oakleigh Thorne: Thanks, Lance.
Operator: Thank you. Our final question comes from the line of Louie DiPalma of William Blair.
Oakleigh Thorne: Hey, Louie — to Louie, how are you? Louie who worked at Williams, sorry.
Louie DiPalma: Hi, good morning, Jessi and Will. Oak, you indicated that you expect to begin shipping the HDX and pendant [ph] in the fourth quarter. When should we expect the first STCs to be received? And will your STC. schedule remain roughly a year behind StarLinks. STC schedule on the business jet market or do you expect to narrow that gap?
Oakleigh Thorne: Well, we’re better at getting STCs they are in and so we’ll get a lot of STCs in a hurry. And that’s why I noted the number that we’re in work already, in my script. We will get –you have to get to your first article STC before you can get PMA. So I think I said we were going to get PMA in Q4. So we’ll have our first article STC before that. And then we work hard with know how to work with dealers on STCs so that they are ready to go when we are ready to go. And so we will have a lot of them pre-primed and you know, I would guess we’d have several maybe even before the end of the fourth quarter and certainly a lot of them in the first quarter next year. So this is one of the things we do really well, very peculiar to our little industry in. It’s something that StarLink is learning the hardware.
