Steve Frankel: Thank you. Patrick, let me go at the broadband growth in a slightly different way. We’re clearly seeing the Comcast acceleration. Can you give us a flavor for when do you expect the other Tier 1s that you already have to kind of accelerate their pace of deployment, which is, I think, something we’ve been anticipating with at some point kind of, or maybe another way to cut out is it, how many of the current customers are at what you think is steady state versus still early in that ramp?
Patrick Harshman: Well, look, a couple of things. We’re fortunate for the relationship with Comcast. They are aggressive, they are out in front and they are pushing hard I think anyone, who listened to their conference call last week can test to all of that. And so we are pleased to be and feel fortunate to be right in the middle and able to support them. That being said, I think that they are paving the way for other parts of the industry. And to date, if you’ve been following us, we’ve €“ I think we’ve been able to disclose 11 Tier 1s to date. And of those, about seven, Steve, I would say, are really in the process of rolling. None of them is as far along and has the pace with Comcast to date. And we see them all of those accelerating toward that.
And indeed, there is another four out of the 11 that are just getting going and haven’t really materially impacted things. So with the €“ just the currently on Tier 1s, we see the rest of the pack picking up the pace, of course, proportionate to their size, right? And then going back to our September Analyst Day, there is a big chunk of the market, over two-thirds of the market that is not on board with our platform yet. And that’s also very much in our sights. And we expect that the rest of the market is also headed our way from an architecture point of view. We think we’re very well positioned to do well in the rest of the market. And over the next couple of years, we see corresponding aggressive deployment. And all that really does speak to the reason why we have been kind of consistent in articulating not only our coming 12-month target about a 36-month outlook for you and the rest of the investment community.
And I hope it comes across loud and clear here not only our growth target for 2023, but our conviction and delivering on the aggressive growth numbers we’ve laid out for 2025 as well.
Steve Frankel: Great. And given the comment around the booking the supply chain pressures seem to be easing a bit. What do you think now are typical lead times for node? So how should we anticipate those orders and deliveries lining up over the next couple of quarters?
Patrick Harshman: Well, to be clear, I think a couple of our customers are €“ maybe a little bit ahead of the good news or slowing down anticipating improvement. I mean it’s still an environment which is not €“ Sanjay indicated, has not returned to what we would consider normal, or pre pandemic semiconductor shortage conditions. So the situation has improved. We’ve made a number of decisions to optimize our execution in the context of continuing challenges. And I think we have to €“ we certainly want to see a couple more quarters before we declare victory or, let’s say, a return to normal.
Steve Frankel: Okay. Let me sneak one last quick one in here for Sanjay, how should we think about the strategy for paying off the 2024 convertible given the way you’ve laid out cash flow projections for year end 2023?
Sanjay Kalra: So Steve, as we laid out earlier, our capital allocation policy is for the debt, we would pay the principal in cash. We are committed to do that. We recently did for the $37.7 million debt, and we will do exactly the same for our $115 million net in 2024. As far as it relates to the premium on conversion, we have time to make that decision. But at least for accounting purposes, conservatively presume that the premium will be paid in shares, and that’s baked into our diluted share down.
Steve Frankel: Okay, great. Thank you.
Operator: Thank you. Our next question comes from the line of Tim Long of Barclays. Your question please, Tim.
Tim Long: Thank you. Two questions, if I could. First, not to belabor this point here, but I wanted to ask kind of about maybe changing contracts and situations as technology emerges and other players come into place. So I’m just curious when you start talking to some of the newer larger Tier 1s or even in your current customer base. Number one, are you seeing any kind of different rollout timing that are available as the technologies has matured? And number two, are you seeing more of an appetite for multi-vendor types of arrangements within some of these networks? And then I have another follow-up.
Patrick Harshman: Well, let’s see, on the first part, I think that the €“ one of the benefits of us having really pioneered the work in virtualization DAA is that we, as a company, have tremendous deployment expertise. And while any rollout €“ any network rollout is inherently complex and particularly with larger operators, they all have different idiosyncrasies factors to consider. I think our ability to bring our expertise and experience to bear is certainly improving the possible pace of rollout relative to what it was a couple of years. That being said, I mean, I think all the customers we talk to still look at and think about multiyear kind of rollout plans. And certainly, multi rollout plan is plans or what is contemplated in our multiyear outlook or targets that we’ve established.
On the question of multi-vendor, specifically around the cable architecture, frankly, we continue not to see any competitor on the horizon with a competitive virtualized software core. On the other hand, from the beginning, we’ve acknowledged and talked about competitors in the hardware arena. You may recall, going back 15 months or so ago, our initial multiyear model contemplated us only having about 30% of DAA market share. We raised that somewhat in our more recent September €˜22 outlook is just reflecting the strong success that we’re seeing in the hardware area. But to be clear, we always expected and continue to expect the hardware piece of DAA to be a multi-competitor situation. And really, Tim, that hasn’t changed. That being said please don’t get me wrong.
While we think we have a kind of an overwhelming lead in software, I’d say we have a strong lead in hardware. And while I fully expect to split hardware business, we still have a pretty strong competitive advantage in hardware that we are seeing play out.
