Craig Ellis: Yes, sure. So, some of that’s just a cyclical effect. Got it. Okay. And then, Greg, just turning to gross margins versus our expectations, we are tracking around 100 basis points lower than we thought in the first half of the year. As you look at the business and the way it can trend in the back half and admittedly, we have a hard time seeing beyond maybe 3Q, but how do we think about gross margins? Are you thinking that we can execute to fairly steady gains that 20% to 25% incremental margin, I think Jeff referred to, or is there either any cost item or mix item that can give us more of a step-up as we think about second half trends? Thank you.
Greg Swyt: Yes. Hi Craig. So, as Jeff said, right, we expect that as we drive incremental revenue, the 25% flow-through is still where we believe we are driving to and expect to see. So, that will continue as we move through the year. The other thing is, as Jeff talked about, is we have got our proprietary side that will start to drive some incremental margin improvements in the second half of the year. How much we are working through all of that, but for now, the 25% flow-through is what you should still model.
Jeff Andreson: Hi Craig. Maybe just to follow-on, is I think our view of our, I will call it, internal proprietary products that we are now integrating into our existing gas panel business, not necessarily our new generation of gas panels is tracking to what we expected as we kind of enter the year. I would say with the exception in Q1, revenue was very similar, but we just kind of – we were too low down the learning curve and cutting some of these new fabricated parts, but they will quickly overcome it.
Craig Ellis: Got it. That’s helpful. Thank you very much.
Jeff Andreson: You’re welcome.
Operator: Our next question will come from Krish Sankar with TD Cowen.
Krish Sankar: Yes. Thanks for taking my questions. Just had a couple of them, one is, when I compare or contrast to your closest peer reported last evening, they have been kind of growing revenues for the last couple of quarters. You guys have been kind of flat lined. Is the delta as simple as they are more tiny semi-cap OEM exposure, you have more silicon carbide, or is there something fundamentally going on with the top large U.S. semi cap OEMs?
Jeff Andreson: Well, I don’t want to speak for my competitors, but we overlap around 40%. I would say largely, I don’t see much deviation where we compete. Having said that, obviously, some of his upside was this China revenue base that I don’t have a channel for or we don’t chase it as well. The services business is different and you recently required another kind of, I guess I would call it a sub-fab gas delivery business as well. So, we don’t overlap as much as people see, but where I think we play, I don’t really see if the bottom line question is, are we seeing share shifts, we don’t see it. So – and so the profiles are just a little bit different because the businesses are not apples-to-apples.
Krish Sankar: Got it, Jeff. And then you kind of spoke about EUV delays for leading edge. I am kind of curious, just can you just talk to the mechanics of like when your EV customer ASML gets a booking to when they ship a tool to when you get the order and when you ship it, can you just talk us through the timeline, because I am just kind of curious how to figure it out compared to this year versus next year and given their build-out profile?
Jeff Andreson: We ship about five months before a tool can be shipped by them. And then I don’t – I am not going to report to know their revenue recognition on the other end. But we are about – we go in about five months before they deliver a tool. We did see, again, some modest reduction within the quarter from the entry point of the quarter. And then we have seen it kind of – when we talk about the midpoint being down a little bit quarter-over-quarter, it’s probably about half silicon carbide and half EUV. And then they have taken down some of their build plans, and I think they have been pretty straightforward with their comments. And so that just flows through to us. And all we are seeing is it going into 2025.
So, it sets us up for a good growth year in 2025 as I look out to EUV right now. And now the other thing we are doing is we have had this relationship now for probably 6 years or 7 years. I think we are starting to pick other subassemblies up and things like that, that are helping us kind of increase the content we get on each EUV tool as well.
Krish Sankar: Got it. And one final question, if I can just squeeze it in. If you kind of spoke about on the inventory side to Brian’s question, how gas panel inventories are kind of normalized, but weldments and machining are still pretty high. I am just kind of curious, if you look at your products, where would you say is the stickiest market share to the lower? I am guessing gas panel is probably high market share or it’s pretty sticky compared to machining and weldments, which could be more fungible. Just your thoughts on that would be helpful. Thank you.
Jeff Andreson: Yes. I would say certain portions of the addressable market within weldments are highly fungible. We call it orbital welding in a little more of a less skilled. When it comes to TIG and more sophisticated combinations of weldments and subassemblies are a little bit sticky. I mean in the long run, nothing sticky to be honest. But I think with machining, it’s fairly sticky. Those take long qualification period. So, once you have a machine shop, that becomes fairly sticky in the long run. And obviously, with gas panels, we still view ourselves as the largest market share, somewhere around 30s, low-30s, I would say, percentage of market share kind of globally. So, that’s pretty sticky as well. And new entrants are fairly rare, maybe one in the last 5 years have come in, so.
Krish Sankar: Got it. Thanks Jeff.
Jeff Andreson: You bet.
Operator: Our next question will come from Tom Diffely with D.A. Davidson.
Tom Diffely: Yes. Good afternoon. I appreciate the chance to ask a question. Maybe, Greg, first a clarification on the cost side, for the components, was it material cost, was it expediting, what caused the variance in the cost this quarter?
Greg Swyt: So, on the components side, Tom, so really, it was, I would say, more of a mix within the customer mix there, not…
Jeff Andreson: Well, that was about half of…
