Steven Humphreys: I think we’ve tried to give some pretty good visibility that we’ve built it up from the ground up. And it really is important to us that we put numbers out there and we commit to them and stick to them and we deliver on them. I think we factored in the risks of dependency on customers launching products, the risks of that are always there in the physical security business and how fast the projects are going to deploy. We’ve got a good funnel that gives us a fair amount of upside protection on that. I mean downside protection. So I think we’ve tried to factor in supply and demand as well as sales cycles and customer uncertainty in terms of deployment. If a major recession hits, then as I mentioned in my comments, things like cannabis, specialty packaging, and mobile devices, those can all be recession affected.
But we factored in €“ frankly, we are expecting some recessionary effect. So that would be as if it was a bad, a strong recession than most people are thinking.
Brian Ruttenbur: Great. Thank you very much.
Steven Humphreys: Thanks, Brian.
Operator: Our next question comes from Jaeson Schmidt with Lake Street Capital. Please proceed.
Jaeson Schmidt: Hey guys. Thanks for taking my questions. Just want to dig into sort of that lower margin, that $5 million to $7 million that is offsetting the growth in that IoT solutions. I mean, how much of that is a function of just lack of supply and therefore, are you guys having to prioritize higher margin business? And how much of it is a function of kind of the pricing environment changing?
Steven Humphreys: Yes, it’s those two factors and you’re exactly right that with constrained supply, we’ll prioritize higher margin business with some categories that are just lower-margin library, for example, is a lower-margin category. And then also there is some projects that we started early that were strategic and we’ve been very open about that that some of them we enter into in the beginning with lower gross margins in order to get the business going and then expand as we go forward. And I mentioned in my commentary that in the mobility space, there is one that we’ve moved on from, because the margins were low in that. So it’s in all three of those categories.
Jaeson Schmidt: Okay. And just to follow up on that, I mean, is this sort of a new situation? I mean, when you had given guidance on the Q3 call, was there an assumption that you would have some natural low margin business that you wouldn’t go after, but now you are seeing more of that, hence, sort of the revised guidance? I am just trying to factor in, yes, what was factored into previous guidance compared to kind of this updated outlook?
Steven Humphreys: Yes. So a couple of things. Certainly, the rigorous attention to gross margin is one of them. And we do think that there is more of a recessionary risk we’re hearing from our customers caution about demand in mobility, even in the medical area where they are just cautious about when exactly they are going to pull the trigger on launching projects. I think that’s working through the budgeting process of a number of companies and so we’re trying to be thoughtful about that and make sure that we factored it totally in and it’s not going to be something that we have to come back and comment on again.
Jaeson Schmidt: Okay. That’s helpful. And then, just the final one for me and I’ll jump back into queue. Justin, how should we think about OpEx throughout this year?
Justin Scarpulla: We are going to see an increase in OpEx. Obviously, we increased our overall headcount in 2022. So that will be fully burdened and fully loaded into the 2023 plan. We are continuing to make some strategic hires and we’ll make some hires within €“ along with our Thailand expansion in 2023. So they’ll be without the exact guidance that we do. There will be an increase in our non-GAAP OpEx and our GAAP OpEx as well in the15% range, somewhere around there.
