Operator: Thank you. [Operator Instructions] Next question we have comes from Erik Woodring from Morgan Stanley. Please go ahead.
Erik Woodring: Super good morning, guys. Thank you for taking my questions and all the support to you guys from Team Morgan Stanley here. Two questions. Maybe Ronen, first for you. Some of us saw firsthand how successful the ITMA show was for Kornit. Across the different kind of new systems and or upgrades that you sold, do you still expect to convert about 90% of those letters of intent? And second, can you help us understand kind of what percent or directionally, how much of those deals you believe will convert in 2023 versus what is more so in the pipeline for 2024? And then I have a follow-up. Thank you.
Ronen Samuel: Yes. So I can tell you that we are working very, very closely on all those opportunities and letter of intent and POs that we received from ITMA. ITMA was indeed a very successful event. And I can tell you that most of the opportunities that we had are still live and serious. We’ve already converted close to 20 deals customers out of ITMA, and we expect to have few more in Q4 with the rest coming into H1 2024. So we are working very closely. I can tell you that most of the deals still alive and kicking. Yes, the sell cycle is taking longer than we expected at ITMA. Some deals that we closed at ITMA are still open to deliver the system because the financing is not closed yet, but the customer are serious. We hardly lost any deals out of those opportunities that we had at ITMA.
Erik Woodring: No, thank you. That is very helpful color. And then maybe as my follow-up, obviously it’s a challenging world right now. I’m sure you’re not necessarily happy with the level of underperformance in the stock since 2Q earnings. It’s just the nature of the markets today, unfortunately. So maybe my question is, I can sense from you a belief in the products, a belief in the pipeline, your ability to manage costs more efficiently, and you have something like 70% of your market cap in cash and no material debt. So why aren’t you buying back more stock in the near-term to send a message of confidence to the market? And that’s it for me. Thanks so much.
Lauri Hanover: Hi, Eric. Well, let me just respond to you. If you remember what I said in my prepared remarks, the average execution price of our buyback has been about $22 per share. And at that price, we believe that the market had meaningfully undervalued us. So now with the stock price just a few dollars away from cash value as you mentioned. We’ve see an even more attractive opportunity to repurchase our shares, and as a result we plan to be much more aggressive in using the remainder of our existing share repurchase program because we do believe that combined with our existing pipeline of investment opportunities, this is a very strong use of a portion of our cash balance.
Erik Woodring: Great. Thanks so much for the color and good luck guys.
Ronen Samuel: Thank you, Eric.
Operator: Thank you. The next question is from Chris Moore with CJS Securities. Please proceed with your question.
Chris Moore: Terrific. Thank you. Appreciate taking a couple of questions. Obviously we talk a lot about the macroeconomic headwinds, continue to create uncertainty. Just are there certain products that will likely be less impacted in fiscal 2024 than others regardless of the macro backdrop?
Ronen Samuel: So when you relate to the products, I assume you relate to system because part of the products, of course are the inked and supplies and supplies I mentioned continue to go nicely in Q3, and we expect it to go in Q4. And I’m talking [indiscernible] sequentially, of course and also in 2024 we expect supplies to continue to go as we see the consumption going with our install base. And also we are entering to new markets and new customers and selling additional systems. In terms of systems, look the entire dynamic is stuff. What I mentioned before, the growth we see in the – more in the retails and brands, we see those customers are getting and understanding that they have to change their business model into on demand and to get rid of their inventory to react faster to the market.
And they have no choice. This is the time for them to change and many of them are jumping into it. And Kornit is the only one that can provide them the quality and the productivity and the TCO that’s required. So we expect to see the continued growth coming from these places and also from the screen replacement. The DTF, as I mentioned, Direct-To-Fabric is another growth engine relative to within Kornit. And there we are seeing the growth coming more from places like Latin America, specifically Brazil and India.
Chris Moore: Got it. I appreciate that color. Maybe just as my follow-up; Lauri had mentioned two new partners on the financing side, maybe can you just give a little bit more detail or an update there with Q3 for example, meaningfully helped by the financing options?
Lauri Hanover: Sure. So, as I said earlier we have on-boarded two new financing partners. In the third quarter more than 20% of our systems were financed by financing partners, excluding the two new ones that we just on-boarded. So it is providing a good source of support for our business and we certainly hope to expand that in the future. These two new partners, one is in Europe and one is in the U.S. So we’re covering those areas as best as we can as well.
Chris Moore: Got it. That’s a helpful number. Thanks, Lauri.
Operator: Thank you. Our next question is coming from Jim Ricchiuti with Needham. Please proceed with your question.
Chris Grenga: Hi, good morning. This is Chris Grenga on for Jim. Thank you for taking the questions. You had mentioned that there was a bit of a pause on the upgrades in Q3 as people get ready for peak season. I’m just curious what the runway is for continued upgrades in Q4 and beyond, if you could elaborate on that potential? Thank you.
