Operator: The next question comes from Mike Walkley of Canaccord Genuity. Please go ahead.
Mike Walkley: Thanks for taking my questions, and I’ll try to keep them a little briefer than multipart here. Saleel, just welcome aboard. I look forward to working with you. You mentioned you’re in the midst of a strategic portfolio review, but given your short tenure at Lantronix and with your unique industry background, do you see any low-hanging fruit right away in terms of, like, go-to-market or distribution channels that you think can help expand Lantronix’s reach?
Saleel Awsare: You know what? I’ve done my first QBR with the team just a few weeks back. I wouldn’t go into low-hanging fruit. There are areas that I can look at that we can go with customers that I might have worked with in the past and as I look at the future. But as I said earlier, I think the Compute and Connect portfolio that we have is really very good as I think about it in the future. And I’ll get you more details as I go through the quarter and go through the review, because that’s when I’m going to get really my teeth into it to understand what, if any, low-hanging fruits there are and I’ve done this in the past. It’s a great question. What can we do more? Where can we go do more? And I’ll just digress and give you one little piece, which I’ve really gravitated and I understand it’s kind of differentiated here, which is the out-of-band.
That out-of-band area, you know, Lantronix is a leader. Not a lot of people in this space. As folks like NVIDIA and stuff roll out these new pods for data centers for AI, they all have this out-of-band port in there. Not being exercised yet, but as I think about that, can that be a low-hanging fruit? Maybe. But again, give me a little bit more time, but I think there are things here that we can really go after.
Mike Walkley: Great. That’s helpful. And just to follow up maybe for you and or Jeremy, as you start to meet with customers and you look at the longer-term opportunity, in the past Lantronix has shared, kind of number of large deals in the pipeline. I think maybe the last time it was around 40 deals and $150 million. Any update on that pipeline opportunity?
Saleel Awsare: Yeah. So let me talk about the funnel, and this is something I’ve spent a lot of time when I was at Synaptics. The funnel is a great thing that you really want to understand. So as I said, I went through the QBR with our sales team and marketing team just a few weeks back, and I’m very pleasantly surprised at the size of the funnel. But before I report back on the specific numbers, and I am very familiar there’s a number out there, I’m going to go just do a much more of a deeper dive, understand it, and see, you know, where we are with each of the programs in the funnel with respect to the schedules and stuff like that. So just give me a little bit of time, but so far I’m happy with what I saw with the funnel.
Mike Walkley: Great. Thank you. Last question for me, and I’ll pass the line. Jeremy, just in terms of the reduced fiscal ’24 guidance, can you just help maybe rank order, the different issues between inventory at some of your customers and this project getting pushed, and were there any other impacts to the guidance, or were those really just the two main issues?
Jeremy Whitaker: I would say those are the two main things that came out of our QBR several weeks ago after we reviewed the forecast with the sales team, both primarily coming out of the embedded business, relatively, I would say, evenly split between kind of a broad-based expected decline from our connectivity business, embedded connectivity business, which is mostly wired products, a little bit of wireless, but not as impacted by that, and then the compute customer and the video application that I mentioned previously. So those were the primary drivers for the reason to bring down our numbers for the second half of the fiscal year.
Operator: The next question comes from Ryan Koontz of Needham and Co. Please go ahead.
Ryan Koontz: Thanks for the question. Just thinking about this from a different angle here on the second half outlook change, sounds like the core business, what I think of as the core business, dating back the last couple years, that that’s where the big headwind here is on your embedded, and so that’s looking like it’s going to — is that stepping down in its run rate materially into your fiscal second half? Jeremy, is that how you think about it?
Jeremy Whitaker: Yeah, I would say it’s lower than what we would have originally anticipated. I’m not sure if it’s taking a major step down, but many of these are legacy products have been in the market for a period of time, and we do have a general expectation that they’re not high growth products even in the forecast. So, they did have a bit of a — many of these products did have a bit of a resurgence during COVID. And I think this is just on the other side of that COVID resurgence. I think that a lot of companies, including us, saw in some of these kind of legacy products.
Saleel Awsare: Ryan, let me just add a little bit of more color, right? Saleel here. So, as I think about this, as Jeremy clearly pointed out, it’s really broad market and, there might be still, more industrial kind of IoT areas, broad market. So, a few macro slowdowns as opposed to what was originally when they planned it maybe six, nine months ago. So, that’s how I would think about it. So, it’s nothing hugely material, it’s just from that dimension.
