Jack Siedow: And then a follow-up. In your press release, you spoke to a restructuring a little bit and said to better align with anticipated top line heading into fiscal ’24. Should we take that to mean at least the start of fiscal ’24 will be challenging as well.
Nchacha Etta: We further reduced our bookings outlook for 2023, which we expect will have an impact on our revenue. While certain portions of our Advanced Services portfolio continued to deliver solid growth, it is not expected to be enough in 2024 to offset the decline we expect in the point of care revenue. So total revenues in 2025 are expected to decline modestly. Of course, we’re still working on our 2024 plan, and we’ll provide a better outlook in the first quarter of next year.
Kathleen Nemeth: Thanks. Next question.
Operator: [Operator Instructions] Your next question comes from the line of Bill Sutherland from The Benchmark Company. Your line is live.
Bill Sutherland: Hi, everybody. I’m kind of curious the shape of the sales funnel, whether that is being impacted or this is just a matter of timing more than anything else as far as the bookings?
Randall Lipps: Yes, I think it’s a good question. Look, the funnel is still there. Most of these are in the pipeline and have been in the pipeline. But particularly the point-of-care product line is getting deferred a lot by these hospital customers because of the low to negative margin that they have for inpatient care. They don’t want to spend the capital dollars there yet, even though they’re out of date on some of these systems that and they’re – they need to upgrade. So the pipeline hasn’t gone awry. They are going to eventually upgrade. So time just puts more pressure on them and it gives us more opportunity to finally close these deals. So these are typically just deferrals in the pipeline. And then literally, they had maybe all the approvals inside the system, except the CFO or the CEO, to sign off on the last piece, and then that gets pushed off to the next quarter or next year.
Bill Sutherland: So the cycle you expect for the XT to play out kind of like the past ones? Or do you think there might be some level of – some of your providers might just look ahead to the next…
Randall Lipps: I think the shape of the curve is a little bit different, right? I think certainly, the pandemic probably sped the curve up a little bit on the XT adoption. And so instead of it being sort of more smoothed out over several years, it certainly, in 2021, was sped up a little bit. So – and now people are kind of deferring at the – as we get towards the second half of the XT adoption curve, they’re trying to defer a little bit. But I think it’s coming back into the shape of the curve is coming back into what we expect, I think, is – particularly as we sort of look out at the ’24. And I think that that helps us run our innovation and development timing cycles when we understand what that curve is and, certainly, the pandemic kind of put a wrinkle in there.
Bill Sutherland: And then last one, just curious if just your latest thoughts on capital allocation going forward.
Nchacha Etta: Yes, we continue to focus on our go-to-market strategy with the recent acquisition and integration largely completed, and driving positive free cash flow. We also continue to monitor our markets for any opportunities which fit into our overall strategy. And so we will continue to invest in growth areas that we have seen robust annual opportunities. And we will continue to reassess our capital allocation dollars based on a whole portfolio view strategy.
Bill Sutherland: Okay. Thanks very much.
Kathleen Nemeth: Thank you, Bill. Next question?
Operator: There are no further questions at this time. I will now turn the call over to CEO of Omnicell, Randall Lipps for closing remarks. Randall?
Randall Lipps: Well, thanks for joining us today. As we go through this economic headwinds, particularly on an inpatient capital, we will get through this. And we’re really excited about the point-of-care market, not just as we innovate product there, but as particularly as we bring in new services, which will help us to accentuate this market and take advantage of this large footprint that we have. We also want to be very focused on getting the company back to profitability. We need to get the company going so that we can deliver strong earnings, strong revenue growth and position us for this return to growth, which I think is a big opportunity for – there is a large opportunity that we’re building there for us to achieve. We’ve got a lot of great businesses on Advanced Services and the like that are growing well, being well adopted, new potentials with IV, very exciting businesses, and we hope to bring that together in the near future to deliver for our customers, for our patients, for our employees and for our shareholders.
Kathleen Nemeth: Of course, we are profitable now.
Randall Lipps: And of course, we are profitable today. Thank you for saying that, Kathleen. All right. Well, thank you for joining us today, and thank you for the hard working Omnicell team who continues to labor without end to help us all be successful as we move forward. Thank you.
Kathleen Nemeth: Thanks, everyone.
Operator: This concludes today’s conference call. You may now disconnect.
