Matt Hewitt: That’s great. And then maybe a similar question or related question. With it just being a software upgrade, should that result in a shorter sales cycle unlike when you’re ripping and replacing the full cabinet. Because this is just software, does that result in a shorter sales cycle or shorter implementation cycle, and therefore, maybe help a little bit sooner?
Randall Lipps: Yes, let me just speak clearly. It is a hardware console. It’s like the interaction screen and keyboard to use. But it’s a fairly simple exchange. Less than an hour to pull out the old and put in the new, and then it has the new software, and it’s ready to go. So it’s a little bit simpler to make the sale and a little bit simpler to revenue as well. because you’re not doing a forklift of a major product line. You’re just upgrading and enhancing the one that’s already there with a little bit of hardware and a lot of software.
Matt Hewitt: Got it. All right. Thank you.
Operator: Your next question comes from David Larsen from BTIG. Please go ahead.
David Larsen: Hi. Can you talk about your own sort of cost inflation trends along the lines of like steel and freight and your own labor? And then I think you’re implementing some price increases for your base to help offset that. How are those being received by your customers? And how far along are we in that process?
Nchacha Etta: So we continue to monitor our supply chain risk and the geopolitical environment and the impact that has on our business. And inflation has normalized in recent quarters, but as we take pricing actions, we believe that this will be well received by our vendors.
David Larsen: Okay. And then with the XT sort of upgrade, Randy, I think we had been talking about like being maybe 70% or more of the way through sort of this full XT upgrade process on previous calls. I think what I’m hearing from you now is that it’s a full reset. Everybody is going to have to go through this new XT upgrade for this new console. Can you talk a little bit about the pricing for that, please? Like how much of a lift should we expect to see per customer?
Randall Lipps: Well, just the console alone, and we’re looking at an expanded portfolio to take to the customer, which we will announce throughout the year how this broader innovation is going to work. But it’s about as these console upgrades generally are about 1/3 of the price of the unit.
David Larsen: Okay. So it sounds like it will be actually very material, quite frankly, which is obviously a good thing. And then just my last one is for the 1Q revenue guide, that looks low. So I like how Nchacha beat the guide this quarter. That’s great. Are you being conservative with the 1Q revenue guide? Or what is causing the seasonality here? And I guess my concern is if you’re not being conservative, then you’re kind of expecting a pretty good lift in the back half of the year? Just any color there would be great.
Randall Lipps: Yes. Look, we’ve provided a plan that we believe we can manage the company through, and we remain optimistic about our innovation within the XT platform, which includes this console upgrade, and we expect a modest improvement in demand for our Point of Care as we go into 2024.
David Larsen: Okay, thanks. I’ll hop back in the queue.
Kathleen Nemeth: Thanks, David.
Operator: Your next question comes from Stephanie Davis with Barclays. Please go ahead.
Stephanie Davis: Hi, guys. Thank you for taking my questions. I heard in the prepared remarks that you guys are talking about XT as your long-term growth strategy. So I wanted to revisit that. I know at the Analyst Day last year, you talked a lot about moving from more of a services and software play away from just hardware alone. Advanced Services was part of that. Where are you in that transformation? And is that still kind of the long-term target?
Randall Lipps: Yes. Obviously, Advanced Services is very key, but we’ll always have product as part of our business model. And a big portion of this model over the past few years, which generated a lot of growth and a lot of revenue, has been the Point of Care. And so that is impacting our model more than we’d like, obviously, right now. But to get our model back in balance, we need to be able to have those product revenues, particularly from Point of Care, start to drive our growth and increased earnings. But there’s a lot of ways we can offer those products. They don’t have to be as a product sale alone. We don’t really want to be doing product sales alone. We want to do those product sales enhanced with services around them.
So it’s really key for us to move from selling products to really helping our customers run the day-to-day operations in their medication processes, so they can achieve success. But it does include the offering and the sale of products either embedded in a service or sold as a service surrounded by services. So I don’t know if that answers your question directly, but it’s the same. It’s we’re moving forward toward managing our customers’ businesses day-to-day with these enhanced services and the revenues that are driving that can be in the form of traditional product revenues, but always adding on Advanced Services to get the results and the outcomes.
Stephanie Davis: No, that’s helpful, that’s helpful. And then as you go through the strategic review and you kind of shake that, just get catch up what in business versus what’s not, are any incremental end market like the retail pharmacy side of the house that might be more compelling to get into, given some of the headwinds in hospital?
Randall Lipps: Yes. I think there’s – always in the clinics and outpatient, there’s a lot of growth there and concerns there that there aren’t quite the tool sets that they have on the inpatient side. So a lot of our customers want us to help them figure those out. And certainly, those kind of markets are in our view and either investing or make or buy. So absolutely, those make a lot of sense to proceed in.
