Eric Martinuzzi: Okay. And the second question is around the gross margins. It’s really good to see that step up not only for the full year at 130 bps, but for Q4, just a big step up with the 640 bps. How should we be thinking about either address a full year basis for 2024 or maybe even just Q1? A year ago you had a 30.2% gross margin in Q1. Should we be expecting something similar, something better? What can you tell us about gross margin?
John Morrison: Gross margins will continue to grow just as a consequence of having lower-margin business from the median customer go away. They were running about 19.7% gross margin. We have been replacing that consistently with sales of between 30% to 40%. That’s pretty much our bottom-line target is 30%. And it really is different when you’re looking at mix. So, depending on how much of our data storage product we’re selling in any given quarter, that tends to have a higher margin, which is actually what we saw in the fourth quarter. We had nearly $2.5 million of data storage and data storage replacement parts, which are very profitable for us to drive that margin. Long term, we believe that we’re going to be more consistent this year with what you saw in 2022 of the 32% to 33% margins on a consolidated basis.
Eric Martinuzzi: Okay. Full year. Got it. And then last question, really more on the product side. At a high level, Mike, what is the lag time between somebody like NVIDIA kicking off their latest and greatest chip and your customers expecting you to have designed that in and have it available for shipment for them? I’m talking specifically to this week’s announcement regarding their new Blackwell chip GPU versus the prior generation the Hopper? What’s the lag time there for your product design?
Mike Knowles: Yeah. Eric, generally inside of a year, less than a year, we can go from product availability from NVIDIA to our product [indiscernible] short-depth server with storage added, we can move to available product inside of the year. Now we’ll also have to work the lead times. There’s a lot of major companies out there who are buying up the GPUs. So, our customers are aware of that. And so, actually we — unique to probably OSS in this respect is because of our expertise and engineering capabilities, we’re actually able to sit down with the customer and work through two scenarios. If they have a clear demand and desire for the newest and the latest and the greatest and they understand the lead times on that, we can do that.
On the defense side, we can use their defense ratings to help accelerate the supply chain on their orders. Alternately, what we’ve done in some cases is we work with customers on what their exact AI or sensor fusion, sensor processing implementation is and we’ll help them with their compute storage and switching needs and performance parameters. And in some cases, we’ve actually been able to recommend alternative NVIDIA GPUs whose lead times might be measured in six to 12 weeks and we can still implement capability that exceeds their demand. We can offer them a faster lead time to get either initial capability that they could upgrade to later with the higher-end GPUs or if they’re happy with that selection then they can carry on with that configuration.
Eric Martinuzzi: Got it. Thanks for taking my questions.
Mike Knowles: Thank you.
John Morrison: Thank you, Eric.
Operator: Thank you. And your last question comes from the line of Joe Combs from Noble Capital. Please go ahead.
Joe Combs: Good evening. Thanks for taking the questions. I wanted to go back for a second to some of this lower-margin pass-through revenue you’ve talked about. Did any of that show up in the revenue for the fourth quarter or is any of it projected for the first quarter of $12.5 million guidance?
John Morrison: There was nothing in the fourth quarter and there is nothing right now planned or included in the guidance number in Q1.
Joe Combs: Okay. Pardon me. Thanks for that. And then…
John Morrison: And when we do, we will disclose it separately. So, we’re going to be very visible as to what those numbers are.
Joe Combs: Great. And on the pilot program for the deployable ground station, you mentioned that you think you can get some future production orders from that. And I was wondering maybe you could talk a little bit about the timing you think of those production orders and the size that could possibly be there in terms of revenue?
Mike Knowles: Yes, Joe. So, in two cases, right, on the kind of the ground station one where we’re shipping our compute capability. These initial forays as they get instantiated and used are in the [mid-$100,000] (ph) range in terms of value. We would expect that follow-on orders could be double that for a couple of years in that implementation. And then depending on how it grows into other similar type programs within the company or others, that’s where we look for the add-on effect. The liquid immersion cooled one also very similar in terms of application. That would be another one. That first one of $200,000 for the first foray, but we would expect implementations double that, maybe a little bit more than double that after they’ve gone in and validated their first fielding, if you will, happy and comfortable with the solution, then we would expect to see multiples of those values in later this year 2025, 2026.
Joe Combs: Okay. Great. And just one more quick one for me. I know in the last quarter, you talked about you got the site facility clearance. Just wondering, have you been able to see that clearance turn into any new opportunities for you or anything particular more that you can tell us about that?
