Operator: Thank you. Our next question comes from Dan Leonard from Credit Suisse. Dan, your line is now open. Please go ahead.
Dan Leonard: Great, thank you. I appreciate you taking COVID revenue out of your forecast, but curious, have your views changed at all on the non-COVID pull-through opportunity from instruments placed during COVID?
Max Krakowiak: Yes, Dan it’s a great question. I would say, not really. And the reason why I say it look as we enter the sort of the fourth year of the pandemic. We now believe that customers have already largely transition sort of their underutilized former COVID capacity to other areas. So we think we’ve already started to kind of see this pull-through and it’s kind of already occurred in our base. And we also think that’s kind of why our applied genomics business has grown on a high-teen CAGR over the past three years, including high single-digits this year and then over 50% in 2021.
Dan Leonard: Understood and Max, my follow-up. I’m trying to better understand the EBIT margin bridge from the 32% plus in Q4 to the 30% guidance for 2023, both for RemainCo. I know there’s some COVID revenue in Q4, but not overly material. So what are the other drivers of the walk-down from that 32% to 30%? Thank you.
Max Krakowiak: Yes, look truthfully, Dan. I would say it is heavily the walk-down is predominantly COVID. The one thing I’d say about the COVID mix that we had in Q4 was a very favorable product mix. And so, I know historically, we’ve quoted that COVID incremental’s are sort of above our company gross margin. I think in the fourth quarter, it was an outsized margin mix related to our COVID products. I think once you normalize that for the fourth quarter, you’re a little bit closer to sort of a 30% operating margin exit rate for continuing ops. Which then if you then factor in next year and 100 basis points of margin improvement you know the math sort of works out, but it wasn’t significant pull out of COVID here from a margin perspective in the fourth quarter.
Dan Leonard: Okay, got it that makes sense. Thank you.
Operator: Thank you. Our next question comes from Matt Sykes of Goldman Sachs. Matt, your line is now open. Please go ahead.
Matt Sykes: Thanks, good morning. Thanks taking my question. Maybe just to clarify just following-up on Dan’s last question on margins, just if we focus on diagnostics you did 28.7% in the fourth quarter, and that was significantly lower COVID revenue than you’ve done in the past? So should we see that 28.7% just for diagnostics is being closer to the lower end, troughing as we kind of look out to 2023, understand that there is some China-related impact and other things like that, but just wanted to get a sense for that 28.7% where that is and sort of the range of margins you think diagnostics can do over the course of ’23?
Max Krakowiak: Yes, hey Matt. So the way I would think about the margin composition of our life sciences and diagnostics business in 2023 is our life sciences business should be above the company average diagnostics will be slightly below. And then you have about two to three points of headwind just from our corporate expenses. So I think that’s kind of how I would think about the market splits for 2023.
Matt Sykes: Got it, thank you. And then just, Max post the debt pay-downs. Going into ’24, how are you thinking about sort of a target net leverage, prior to any acquisitions like what’s your comfortable range to be in sort of on an ongoing basis?
Max Krakowiak: Yes, I think it’s a great question. So we are definitely committed to remaining investment-grade. And so, I think that’s what you’ll see sort of reflected in our comfort from a leverage perspective. That’s probably the best way to think about it Matt.
Matt Sykes: All right, thank you.
Operator: Thank you. Our next question comes from Rachel Vatnsdal from JPMorgan. Rachel, your line is now open. Please go ahead.
