Ken Gianella: So not giving an exact number. We’re really pleased about how we’re seeing the active subscription sales going. I think the thing to highlight to everybody out there is that the product set that we started with for the first set really only touches about 30% of our installed base. So focusing with these initial set of sales and these initial set of products, we’re really pleased with where the product is going, and we’d expect to continue to see strong growth and momentum there because we’re going to be focusing on this and trying to acquire as our customers. And more importantly, our sales channel becomes more comfortable with the selling motions around this new product set versus just a point sale.
Craig Ellis: Got it. That installed base scoping is good context. And lastly, regarding the gross margin outlook, the decline of about 250 basis points to around 33.5%. How much of that is the big healthcare deal that you flagged versus other things? And is the recovery back north of 35% and towards 40%, really just working that through? Are there new initiatives that you and the team are executing? And if so, what are they and when do you expect to get a payoff from them?
Ken Gianella: Predominantly, the headwind was this large deal that we were talking about. But I don’t want to downplay the other work that we’re doing to continue that rotation and the margin back up. There’s a lot of things that we have on deck that even in my short time here, people have been really active in showing the game plan of how we get there of making sure that we’re very focused on manufacturing and our services team. As we highlighted before, there’s been a pretty steady decline within the services business with our legacy side of the business as we rotate away from these end-of-life older products. That starts bleeding off, and we’re really doing a job of rationalizing how that team looks to service that base, but then also leaning into the active subscriptions to continue to fill that growth.
So I think you’re going to start seeing that help in 2024 going forward as well as some of these actions we’re taking in cost downs of products and narrowing that product portfolio to be more effective and efficient. So it’s not just the one customer flushing through deal, I think there’s going to be other factors involved in a lot of self-help that is going to get us to where we need to be going forward.
Craig Ellis: Got it. Thanks, Ken. Thanks, Jamie.
Jamie Lerner: Thanks, Craig.
Operator: Thank you. Our next questions come from the line of Nehal Chokshi with Northland Capital Markets. Please proceed with your question.
Nehal Chokshi: Thank you. Congratulations on strong results, both on the top and bottom line. Jamie, you’re talking about the progress you’re making with solutions selling and note that APAC is ahead of North America. Why are they ahead?
Jamie Lerner: They started earlier. They were smaller geographies that were less of a risk to our business. So we consciously said, look, let’s start there. North America is such an important part of our revenue engine. It’s just kind of an unsafe place to experiment with. So, Asia and parts of Europe, we could do some trials of these new models with a much lower — it’s a lower risk. And so we started there, had some really good success in Australia, some good access across Korea and have been having a lot of success in France, Germany, England, and now we’re sweeping that across North America.
Nehal Chokshi: What are the metrics that you’re looking at in these smaller geos in APAC that tells you this is indeed working well?
