Joseph Giordano: Hey. I just want to keep following up on the margin here. So, I think having all the mix issues and pricing, I think competitors struggled with this as well over this kind of cycle here. But when I look at some — Performance Sensing was like almost a 30% margin business at one point, right? And we’re still pretty far below that. And I think everyone is. I think others maybe are getting closer to where they were pre-COVID and pre-supply chain disruption. I’m just curious if maybe like, is there a more aggressive kind of restructuring effort needed from a footprint standpoint or from a facility? Is there more you could do in the absence of favorable volumes to kind of push margins back up to kind of historical levels?
Jeffrey Cote: Yeah. So, I think we demonstrated in the third quarter that we’re not bashful about doing, making really tough decisions regarding restructuring, but we also clearly want to make sure that we have the team in place to deliver on the future. And in a long cycle business, as you can imagine, that’s a very delicate balance because we have a very large portion of new business wins. The $1.3 billion of new business wins over the last three years was just electrification. It was more like $2.5 billion of new business wins that we need to deliver on, that will provide the growth going forward. And so that short and long term is a delicate balance. We’re trying to thread the needle on that. We’re taking what we believe are appropriate measures associated with restructuring the business, focusing the strategy in areas that are around the future, difficult decisions regarding INSIGHTS.
So, we believe we’re making the right decisions. We’ll continue to look at it. That’s our commitment to continue to look at what else we can be doing to accelerate that pace of change. And so we’re sharing with you what we’ve acted on and what we believe the opportunities are right now. From a footprint standpoint, we’re fairly consolidated. I mean, for $4 plus billion business, we have 15 sites around the world. We don’t have 50, right? So we are already sort of — and that’s what drives the 18%, 19% margins in our business, which is comparable to some of our peers with much larger organizations. But we recognize we need to keep working at it to get back to a higher level of margin, and we’re not backing off the 21%. It’s just going to take us a little bit more time to get there, and it’s a balance of short and long-term investment for the growth of the business long term.
Brian Roberts: Yeah. And to your point on the Performance Sensing margin, again, keep in mind that as electrification does continue to grow for us and gain scale, that helps. We see similar levels of gross margin today in the safe and efficient side versus the electrification side, but we’re not yet at the EBIT margins, if you will, in electrification, and that will improve with more scale. As Jeff’s noted several times, a lot of these new business wins, especially over the last couple of years really start to kick in, in the 2025 and 2026 cycles, which is part of the reason why we’re investing today, and we’re ultimately going to hopefully see that growth tomorrow. So, those are two big drivers of where it is. And so, again, I agree with Jeff. I think we need to always be prudent and smart around the cost structure. But ultimately, growth is going to be an important aspect and we have the fuel in new business wins to do it. So now, we have to execute against them.
Jacob Sayer: Thank you, Joe, for the question.
Operator: The next question comes from Chris Snyder with UBS. Please go ahead.
Chris Snyder: Thank you. I wanted to follow up on the INSIGHTS business, and I understand that electrification is a bigger opportunity and probably maybe more worthy of investment dollars. But it’s only been two years or three years since the company bought Xirgo and SmartWitness, and the investment was very substantial at $600 million. And I thought at the time, at least, Xirgo was neutral to maybe even accretive margins. So, I guess my question is, has something changed in these businesses over the last two years, three years? Are they more competitive than you thought? Did something happen? Thank you.
Jeffrey Cote: Yeah. It’s a great question. So if you look at the most notable public comp to our INSIGHTS business, it’s a company called Samsara. You may or may not know them. But their model is very different, and they’re investing heavily in the growth rate that they’re experiencing in that business. So it does require a very different business model in terms of investment, gaining market share and getting equipment out there to then have a revenue stream associated with the software. The opportunity is real, but it’s tough to operate that model in Sensata’s business when, number one, we can’t run at a loss, and number two, we have other areas that are more meaningful for us where we can be investing in. And so, listen, I think we don’t like a write-off on this business.
We don’t like changing our perspective on it. But I think that we have to make the tough decisions based upon the investments that we’ve made, the lines we put in the water, and where that future holds, and we’re going to work to optimize that business to allow it to achieve its full potential.
Jacob Sayer: Thank you, Chris, for the question.
Operator: And we have a follow up from Christopher Glynn with Oppenheimer. Please go ahead.
Christopher Glynn: Thanks. Yes. Just wanted to clarify on the 50% electrification revenue. I don’t think Dynapower was a huge part of that. Wondering if you could comment on what the organic was and what your outlook is for the 2024 backdrop for new business wins?
Jeffrey Cote: Yeah. So trying to think back in time here, it was in the summer of 2022. So, we had a half of 2023 that was the portion from Dynapower that was inorganic, but it’s still sizable 30% plus growth that we’re experiencing in the electrification business, Chris.
Christopher Glynn: About 2024 — anything on 2024 MBOs, the overall size?
