Lucas Haldeman: Yeah, I’ll answer that one, Ryan. So I think we are continuing to see robust demand for WiFi throughout the entire multifamily rental housing segment, it’s actually an area where we’re seeing more interest with new customers than IoT today. And I think part of that goes to sort of the question that Erik was asked about the macro. There’s actually a quicker payback on WiFi in terms of IRR basis. And so we’re seeing CapEx dollars being tilted that way, which we think is a great thing and update on the projects, all the projects that were shipped in the Q4 have been either started or are nearing completion. And yes, we’re continuing to have robust demand.
Operator: [Operator Instructions]. Our next question for today comes from the line of Tom White with DA Davidson.
Tom White: Great. Thanks for taking my question. I guess on the guidance, so no change to the consolidated revenue outlook for the year. So maybe you could just provide a bit more color on maybe some of the different scenarios that might result in you guys cannot only get into the low end of that versus the high end, like it’s a WiFi, maybe it gets delayed for some reason. Can you get to the low end kind of just mostly on the core . And then just to follow up on the core IoT business and then just as a follow up. I think last quarter you talked about some customers kind of deferring some IoT implementation until the WiFi stuff happens. Can you help maybe quantify the number of units of IoT units that are kind of tied or attached to a WiFi project? Thanks.
Daryl Stemm: Yes, hi, Tom. This is Daryl. And the two primary factors that are going to impact the back half of the year, we — actually let me take a step back. We talked on our previous call about some of the tailwind items that we’re expecting to positively impact the second half of the year like the upgrade hardware, upgrade cycle and some SaaS renewals, as well as the expanding WiFi market. I think the two primary factors, though that are going to impact where we land in the range will be that macro conditions, the macro headwind, conditions that Lucas referred to, as well as how fast WiFi expands.
Operator: Tom, thanks for your question. Any follow-up from your side.
Tom White: Maybe just a little color on, maybe trying to get a sense of how many IoT and implementations are tied to the WiFi deployments happening? You touched on that last quarter?
Lucas Haldeman: Yeah, Tom, we are seeing that continue, but not at the rate we saw in the first quarter. So I think we’re actually working through a number of those pilots right now and feel like next quarter, we can give a more granular update on exactly how that’s progressing. But it’s definitely — it’s still the case of, if an owner is interested in doing IoT and WiFi, they definitely want to do them together. And so we will see that continue to be a little bit of a headwind on the IoT. But ultimately, the total revenue is so much greater, we think it’s a good trade-off.
Operator: [Operator Instructions]. Our next question for today comes from the line of Ryan Tomasello with KBW.
Ryan Tomasello: Thanks, for taking the follow-ups. Just on a hardware gross margins came in very strong in the quarter, I think around 35% off of memory here. Is that a sustainable run rate going forward? And if you can just give us some handholding on how we should be modeling gross margins for the balance of the year and into 2025, given the changing mix of the in-house hardware that you’re deploying today?
Daryl Stemm: Yes, part of — the change you’re seeing is the increase in the number of Hub-plus-Devices, that we’re shifting Q1. So Hub-plus as a quick reminder is a combination of both our traditional hub and also includes now a thermostat, which means that we have third party device fewer that we’re selling. So there’s a significant margin difference between when we’re shipping hardware that is third party versus the Alloy SmartHome brand. And the Hub-plus went from about 10% of the total shipments in Q4 to about 30% in Q1. We do expect that that percentage will increase over the course of the year. So from that standpoint alone, we expect that it’s a sustainable gross margin improvement. However, as WiFi business picks up, you can expect that they have a muted impact on the hardware margins.
Ryan Tomasello: Okay. That’s helpful color. Thanks, Daryl. And then just another follow-up here. In terms of the outlook going back to the puts and takes around the high and low end of the guidance, are there any meaningful customer concentrations driving expected new unit deployments for the year that again could maybe swing in our results for the year or towards the higher low end of the range?
Lucas Haldeman: No, Ryan, there’s no real customer concentration there that would affect the higher or low end of the range. We have a pretty wide savers base that we’re rolling out with right now.
Operator: Our next question for today comes from the line of Erik Woodring with Morgan Stanley.
Erik Woodring: Great. Thanks so much, guys. Just one last clarification question for me. I’m just trying to think about the relationship between units booked and units deployed. I guess in the last two years or I guess maybe this is nine quarters, you’ve booked over just over 500,000 units. During that same time, you’ve only deployed a little over 400,000 units. Can you just help me understand the mismatch where that 100,000 kind of missing units — were that effectively whet, just had to explain that mismatch. That would be helpful for me. Thank you so much.
