Michael Latimore: Okay, thank you. Yes. Great results here. Just in terms of the deployment time frames, what are you seeing now? How long do you anticipate deployments to take, given some of the added outsourcing capacity here?
Tom Ernst: Yes. Thanks for the question, Michael. So we continue to make progress on this front. We are definitely beginning to feel the benefits of having done it many times now, along with beginning to get support from our outsourcing partners that are helping this trend in the right direction. And as you would expect, Michael, our first wave of systems take longer than what we expect that those next couple of waves to take, particularly in the light of having an extended supply chain where we got out in the front and made sure that we started those systems early with an extended supply chain. So we are making progress. I think we’re generally on track with our plans and where we thought it would be a year ago. And to the points of Rick’s comments just a minute or two ago, working with these outsourcing partners in the next few months really help us unlock the ability to move faster here over just the coming four, five, six quarters.
Michael Latimore: Got it. Right. And then as you think about backlog addition opportunities, would they be bigger in terms of new customers or would it be kind of expansions of current customers? So as you think you grow backlog longer term, is there one that clearly is a bigger contributor there?
Tom Ernst: I think you’ll see a mix of both. Again, our strategy here is less to grow backlog and more to scale our operations against the existing backlog. But we do anticipate that over the coming handful of quarters, you’ll see us add both new customers and new projects with existing customers.
Michael Latimore: Got it. And just last one, gross margin. I think you gave some color; I just want to be clear. So would €“ is it fair to say gross margin in the first quarter would be the trough for the year or low point for the year? How should we think about gross margin?
Tom Ernst: Yes. I think we said pretty clearly, last quarter, we expected, when we reported a 15% gross margin, that, that was a low watermark. So we emphatically feel that that’s still very much a low watermark. Progress against the 18.7%, we reported this quarter, we expect to see that happen, but the progress can be stair-step. So we will talk about the progress as we make it each quarter.
Michael Latimore: Okay, great. Thank you.
Operator: Thank you. Our next question comes from the line of Chris Snyder of UBS. Your line is open.
Chris Snyder: Thank you. I understand the outsourcing push is helping to accelerate the rate of system deployments. But is there any negative offset on the gross margin line, because I believe in the past, the company has spoken to or talked to a high 20% gross margin target versus kind of high teens today within systems. Is that target still achievable with a higher level of outsourcing?
Tom Ernst: Yes. Thanks for the question, Chris. In fact, we think that our gross margins are higher long-term under our outsourcing initiative. Now we did talk last quarter about the aggressive ramp to bring on some of these outsourcing partners, was definitely coming along with some increased short-term expenses to ramp these partners. As you can imagine, we have redundant resources, right, as we are ramping partners and redundant supply chains and kind of a whole host of costs that not only flow through COGS, but also flow through OpEx. So, we are still seeing some of those transitory costs associated with the outsourcing program that is a negative near-term impact to gross margin. But we think that, that very quickly flips to a positive and over the long-term leads to not only higher gross margins, but just the ability to deliver these systems with less risk and the ability to do many, many more systems concurrently than we could do on our own.
Chris Snyder: Thank you. If I could just maybe follow-up quickly on that. Rick, if I look from fiscal Q1 to fiscal Q2, the company is guiding revenue up mid-single digit, high-single digit percent at the midpoint, but a roughly unchanged EBITDA loss. Is that just due to the ramping of the outsource partners? And is that like effective margin down on the gross margin side or the OpEx side?
Rick Cohen: I think one of my comments I made in the prepared remarks was that we saw a relatively low amount of third-party special projects in fiscal Q1. So, those costs are €“ can be variable, a little bit less easy to predict on kind of a quarter-in, quarter-out basis. I think the implicit of my Q2 guidance is a little bit more of an average type of quarter in terms of third-party and one-time costs relative to what we expect looking forward for the year. Does that help?
Chris Snyder: Thanks. Absolutely. Thanks. And if I could just follow-up on something maybe more thematic, if you guys look at the backlog of projects or you are engaging with customers, is it more on the brownfield side, essentially upgrading or modernizing an existing facility, or is it more greenfield, so I am just kind of new warehouse capacity coming to the market? Thank you.
Rick Cohen: Yes. Our existing backlog, Chris, is heavily concentrated to retrofits to brownfield. That being said, as we think about the market over the long-term, we see a very, very large market opportunity with greenfield as well. I think as you know one of our key €“ one of the key benefits that we have as a business is there is no other end-to-end automation technology that can really work effectively and efficiently in a brownfield environment. But shifting to the greenfield market, we are incredibly more economically efficient. We just bring a much, much stronger ROI versus legacy generation end-to-end automation systems. So, we do anticipate that you will hear us over the coming years talk more and more about greenfield opportunities as well. Today, backlog is highly brownfield.
Chris Snyder: Thank you.
Rick Cohen: Thank you.
Operator: Thank you. One moment please. Our next question comes from the line of Rob Mason of Baird. Your line is open.
