And as we get better, then we’ll have braggingly happy customers and then the stuff that we’re doing that people said I’ve never seen this before gives us instant credibility. And I think that makes it very easy for us to expand our market.
Jim Ricchiuti: Okay. Follow-up question is just going back to that 20-month deployment, that you, you achieved. As you bring on more partners, outsourcing partners, it sounds as though there some fits and parts and that we’re going to see this move around. It’s not going to be or tell me if we’re going to see, yes, consistent progress on this front. It just seems like as you bring on new partners, it’s going to bounce around a bit.
Richard B. Cohen: No, I don’t think that’s, we don’t think that’s going to happen. We are now — when we started the outsourcing process, I think our team was smart enough to say if there’s a better way to do this than show us. What we’ve been doing for the last year now is we are asking people to build to print is what is the expression they use. So, you don’t change our design. If you want to talk about an improvement that may happen a year from now, but we’re really working very hard to standardize our design, which speeds up the implementation, which simplifies the programming, the programmable logic, they call PLC code that goes into our machines. So, the ability to replicate what we do at the very highest level is what we’re focused on. So no, I don’t think you will see I mean, I think we had a lot of learnings last year and I think we talked about that openly. I don’t think you’re going to see that again in the future.
Jim Ricchiuti: Good. Thank you.
Operator: Thank you. One moment, please. Our next question comes from the line of Ken Newman of KeyBanc Capital Markets. Your line is open.
Ken Newman: Hey, good morning. Hi, good afternoon, I should say.
Carol Hibbard: Good afternoon, Ken.
Ken Newman: Yeah. Thank you. Carol, curious if you can just dig down the comment about the increased spending to service the higher growth in the second quarter. I mean, when you think about that, is the biggest bottleneck there the service of deployment, is that just in house engineers? Is it the third party supplier base? Just any color there to kind of help us pocket that that headwind.
Carol Hibbard: Yeah. It’s a mix. Thanks, Ken. It’s a mix of I wouldn’t say it’s mostly engineering because our engineering folks are focused on the R&D part of the business, and less of that goes into our COGS, but it’s the operators and it’s the folks we’re putting on-site for that final stage of commissioning and deployment to ensure we’re hitting the reliability. That includes some of our outsourced you referred to it as suppliers. So that would be their spend as well.
Ken Newman: Okay. And then of course, just wanted to get a little bit more color, I think you mentioned working capital expansion in the second half. Obviously, we saw a big ramp in accounts receivable and maybe prepaid expenses this quarter, I’m guessing that’s from Southern Glazier, but just any color on what drives the working cap expansion to the second half and just how confident you are about top cash or free cash getting better into the back half of this year?
Carol Hibbard: Yeah. So as most of you know, over the course of our deployment our cash inflows tend to be very front loaded, and so that’s driven our favorable cash flow as we’ve ramped. But then in any particular quarter depending on the maturity of that particular deployment, we might see a higher cash outflow. So as we’re ramping to having 37 different deployments in flow, now as we’re heading into this quarter, we’re going to see higher cash outflow in the second quarter similar to the Q1. What we’re expecting for the year, excluding the warrant exercise, I’d expect our cash to be flat.
Ken Newman: Got it. Thanks.
Operator: Thank you. One moment please. Our next question comes from the line of Joe Giordano of TD Cowen, your line is open.
Joe Giordano: Hey, guys. Can you hear me? My phone seems to break up a second there.
Carol Hibbard: Yeah. We can hear you, Joe.
Joe Giordano: Okay. Great. So I preface this by saying it’s a high class problem, but, and you guys delivered revenue at like the high end basically of what you said you would. But it’s to be fair, it’s the first time you haven’t like pretty easily gone considerably ahead of the high end. And I just want to like it’s a little bit of a tough question, Carol. I know you haven’t been there for those prior quarters. But is it — was there a need to be more conservative with guiding back then because you had fewer projects under that were in deployment and more variable by nature and now you have more kind of precision around the guide because you have more projects to like limit the inherent volatility there?
Carol Hibbard: Yeah. You’re exactly right, Joe. So as we scale and we have more and more systems in progress, the variance on a single project, we’re not going to see that have as much contribution to an individual quarter’s revenue. So before when we had fewer projects, if you had one Project either completed month 30 earlier or complete month later or even a week here and there, it was really driving the variation in the revenue. And as I indicated just in the opening remarks as well, we’ve deployed SAP and some of the controls we’re putting in place should help us standardize and, drive our ability to tighten up that prediction range.
Joe Giordano: Okay. That’s kind of what I figured. And your commentary suggested that you put in five into production this quarter sounds like it will be give or take that level for a bit here. I know like if you models have that ramping pretty large at some point. We could debate exactly when that starts. But I just want to make sure I understand like what is — is there anything that’s specifically not allowing that amount to be significantly higher right now? Or is it just subject to like the scheduling of your large customers? Like if your customers wanted that to be 15 next year, is that like theoretically possible right now?
Carol Hibbard: So I’d say you’re spot on. Our ramping of additional customers, we’ve indicated 1 to 2 a year and that is metered by our ability to want to provide excellent customer service and satisfaction to the backlog that we have. And so we don’t want to continue to take on more and more statements of work and additional customers and not have the ability to deliver on the $23 billion backlog that we have.
Joe Giordano: Okay. And then one for Rick, if I can. Rick, going through the SymBot characteristics there, I’m just curious, like, when you now have the ability to handle multiple boxes, at one time on the outbound, like, does this ultimately allow you to accomplish the system with fewer bots? And is that kind of going to be somewhat required as you move to non-ambient where, like, as you said, the facilities are smaller and you probably need to get, like, more bang for your buck from a square footage standpoint. And does that whole dynamic lead to like any sort of difference in margins that you think you’d be able to get? Or is it better, worse, equal versus what you’ve been doing on at scale? Thanks.
Richard B. Cohen: Yes. So, I can honestly say everything we’re doing is trying to increase our margins. We’re not doing anything consciously to decrease them. But seriously, the journey that we’re on with the SymBot, we expect that we will be able to run systems with less bots because they will be more capable, faster, be able to do more work and that’s the journey that we’re on and that will only increase margin. The other thing that that will do is it would allow us to do a smaller system because we could so we could use less bots because they’re more capable. So that would allow us to, on the low end, hit a new price point, which is one of the things that I’m very focused on. I love having these big customers and I love having these big sales, but if we could sell a smaller system with a lower price point and still increase our margins, that’s an even bigger market than we’re talking about right now.
Joe Giordano: Yeah. Absolutely. Okay. Great. I’ll pass it along and jump back in queue. Thanks, guys.
Operator: Thank you. One moment, please. Our next question comes from the line of Greg Palm of Craig-Hallum. Your line is open. Hey.
Greg Palm: I think I heard my name, but something, cut out. In terms of GreenBox, I was hoping to dig into a little bit more on the deployment schedule. Rick, I think you said, deployments or maybe initial rev rec in fiscal ‘24. So I’d like you to confirm that if possible. But how do you think about the ramp up of deployments specific to GreenBox, and just in terms of, you know, aggressiveness, is it dependent on customer announcements or sign ons or how you’re thinking about that over the coming years?
Richard B. Cohen: I think that we well, the answer, we’ll do it in parts. So, we’ve been talking to some large customers and large suppliers about the opportunity. And so, I think what will happen is that GreenBox will start off slowly and then go very fast. So there’s a proving out concept where if we build a green box site and we have multiple vendors in that site and they test it, then logically, they’re going to say, okay, I want 10 of these sites around the country because I need to cover a national network. So I think what we’re doing is doing all our homework, putting in the foundation for GreenBox, and I think we expect to have some good news on GreenBox in 2024, but we’re also doing a lot of diligence to make sure that we set the foundation correctly.
Greg Palm: Okay. And just to be clear, you expect deployments or rev rec to start in this fiscal ‘24. Is that right?
Richard B. Cohen: Yes.
