Carol Hibbard: Yes. So when you look at the step up, the single biggest driver is we now have 18 systems that went operational, we were at 15 last quarter. And you compare that to just a year ago, we were at nine. So significant step up. You’re going to continue to see that grow. And I’ll separate software and I’ll separate the operations because I think you started with the operations piece of it. We expect operations revenue to continue to grow as we bring systems online. You will likely not see the same level that you saw this quarter. We had several one-time events in the quarter that were – that contributed not only to revenue, but to our gross profit in the operations area. So a few of those you will not see repeat. But you should expect that revenue to continue to grow.
Nicole DeBlase: Thank you. I’ll pass it on.
Operator: Thank you for your question. One moment for the next question, please. Our next question will be coming from Ken Newman of KeyBanc Capital Markets. Your line is open.
Ken Newman: Hi, guys. Thanks for taking the question. Maybe just – can you hear me?
Carol Hibbard: Yes, we can hear you.
Ken Newman: Okay, sure. So first question here, I’m just curious, obviously you’re talking about accelerating deployments or initiations here into the back half. Is there any way to kind of size how you think about acceleration to the back half? You did three this past quarter. Is it fair to assume that you kind of return to that, call it four or five types of projects in the back half and accelerate into 2025?
Carol Hibbard: So we don’t guide on system starts, but I’ll start with where we were this quarter at three. So we indicated last quarter that we would see stabilization of our system starts that allowed the team to focus on all the innovations that Rick talked about and really implement system standardization for those phased deployments. So that’s what you saw this quarter. And it is a team effort to make a decision to go ahead and implement a new project or a new SOW. So that’s a complex decision between ourselves, our suppliers and our customers. So our customers also need to manage their operations through all of our installation activities, including decommissioning legacy systems, preparing the site. So it’s a combined effort when we decide to go initiate. But given our contracted backlog at $23 billion, you’re going to see the system start step up in the second half of the year.
Ken Newman: Okay, that’s helpful. I appreciate that. And then for my second question, I think you had positive free cash flow of just over $18 million this quarter. Is there anything that would prevent you from being free cash flow positive for the full year as it relates to some of the innovation spending that you guys are expecting for the rest of this year or any of the other restructuring actions you might be considering?
Carol Hibbard: As we look to the end of the year, we’re expecting – we don’t guide on cash either, but you should expect to see positive working capital as we head to the back half of the year. Each quarter, there could be some lumpiness, I’ll say, in that, because depending on what maturity level of the systems we have in deployment. Just as I described, the revenue curve, the cash curve also mirrors that. And so we could have some quarters where we are really heavy in terms of the final installation that might be a driver on cash. As a reminder, we’re very front loaded in terms of when we sign projects, so you could still see some lumpiness, but we are on a trajectory for positive working capital going forward.
Ken Newman: Thanks.
Operator: Thank you. One moment for the next question. Our next question is coming from Greg Palm of Craig-Hallum. Your line is open.
Greg Palm: Yes. Thanks for taking the questions. I’m curious, we’ve been talking about driving timelines down for some period and you’ve been really successful at doing that. And I’m just curious how much of that is in your hands versus at the maybe expense of some of your outsourcing partners. And do you think that you’re reducing the timelines at the expense of margins, meaning that as you continue to get better, that you might not need, I don’t know, as many folks that are paid overtime or any of the other related costs to ensuring that you have happy customers and get a system at a shorter amount of time.
Carol Hibbard: Yes. Thanks for the question. I’ll start with the first part in terms of how much is in our hands and versus all of our partners. It is a joint effort, so we’re there helping to ensure the management of the project. Symbotic is also responsible for the planning upfront. So you’ve got to start the system right and make sure you’ve got all the planning in place so that material shows up. And then all of our partners need to deliver to the schedules that we lay out. So it’s a combined effort across ourselves. And then our customers certainly have a play in that too just ensuring the readiness. A fair point in terms of the timelines we’ve achieved. So, we have talked about wanting to make sure we’re putting the resources on a certain project so that we can deploy on time and make sure we are deploying a very high quality project.
I’d say as you see us moving towards our going through our learning curve, and we continue to learn at every single site installation, as do our supply buyers, you’re going to see that we’ll continue to improve that timeline without needing the additional resources to ensure schedule.
Greg Palm: Yes. Okay, that makes sense. And as we think about sizing up that non-ambient opportunity, I know you’ve talked about that TAM or that SAM in the past, but just given your thoughts around maybe having some orders or some facilities. Can you at least size up what type of share expansion is possible? Could you theoretically double the size of the opportunity with some of your current customers? I mean, is it more, is it significantly less? I’m not expecting an exact answer, but it would just be curious to know what that sort of wallet share expansion opportunity is, again, with your current customers, not necessarily with customers that you haven’t won to date with something else.
Carol Hibbard: So, I’ll start, and then Rick can share his thoughts. So, we have not put a number out there in terms of sizing the TAM from our existing customer base, but we’ve also indicated that our current backlog does not include that particular opportunity. And we know that each of our customers has the opportunity to go ahead and expand to non-ambient, and so we consider that a significant opportunity for Symbotic going forward.
