Marshall Witt: Yes, I’ll start and then allow Rich to provide commentary. I think we’ll start with just what we said about what we experienced in the quarter, endpoint solutions softer and down on a year-on-year basis in the majority of the regions that we performed. So I think revenue itself is probably the biggest driver of we’ll call it the operating income decline. As we said, we feel good about the margin profile and structure of our business being in that 2.6 to 2.8 range. We like the position of where we’re at strategically within the organization. We’re proud about the market share that’s either at or better than what it was. To us, it certainly implies that during these uncertain times, our position in the market is allowing and providing for our partners to spend more with us and use us more as they’re also trying to figure out ways to be more efficient in this uncertain economic situation. Rich, I don’t know if you want to anything else to that.
Rich Hume: The only thing that I’d add, and it’s a bit repetitive, is that as Marshall had stated, the financial profile and the engagement model as we talked about, our market participation I think is very strong. And this is more a macroeconomic challenge as opposed to anything else. And with all the uncertainty, we just don’t feel comfortable with providing a view with regard to 2H at this time.
Adam Tindle: All right. Maybe then as a follow up since that might create some volatility, Marshall, how you’re thinking about capital allocation and cash flow. And I guess maybe more specifically, you talked about 1 billion for the year, the cadence of that and any kind of buckets that that’s coming from, how that should layer out through the remaining quarters and what gives you the confidence? And secondly, on cap allocation, I think you said it’d be aligned with cash generation. Presumably that’s going to increase going forward, given you were negative in Q1 and talking about 1 billion for the year. Might that translate to more share repurchase, just how we can think about that would be great? Thanks.
Marshall Witt: Sure. Yes, I’ll first answer the question just on the cadence to cash flow. Typically, Q1, as you saw, it tends to consume cash is what we saw, of just over 100 million that begins to reverse itself. And as I mentioned on a previous Q&A, we think cash days improves probably a couple days in Q2. I would expect that probably to end up being similar improvements in three and four, Adam, so I think you could think about it from that perspective of being positive cash flow on some form of equal basis Q2, Q3 and Q4. And thinking in regards to the capital and our allocation, overall goals and strategies, that hasn’t changed. As you know, our cash flow and how we allocate that free cash flow between reinvestment back in the business and returns back to shareholders, we still feel good about that 50/50 allocation for 2023.
Our desire is to continue to step up to that 50% attainment. And hopefully, we’ll reach around 40% for 2023. And as you had mentioned and we’ve mentioned historically, it has certainly aligned cash flow generation. We feel positive about where we expect to be for this year. And if we do exceed our initial expectations, we certainly will look at opportunistic repurchases going forward.
Adam Tindle: Great, thank you.
Marshall Witt: Thank you.
Operator: And we will take our next question from Matt Sheerin with Stifel. Your line is open.
Matt Sheerin: Yes, thanks. Good morning, everyone. Rich, my first question, just had another demand question. And you talked about the weakness in North America. Could you drill down a little bit in terms of those various channels that you sell into, the large resellers versus bars, selling it to SMB versus public sector? And what you’re hearing from those customers in terms of when they think stabilizing? And same thing on the advanced solution side, because your comment was that it’s growing but not as strong as in Europe.
Rich Hume: Thanks for the question, Matt. I’ll share this with Marshall. I would tell you that I think that as we evolve through the years so far, we have seen a bit of a change in sentiment relative to the customers to words like a bit more cautious, words like things elongating in terms of the sell cycles. So I think that as sort of the economic circumstance is playing out, there is a bit of a change in sentiment. So that is what we see from the macro level. As it relates to, are we seeing any differences between particular channels? I would say no, not so much that that overlying sentiment seems to be fairly consistent. But, Marshall, maybe you can provide some insights right from the numbers.
Marshall Witt: Yes. Matt, so when we look at our bar allocation between public sector, large, medium, small, retail, and all the aspects that go with it, the percentage of those buckets have remained fairly consistent, which is great. So SMB, as you know, is a very important aspect of our portfolio and it stayed resilient throughout this market. I would say, as Rich said, across the board, there’s probably just generally less spend. But if you look at how we’ve been allocated, it stayed fairly consistent over these last two to three quarters.
Rich Hume: Yes. One exception from — I was jogging my memory as Marshall was talking, I think we see government spend being a bit more robust relative to the other segments, but that’s sort of the only outlier.
