Rich Hume: Yeah, I’m going to offer a thought while Marshall in the background is calculating in his mind how to respond to your question. So, if you take a look at our balanced end-to-end portfolio where we show our different segments, when we were on this call about a year ago, we were talking about PCs being low 20%, right, of our portfolio. Now it sits at 16%. So there’ll be some recovery in that particular category for sure as we move through time. And this is why, well, Marshall talks about sort of a bit of a remixing of the margin and the portfolio as we move to the back half of the year. My own personal speculation is that it’s not going to sit at 16%. It probably is going to increment based on the recovery within that category. And so therefore, there will be some rebalancing of the Endpoint and Advanced in total. But, Marshall, maybe you can provide a…
Marshall Witt: Yeah, Keith, I just want to make sure the question was, how does AS and ES mix going forward?
Rich Hume: Yeah.
Keith Housum: Yeah, it’s clear it’s 40-60. Historically, has it been 50-50? And can it go up? Is that 70-30? Or is it usually pretty range-bound?
Marshall Witt: Yeah, so it’s definitely region-dependent. If you think about Americas, they tend to be a little bit more heavily weighted towards AS. Europe, a little bit more weighted towards ES. Again, that’s kind of a historical commentary. APJ tends to be kind of down the middle. Sometimes they’re a little bit more heavier weighted to AS. So it does depend on the region and it does depend on the trends but currently the mix is a little bit more in favor of AS today.
Keith Housum: But we shouldn’t expect ES to get to like 60%, even at the height of PCs.
Marshall Witt: It’s really hard to tell, Keith. A lot of it is dependent on this acceleration and how we think that — how the second half will play. Our take is we like both, and we know that our vendors and customers need both, and we solution both in many different ways to all our customer base. So, kind of it all matters.
Keith Housum: Okay, if I could just ask one more follow up question. You guys have used the word stable as well as improving when referring to the IT market demand. And I don’t want to parse words too closely, but it’s kind of what we do, right? So as you kind of look at the rest of the year and you talk about improving demand, I guess what are some of the — I guess two or three factors that give you confidence that the market really truly is improving?
Rich Hume: Well, I think first is if you take a look at our sequential sort of year-on-year declines they’ve been narrowing as we’ve moved through the last couple of quarters. That would be number one. Number two is obviously we are going to start to laugh on those tough compares where there was a lot of backlog rundown that propped up, AS last year and we got the rap on the PC category. So I would just say that the cycles sort of provide an opportunity or catch up. Third would be AI, as we talked earlier, is going to offer new demand in the market that hopefully will be able to take advantage of moving forward. And so those are some of the thoughts. I would tell you that there’s still some volatility relative to our expectations and categories.
Obviously, when we take a look at Q1, it was a little bit softer than we thought at the midpoint and gross billings and revenue came towards the lower end of our expectations. So I feel comfortable that the market is going to continue to improve moving forward, but I’m sure there’ll be some shorts and longs along the way.
Keith Housum: Great. Thank you.
Operator: Our final question comes from a line of Ashish Sabadra with RBC Capital Markets. Please go ahead.
Ashish Sabadra: Thanks for taking my question. Just to follow up on a few questions that were asked before around the demand. I was thinking about more from a spending environment, like, how much of the mid to high single digit gross billing growth in the back half of the year is contingent upon the IT spending increasing versus some of the company specific dynamics, some of those which you laid out earlier in response to earlier questions, but also the headwind from the consignment model coming off possibly by third quarter of this year. So, how much of it is potentially you winning a greater wallet share of the IT spend versus the IT spend actually improving as we get through the year? Thanks.
Rich Hume: Yeah. So, first, again, I’m going to repeat a comment that I had stated earlier. As we think about our future and having potentially a larger percentage of our portfolio of things which are netted, gross billings are what we track and think about when we think about our productivity, et cetera. So that’s an important feature. Second is, our stated strategy has always been to grow a little bit greater than the market. So, we would anticipate that as we move forward that we can maintain that sort of objective and hopefully be successful executing against it. So, the net of the question is we hope to outgrow the market to some degree in the back half of the year.
Marshall Witt: And I would just add to that, Ashish, to Rich’s comment about gross billings being a really important data point for us, and your comment about confinement. We expect that gross versus net, which is highly correlated to our advanced solutions and strategic portfolio, will probably continue. And so with that, it’s very difficult to gauge accurately where net revenue may play out. We certainly report to it, so it’s a meaningful gap number, But the gross billings is why we continue to make that a focus point for us in terms of its growth rate and its relationship to SG&A and op income, et cetera.
