So yes, I think it will have a positive effect on IT growth, but again, it won’t be a complete increment.
David Vogt: Great, that’s helpful, Rich. Thanks guys.
Operator: We will take our next question from Vince Colicchio with Barrington Research. Your line is open.
Vince Colicchio: Yes, Rich, curious how you think your share position performed in all your geographies this quarter?
Rich Hume: Yes. As we had reported in the past, when we think about share, we have really good insight relative to North America and Europe, but we really don’t have visibility yet. There is a service that is emerging in Europe. As it relates to the quarter, our information would say we lost a couple of tenths of market share, tenths of 1%, if you will, on the aggregated basis, while having grown share for the full year.
Vince Colicchio: And then could you provide a bit more color on what gives you confidence in the continued improvement of Endpoint Solutions throughout the year?
Rich Hume: Yes. So as Marshall talked about the very comprehensive process that we go through, our indicators in talking to customers, vendors, working with our own teams are that we will see growth moving forward in Endpoint. And in fact, within our Q1 guide, we anticipate some growth within the Endpoint. So we feel good about that. While we have a moderating situation in Advanced Solutions based on the commentary that I provided earlier.
Vince Colicchio: When you talk about growth in Endpoint, you’re talking about sequential, I suppose?
Rich Hume: No, year-on-year.
Vince Colicchio: Oh, really? That’s good to hear. Thank you.
Operator: We’ll take our next question from Ruplu Bhattacharya with Bank of America. Your line is open.
Ruplu Bhattacharya: Good morning. Thanks for taking my questions. My congrats to Patrick on the new role. And thanks for giving guidance on billings. I was wondering if you can talk a little bit more about the impact of this mix shift to more netted down items? Specifically, what year-on-year impact to revenues and margins is embedded in your fiscal 1Q guidance? And if you can talk about how we should think about this for fiscal year ’24. So as this shift happens, should we expect this difference between gross billings and revenue to continue to expand throughout the year?
Marshall Witt: Thanks for the question, Ruplu. So for Q1, we gave a guidance of gross billings, I think, around 3% down on net around 5. So Ruplu, if you think about the overall gross versus net momentum, if you — I want to call it that. We were around 22% to 23% of netted down revenue in fiscal ’22. That has gone now to 25% to 26% in ’23. I would anticipate that we’ll probably continue into ’24. It’s hard to call that beyond the first quarter in terms of relationships. But for us, the mix shift is a reflection of how AS has played against ES, I would say that as we think about next year and the increased expected performance of AS, there may be a shift or a stabilization of that gross versus net, maybe it sticks around 26%.
It’s quite possible, just given what we’re seeing behavior-wise. Our thoughts in terms of forecast is as we get into the year, there could be a more balanced growth rates for both ES and AS. Whereas in the past, there’s been kind of a predominant ES growth, and then that takes a backseat, and AS comes in and takes the front seat. So I would use a 25% to 26% adjustment for ’24. And then as we plot along, we’ll inform you as to the behavior, what that looks like. One thing just to call out that was in the prepared remarks was the consignment program for Hyve. That had about a $270 million impact on net revenue, no impact on profit. We’re expecting that to be about $250 million per quarter. That all expects the continuing in volume related to this consignment program with this Hyve customer.
Ruplu Bhattacharya: Okay, Marshall. Thanks for all the details there. Just for my follow-up, if I can ask, you guided free cash flow to $1.2 billion. And you maintained the shareholder return of 50% returns and 50% reinvestment in the business. So when we think about that reinvestment, 50%, how are you thinking about organic investments versus M&A, now that your integration with the two large companies is now more or less complete in North America? So is it now tying for further M&A? So any thoughts there?
Rich Hume: Ruplu, good morning, thank you for the question. This is Rich. So when we talk about our capital allocation strategy, as you know, it’s 50% and 50% over the continuum. There could be periods where we’re heavier weighted one way or the other. Obviously, Marshall talked about FY ’23 in his prepared remarks, and we were, I think, at 60%-ish for return to shareholder in total. So as we kind of plot through the year, certainly, we have a pipeline of acquisition targets that we continue to look at and work. Those deals have to have a willing recipient on the other end, and they’ve got to work for us. And usually, we take a look at those acquisition targets and really want to make sure that they complement our strategy. So going forward, I would tell you that the 50-50 is sort of a good way to think about it. And again, things don’t always go exactly as planned. So we adjust course as required based on the circumstance. So Marshall, anything you have to add?
