Rich Hume: Yes, I may. As it relates to Q4 in the prepared remarks — and this is — I guess, the pleasant surprise is, for the most part, the sales were consistent with our expectations. I think Marshall talked a little bit about maybe some — a little bit better strength in Europe versus our expectation, but it wasn’t overwhelmingly different. And then for each of the segments, they sort of came in fairly consistent with our expectation. As we move ahead, as we had talked about, because of the backlog runoff last year in AS, we would anticipate a more challenging compare year-on-year. And then as we sort of move through the year, that compare sort of through time gets a little bit easier as the backlog had dissipated, if you will, through the year. And so that would be our expectation. But again, our crystal ball would say that both of those segments are growing in the second half of next year, both the Endpoint as well as the Advanced segment.
Unidentified Analyst: Awesome. Thank you, guys. Really appreciate it.
Operator: And we will take our next question from Adam Tindle with Raymond James. Your line is open.
Adam Tindle: Okay. Thanks. Good morning. I wanted to ask on trends and profit dollars for the business overall. And just observing that you finished fiscal ’23 with non-GAAP net income just down, I think, over 8%, you executed on synergies during the year. So ex that, I would think non-GAAP net income down double digits. And if I look at the midpoint for Q1, based on your guidance, it looks like net income is going to be down close to 10%. And it looks like you’ve got some cost optimization that may be helping a little bit in the first half of the year. So probably north of 10%, ex that. So for investors that are seeing these double-digit net income declines, maybe you could touch on the drivers that are causing that trend and whether you think that’s just kind of a structural aspect of the business at this point, and we’re working on just optimization on that? Or is there a stake in the ground that you want to put on timing to return that to growth?
Marshall Witt: Adam, this is Marshall. I’ll start. So I’ll take it first on just the overall revenue attributes and the comment we made about our expectation on ES showing positive growth attributes in quarter one. So with that comes a margin profile — gross margin profile that is somewhat lower than the AS margin profile. We think that’s probably about 20 bps. And just in terms of the mix, we think that that plays out for quarter one. And then just if I touch on some of the cost attributes that I commented on earlier and thinking about quarter one. Quarter one last year was kind of the beginning point where we started to see the volumes of our business fall. We had identified that we had seen some mismatch — inefficient mismatches in quarter two and three.
So we took some additional cost reduction opportunities. We were able to kind of recoup that inflated cost back in by the time we got towards the end of this year. And now in terms of these net headwinds going into quarter one, as I said earlier, there is some overall expectation that we’re going to be growing into a better performance throughout the year. So with that, we’re kind of filling our variable expectations for pay versus last year. We had already started to take down those variable attributes given where we thought the business was going. And then again, as I said earlier, the AS investment, we’re leaning into those. So there’s a little bit higher cost associated with that, which is driving maybe some of the margin headwinds on that.
So I think inflationary might be the last one where we are seeing a little bit of a longer tail on some of the inflationary areas around health care. But as you probably have seen in the past, we figure out ways to create productivities to offset that. It may take a couple of quarters to get there. So I do think the compare itself is a little bit more difficult in quarter one from a margin profile perspective. But if I actually think about the margin attributes of AS and ES, our intentions are that we still believe we can grow both of those portfolio margin attributes over the course of the year. It’s the mix itself and some of these SG&A elements that I think are causing some of the story to change a little bit.
Adam Tindle: Got it. Okay. So maybe just to follow up on that. You helped with the gross billings for the year, it’s kind of flat first half, mid- to high-single-digits in the back half. Let’s just call it mid-single-digit growth for the year in gross billings overall to keep it simple. Would — given everything that you just mentioned there, would growth in non-GAAP net income be at a similar level of gross billings growth? And why or why not?
Marshall Witt: Yes. I mean, roughly said, our expectation is that gross profit hopefully will be flat to up and non-GAAP op income will be flat to up. So again, that’s the expectation. We’ll have to see how it plays out as we — as we expect that second half growth profile to be in that mid- to high-single-digit range.
