Liyuan Woo: To answer that question, we really wanted to be clear in terms of the seasonality. When you look at Q1 being the lowest quarter of the year and the fact that we’re launching globally Syndeo in Q2, I think — and with all the investment we’re going to be making on marketing to support the growth, all of which will speak to the higher investment for the first half of the year. And that also goes hand in hand with margin — gross margin, right? The fact that we’re going to push trade-up, we emphasized this whole year last year. As you add trade-up, it’s incrementally have a positive flow through. But from a gross margin percent point of view, it will give you a temporary negative impact. So with that in mind, absolutely to confirm your comment, it’s going to be very much heavy for 2023.
Operator: The next question is from Allen Gong of JPMorgan.
Allen Gong: I just wanted to follow up on a question that was asked earlier on the call just in terms of, I guess, the mix of new systems and churn in the quarter. You highlighted that China was one of the challenges there. So when I think about the trends you’re seeing from China so far in the first quarter, it sounds like — is it appropriate to think that we’re seeing that more gradual improvement that you’re assuming near the bottom end of your guidance? And then also when I think broadly about your assumptions for the year, when I think about that $450 million to $470 million, how should we think about that when it comes to the mix of growth you’re seeing between systems and consumables?
Andrew Stanleick: Thanks for your question. I’ll start with China and then hand off to Liyuan. I think, look, what we’re seeing is, obviously, we’re in constant contact with our team on the ground in China. I think what we’re hearing is that after an initial surge in COVID infections after reopening, as we get into late February, the market now is pretty much fully open. And in fact, during the last two or three weeks, you’ve seen traffic gradually pick up. And our team estimates it’s about 80% free COVID levels at this stage. So with that, we’ve taken a measured approach factoring in a limited contribution from China in the earlier part of the year, but we remain cautiously optimistic about Q2 and beyond. And of course, we’re excited to launch Syndeo in that market during Q2.
And of course, if the rebound in China is more accelerated than originally anticipated in the second half of the year, as Liyuan stated earlier, that’s when we’d be looking at more of the 20% higher range of our adjusted EBITDA guidance for 2023. Moreover, should the market deteriorate, we’ll quickly take steps to adjust levers of investments to protect the bottom line.
Liyuan Woo: Yes. Allen, I think that’s well summarized. I think the motto just confirms that, right? Q1 is almost over the fact that nothing really happens to after Chinese New Year kind of give you the sense of why we emphasize the gradual reopening. And you have to keep in mind, even the providers are very much focused on hiring, engaging their consumers and utilizing whatever the inventory they have at hand. So we took that into consideration. Hence, both of the revenue upside and EBITDA upside tie pretty closely to how robust the reopening will be.
Operator: The next question is from Korinne Wolfmeyer of Piper Sandler.
