Rick Olson: It’s a meaningful range of expected growth between the two spectrums, the two ends that I talked about.
Tim Wojs: Okay. Okay. Good. And then just on AMP, I guess how different is this program than what you’d kind of normally be doing around things like the supply chain and product design and things like that on an annualized basis just to improve productivity. I’m just — I guess I’m trying to just to make sure I understand. Like is this something that would be purely incremental to what you’d kind of expect from a normal incremental margin perspective? Or is this something that does more to kind of support the normalized incremental margins? And I guess, how do we phase that in?
Julie Kerekes: Yes. So I think what I’d start with, so it is different than our drive for five initiative, which is an employee initiative that will remain intact. AMP is really a transformational productivity initiative and the largest that we’ve ever done in PTC’s history. It really — we have been able to do this because our supply chain has really improved over time and allow us to focus more on productivity. It will be incremental. So, our goal is to get $100 million in annual run rate cost savings by 2027, which will be incremental to our normal gross margin and productivity improvements. And we do expect that savings to accelerate over time, probably seeing the majority of the savings come in years two and three.
Tim Wojs: Okay. Okay. That’s helpful. And then just the last one. You gave us a little bit of color on the fiscal Q1 kind of expectations. Anything else to think about in terms of the cadence as we think about the rest of fiscal ’24, either from a revenue or an EPS perspective?
Julie Kerekes: Sure. Yes. So as we said in our prepared remarks, typically Q2 and Q3 are largest quarter. But if you think about kind of the cadence for our adjusted EPS, it is typically higher in the second half than it is in the first half and we expect it to be.
Operator: Thank you. One moment, please. Our next question comes from the line of Tom Hayes of CL King. Your line is open.
Tom Hayes: Rick, maybe just a little bit. I think you may have mentioned in your prepared remarks, but I just wanted to go back because we’ve heard some weakness in the channel, maybe just your thoughts on where the rental channel is right now?
Rick Olson: From our perspective, the rental channel continues to be very healthy. It’s been — it was a strong driver for us in 2023 and order positions continue to be very strong. Obviously, there are adjustments taking place by category and by an individual customer, but we still see that as a healthy business for us.
Tom Hayes: Okay. And then maybe just, I know it’s come up in a few other questions, but maybe just on the field level inventories on the residential and your professional lawn care. Do you think we’re closer to the end of the destocking than kind of the midpoint or just kind of some additional color on kind of where you feel we are as far as the field inventory levels right now?
Rick Olson: Field inventories are still meaningfully elevated from where we would like to see them at this time of year. Especially given for spring products, it’s really the off season at this point. So, that — we’re not going to see major retail flow through until we get into the spring in North America, where we’ll start to see the momentum, so still higher. Snow is higher. We had a relatively poor snow season last year. Not off to a great start so far this year, but that’s all built into our guidance as we provided it.
Tom Hayes: Okay. Maybe just a — sorry, go ahead.
Rick Olson: Tom, just one last thing regarding on the pro side of things, field inventory is still very low, historically low for underground, specialty construction and the golf and grounds businesses. So, that’s still a channel that needs to be refilled once the balance is found with demand and supply.
Tom Hayes: Okay. I guess, similar along the lines of that last point, I think last time you and I talked, you indicated that you felt the municipal budgets remain pretty solid and that would be a good indicator for your ground and golf-related revenue opportunities. Is that still the case? It sounds like it is.
Rick Olson: That’s still the case. I’m just looking at some golf information just this morning and the strongest growth in participation has actually been in municipal access golf courses. So, open access of golf courses with that strong from a golfing standpoint. Budgets continue to be strong and really prioritized to green spaces for municipalities. And I guess the last piece would be the investments that we’ve made to have zero emission products has really positioned us well with municipalities that tend to be the early adopters in making those investments. So, it puts us in a really good position from a municipal standpoint.
Operator: Our next question comes from the line of David MacGregor of Longbow Research. Your line is open.
David MacGregor: I mean, arguably, the most important event for 2024 for you is the addition of the Lowe’s business, which is just a tremendous addition to the enterprise. But if I could just maybe come back to Sam’s question and ask it maybe a little bit differently. Within the low single-digit 2024 revenue growth guidance, what’s the expected incremental contribution from the Lowe’s business net of likely reductions to your other big box retail partners? And will this incremental business be accretive or dilutive to margins?
Rick Olson: Net, we don’t break down to the specifics of the mix. We also just — if you think about the major ports and it goes through our dealer network as well. So, there are other elements that were not even kind of bringing into the equation here that are really key. Our dealer business has been very healthy. It’s continued to grow for some time. And — but the net with Lowe’s will be a benefit overall for the residential business. Our desire is to continue to grow with all of our partners. So, we will continue to work on that with every — all of our gas and dealer partners look for differentiated product mixes for them. And work to continue to grow that, but net effect with Lowe’s would be a positive for residential.
David MacGregor: And Rick, can you speak to whether the incremental business is accretive or dilutive to margins? And I’ve got a follow-up.
Rick Olson: Should be consistent, it’s not a big swing in either direction.
Julie Kerekes: Yes. And our best estimates for that, David, are included in guidance.
