Benny Buller: I’ll just add on this. But we did have quite a few new customers that we ship systems in the last 12 months. And those new customers are getting to the point that we are going to start seeing some orders coming from many of those new customers.
James Ricchiuti: Got it. With respect to the R&D spend in Q2, does that remain elevated or as you are working, presumably, it sounds like you’re working on a new project? Or is the bulk of that behind you? And then should that begin to come down in the second half and maybe that plays also into the sequential decline that you’re anticipating on OpEx?
Benny Buller: Yes, absolutely. Q2 was an outlier on this. And we will see a decline in Q3 and Q4. We had a lot of spending on material in Q2. That was a procurement of a lot of hardware for this new project. But this is behind us and things are going now to lower spend level on R&D.
James Ricchiuti: And it’s difficult in this environment to get a high-level of confidence around bookings that get pushed out being actually converting in the next one to two quarters. So I’m also trying to get my arms around the full year outlook for revenues. And again, the confidence that within that existing customer base that you’re going to see that kind of a pickup in bookings activity. Presumably, you are also be adding newer content. But it sounds like, as you think about the second half of the year, it’s going to revert to something more like we’ve seen in the past where existing customers have been a big part of the business.
Benny Buller: Yes, absolutely. Our confidence on this is partially statistical based on what we pattern that we have seen in the past and partially talking with specific customers and seeing specific demand that is emerging from these customers. Both of those trends suggest things are going to pick up in this quarter and some of that in next quarter.
James Ricchiuti: And the last question is just with respect to the gross margin guidance, looking out to Q4 and the step-up there, is there something that you can say with respect to the current backlog that you have, the margin profile of that backlog that gives us the confidence that you could get to the target range that you’re talking about looking out in Q4.
Bill McCombe: Yes, Jim, from a pricing perspective, the backlog is more favorable than the prior quarters and that we had one of these early bird reservations in the current quarter. And I think we had them in the first quarter. We have one more of those to go. So, these reservations and prices that were committed to in late ‘21, early ‘22 when the Sapphire XC was being introduced. And then we ended those reservations in the end of the offer of those reservations in early ‘22. And so those will be behind us by Q4. So pricing at the backlog continues to sort of average up those reservations get behind us. And then the other part of the margin improvement is a bill of material cost reduction. So we have contracts in place and delivery starting to occur that will give us lower cost material.
And then the third part of it is just an expected increase in volume between now and Q4. So I think the answer to the question is yes, based on those three parts of the margin equation.
Operator: [Operator Instructions]
Benny Buller: Thank you, everyone, and looking forward to see you in our next earnings call.
Operator: This concludes today’s conference call. You may disconnect your lines at this time. Thank you for your participation, and have a good day.
