And I think the last thing is really the convenience and the comfort with the ASC setting is also helping to accelerate the overall market. So the market dynamics are still early and preliminary, but the execution is very strong and very real. So — we’ve got a lot of confidence qualitatively. And I think if you look at the back half of our guidance, the implied growth rate of being roughly about 5%, I think that’s another proof point quantitatively that gives us that confidence. So again, thanks for picking up on that. And those are the things that give us confidence.
Operator: We’ll go next to Richard Newitter with Truist Securities.
Richard Newitter: Maybe just looking at the margins, I’m trying to calibrate if we’re kind of back to normalized levels sustainably, what your normalized margin and margin improvement prospects are? You did about 200 basis points of year-over-year operating leverage in the first quarter, and you grew double digits on the top line. Now you’re at about 100 basis points roughly in the back half, and that’s like you said, a mid-single-digit implied growth rate on the top line. So can we assume like that — those are basically the right level of operating leverage to correlate to call it, upper mid-single digits? You’re getting north of 100 basis points, something more in the lower mid-single digits or upper low single digits, you’re 50 basis points plus operating leverage?
Suketu Upadhyay: Yes. So first of all, thanks for the question, Rich. I’ll just step back a little bit and just say, if you go back to 2022 even in a very challenging market with a lot of inflationary pressure, supply chain disruption, et cetera, we were able to grow our operating margins. As you look at 2023, you take our implied guidance, it would suggest we’re going to grow operating margins by almost another 100 basis points at the midpoint. So we feel really good about what the company has been doing. And inside of that, we’ve been doing that with very strong, as you’ve seen, mid-single-digit growth, very good gross margin performance. I’ll break that down in just a moment. Offsetting continued challenges with inflationary pressures, but also inflation from ’22 that capitalized into this year, which we’ve talked a lot about, while still investing against the business for future growth, right?
So a very strong profile, good top line growth, good gross margin, offsetting the challenges and continuing to invest against the business. So I do think our ability to sustain these very high, very attractive margins this year into the future is absolutely table stakes, but I also think that we’re going to be in a position going forward in a normalized market, where we’re going to be able to expand margins from here. So that’s how we think about things. I won’t try and break down between what level of revenue growth, how much margin expansion. There are a lot of factors that play into that. The big picture takeaway is we’re at a really good level now, we’re going to sustain that, if not grow that into ’24 and beyond.
Richard Newitter: Okay. And just maybe feeding that into M&A. As we think about your M&A and tuck-in strategy, how should we think of the prioritization of top line from tuck-in M&A versus margin and earnings dilution trade-off?
Suketu Upadhyay: Yes. So we know how to work around this as a leadership team. And clearly, what you see by looking at other companies in our sector is that valuations are correlated at a very high level to revenue growth. So understanding the ability to get our revenue growth at a higher rate. The mid-single digit is a great accomplishment given where the company was just 3 to 5 short years ago, and we’re happy about the progress we’ve made, but we’re not satisfied, right? And we believe that M&A, investing into faster-growth markets absolutely is the right thing to do and ultimately, we’ll improve our overall weighted average market growth and the overall growth rate for the company. And then once you get there, you get natural leverage, the P&L starts to flow through and over time, you start to get to a profile where you get very strong earnings growth well ahead of revenue growth.
