Greg Konrad: And then just one follow-up. I think you said working capital would be lumpy given the good inventory and receivable in the quarter, but I think that was the first down inventory sequentially in maybe five or six quarters. Anything to read in terms of that? In terms of supply chain stabilization or anything else around that working capital move?
Kevin McDonnell: Well, I’ll take that. Basically, we’ve kind of reached, if you look at our revenue trend, it’s kind of reached another level of the $180 or so million. So the working capital usage was to get us up to that level. Obviously, we’re going to continue to increase and grow the business, but this is a 30% growth year when you look — if you go to the midpoint of our guidance range, with a 20% growth year last year. So that’s a lot of growth over a two-year period. And you’re right, it’s the first quarter and I think over two years that we’ve had a down sequential working capital quarter. But as we move forward we’ll see quarters where it’ll go up and down depending upon what the demand is in the following quarters.
Greg Konrad: Okay, I’ll leave it at that. Thank you.
Wahid Nawabi: Thank you, Greg.
Operator: One moment for our next question. Our next question comes from Pete Skibitski with Alembic Global. Please proceed with your question.
Peter Skibitski: Hey, good afternoon, guys.
Wahid Nawabi: Hey, Pete.
Peter Skibitski: Hey guys. As you look into fiscal 2025 and you’ve given a double-digit top-line target. I’m wondering given that — on the gross margin line, should we expect the current — the recent trends to continue? In other words, that revenue continues to shift towards product sales, and within product sales, we continue to shift towards LMS. And so maybe overall gross margin is sort of flattish in fiscal 2025, is that the right way to think about it?
Wahid Nawabi: Yeah, I think that’s a good way to think about it.
Kevin McDonnell: Yeah, absolutely. Pete, as I said on the remarks, I mean, our gross margin is very healthy, very solid. We’ve made a lot of adjustments in our product portfolio and mix that has resulted in that. And we obviously provide you with our fiscal 2025 guidance next quarter. But we feel very strong that our business is at a growth mode and both our services as well as our products margins are quite favorable and improved quite a bit over the last several quarters.
Peter Skibitski: Okay. Got it. Thanks for that. And then just on Switchblade, I guess, for fiscal 2024, can you give us a sense of how many international customers you’re actually delivering to? Obviously, Ukraine is one, but any other major orders internationally that you’ve delivered to in fiscal 2024 and any that are kind of near-term expected?
Wahid Nawabi: So, Pete, we are working with a very large number of customers. As I said in my remarks, well over 20 countries that have shown and demonstrated real strong desire to acquire Switchblade. About a third of those countries are in the actual export license approval process with the U.S. State Department and with us and with the respective militaries. I’m not able to specify a country because of the sensitivity of those countries and our customers respect [indiscernible] respect our customers’ needs for that. What I can tell you is that the pipeline is robust. The demand is going to be a long enduring demand in my view. And I believe that the number of countries and customers are going to continue to grow and not shrink, in fact, over time.
They’re all in different phases of acquisition and many of them we haven’t delivered yet, many of them. So a lot of that demand is still to come in fiscal year 2025 and beyond. And that’s why we feel bullish about our Switchblade business in general. As we market — as we grow into this business, the market is expanding and our solutions track record also has literally convinced customers that there is no alternative to Switchblade. There’s nothing that can match this capability of Switchblade in the battlefield. And so we’re quite bullish on that front for the long run.
Peter Skibitski: Okay, appreciate it. Thanks, guys.
Wahid Nawabi: You’re welcome.
Operator: One moment for our next question. Our next question comes from Louie DiPalma with William Blair. Your line is open.
Louie DiPalma: Wahid, Kevin, and Jonah, good afternoon.
Wahid Nawabi: Hi, Louie.
Jonah Teeter-Balin: Hey, Louie.
Kevin McDonnell: Hi, Louie.
Louie DiPalma: Various media reports reference the Switchblade as a top contender for Replicator. I’m sure you saw on the call you discussed the tremendous demand for the Puma over the past two years. Is the Puma also a Replicator contender?
Wahid Nawabi: So I will not speculate on things that the U.S. DOD is working on. What I can tell you, Louie, that is — we are very engaged with both DIU as well as the Pentagon in different branches of the services. We do agree with you that our systems essentially if you look at the AeroVironment’s portfolio, the entire portfolio of our solution set is essentially a poster [ph] child of what the Replicator initiative is all about. It’s all about intelligent, multidomain distributed unmanned systems and robotics that are coupled and integrated with AI and autonomy in battle and contested environments. And it’s also about low cost, high volume. That is precisely what AeroVironment’s DNA and identity and background and current portfolio is all about.
And so multiple of our solutions could be candidates and should be candidates for Replicator. I’m not in a position to speculate on any of the details, although we’re very heavily engaged with the U.S. Department of Defense, with DIU, as well as the various services to make sure that we stand ready. The other thing that’s really important about the Replicator that I want to highlight is, as you heard from the military leaders and from the Pentagon, the whole concept of Replicator is supposed to be things that you can go into production fast. Well, all of the systems that I described to you today, and you see in our portfolio is in production level today. And in most cases, we have produced thousands of them already. So the ability for us to be able to deliver tens of thousands or even hundreds of thousands is way, way better than anyone else in the entire industry.
