Joseph Hogan: Yes.
Nathan Rich: Okay, great. Joe, you mentioned the focus on delivering improved operating margins and you guided to non GAAP margins being up sequentially in the fourth quarter despite the reduction in the revenue guidance. I guess as we think about the business going forward, should we think about that four Q margin as a good base level for the business even in an uncertain demand environment? And are there additional actions you can take on the cost side to give yourself some additional cushion for margins going forward?
Joseph Hogan: You’ve been watching us long enough to know that each of our quarters have a certain personality in the sense of the kind of operating profit we deliver. You can see in the fourth quarter that we feel good about where we stand right now and the levers that we can pull in order to deliver the operating margin that John talked about. So – I think you know, more than anything, I want the investors to understand that while we have this uncertain environment, from a demand standpoint, we’re going to be responsible on cost. We’ll invest in technology and we’ll focus in those areas, but we’re always looking closely in the sense of where we can rationalize, also where we can prioritize in different areas that will help in that operating profit area. John, anything you want to add on that’s?
John Morici: So we’ll see the benefit that we’ve seen all year to be able to see that operating margin improvement. But as Joe said, we’re prioritizing our investments. We look at this time as we finalize our plan for next year. But we have got a lot of technology coming and we want to make sure that we’re properly invested there as well as being able to deliver like we can on an margin basis.
Nathan Rich: Okay, great. And if I could just ask a follow up on the 4Q guidance for clear liner volumes. I think you had said that you don’t expect improvement in adult and had talked about, I guess, modeling what you saw in September through the fourth quarter. I guess how should we think about adult cases relative to the 381,000? I guess when we take that together, given how it sounds like September shaped up, should we expect a decline off of that 381 level in the fourth quarter for the adult cases specifically?
Joseph Hogan: I think when you look at things, Nathan, like we said, teen showed up well in the third quarter. We’re pleased with that. Seasonally comes down in the fourth quarter. And based on what we saw in September and so far in October, I think you would expect to see adults down as well.
Nathan Rich: Great. Thank you for the color.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Brandon Couillard from Jeffries. Your question, please.
Brandon Couillard: Hey, thanks. Good afternoon. Just a clarification, Joe or John on the adult trends and the weakness, is that predominantly in the US or is it about to extend outside the US as well? If you have any chance, you’re willing to take a stab at some of the factors behind that and whether or not student loan repayments may be contributing to some of the [indiscernible] and sentiment in that customer base.
Joseph Hogan: Remember, third quarter is a big teen quarter, but adults are obviously a large component of that. We saw that adult phenomenon in North America, but we saw it across each geography.
Brandon Couillard: Okay, then just to follow up, John, on the fourth quarter, margins operating margins up with revs down sequentially, is that all coming from OpEx, or would you expect gross margins to bounce up sequentially as well?
John Morici: When we talked about down sequentially on Op margin, that was on a GAAP basis. We have some of the restructuring and other things that include we expect sequential improvement on a non-GAAP basis from Q3 to Q4. And we didn’t give specific gross margin guidance, but we’re working to try to make sure that we work on our gross margin as well. But right now we’ve kind of given the guidance down to our margin.
Brandon Couillard: Thank you.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Mike Ryskin from Bank of America. Your question, please.
Mike Ryskin: Great. Thanks for taking the question, guys. I got a couple real quick here. First, hopefully you can hear me. First I want to ask on the right, sizing or some of the layoffs you discussed. I’m thinking back to 2020, sort of like peak COVID when everyone was panicking and some of your competitors or other players in the dental space announced some layoffs and you held fast and powered through it. And then the argument was that you saw it as being transient and you wanted to invest in growth and sort of be ready for the rebound. Just contrasting that with a decision to implement some cuts here. Does that mean anything in terms of your thoughts on the duration of the macro slowdown? Why, if this is just macro related and as you said, September slowed pretty suddenly, if there is a rebound, why not continue to invest given the balance sheet is strong, the free cash flows are strong, just sort of compare and contrast and lay out your thinking on that.
Joseph Hogan: First of all, when you go back to 2020 that you referenced, and we did power through that personally, what I looked at that is I looked at that as not an economic issue. That was obviously a pandemic kind of an issue and I think I anticipated it have a clear beginning and a clear end. And so in that sense, I think it’s easier to make that decision, whether that’s right or wrong, with that kind of a thought process in mind. In this case, we’re seeing unprecedented change from an economic standpoint. We’re seeing consumer sentiment down. I mean, I’ll have to go through all the economic data. You probably know this better than me, so there’s a lot of uncertainty there. But I don’t want to be misinterpreted that we’re going to disadvantage this company in a rebound.
No way. We’re going to make sure that we’re responsible in the sense of the resources and the restructuring that John talked about, too. We’re going to make sure that we’re well positioned in the key areas, too, that if we have a rebound, we’ll be able to respond with the right kind of capacity and the right kind of product. So I feel like we’re balancing that well right now.
Mike Ryskin: Okay. All right. I appreciate that. And then second point, sort of piggybacking on I think it was Block’s question earlier. Not going to ask you for the specifics on ’24, but just thinking about this year. The price you took earlier this year certainly contributed to your revenue growth as we think forward to next year and your ability to take price again or potentially have to give price, given how much the macro has changed and how the demand dynamics have changed, how do you feel about pricing and products? Any opportunity to take that up again next year? Or on the flip side, are you potentially getting some pressure there where you might have to give a little bit?
