So, that’s why we see that impact on gross margin sequentially. Nothing more than just the mix of products we ship and the natural gross margin on those products vary one from the other. And you can actually see it with the way our inventory grew, too. As we — as Kirsten reported, our inventory ending Q4 grew about 5% from that ending Q3, the quarter before. And obviously, the Q4 inventory is positioned to ship in Q1, and you see that increase even as our guidance on revenue remains pretty flat.
Operator: One moment for our next question. That will come from the line of Joseph Moore with Morgan Stanley.
Joseph Moore: Great. You talked about being booked for the whole year next year. How much visibility do you think that gives you really? And I guess, what’s your philosophy going to be if customers with non-cancelable backlog come to you and try to make an adjustment in a potentially weaker economic period next year?
Hock Tan: Let’s start with the first part. I mean, when we’re booked, we’re really booked. I mean we got paper that says they have committed orders for us to ship. And as you know, our orders are non-cancelable orders. Customers know that. We have the paper. And when we say we are fully booked, it means we have the backlog sitting there. Now, the second question you asked is a more interesting question. What if we all hit a massive recession, depression or recession, late next year, in the next 6 months, 9 months, and customers — and things really collapse around years, what would we do? My answer is I don’t know, which is partly why we’re not giving you annual guidance. We will react as and when circumstances require us to do. But at this point, we have the orders.
Operator: And one moment for our next question. That will come from the line of William Stein with Truist.
William Stein: Great. Thanks for taking my question, and congrats on the good results and outlook. The — it seems that the capital allocation policy in terms of the outlook — maybe the policy didn’t change, but at least the tactics did. The payout ratio relative to free cash flow, you’re setting that a little bit lower than the 50%, and you’re resuming the buyback. And I’m hoping you can just discuss why these decisions were made. Does it reflect an indication or a changing view about the timing of the VMware close, or is it related to concerns around macro or anything else? Thank you.
Kirsten Spears: Well, I would say that we are — policy-wise, we’ve always said we would pay out approximately 50% of the preceding year’s free cash flows. And in this economic environment that we’re all seeing, we believe that a 12% increase year-over-year is a robust dividend. And so yes, we’re quite happy with that.
Hock Tan: And don’t forget, we’re going to start buyback once the rules allow us to do that. And so, that’s another return of cash to shareholders, and we fully intend to get that going as soon as we could.
Kirsten Spears: As soon as we can, and we still have $13 billion under that program.
Operator: And one moment for our next question. And that will come from the line of Matt Ramsay with Cowen. Please go ahead.
