Amit Daryanani: Got it. That’s really helpful. And then if I could just follow up, cloud continues to perform extremely well for you folks. I am wondering if there is an element of some of the AI demand that’s trying to come into your numbers right now or do you think the AI opportunity is still much more of a future narrative, but it’s not impacting your numbers right now, let’s just understand what drives the cloud trend and if you have time to see some AI benefit already?
Gary B. Smith: You know, I would say we’re not really seeing the, now there is some AI traffic with the various offerings, Gemini, etcetera, GPT that’s out there. So that is generating some traffic, but obviously not an appreciable step function. And I think, our understanding with these guys is that’s all to come really about how they monetize the broader dimensions of AI. They’re investing massively right now, as we all know in compute and figuring out how to then release that for monetization, which will then flow into the network. So what we’re seeing is just basically business as usual cloud growth. I think you are seeing an acceleration of that. You’ve seen the SaaS companies do well as another sort of gauge of that. And I think we’re seeing very robust, we saw it last year, we were massively in network deployments with these guys and that was really cloud.
I don’t think you’re seeing virtually any of the AI step function that we’re all anticipating in those numbers yet.
Amit Daryanani: Great, thank you.
Gary B. Smith: Thanks Amit.
Operator: The next question comes from Tal Liani with Bank of America. Please go ahead.
Tal Liani: Yes, hi guys. How do we know that what we’re seeing here in service providers is not structural, that it’s, in your comments you’re talking about cyclical downturn that will recover absorption of inventory, when you talk to the carriers, they talk about a permanent decline in spending, their desire to spend less, are there any parts of their spending that could be more structurally down that could be replaced by something else or do you have really confidence that this is just cyclical?
James E. Moylan, Jr.: Yeah Tal, it’s a good question and obviously one that we’re super focused on. I would separate it out. I would say in North America, I do not believe there’s a structural sort of issue to it. It’s really about absorption, their CAPEX, what they want. Their intent is actually to spend more and absorb more and I think with all the major service provided, that is their intent. They want to catch up with their network builds. I do think that there is a reticence around 5G. Obviously, it’s not been the monetization event for many carriers around the world that was anticipated and I do think there’s a curtailing of that spending, which my own personal belief, I think is structural. I do not think that will have a major impact on the transmission and infrastructure build.
I mean, they’re very focused on access and the build out there in North America. So I think, in total to it I do not think there’s a structural issue, notwithstanding my comments about 5G. Europe, I would think a little bit differently on. I think they have some inherent structural challenges there. You have 180 carriers in Europe. You have some tiny jurisdictions with multiple carriers, makes no economic sense. And I do think that, A) you’re seeing a bit of a downturn in the economy in certain key countries like Germany, which is hugely influential in Europe. And I think they are more receptive to those kinds of challenges than the North American model, where the economy continues to do well. So I think there are, Tal some structural issues associated with the European piece.
And that’s not new news. But they are more sensitive to the economic challenges.
Gary B. Smith: And India, we think, is still going up in to the right. They’re going to continue to build out their networks. We had a big year with India last year. We’re going to be sort of flattish with them this year. But India is going to be a great place for us for a long time.
Tal Liani: And we’re not seeing any of that in Asia Pacific either, that sort of uncertainty?
James E. Moylan, Jr.: Yeah, the one thing I would say, Tal, is the driver for our business is demand for bandwidth. And that has grown and continues to grow at very rapid rates. Now, the people who are building networks to manage that demand, really, the structure has somewhat changed towards the cloud providers. If you go back 10 years ago, they weren’t buying any network gear. They’re buying, a significant part of it today. It’s very possible that that could expand over time. If there is any shift, that would be the shift from service provider to cloud providers.
Tal Liani: Certainly in the long haul.
James E. Moylan, Jr.: Yes.
Tal Liani: Great, thank you.
James E. Moylan, Jr.: Thanks, Tal.
Operator: Your next question comes from Simon Leopold with Raymond James. Please go ahead.
Unidentified Analyst: Yeah, hi, thanks guys. This is Jeff Cojian [ph] for Simon. So I was just hoping you can maybe hash out the strength in Europe this quarter, maybe how that reconciles with your comments on the weeks, maybe the weakening macro outlook there? And as well as like Huawei swaps or displacement opportunities, it sounds like it’s going really well in India? Thank you.
James E. Moylan, Jr.: Yes, I’ll deal with the first part. Our regional report reflects the region into which we deliver equipment. It doesn’t necessarily reflect the type of customer. So the big jump in deliveries into Europe were driven by cloud providers, not the service providers in Europe. The Huawei thing, there’s still an opportunity ahead for us. Now the whole supply chain and COVID situation was actually a benefit to Huawei because they had gear. And service providers really wanted to stick with the status quo. They didn’t necessarily want to build out stuff. And so for a combination of those two reasons, Huawei did pretty well over the last two years. The desire of Western economies to reduce their dependence upon China in general, and Huawei in particular, has not abated.
