Nicole DeBlase : Just maybe asking a quick one on pricing. With the price guidance that you guys have embedded, is that all price carryover? Or are you embedding another annual increase as per like a return to normal in 2023? And how has the customer response been to pricing?
Brent Norwood : So with respect to price, you’re picking up a little bit of both. I mean there’s definitely some carryover from 2022. Particularly, we had a lot more — a lot higher pricing in the back half of 2022. So you’re going to see those compares be a little bit higher in the first half of 2023. But there were additional list price increases for the 2023 order book. So it’s going to be a combination of both. I think with respect to the elasticity of demand, we haven’t seen a drop off in demand yet. As we noted, we’ve had to put ceilings in on all of our order books, which right now, demand just continues to outstrip supply. And as John noted earlier in his comments, the velocity of those orders hasn’t slowed at all as we’ve paced through the fourth quarter.
Operator: Our next question comes from Mig Dobre of Baird.
Mircea Dobre: I want to go back to the discussion on precision ag, if we can. And I’m sort of curious here, the Autonomy product suite, how are you — how has your thinking evolved in terms of the way you’re commercializing this portion of the business and the progress that you’ve made towards bringing this to actually become the mainstream product. Is that a 2024 timeframe, 2025? And I’m curious for the customers that are buying 8R tractors now do they have the option to get this feature as a mass product?
Brent Norwood: Great question on Autonomy. So right now, our autonomy is being rolled out on a limited basis. So it’s not available to every single customer.2023 will be another year where we’ll have a limited commercialized rollout of Autonomy. I think what’s changing a little bit with our mindset around precision, really two things. One, this is the type of technology that we think lends itself really well to a per acre type of monetization model which is different than our historical point-of-sale model for most of our products and solutions. So we’re getting an opportunity to roll that out with customers. And what we’re learning is how customers consume our solutions differs among the customer base. I think they’ve actually really enjoyed the variable cost aspect because what we’re seeing is customers use Autonomy, a bit of a hybrid role or a hybrid model.
They’re driving their tractor some. They’re putting on autonomy mode overnight to get the job done while they sleep. And so that allows them to really pay just for the part of the product that they use. I think the other thing that’s really important with the rollout of Autonomy is — and this is a little bit different than what you’ve seen in the past. We will roll out this technology, really retrofit first or field kit first as opposed to most of our technologies have gone factory installed first. So I think you’re going to see a little bit of a shift in some of these next-generation technologies, both in terms of the business model that we apply to it, giving us some opportunities for recurring revenue, but also more of an emphasis on field kit opportunities or retrofit opportunities at the onset of some of these technologies.
John May : Yes, Brent, just to add to that, a couple of things I think are important. First of all, our experience with customers this fall really reinforced our view on the very real challenges our customers are facing with respect to labor, labor availability and the value of hitting that agronomic window. So with limited skilled labor, the downside effect to it is not hitting the agronomic window and then having an impact on yield. So having the machine running when it needs to run was very critical to our customers. Also, as you mentioned, the customer acceptance of the per acre model was really, really good. And one evidence of that is every single customer that use this product in this fall have signed up to use it in the spring.
So really, really important. Last thing I want to leave you with is, when you think of Autonomy, I want you to start thinking about autonomy and automation. And this is just one major productivity unlock an entire production system. And if you remember, as part of our Leap Ambitions, we’re committing to have a total autonomy and automation solution for corn and soy in the U.S. We want to unlock all of this value for our customers. And what we’ve been doing here the last couple of years is proving out, this is technically possible, and I am really excited about it.
Operator: Our next question comes from Larry De Maria of William Blair.
Larry De Maria: Good morning and nice start, Josh. So staying on that topic a little bit, you continue to obviously put price and value per machine, but it’s getting harder to pencil out for the midsized farmers, and forcing more scale needed in the industry. So ultimately, I’m wondering if we’re getting towards the upper limits of what the growers can handle and will accept in terms of price, maybe — do you think they need to break maybe into €˜24 and or perhaps this is moving us closer towards a broader per acre model beyond just your Autonomy quicker?
Josh Jepsen : Larry, it’s Josh. Thanks for the question. I think the opportunity we have in front of us here is — and John and Brent just mentioned this as a retrofit, and the ability to go back across the installed base and upgrade and improve productivity and technology without requiring a completely new machine. So I think that is differentiated solution than we’ve had in the past and also allows for relative value based on whether it’s size of farm, particularly if you’re paying on more of a per use per acre basis. So we think that’s a significant component to unlocking that value for our customers and allows the technology to cover more acres as we go through the field.
Operator: Our next question comes from John Joyner of BMO Capital Markets.
