John May: Yes. Great. Thanks, Nicole. I mean, I think as you look at overall equipment operations, we’d expect Q2 to be down relatively more than the down for the rest of the year, although pretty close. PPA, though, it’s a little bit of a different story. That’s a little bit more back half loaded. Q3, Q4, I think where you’ll see more of the reduction coming out of the PPA segment.
Josh Jepsen: Yes, Nicole, I think from a seasonality perspective, I think ’24 looks a lot like ’23, a more normal distribution in terms of quarterly splits. So expecting the strongest top line margin in 2Q would remain. So not a significant change from a seasonal split perspective in terms of how the business looks. Thank you. We can go to the next question.
Operator: Our next question comes from Steve Volkmann with Jefferies. You may proceed.
Steve Volkmann: I wanted to go back to the ideas around the sort of decremental margins here because Josh Jepsen, I think you said that you were sort of looking to prioritize reduced volatility, but obviously, these decrementals early in the downturn look pretty big, I think, relative to what we were expecting. So can you just talk about, update us on what normal decrementals should be as we think through a longer sort of downturn? And any implication for how we should think about 2025, I guess, is what I’m trying to think about? And then what an incremental might look like as well if there’s just kind of any update there? Thanks.
Josh Jepsen: Hey, Steve, it’s Josh Jepsen. I would say, we’re running right now. If you look at the total equipment operations, our forecast is probably in the range of 37%, 38% overall kind of across the businesses. And then obviously, there’s a range there from 30 to just in the low 40s on the Production Precision ag side. That production precision ag piece is clearly impacted by the underproduction there. I mean, historically, that’s probably on the decremental side, run higher, closer to 45 I think we’re seeing a shift in structurally how we perform and driving that down. And I think [ x ] under production would be 40 or maybe a touch better. But I think our focus area is, yes, we can manage this across these businesses in this range of — from an equip ops perspective in between 35 and 40.
And as we continue to execute, drive that down lower. Now part of that, to your question, one of the points you made is the ability to drive less variability in their business, certainly continuing to execute on our life cycle solutions strategy helps there. The Solutions as a Service as we just talked about with Satcom as an example and some of the things we’re doing on the precision upgrade side. Also, we think we can continue to build a base of revenue and profitability that is much less reliant on just end market demand in terms of new units and volume each and every year. So we’re focused there. We’re going to continue to execute, but we feel good about the opportunity we have there.
John May: Thanks, Steve.
Josh Beal: We probably have time for one more question.
Operator: Thank you. And the last question will come from Tim Thein with Citigroup.
Tim Thein: All right. Thanks for squeezing me in. Yes, I suspect we’ll hear some early feedback on the Crop Care EOP on next quarter’s call. And obviously, the commodity price backdrop heading in the planting season in North America, it looks like it will be less supportive than last year. And I think there was also some uniqueness in terms of the tightness in new and used sprayers a year ago. So and maybe this is best for Aaron. I’m just curious, if you can share any thoughts as to how you expect this will play out and back to the earlier point around early indicators for next year, what — will that — do you expect that to be as useful as a signal for large ag demand in ’25 and then I guess, importantly, how you expect you’ll approach pricing on that? Thank you.
Josh Jepsen: Yes, I think this is Josh Jepsen, maybe I’ll start. I would say as we look at, going forward, we’re early, we’ll roll out those early order programs in the June time frame, beginning on planters and then sprayers to follow in that range. You’re right. Last year, we saw a little bit of a bifurcation between those. Those generally have looked similar. We saw planters incrementally a little bit weaker than sprayers and sprayers have been constrained. So there has been some difference in what we’ve seen there. I think importantly, to your question of do we think it’s going to be a good indicator, I would say, yes, I think that’s always a good opportunity for us to get a pulse on our folks thinking after they’ve got a crop in the ground.
What are they looking at in terms of upgrading their planters and sprayers and also level of technology and the ability for us to also go back and make trade-ins for folks that do want to upgrade their technology and take those trade-ins and upgrade them for the second or third customer, I think, will be important as well. And our dealers are investing that activity. They’re investing in the capabilities to do that, I think, which is really important. Go ahead, Aaron.
Aaron Wetzel: Yes. I don’t know that I can add much more to what Josh said. Other than, I think, given some of the new technologies we’re bringing out across both planters and sprayers, we expect customers to want to take advantage of that for their operations. But we’ll closely watch the EOP activity as it transpires through the period and adjust accordingly once we see how things roll out.
Josh Beal: Thanks for the question, Tim. And that’s all the time we have for today. We really appreciate everybody calling in, and thanks for joining us. Have a great day.
Operator: Thank you. That does conclude today’s conference. Thank you for participating. You may disconnect at this time.
