Unidentified Analyst: Understood. And then just lastly, for me, on your capital allocation strategy, I know you guys need to mention, you keep six shares, but how does your M&A pipeline look? Have you seen anything there where you could add on to either hubs or your factory offerings?
Rob Bodor: Yes, what I would say is we’re first primarily focused on the acquisition of hubs and making it successful. You can kind of see that in the results of hubs. We’ve been very focused on cross-selling and on improving the e-com experience that integrates both the factory and the network. That is our primary focus right now.
Unidentified Analyst: Understood. I’ll pass it along. Thank you.
Rob Bodor: Thank you.
Operator: Thank you. And our next question comes from the line of Greg Palm with Craig Hallum Capital Group. Please proceed with your question.
Greg Palm: Hey, thanks. Good morning, Tom, thanks for taking the questions. I wanted to start with a question just about the demand environment, but maybe I’m going to ask it in a little bit different way. I’m just kind of curious if you’re seeing any change in customer behavior, whether it’s customers ordering more parts or whether they’re doing more expedited. Any change in behavior that gives you some indication of any underlying change in the macro? You’ve seen any of that or is it pretty steady relative to what you’ve been kind of seeing year-to-date?
Dan Schumacher: I think year-to-date there hasn’t been that much change quarter on quarter, but I would say overall we’re seeing and we talked about this a little bit in the script, right, that we’re seeing customers have a tendency to be less in a hurry. And so utilizing our longer lead time options more.
Rob Bodor: I think the others thing Greg that we saw, maybe this is specifically for our factory business in Europe, as we did see larger projects that we talked about in the first quarter earnings call. We were not seeing as many of those in the second quarter. And on some of those larger projects, we’re having customers upload that are being indecisive and longer in terms of making decisions on those. And I think we called it out a bit, Greg, in my commentary on injection molding. I think we’re seeing particular softness in medical and consumer electronics.
Greg Palm: Okay, that’s helpful. On gross margin, just to follow up, was there anything sort of non-recurring or one time, I know we’ve been talking about 25% to 30% hubs. You were a little bit below that in Q1, but yet really nicely outperformed in Q2. So but I think you reiterated, you still expect 25% to 30%. So just kind of curious whether there was anything unusual that drove the upside specifically in the quarter.
Rob Bodor: So two things, we talked about this, Greg, I don’t remember us talking about this, maybe last year or the year prior, for the hubs business, in terms of where the MPs are sourced, Chinese New Year does have an impact in Q1 and ends up being pressure on our margin. So, you know, I would say Q1 was well, kind of below the average, right? So it’s part of the pickup was there. I would say the second thing is we did make changes to our model that were quite successful. And some of those changes are on the demand sourcing side and some of those changes are optimizing the pricing for different types of geometries and materials. So we did implement changes we had been working on in the quarter as well. Those were the two primary drivers.
Greg Palm: And just to be clear, those were not just one quarter type changes. That’s something that will affect the go forward.
Rob Bodor: Correct. But we will see how successful those things are. You know, I’m not letting three months kind of dictate where that’s going to be, Greg, before adjusting the longer term model of the 25% to 30%.
Greg Palm: Yes, okay, no, that’s fair. And then just, I guess my last question, operating expenses took another sort of tick down in Q2. So you’re clearly managing costs pretty well. What’s the expectation going forward? Is this kind of a good sort of level, a good run rate? Or are you going to continue to sort of manage that pretty tightly?
Rob Bodor: I think as you can see from our guide, you know, we’re expecting to be flat-ish at the midpoint quarter over quarter. So we would hold where they are now, but this is a dynamic environment. So depending on if the revenue goes up or down, we’re gonna need to be flexible, right? And continue to find ways to be more efficient.
Greg Palm: Got it, okay. I will leave it there, thanks.
Operator: Thank you. And our next question comes from the line of Ben Rose with Battle Road Research. Please proceed with your question.
