So as now we look for Q3, our expectation is for us to come down an improvement of probably about one cash day. And then Q4, based on our comments about the seasonality recovery of 8% sequentially, sometimes that does consume working capital. It’s difficult to tell today, but still allows us to have confidence to achieve the $1 billion plus cash flow for 2023 and thus, the increase in the second half of share repurchases by $100 million. And then your question about going into 2024, we have said in our Investor Day and along the last couple of quarters that we still feel that, that medium-term target of being able to generate free cash flow of $1.5 billion is still reachable and attainable. I do think that coming out of 2022, we were quite elevated on inventory.
I think we acknowledge that and that we would expect some of that inventory to unwind. We have experienced that to date for the first half. We do expect that to continue to improve in the second half of 2023.
Adam Tindle: Okay. And then into 2024 [indiscernible]. I’m just seeing that you’re under 2 times net leverage, you’ve got over $5 billion of liquidity. And if cash flow is going to continue like this, I’d imagine the capital return story doesn’t end here, but I don’t want to put words in your mouth.
Marshall Witt: That’s correct. And as you know, it’s not always linear. The indication of us increasing our share repurchase is not indicative of anything we’re doing on the M&A front. So we’re always going to take that with a balanced approach.
Adam Tindle: Thank you.
Rich Hume: Thank you, Adam.
Operator: The next question is from Michael Ng with Goldman Sachs. Your line is open.
Michael Ng: Hi, good morning. Thank you for the question. I just have one on SG&A. Given that OpEx is 65% variable, I was surprised to see it up year-over-year. I know you mentioned the investments in the strategic growth areas that drove the elevated SG&A in the quarter. I was just wondering if you could talk a little bit more about that, what areas of growth were most impactful? And then could you talk a little bit about the glide path towards coming back to that 3.5% to 4% range in the back half. Is it evenly split, more back weighted towards the fiscal fourth quarter? How are you thinking about that? Thank you.
Rich Hume: Yes. Thanks for the question. So first, I’ll handle the first part and Marshall can assist on the glide path of the back half here. So first, when you think about Areas investment, we point towards the high-growth technologies. This would be cloud, analytics, cybersecurity and then our hyperscale infrastructure business. And you’ve been noting that those have been performing quite well for us over time. So that’s sort of the first data point. The second data point is, when we think about our SG&A structure, there clearly has been an impact with inflationary measures across most of the SG&A category, whether it be labor and logistics centers or whether it be some of the logistics and supplies like activities, which exist within that framework as well.
That being said, we’ve done a pretty good piece of work to think about where we’re headed for the back half of the year and in FY 2024 and have realigned, if you will, the trajectory of our spend to be consistent with getting us back to an overall business profile, and I’ll let Marshall comment a little bit on that.
