Adam Tindle: Okay. Just last one – Marshall, congrats on the cash flow year-to-date. You had, I think previously, talked about an annual goal of a billion in cash flow. Obviously you’re already there, so wondering if that’s still the right way to think about it. I think Q4 is normally a positive free cash flow quarter, but I know it can be volatile. Looking forward as you reflect on this year’s cash flow performance, are there any pieces of this that might be a little bit more temporary – you know, working capital benefits that don’t repeat itself, or do you think this is sort of a baseline to build off of?
Marshall Witt: Yes, thanks for the question, Adam. For the year-to-date cash flow of $1.1 billion, we did see about a half a billion of working capital unwind. We expected that as we spoke to–as we finished last year and had inventory elevations. We knew those would unwind, so $500 million or so of that $1.1 billion is working capital unwind. We’re still fairly confident about hitting a $1.3 billion target for this year, and then if I think about cash conversion and how that progresses over the medium term, we still feel confident about achieving that $1.5 billion over that medium term, which we’re calling fiscal ’25 or ’26.
Operator: Thank you. Your next question comes from the line of Keith Housum of Northcoast Research. Your line is open.
Keith Housum: Good morning guys. You know, Marshall, with the interest rates where they are today and perhaps probably one more increase to go, how are you guys thinking about debt pay down versus increasing your capital allocation towards return to shareholders?
Marshall Witt: Yes, thanks for the question, Keith. Interest rates are high, the variable aspect right now is running at around 7%, so we’ll remain fairly balanced in our outlook about where we are with our leverage. We’re at the 2.2 times gross and 1.6 net – that might go up a little bit in Q4 primarily just due to the trailing four to five quarters of EBITDA, but other than tenor [ph], we’re not anticipating making any other incremental pay downs debt, but being mindful of cash flow and how best to redeploy that within the options that we have.
Keith Housum: Great, and then if I look at [indiscernible] earnings release, it sounds like you guys will be increasing your share repurchases in the fourth quarter. Is that the correct way to read that?
Marshall Witt: It is. In my prepared remarks, we commented about where we were at for the year-to-date through Q3 and all-in for the full year at 580. That puts us in a repurchase expectation of about $170 million for the quarter, so that’s where we do see some acceleration in share repurchases. Given the strength in our cash flow, we’re going to remain opportunistic as well and play that based on price and overall completion of the quarter.
Keith Housum: Great, and then one more, if I can get it in here. I know [indiscernible] but Asia-Pacific and Japan area, another good quarter of growth there, and it sounds like advanced solutions in India and Australia are driving that. Is that sustainable growth? Are you guys able to sustain that growth going forward in that region?
Rich Hume: Keith, I think you have to break it down a bit. I think that the region right now that seems to have outsized opportunity is India. Obviously there is a lot going on there relative to major vendors resourcing supply chains, etc., so my view is that maybe they’re a little bit insulated from the economic cycles. But the rest of the region, I think, has a dynamic of the rest of the world and will ebb and flow based on that macro. That would be my view.
Operator: Your next question comes from the line of Joseph Cardoso of JP Morgan. Your line is open.
Joseph Cardoso: Hey, good morning everyone. Thanks for the question. One question from me. Can you just touch on the better trends that you’re seeing in North America? I’m curious if the better trends that you’re seeing in the region are weighted towards any particular customer verticals, like public sector, or are you seeing the recovery in the region more broadly and has that recovery been linear through the quarter? I remember last quarter, you suggested that there was choppiness as you were looking at it from a month-by-month basis. I’m curious if you can touch on that. Thanks.
Rich Hume: Yes, so the stronger performers have been a mix of offering sets here with verticals. Stronger performers have been advanced solutions, and that has been pretty consistent throughout the year, pretty robust growth rates in that business. At the same time from a vertical perspective, as stated earlier, federal has been a stronger vertical overall, and then the benefit, if you will, moving through time of lesser declines in the endpoint, and again we believe that that trend will continue as we move forward. Those would be the big changers, and I think Marshall has something to add.
Marshall Witt: Yes Joe, just to your question around linearity and volatility, we’re still seeing a little bit of bounce month to month. We’ll call it a good month– a soft month a good month, and so that necessarily hasn’t gone away, but generally said, as Rich said, for Americas, both AS still showing growth, ES showing declining or improvement of the declines on a year-over-year basis, and then we can’t forget about our high growth technology services. Those continue to perform well, as we said. Cloud security, IoT, data analytics grew more than 10%, and that’s a comment beyond Americas but it certainly did help Americas.
Joseph Cardoso: Thanks guys, appreciate the color.
Operator: Your next question comes from the line of Matt Sheerin of Stifel. Your line is open.
Matt Sheerin: Yes, thank you and good morning, everyone. I had another question just regarding your commentary on advanced solutions, which has been strong; but Rich, you mentioned that backlog has been coming down. Could you give us more details on what the backlog levels are and drill down by product area – server storage, networking, and as we go forward and that growth slows and endpoint solutions starts to have favorable year-over-year comps, I would think that that could pressure gross margins, so how should we think about drop-through in that mix shift and what the operating margins might look like?
Rich Hume: Thank you Matt, good morning. I’ll handle the first part of the question and I’ll turn it to Marshall for the back half of the question. I think we had started to make this statement in our last quarter that the backlog is beginning to near profile, and I think that if we were to represent where we are today, that’s exactly what we’d say, is we’re near profile. Sort of a side comment here – we’ve been talking over many quarters here about our inventory being higher than normal because of the serviceability of the supply chain, and now you see with the reductions in inventory and inventory sort of nearing historical profiles, that the serviceability of the overall business is becoming quite good. I would say that almost across the board right now, product set-wise, we’re at profile and serviceability has been restored.
