Operator: Thank you. One moment for our next question. [Operator Instructions] And our next question comes from the line of Chris Kennedy from William Blair. Your question, please.
Chris Kennedy: Yes. Good afternoon. Thanks for taking the question and it’s great to see the leverage in the business. Can you talk about subscription revenue, the growth slowed a little bit this quarter? You previously targeted at least 20% subscription revenue growth over the next couple of years. Just talk about your confidence in that? And if you could talk about the quarter, that would be great.
Scott Stewart: Sure. So yes, Chris, overall, we did see a slight dip in our subscription fees this quarter compared to last quarter. Part of that was due to the 3G, 4G upgrade cycle, where we did have some devices and 3G devices that went dark and they went in and deactivated those. A lot of that deactivation happened in the fourth quarter. So we took a little bit of a hit. What we have seen is a lot of those devices now have been replaced and the new devices are back up and transacting. So we see that just as a onetime dip. As we look out to 2024, we are projecting our subscription revenue to grow somewhere in the 18% to 22% range. The guidance that we provided on the transaction and subscription revenue was in the 17% to 21% range. We think the subscription will be a little bit higher than the transaction. And we foresee that as we go out into the next 2 to 3 years as well.
Ravi Venkatesan: Yes. And as a reminder, we had – prior to doing the 32M acquisition, we had said that we expect to – for the year to be in the low teens, when we did the 32M acquisition, we said it would be in the mid to high teens. So we’re still in that range, albeit on the lower side in terms of the overall subscription revenue year-on-year growth.
Chris Kennedy: Okay. Very helpful. Thank you for that clarification. And then just Ravi, any update on like the M&A environment, talk about your balance sheet and kind of what you’re seeing out there in the market? Thank you.
Ravi Venkatesan: Yes. Our cash position and balance sheet is measurably better than it was 6, 7 months ago, which is a lot of great work done across multiple areas from Scott’s team as well as collaborating with other departments. The M&A environment continues to be competitive, and we see both good companies with good products that could be an opportunity for us to acquire. However, even though the public markets have significantly corrected down, we are still seeing a little bit of dissonance in terms of expectations when it comes to the private market side, particularly with smaller companies that could be tuck-in acquisition targets for us. So – so there have been cases where a company or an acquisition would have made sense for us.
However, we just did not want to pay the multiple or the valuation that they were aspiring to. And we continue to be very disciplined about what multiple we would pay for a target even if it makes sense, otherwise, from a synergies perspective.
Chris Kennedy: Great. Thanks for taking the questions.
Operator: Thank you. One moment for our next question. And our next question comes from the line of George Sutton from Craig-Hallum. Your question, please.
George Sutton: Thank you. Post the upgrade cycle to 4G, we talked about how you were going to be going on offense, and you did mention pricing, but you ran through a pretty impressive list of name brand wins this quarter. And I’m curious if you can just give us any sense of how offense has meant changing your go-to-market strategy in terms of more salespeople, anything else that you would sort of call out there that’s responsible for this?
Ravi Venkatesan: Yes, George, thank you very much for that question. And yes, the 4G upgrade cycle had required us to be high on defense and also incent and support. More importantly, our customers through that cycle so that they don’t lose revenue just because they didn’t upgrade the device. Having got through that, our customers’ wallets have also freed up much more, right? So instead of investing in upgrade of a device, which really gives them zero added functionality, they are now looking at how do I make my business more resilient, more operationally efficient, and that has led to better appetite and adoption of our software side. And as that happens more and more, it will benefit the subscription revenue side of the equation.
And more importantly, it will also make our customers be more stickier. So we’re definitely on the offensive on that side, and we are on the offensive with adjacent verticals like amusement, et cetera, where, again, the upgrade cycle had a little bit of a drag effect.
George Sutton: Got you. And then just second and last for me. Ravi, you mentioned meaningful potential revenues internationally in ’24. Can you explain to us what’s built into your guidance for ’24? And how are you defining meaningful?
Ravi Venkatesan: So we haven’t broken that out. And for competitive reasons, I’m reluctant to share a specific percentage. But what I will say is I consider it meaningful as it starts cresting kind of the 5%, 8% level. And over a few years, of course, it will become much more meaningful than that. But for what I would call the first year of meaningful contribution from other markets, I think that’s a good barometer to use.
George Sutton: Got you. Perfect. Just to comment, Scott, at the Analyst Day when you laid out your expectations, particularly for margins, I think everybody thought you’re a little nuts and you loan away those expectations. So congratulations.
Scott Stewart: Thank you, George. I appreciate that comment. Thank you.
Operator: Thank you. [Operator Instructions] And this does conclude the question-and-answer session as well as today’s program. Thank you, ladies and gentlemen, for your participation in today’s conference. You may now disconnect. Good day.
