Especially with cellular and Ventus working increasingly closer together, we may lead with a cellular router solution, but over time it transitions to more of a Ventus solution.
Mike Walkley: Got it. That’s helpful. And I guess for my follow-up question. Jamie, as supply-demand is more imbalanced now, are there still harder to get the components and then as we think about maybe your cash flow in fiscal 2024, how might inventory and working capital improve to drive some incremental cash flow off the year — off the guidance you just gave?
Jamie Loch: Yeah. Mike, the challenges in the supply chain better than anybody. I do think we are seeing some improvement. I think there still is a handful where we are tested, but largely I think we have navigated through that, either through the supply chain easing or through some of the strategic buys that we made that have really put us in a position to meet our customer demand. I agree with your assessment. I would expect, as the year progresses, that we will not see some of the demands through the supply chain and that should free us up from a working capital perspective, both to realize the benefits in working capital on the investments that were made in 2023, as well as or maybe not needing to see the builds that we saw to that degree in 2024. So I would expect cash conversion on that adjusted EBITDA line to improve from where it was in 2023, and probably, could predict that that would equate into more aggressive debt paydown in 2024.
Mike Walkley: Great. That’s helpful. I will pass the line.
Jamie Loch: Thanks, Mike.
Operator: One moment for our next question. Our next question comes from Scott Searle with ROTH MKM. Your line is open.
Scott Searle: Hey. Good morning. Thanks for taking my questions. Ron, maybe could just quickly follow up on Mike’s question again. As you are looking at the traditional one-time sale of the hardware, our gateway market, transitioning more to a Ventus like model. Could you give us some metrics around what you are seeing in terms of, that pre-existing base wanting to move towards the recurring model from what’s historically been the one-time hardware sale model, try to kind of give us a little bit of an assessment in terms of, how much of that is impacting the flattish sales for fiscal 2024?
Ron Konezny: Yeah. So, one metric as an example, if you look at — within our Solutions segment, you look at the revenue that’s of a subscription nature versus the total revenue in fiscal 2022 it was around 79%, fiscal 2023 it was 82%. That’s an example of moving more towards recurring and away from the one-time sales that’s been predominantly driven by SmartSense. As a comparison within product and services, we saw significant increase in the recurring in fiscal 2023. I think it was close to 50% increase in the recurring and that’s a combination of having greater attach rates with our solutions. But also to some extent moving towards more of a subscription and solution sale versus the traditional one-time. It does take a lot of work on change management, both internally and with our channel partners to execute. But we are really excited to see that progress of 2022 over 2023.
Scott Searle: Ron, maybe then to just follow up on that. So what’s the expectation in terms of the conversion of that hardware base, that one-time sale to a recurring mix, as we look out into fiscal 2024 and fiscal 2025.
Ron Konezny: And that…
Scott Searle: I think it is looking like a gradual process initially, but it sounds like it started to accelerate, which is a good thing longer term?
Ron Konezny: Yeah. Scott, it’s got a really good question. It hasn’t to provide specifics, but I think it’s going to be a gradual thing. We have got to be a very careful change management. We have got a lot of long-term customers we need to work closely with as we move to this model. And some of them had been budgeting for years with CapEx, right? So, we show up, and say, we want to deliver OpEx. We need to be patient as they incorporate that into their budgets moving forward. So to your question, I think it’s more of a slow motion event than say a big bang where we force customers to move over. This may be inappropriate for them from a timing perspective.
