And we’re able to do that with a couple of customers that has subsequently led to some new design deal contracts for new facilities that are yet to come into the pipeline in terms of backlog that we’re actively working on. And those obviously for us are can be better margin but that’s where we’re going in and again doing refurbishments. So I wouldn’t call it necessarily recurring revenue per se but it’s a different type of business that we’re executing. It’s a different source but it’s actually helped us broaden our customer versus where we were three or four years ago. The number of customers we’re serving now and the end that we took to get there is a lot to do with this refurbishment initiative that has really taken hold and that’s been now starting to result in some of these new projects that are being signed.
So we have some new customers that are part of the $40 million. We have some existing customers that are part of the $40 million. And if I think about what’s in the pipeline, which arguably is even more so than what we just talked about signing there’s just a lot of really positive momentum right now.
Daniel Moore: All right. Very helpful. I will jump back for the follow-up opportunity. Thanks.
Bill Bosway: Great. Thanks Dan.
Operator: Thank you. Our next question comes from the line of Julio Romero with Sidoti & Company. Please proceed with your question.
Julio Romero: Hey, good morning Bill and Tim, I appreciate the updated slides. Nice works.
Bill Bosway: Thank you.
Julio Romero: Maybe to start on renewables anything in the first quarter that changes the way you’re thinking about the cadence of renewal sales growth momentum expected throughout 2024?
Bill Bosway: No. I think we came into the year, we knew Q1 was going to be slower just because of this transition. Just to remind everyone that transition isn’t what caused a bit of a delay in push is a lot of our key customers were thinking fixed, they moved to tracker and that was somewhat correlated with moving to different states where tracker they felt more comfortable with as weather patterns and different environment versus what they either grew up with or were used to using safe favor in the Northeast. And that’s why Illinois as an example I used so important. That was our first 1P job that we did that we finished here recently and that was with one of our customers we kind of grew up with in the Northeast but they grew up mainly with fixed tilt because of the weather conditions.
So as we move more towards places like Illinois and you have different land mass, different weather patterns. And they saw incentives from Illinois chimes becoming more attractive where permitting was less challenging, the siding or zoning was less challenging. They migrated there pretty quickly. And then as a result that switched pretty quickly to tracker where they can take advantage of that. So it’s a combination of things that really cause what we’re referring to as this delay of sales. And so the bookings are there it’s just a matter of when you change from fixed to tracker, you can imagine you go back through and rehash your designs and everything that you do because you’re generating more power and that just drives a lot of different things.
So and how you attach that to the foundation is different than if you do fixed hill. So it’s a good news story, but at the same time it’s a short-term a bit of a delay for us but we’ll take it just because the uptake has been so rapid much more than we thought. We just had 30 developers in Florida at our tracker engineering location to look at the technology for two days back in March. And typically things take a little bit longer. But I think there’s just been a combination of things that have helped customers move a little bit quicker and that caught us a little bit off guard. So we’re ramping up as quickly as we can with our supply chain. We’ll get good arms around it, but that’s really pushed more of the revenue into the second half related to that and some of that Q1 into Q2 as well.
Julio Romero: Yeah, good color and good reminder that that 1P tracker and the longer lead times caused that expected dynamic in the first quarter. Just on that point, how much revenue do you expect from 1P tracker in the second quarter and maybe for the full year?
Bill Bosway: Yeah, it’s hard I don’t have an exact number for you, Julio. Our backlog on 1P is up significantly. No it’s coming off a very small base. So it’s still going to come down to just like any other racking system we use those projects flowing given permits and all that good stuff. But it’s becoming, it will be a bigger piece of what we’re doing this year than it has been obviously because it’s new, but the acceleration is going to make it, I can’t give you an exact number right now just on where everything is going to flow, but it’s going to be a bigger piece of what we’re doing. Once we get this base year behind us, I think it will be better — it will be easier for us to figure out where the mix is going to be going forward between fixed Canopy and tracker and then Insight Tracker 1P and 2P.
And we’re kind of looking at all five and how they’re moving but it is accelerating for sure. Now just to clarify one thing, it’s not the lead time from the supply chain that is the problem. It’s the fact that we switched from one tech to the other tech in a short period of time. If we would have known that we were going to transition to 1P, we would have brought inventory in much sooner to help with the start-up. That’s where we got caught. So it’s not the — the push in sales is I would say is more of a onetime event. It’s not because we have 12-week lead times or eight weeks or 10 versus our traditional four. We’ll get there eventually, but it’s because we didn’t have the inventory plan for the launch because it happened unexpectedly sooner than we thought.
So that will work itself out I guess is my point. And we have ways to do that such that the lead time of supply chain does not become an issue in the future. Does that make sense?
Julio Romero: It does. And that’s helpful. And maybe just last one for me is you had a really good cash flow quarter. You talked a little bit about the M&A pipeline, and I think you said better probability of the near-term deployment towards some inorganic growth in some residential tuck-ins. Is that a function of valuations more than anything? And would those residential tuck-ins be more inclined to focus towards either of your initiatives of either geographical expansion or new product.
