Dickerson Wright: That’s certainly been the trend. We really are seeing an increase in our organic growth. And in the infrastructure business, we are optimistic about the future organic growth .
Jeffrey Martin: And then just one last question, if I could. On the real estate transaction side. What has been the trend over the course of this year? I think in Q2, we thought it may have bottomed out, did an uptick in Q3?
Dickerson Wright: There’s been a slight uptick in both segments of that business. But as Alex mentioned, the interest rates are really driving projects. We’ve had project delays recently, we were awarded a large project, and I can’t name the specific — I won’t name the specific name, but they have delayed it until they see they’re sure that interest rates are going to stabilize. So you can imagine that if everyone is working on a more so the not unborrowed money. So when the increase of interest rates, it really has slowed down that business, which is really portfolio acquisition and things that are very dependent on investments, and the investments are dependent on what the interest rates were.
Edward Codispoti: And I’ll just add to that, that sequentially over the last 3 quarters this year, so real estate has improved each quarter through Q3.
Operator: [Operator Instructions]. Our next question comes from Andy Wittmann with Baird.
Andrew Wittmann: I just wanted to ask a couple of questions here first to stand the quarter a little bit better. Can you hear me? I just want to make sure I’ve had clinical difficulties. I’ve had too many calls recently where I have been coming to.
Dickerson Wright: Well, we all have difficulty hearing hard questions. But if you have an easy question.
Andrew Wittmann: Yes, we’ll see. I don’t think — so I guess maybe for Ed, how much of the revenue in the quarter was derived from companies owned less than 12 months, I guess this number is going to show up in your — in your 10-Q anyway, but I just thought to understand that one to calculate the organic growth rate for the quarter.
Edward Codispoti: Quarter three had around $33 million or so, $32.9 million of revenue from acquisitions.
Andrew Wittmann: And then just on the tax rate here, it looks like you actually had like kind of a refund or something that was recognized. You’ve got positive or negative tax, positive income on that. I was wondering if you could describe what happened in the quarter and what — when these things happen, it’s always somewhat difficult to understand what the underlying effective tax rate was for the quarter because I imagine there’s some kind of onetime or special item in there.
Edward Codispoti: Understood. So with respect to the third quarter, as you alluded to, there is a benefit this quarter. And that was primarily driven by both R&D tax credits and deductions for stock compensation. But the larger piece of that our R&D tax credits, and that’s just — in the business that we operate in, those come around just as a result of the R&D work that we do, frankly, with across our businesses. So our statutory rate, Andy, is 25.5%. That’s the statutory rate. But on top of that, you’re going to get, call it, discounts for R&D tax credits, stock comp deductions, et cetera. In this particular quarter, that statutory rate, it’s always going to be in that 25.5% range, 30% of the — 30% represented R&D tax related. And then you’ve got about another 7% that to comp deductions that got you to that 19% benefit if that makes sense.
Unidentified Company Representative: Yes. I think it’s 19% rate, that’s a benefit. If you start with your effective rate of 25.5% or so, deduct 30% for stock for R&D tax credits and another 7% for stock comp and then you have some other items mixed in there. But the bigger story is that it’s related to R&D tax credits.
Andrew Wittmann: And then I guess kind of curious, the cancellations that Orsted has made or announced a couple of days ago for 2 therefore, offshore wind projects. I didn’t know if you had direct exposure to Orsted or not. I think you’ve talked in the past about doing some things related to offshore wind, I think some of the investments that you’ve made in subsea Geospace [indiscernible] I think you’ve done some onshore stuff for the grid. I just don’t know if you’re connected to do these projects at all. So I was wondering if you could comment on if this has any impact on NV5 and what that impact could be, if so?
Dickerson Wright: A very good question. We do — Orsted is a client of ours, and we have done some things for their specific needs. The cancellation of the project that was in the news today in New Jersey, we were [Technical Difficulty] doing much there. So I’m knocking on serious hardwood, which is my head right now. We are doing a lot of work in North Carolina. As you know, we had one of our capital expenditures was that deepwater measurement ocean vessel and that was really for foundations for wind farms. That has not — that portion of Orsted’s project has not been delayed as much, but we — or it is a client, and we will be affected if they [indiscernible]
Operator: At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Mr. Wright for closing remarks.
Dickerson Wright: Thank you, operator. I just had a few thoughts, and actually, I am often asked or we, our companies often asked, what is our vision, what do we see for the company? How do we — what areas are we going to grow and what are we going to do to mitigate any downturns in certain sectors of the business. First is diversification. I’m thankful that we have a very diversified and NV5 was built on segments. And so when some segments are down, other segments seem to improve, but we’re not so dependent on any one specific area. So we want to grow, but not grow for the sake of growth. So we are growing with — we’re looking for stable revenue with minimal leverage. And you can see that in our base. So we want to grow by debt by taking on more debt.
We have and we have many ways of independently doing this, but we really are looking for continuity of earnings. We want to make sure that the earnings are stable, what revenue that we have that translates to earnings is going to be stabilized. So you’ll notice, and you’ll notice on our Geospatial and other formats, we are really moving to subscription-based revenue, revenue that’s reoccurring, revenue that we can continually count on. And so that is another way that we are positioning NV5. Technology. You’ve noticed a lot in the presentation today, we think the competitive edge will be given by technology. And so we want to be on the forefront of that and we’re positioning our company to be very — to be very dependent and have that advantage of technology.
So look for that in the growth of the company. I would say if there’s a good outcome of the increase in interest rates, it allows for more opportunities for NV5 in our — to move in our vision and to be — to capitalize on companies that are leveraged but may have good earnings. So it really has grown our M&A field. We have a lot of opportunities that the valuations are becoming more realistic. And we’ve moved competitors that are basing on debt. This increase in interest rates is something that if they have to utilize more debt, it becomes more expensive for us. So we think there’s some good opportunities there. I think I often ask — or we often — the company often asks that to companies, what separates you from the competitors. And they can use many things that are not objective.
We believe an objective measurement. So I said this earlier, I would like to mention to you and just something that we really need to improve. We constantly need to grow. But if you look from when we — the inception of the company with zero, but when we went public, and I said this earlier, in 2013, our revenue was 100 — was a little over $100 million. In 2023, we think our revenue is going to be close to $900 million, $865 million, and we’re looking at a very strong year in 2024. And we have positioned with everybody our goal of being $1 billion in revenue by the end of ’24. We still are focused on that. And so what I’m trying to mention or to convey is if we are anticipating a good year, every indicator that we’ve used that we’ve grown from 2013 to 2023 from $100 million to $800 million.
Those indicators that we use really are showing us or giving us some clarity on having a stronger year in 2024. So we look for a good prospects in 2024, and some of those dashboard indicators, of course, are backlog. We take that very seriously. We’ll learn much more in the budget process and hopefully, we’ll have some of those acquisitions that enhance our growth will be dialed in sooner in the year than later. So I want to thank everybody for listening in. And we like to be very conservative on our outlook on things, and we want to base it on one, where is the company going? What is the vision? How are we going to get there and then what are we forecasting? So I thank everyone for their continued interest in the company, and we look forward to having to speaking to you again in the fourth quarter and entering into 2024.
So thank you, everyone.
Operator: Thank you, ladies and gentlemen. That concludes today’s call. You may now disconnect.
