Operator: Please stand by. It appears we are having a minor technical difficulty. If you could please stand by and we’ll be starting again shortly. Okay. So it does appear we are back online. So we will continue with the question from Chip Moore from EF Hutton. If you can please proceed, sir.
Kyle Udseth: Hey, Chip.
Chip Moore: I’m sorry. Thanks. I’m just asking my last one has around
Kyle Udseth: Yes, please go ahead.
Chip Moore: Just the M&A funnel and balance sheet. Thanks.
Kyle Udseth: Yes. So M&A funnel robust, we’ve been continuing working on the performance of the existing businesses and focused on organic growth and margin improvement there. Certainly didn’t want to take our eyes off the overall strategy too of growing and continuing to grow by way of acquisition. We’d set an internal goal of doing an acquisition a quarter roughly in 2023. I think we knew we weren’t going to get one done in Q1. But I’d say that still remains the goal. I’d love to be able to do four in 2023. I think that we think about sizing of what’s the Goldilocks number there. I think, say they don’t want to do something smaller than one we’ve done before in Hawaii. It’s just probably not worth the effort of getting the audit done, and we want the contribution margin to be there.
So $25 million, $30 million probably needs to be bigger than that. I think that a $100 million is maybe topline number, probably more like $75 million something like that is where I think you don’t have integration risk. And it’s like the kind of cultural, it can be ascertained a little bit better and you can integrate it better, profitable companies, I think more importantly, it’s the fit piece of it. It’s this kind of focus on customer experience, kind of focus on growing at efficient CAC through referrals, experience with batteries. So I think there are many companies out there that fit those criteria, and I think when we go talk to them, I think they are excited about the Pineapple story and the Pineapple vision and being part of something bigger and building it together.
So I think that we’ve got a healthy pipeline across a number of states. We’ve got a good number of companies that we’ve been diligencing, we’ve got several of them pretty deep down in the funnel. Realistically are we going to close on four acquisitions this year? I certainly don’t want to set the expectation if that’s the case. I think that’s more aspirational, but I think we got to keep pushing ourselves to grow the business. And I think maybe you asked about balance sheet, I think, yes, we don’t have cash on hand to go do additional acquisitions, so we’re going have to raise capital if we’re going to do other acquisitions, but I think that when you look at where valuations are at and multiples and I think when you look at the logic of putting the companies together and some of the synergies and just the continued desire to have scale to compete against the Sunrun and snows and sun powers of the world, I think that it’s a pretty compelling scenario both for the companies we’re looking to acquire and for potential capital partners who would fund those acquisitions.
Chip Moore: Okay, great. I’ll take the rest offline. Thanks very much.
Kyle Udseth: Thank you, Chip.
Eric Ingvaldson: Thanks, Chip.
Operator: Our final question comes from the line of Jeff Grampp from Alliance Global Partners. Please proceed.
Jeff Grampp: Good morning, Kyle and Eric. Thanks for squeezing me in. I was curious on the 2023 guide. What do you guys think will be the largest factors for that organic growth? Whether that’s growth and installs, ASP growth, size of system, things of that nature? Are there any of those individual components that you’re seeing being an outsized driver of the growth in 2023?
