Lucas Haldeman: Yes. So, this is Lucas. I’ll just add a little bit to that, that I think we’re expecting some more of that in Q2. And while it’s not ideal to have units move out of Q1 and Q2 really, if you look at the strength of the business, this is an incredibly positive thing that we’re seeing. If we can take kind of a broader view of it, which is our hypothesis was that we would have a good time selling WiFi to customers who are also interested in IoT because we’d be able to do one construction project versus two. And if you think about an occupied unit and disruption of residents and construction going on around you, not fun to have that happen. And so while these are — these projects are moving out of Q1 and Q2, I think it’s really a net positive showing the momentum we’re getting around our ability to sell and deploy WiFi and be really the only company that can do both an IoT and WiFi implementation at the same time.
Daryl Stemm: I think one other comment with regards to WiFi is that we did call out that we shipped hardware in Q4 for 6 new WiFi projects that we expect to be fully completed by the end of the first half of this year. But in Q4, I’ll give you one more data point. We’ve also booked a new Wi-Fi project should be, we believe, the beginning of a good real strong relationship with a customer for the back half of the year on both WiFi and IoT projects.
Soham Bhonsle: And then just last one, I wanted to ask you about the SaaS ARPU in your booking disclosure this quarter. So it looks like it was up to $12, almost $12, which is almost 3x last year. So was that just something specific to the cohort that came in this quarter? Or is that something more sustainable? How should we think about that?
Daryl Stemm: Yes. I think that the — good question. I think there’s a bit of an aberration caused by the mix of bookings that we had during the quarter. I believe that the last two quarters, which have been in the $8 to $9 range are more indicative of what to expect going forward.
Operator: We’ll move to our next question from Ryan Tomasello at KBW.
Ryan Tomasello: Daryl, I think investors would appreciate if you could provide some color on the breakdown of the revenue guide, particularly what you’re modeling process revenue growth this year versus the more lumpier hardware and implementation revenue. 4Q SaaS revenue growth was running at over 40%. Is that a reasonable sustainable pace through 2024? And just curious, why not guide to that metric, given I assume that there is actually more visibility on that front than modeling the lumpier hardware and implementation revenue?
Daryl Stemm: Two points. Number one, the — certainly, the existing part of our recurring revenue is imminently predictable. And — but the actual cadence related to further deployment do cause some predictability issues with regards to software revenue. So it’s not quite as easy as you might suspect. But I will give you one piece of guidance around software revenue, and that’s that we do anticipate that it would be higher than the overall revenue growth rate.
Ryan Tomasello: And then a follow-up on the ARPU metrics. Can you help us understand what assumptions you’re baking into the guidance across the different revenue buckets, hardware, professional services, SaaS? And on SaaS ARPU, in particular, the 550 ARPU this quarter has been, I’d say, relatively stagnant in the last two quarters despite the acceleration in the bookings metrics. Some of that a function of the revenue mix and the nuances with the site plan revenue that’s flowing through there. Just trying to understand why the SaaS ARPU component should be growing materially faster than what we’re seeing. And again, just a breakdown of maybe some of your assumptions on broader ARPU metrics in the guidance.
Daryl Stemm: So with regards to the growth of ARPU I would say that until WiFi becomes a significant contributor, what I would expect to see is incremental growth like we’ve experienced over the course of the last year. It’s tough to move that ARPU number too rapidly because the base that, that number is built off of are the already installed 720,000 units. So as we add 40,000 new units a quarter, and we’re adding them at $8, $9 per unit, it’s going to just have an incremental impact on ARPU in future periods. The real needle mover and why one of the reasons why we’re so excited about WiFi is the economics of WiFi to us could basically have a 2x impact on the recurring revenue. We’re talking about, give or take, $15 a unit per deployed unit for WiFi.
Operator: We’ll go next to Tom White at D.A. Davidson & Company.
Tom White: Two, if I could, please. I guess, first on professional services and specifically kind of the cost structure and margin profile in that part of the organization. I guess, first of all, how close are you guys to kind of fully rightsizing kind of the fixed cost base there? And then how should we think about maybe any lingering overhang from kind of some of the older contracts you guys have talked about in the past, I think maybe have some volume-based price concessions? And then I just had a follow-up on WiFi.
Lucas Haldeman: Tom, it’s Lucas. I’ll go first on this one and then let Daryl add some color. So the lingering overhang it’s a good question. We still have some of that we’re working through in Q1 and Q2, but we’ve largely worked through the bulk. So we’re definitely winding that down through the first half of the year. And then on the professional services cost margin, I think we feel really about where we have that coming into Q1. And as Daryl said in the prepared remarks, we’ll see that continue to trend the right way through 2024.
Daryl Stemm: I also want to add one — other point, Tom, if you don’t mind, which is we actually — some of our newer solutions like access control and the WiFi projects that we’ve completed to date actually have been completed at modest profit. So as those other solutions become more prominent portion of our total revenue, those will help as well as the additional investments in technologies and efficiencies that we’ve been incorporating.
