But with Assist and with Assist Premium, we also had benchmarks. We know what dealers charge. It’s all over the place by the way. Some people think $3,000 a year for a premium service is super expensive. Others think it’s incredibly inexpensive. We’ve had experience with Parasol, which is roughly anywhere from $500 to $720 a year and we can’t and Control4 Assist and Assist Premium do more than Parasol. And so, after being in market worthwhile, again with a number of our members of our partner Advisory Board, we felt like the right pricing for the service part of the model was either $900 or $3,000. And then in terms of the materiality over time, I mean, the numbers start to get very big that I spoke about and you can see what, I mentioned around $100 million if you run those at 55% margins, $55 million on top of our existing operating income today is, number one quite significant.
If we are successful transforming half of our installed base, just half of our installed base, again multiply 250,000 more sites times $250 a year and then add on some services businesses. So, it becomes quite significant there. And then, the other component is the ARPU, which, yes, we’re thinking about it, where we feel like we’re building the rails for the industry to deliver services to their end customer. We came out with a new product this past year. It’s won a number of awards. It’s getting great reception. It’s our Luma x20 surveillance lineup and it comes with a software product, Luma Insights. The market is not used to that those types of software services. We’ve included a three-year subscription for now in Luma Insights, and that will be that’s free upfront.
But over time, we’ll continue to expand the video analytics that we have in the system. We think cybersecurity is a big opportunity for the Company. The industry has got a lot of talk about it. And so, I think my old company, we started off with one software as a Cyrus product, we ended up with 20. And today we’ve got, I think a few, and we’ll continue to evolve that to help provide the right service to the customer and develop healthier models for our integration partners.
Adam Tindle: Great. That that’s super helpful. And I mean, it’s only right that I follow-up with a two parter for Mike, but I’ll keep it a little bit more brief. Mike, sorry if I missed, but just wondering if you could maybe touch on expectations for cash flow in 2024, the TRA piece of that and what capital structure should look like at the end of the year?
Mike Carlet: Yes. So, on the TRA piece the payment that is being made in Q1, actually was already made was $22 million for 2025, the expectation right now would be about $13 million. That’s often subject to changes, all kinds of things that are out there that could change that, but that’s at least where we sit here today. As far as specific cash flow, we don’t guide to cash flows, but I would say that we still believe there’s some opportunity on inventory on a run rate basis. Obviously, as we think about our guidance, if we do see growth, we would expect inventory to grow a little bit. We think our inventory, plus or minus, is at the right level right now. And so, we should see no significant inventory growth, no significant decreases.
If we see some growth in revenue, we probably see a little bit of growth in inventory as we open a few more stores in the back half of the year, that would take a little bit of inventory. Having said, we think it’s the right level, don’t tell my supply chain that team that. We keep telling them they’ve got opportunity to keep reducing it. So, maybe we’ll get a little bit more benefit there. So but overall, we would expect EBITDA outside our normal CapEx. I think our CapEx for the last couple of years has been a little bit inflated due to the relocation of our Lehigh headquarters. I think we spent I think the CapEx number is about $7 million each year, $7 million in ‘22 and $7 million in ‘23. About a third of that, I mean, almost a half was actually TI paid.
And so, it wasn’t actually cash flow through some classification. We think about real CapEx, it’s been around $21 million, $22 million the last couple of years, really the run rate should be about $15 million. Working capital pretty much neutral, little bit of growth in-line with our revenue growth. And then everything else should be free cash flow, which should be pretty robust and allow us to make good operating decisions as we go forward.
Adam Tindle: Very helpful. Thank you.
Mike Carlet: Thanks, Adam.
Operator: Thank you. [Operator Instructions] At this time, this concludes our Q&A session. I’d now like to turn the call back over to Mr. Heyman, for his closing remarks.
John Heyman: Norma, thank you very much. Again, thanks to all our shareholders out there. I want to say thanks to all of our integration partners who are working so hard week in, week out. Most of all, I want to single out the Snap One team. You guys have been amazing and the efforts you deliver every day for our end customers, integration partners and our shareholders will pay dividends in the future. Appreciate it everyone.
Operator: Thank you for joining us today for Snap One’s fiscal fourth quarter and full-year 2023 earnings conference call. You may now disconnect. Everyone, have a wonderful day.
