Mike Hill: Yes. No problem. So most of that decline is going to be the sunset assets with recurring revenue. Now we do have a little bit lower perpetual license revenue and PSO revenue that’s sort of adding to that. And of course, like we said, our guide, we think our guide is a little bit conservative there. So that really sort of adds up to that $27 million walk. The headline is, it’s the sunset asset decline burning off.
Operator: Your next question comes from the line of Jeff with Craig-Hallum. Jeff, the floor is yours. .
Jeff Van Rhee: Great, thanks. I appreciate it. So just a couple, guys. Maybe Mike, with you first on the sales approach. Could you just spend a minute as I’m thinking through how — what the sales approach is here. I know there have been periods where cross-sell was a vision, and there was opportunities potentially to cross-sell from various products. Is this now purely a stand-alone, we’re targeting each individual product? And if so, are all reps selling all products, just maybe a refresher on the sales approach right now.
Jack McDonald: Yes. So on the — this is Jack. And on the sales approach, the motion is principally product-based and we’ve got a field sales force. We’ve also got an inside sales capability that we stood up last year and again, starting to see from that inside sales force some good early successes in terms of getting some nice size mid-market deals done. Now we still will have a few global account executives who will go after larger cross-sell opportunities. And of course, we have seen some of those including some million-dollar plus deals in Q4, frankly, that were brought home by those global account executives and so that will continue to be a part of the model. So again, it’s inside and field with a limited number of global account executives.
And then finally, in terms of mix, this is a business that should run roughly 50-50 expansion and new. It’s been running higher expansion and lower new, and so we want to bring that and expect through the course of this year to bring that back into kind of historical balance on a 50% expansion, 50% new mix.
Jeff Van Rhee: Yes. Okay. I appreciate it. And then, Mike, the — in terms of ’24, what does that — what’s the expectation around what kind of free cash flow that EBITDA yields?
Mike Hill: Yes. Jeff, we’re targeting $20 million to $25 million of free cash flow this year 2024. .
Jeff Van Rhee: Okay. All right. And then just one last for me. The — as we’re looking at the organic and nonorganic I think you answered the early question, like most of the decline is, I guess, the sunset assets coming out of, I think you said $30 million that has to work off over several years. Just refresh me on the sunset is that the basket of products that is in the sun setted basket, was that a one and done, you kind of picked a handful of products that, for whatever reason, needed to be sun-setted and then it hasn’t — and isn’t expected to change? Or is it — is there any variability to what’s in there? Just refresh me on how that works.
Jack McDonald: Yes. So when we took the investment from HGGC, we did a strategic review of our product portfolio to examine what were those products that we really wanted to put some wood behind the arrow on in terms of driving growth. And at that point and as a part of that process, we identified the sunset assets. . We made a revision to that about a year after where there are a couple of assets, frankly, that we realized had some growth potential, and there were others that we thought were better off being sunset. So we — it was a onetime and then with a revision to it, it is not our plan to revisit that. We view that as a process that we’ve completed. Now it’s possible that it could come up again, but I don’t anticipate anything near that kind of scale happening again.
Operator: Our next question comes from the line of Jake with William Blair. Jake, the floor is yours.
Jacob Roberge: Hey, thanks for taking questions. It was good to hear the 3% organic growth expectation exiting this year. Just curious how much of that growth is related to political messaging business, just given it’s an election year. And then, Jack, if you take a step back, how should we be thinking about this business when you come out of this transition? Is there a certain kind of growth and margin profile that you’re aspiring to? And then I have one follow-up.
Jack McDonald: So we’re not expecting — that target core organic growth rate does not count any election year bump. So there’s none of that in there. In terms of what our longer-term target is for the business is for mid-single digits core organic growth. And we know that once we get through 2024 and get the core organic growth motions working that we will turn our sights to some significant margin expansion beginning in 2025. We’ll have the hindsight at that point, which go-to-market investments and motions are yielding the highest return that we’ll be able to continue those and adjust spending on less efficient go-to-market motions. We’ve also put in place as a part of this growth plan, a couple of levers that we think will help us drive growth through time while reducing costs.
