So one of those, for example, is the digital marketing capability and the ability to use organic search to drive pipeline, right? That involves some investment upfront but then you create a flywheel that enables you to generate ads for the sales team through time with increasing cost efficiency. And of course, in addition to that, on the innovation side, the Center of Excellence in India and our other offshore initiatives give us the ability to really have the right hybrid mix and development capability that can deliver innovation and growth, within a cost envelope that fits margin expansion. So where we can get a headcount arbitrage and manage our cost effectively and drive margin through time. So again, coming out of this as we move into 2025 and beyond, targeting mid-single digits core organic growth and then targeting through time an adjusted EBITDA margins between 30% and 35%, driven by, again, those efficient motions in the growth model.
Also using AI, to manage costs in various parts of our business. And then finally, we’re going to look this year to turn acquisitions back on, something we didn’t do last year as we were focused on our internal go-to-market plans. And as we do that, we’ll get some operating leverage, which will drive margin expansion. And again, we’re talking about one, maybe two deals for this year, we’d like to get done. But then again, through time, we would see that ramping up, and that will also help to drive margin expansion.
Jacob Roberge: Okay, very helpful. And then yes, you kind of preempted the next question there in terms of just how you’re thinking about capital allocation. Sounds like you’re turning back on the acquisition motion and looking for a couple of acquisitions this year. But how are you thinking kind of about the balance between M&A potential share buybacks and then just the potential for debt pay-down. Just curious how you’re thinking about the capital allocation between those three buckets?
Jack McDonald: Yes. So as Mike mentioned, the $25 million buyback is underway, and we are a good part of the way, more than half of the way through that. So we anticipate that continuing and filling the full buyback allocation of $25 million. So that, I think, is sort of step 1. On the acquisition side, again, I think we’re looking at one, maybe two, but kind of internal plan is around one, but if the right opportunities present themselves, maybe that becomes two deals this year, and we’ve been in the market and actively looking at deals all year around. And of course, we’ve got the capital we need to go after those deals and we control the timing, but we are remaining patient for the right assets that are strategic and are available at the right price.
And again, I also wanted to really spend the time with the team focused on making the investments I’ve described earlier in getting this business ready for core organic growth and then we’ll start feathering in some acquisitions on top of that.
Operator: Your final question comes from Alex with Raymond James. Alex, the floor is yours. Alex, the floor is yours.
Johnathan McCary: All right, thanks for taking the question. This is John on for Alex. Jack, I think in the past, you’ve mentioned bundling solutions and focusing on groups and bundles of solutions. So can you give us an update on what successes you’ve seen there so far? And if there’s any learnings that you have so far as you put more muscle behind the go-to-market motion in 2024? And then I have a quick follow-up.
Jack McDonald: Yes. The learnings there are that the most effective motion for us is going to be product centric, and it is of course, further penetration of the existing customer base, frankly, through straightforward expansion and then a new logo motion that has driven 80% by a point product sale and maybe 20% by cross-sell. And that is consistent with what I was speaking of earlier in response to Jeff’s question regarding the composition of the sales force. So we anticipate continuing to have limited number of global account executives that are driving more of that cross-sell motion. But in general, and for the vast majority of 80% you’re going to be looking at product — point product sales.
Johnathan McCary: Okay. That was helpful. And then, Mike, how are you thinking of the free cash flow contribution from the sunset assets here over the next two years? I appreciate you gave us color for this year, but how do you think about that over the next two years?
Mike Hill: Yes. Well, by definition, the sunset assets are low margin, low free cash flow contributing. So sort of not quite neutral, but pretty close. So just not much impact on the free cash flow there for those.
Operator: I would now like to turn the call over to Jack McDonald, Chairman and Chief Executive Officer.
Jack McDonald: Okay. Well, thank you for joining today and we will see everyone on the next earnings call.
Operator: Ladies and gentlemen, that concludes today’s call. You may now disconnect.
