Mike Bieber: Thanks, Richard. And I’ll take them in order of your questions here. The first part, I think, was, is there upside. We’ve embedded some of what we can foresee of the software licensing into guidance, but there’s still upside. We factor those down as a probability. And our probabilities are going up, especially after the meetings last week. So that looks really good. There is upside in both the first half and the second half of the year. The second question, and I’m glad you asked it, is what opportunities are we seeing outside of California. Very specifically, the hottest states for us are Florida and Texas right now. The population, the demographic shift, is noticeable in those states. Activity for municipal clients is very robust in both places.
I was just in the Orlando office and I’m heading to Texas next month, it is the growth market for Willdan right now, especially with its municipal clients. So, a lot of opportunity there. The third was AI, and we have a working group at AI that’s been in place for about a year. It’s still early on. We’ll be adopting AI tools across the Company in 2024. We’re evaluating those tools right now because we want to be at the forefront of using those tools to help solve our customers’ problems. The working group is, I would say, close to world-class. We hired AI experts when AI was not a well-known term. This was more than five years ago. And they’ve been working on this and preparing both our software and the tools that we’re using across our businesses to solve those problems.
Operator: [Operator Instructions] Our next question is coming from Greg Kitt from Pinnacle Family Office. Your line is now live.
Greg Kitt: I wanted to ask, I can’t remember a period in which you’ve had so many meaningful customer-contract wins, with Clark County and the New England program announced today as a health care provider, which was a big commercial win, which is not the majority of your business and then the recompetes with Con Ed and Puget Sound, among others. Has there been some change that’s helping you win business more effectively? Maybe can you help us understand what’s going on.
Mike Bieber: I don’t think there’s a change other than we’re a big company, and we focused on a lot of those contracts two years in the making. You mentioned Clark County and New England specifically. Both of those contracts were well over two years in the making. And the impressive part, I think, was, yes, we knew about them. They were both competitive. In both cases, we thought the customers would make multiple awards to many of our competitors. And in both cases, in those examples, they selected Willdan, very surprising. So, the contract sizes were larger than even we expected to receive there. And we’re seeing that. We’re also doing a good job of delivering. You saw that in the fourth quarter, and that’s what allows, I think, customers to have confidence in us.
When the customers came and asked for expansions in the fourth quarter, we actually delivered those higher numbers on a very short order. So that’s what we’re seeing, Greg. The contracts are getting larger because of that.
Greg Kitt: That’s great. And maybe I wanted to make sure I understood the guidance because I think you did, if I saw correctly, just under $270 million of net revenue in ’23 and the forward commentary was $270 million to $280 million. And so, to me, it sounded like a lot of the commentary was a mid- to high single-digit growth made sense off of that $270 million that you did in 2023. But first, I guess, was that commentary talking about opportunities for mid- to high single-digit growth? Was that on a contract revenue basis or a net revenue basis?
Mike Bieber: It’s both, Greg. We wanted to be appropriately conservative coming into the beginning of the year announcing guidance, but you’ve seen the wins out there. The only note I would say is the $15 million headwind that we faced due to the exceptional revenue in Q4. We don’t know if that’s going to happen again next year. It doesn’t happen every year, but it looks very good to expand our existing contracts. We’re already amidst the beginning of the year, and we’re already talking about contract expansions in a couple of places. So, we’re optimistic that as we get into the year, we’ll be able to potentially beat and raise that number.
