Jon Vander Ark: And that is the protocol, right? As soon as we’ve got multiple overages, right, the protocol, it’s pushed through Salesforce and the salesperson calls on that customer says, hey, it’s time to go from twice a week to three times a week or a larger container or whatever the right solution is. To Del’s point, I think it’s still early days, and we’ve seen it’s across a variety of customers, right? It’s not like we’re getting all this from the same, small set of customers. It’s kind of onesie-twosie on that front. So it’s a little early to tell in terms of what that conversion looks like in kind of permanent upgrades.
Michael Hoffman: Okay. Thank you.
Operator: Thank you. The next question comes from Bryan Burgmeier with Citi. Please go ahead.
Bryan Burgmeier: Good afternoon and thanks for taking my question. In the prepared remarks, you touched on a revenue opportunity in recycling. I guess, just what’s kind of driving the biggest tailwinds there right now? Is it capturing maybe different materials such as plastic? Are you increasing the throughput speed? And is there any opportunity maybe on the labor side as well?
Brian DelGhiaccio: Well, I think what we talked about, Bryan, on the recycling side a little bit was on those fees. We were just talking about more on the contamination side. So again, when you take a look at how we’re deploying AI into the business, we’re doing it on overages right, on the traditional waste and then on the recycling, it’s more about contamination. So that’s what we’re talking about there. When you just talk about where you saw the uplift in recycling, that was really a function of just the recycled commodity prices and the lift in the overall basket. So our overall basket was $153 per ton in the first quarter, we exited the year at around $130. So that’s that uplift, which is really what’s driving that increase in recycled commodities.
Bryan Burgmeier: Got it. Got it. That makes sense. Yes, I was inquiring about the $60 million opportunity there. Thanks for the detail. And then maybe just some solid waste, like really nice margin performance in 1Q. What are your expectations for cost now versus the start of the year based on the public data, maybe wages are cooling a little bit. I’m not sure if that’s really accurate for you guys and any view on kind of M&A costs. Thanks. I’ll turn it over.
Jon Vander Ark: Sure. Yes. I think we’re — the team is executing well in the middle. The outlook is favorable in terms of cost. But on the wage side, that cake is already baked. We give our colleagues all their annual increase at the end of February, right? And even if inflation cools, we don’t call them up in September and say we want some of that back. So that forms — it’s more of a step function in terms of cost. Same thing on third-party transportation. I’d say the most dynamic parts of the cost structure landfill operating and maintenance. And just on maintenance, again, team is executing well. We’re taking more truck deliveries, and that will certainly have a positive aspect as we park some older trucks and replace those with newer trucks, the maintenance cost is obviously substantially lower on those newer trucks. So that should provide a nice benefit toward the second half of the year.
Operator: Thank you. The next question comes from Noah Kaye with Oppenheimer. Please go ahead.
Noah Kaye: Thanks for taking the questions. Really nice OpEx leverage here as others have alluded to. At this point, 30 bps margin expansion at midpoint for the full year looks pretty conservative to us, at least in light of 1Q results and the trends. So can you kind of comment to margin expectations and at least how we should be thinking about the typical step-up in margins as we get into the stronger seasonal quarters?
Jon Vander Ark: Yes. We certainly feel comfortable with how the team is executing and our plan for the rest of the year on that front. Listen, the overall environment, keep in mind, we’re in a pretty much a zero growth volume environment on recycling and waste over the last couple of years, if you think about housing starts and the correlation of that to volume on that front and certain parts of the economy are a little slower like construction for sure, with interest rates remaining elevated, both commercial and residential construction has been softer on that front. Manufacturing has certainly been soft as well. Now there’s some certainly positive signs that, that activity is picking up at the plant level, which is encouraging.
So we remain pretty confident in our plan, but also mindful of the external environment, election years, sometimes special waste volume can push out a little bit on that front. So we’ll update you more as we get into the seasonal upswing here after Q2.
Noah Kaye: Absolutely. I think the spirit of the question is that despite volumes being down more than expected, I mean, margin performance in 1Q was definitely stronger. I think, perhaps, maybe even in your internal forecast, certainly than the Street. Is there any reason why some of the underlying tailwinds to margins, excluding volumes, shouldn’t continue into future quarters? So as we said, you have pretty good visibility on things like labor costs. Is there anything on the cost side of the equation that should give us pause?
Brian DelGhiaccio: No, it’s to your question, right? We got off to a nice strong start, but it’s the first quarter, right? So again, we like to see that continue, that seasonal up-tick. We’ve got some strength right now in recycled commodity prices, but we’re 1/4 of the way through. So, to your observation, we’ve gotten us to a really good start to the year, which would suggest there’s some modest upside, but we’ve got to sit there and see it play through the remainder of the year. But we’re very pleased with our results in the first quarter.
