Feb 4, 2014
Executives
Kathy Guinnessey - North America CFO, Treasurer and IR Bob Carrigan - President and CEO Rich Veldran - CFO Josh Peirez - COO
Analysts
Andrew Steinerman - JPMorgan Minaz Patnaik - Barclays Capital Shlomo Rosenbaum - Stifel Nicolaus Brett Huff - Stephens Inc. Jeff Meuler - Robert W.
Baird & Co. John Crowther - Piper Jaffray Andre Benjamin - Goldman Sachs
Operator
Good morning, and welcome to D&B's 2013 Fourth Quarter Teleconference. This conference is being recorded at the request of D&B.
If you have any objections, you may disconnect at this time. [Operator Instructions].
I would now like to turn the call over to Ms. Kathy Guinnessey, North America CFO, Treasurer and leader of Investor Relations.
Ms. Guinnessey, you may begin.
Kathy Guinnessey
Thank you, good morning everyone and thank you for joining us today. With me on the call this morning are Bob Carrigan, our President and Chief Executive Officer, Rich Veldran our Chief Financial Officer and Josh Peirez our Chief Operating Officer.
Just so you can expect on the call today. Following my brief remarks Bob will talk about our strategy to deliver long term sustainable growth and our guidance for 2014, then Rich will come on and take you through the highlights of the fourth quarter, after that we’ll open the call for your questions.
To help our analysts and investors understand how we view the business, our remarks this morning will include forward-looking statements. Our Form 10-K and 10-Q filings, as well as the earnings release we issued yesterday, highlight a number of important risk factors that could cause our actual results to differ from those forward-looking statements.
These documents are available on the Investor Relations section of our website, and we encourage you to review the material. We undertake no obligation to update any forward-looking statements.
During our call today, we will be discussing a number of non-GAAP financial measures as that's how we manage the business. For example, when we discuss revenue growth, we'll be referring to the non-GAAP measure of our core revenue growth before the effect of foreign exchange unless otherwise noted.
When we discuss operating income, operating margin and EPS, these will all be on a non-GAAP basis before noncore gains and charges. We’ll also be discussing our 2014 guidance today, when we refer to our revenue guidance we’re referring to core revenue before the effects of foreign exchange, when we refer to our operating income and EPS guidance we’re talking about those results before noncore gains and charges and finally when we refer to free cash flow guidance we’re talking about free cash flow excluding the impact of legacy tax matters and any potential regulatory funds associated with our China operations.
You can find the reconciliation between these and other non-GAAP financial measures and the most directly comparable GAAP measures in the schedules to our earnings release. They can also be found in the supplemental reconciliation schedule that we posted on the Investor Relations section of our website.
Later today, you'll also find a transcript of this call on our Investor Relations site. With that, I'll now turn the call over to Bob Carrigan.
Bob?
Bob Carrigan
Thank you Kathy, good morning and thanks to all of you for joining us today, as you know I started my new role as President and CEO of D&B in October, and as I said I would do I spent the last four months getting inputs from customers, team members and some of you and have done a deep dive into our business. My team and I have developed a strategy to deliver long term sustainable growth which I’m going to talk about today.
As I’ve approached this strategy my background in sales and marketing naturally means I have a more external focus, and you should expect me to bring that experience to D&B and rest assured that everything we will be doing is through a customer focus lens. First I want to talk about the needs of the marketplace.
Today we live in a world where data is pervasive, and this represents both a challenge and an opportunity for our customers. They’re struggling with how to organize and make sense of all the data that is newly available to them and how to engage with their customers and prospects to drive new sources of revenue and they live in fear of their competitors will derive an advantage that they will miss.
I’ve lived this challenge and understand where our customers need help. D&B is in a unique position to help customers navigate this territory.
We have the ability to bring together our proprietary data and analytics, our customers own data and data from new sources like the social web, and when these disparate sources are combined, organized around the DUNS number and married with D&B’s powerful matching capabilities and predictive analytics, we create insight for customers that is exponentially richer and more valuable than the separate data element standing on their own. The combination of data, analytics and insights is what we mean when you hear us talk about content.
And that is who D&B is, we are a content company and in the B2B data and analytics space we are the content company. The big opportunity for us lies in taking our content beyond the traditional trade credit space, help our customers understand the future implications of every part of their sales cycle, from who to target, what to sell them, whether they’ll get paid and here’s the really exciting stuff, what their markets will look like in the future and how they should act now to be ready to capitalize on those trends.
And the winds are shifting in our direction markets are moving their spending from traditional marketing campaigns to leveraging data driven strategies for new insights to change the conversation with their customers. There’s no one out there better positioned to provide these insights than D&B.
We have very valuable assets that single us out, loyal customers, they’re a who’s who of the top corporations in the world, a well-recognized brand and superior content all of which create a tremendous advantage in the data driven world. However over the past five years we have not turned this advantage into growth.
It’s not surprising to find that a 170 year old company like D&B has been very inwardly focused, doing things the way they’ve been done in the past. Well that’s over, we’re going to change the game going forward.
To describe this strategy in a nutshell we will become one global company delivering in indispensible content through modern channels to serve new customer needs. This will be a big change from the past.
D&B today is really a bunch of companies that do not leverage the advantage of its global footprint. We distribute our data and insights through older channels primarily hard to update software and we’re not fully taking advantage of the benefits of indirect channels of distribution and our customers' environments.
There is a tremendous opportunity for D&B in taking a more expansive view of the world where data and insight are becoming core to our customer’s decision making D&A. We will be very aggressive in pursuing more used cases for our data, modern ways to deliver our content and more indirect channels and alliances on a global basis where our customers want us to take them.
Let me be a bit more specific about what I mean; there are five key components to our strategy; investing in content; modernizing delivery; globalizing the business; modernizing the brands and creating a forward leaning outside in culture. The first component of the strategy is investing in content which as I said before is the marriage of data, analytics and insights to increase value for customers.
This is what we do. We’re not just a data company, we’re a product company or even a risk management company, we’re a B2B content company and we’re doubling down on our investment in that content.
If we make our content indispensible to our customers, and give it to them in the way they want to receive it, they and D&B will both be successful. Our content investments are focused in three areas; first, improving the quality and consistency of our data around the globe.
Not all of our markets are at the same level as the U.S. and we’re changing that.
Second, developing new analytic tool and scores that are vastly improving the predictiveness of our content. Last year our customers saw predictive list of 30% to 50% when using our newest content.
And third, cultivating new proprietary data sources and combining them with our existing data. As we are expanding our data bases it is imperative that we keep this data secure.
In this environment cyber-attacks on data are becoming a daily occurrence. We have been targeted as well.
D&B is committed to protecting our data sources around the world and we're investing to significantly upgrade our security. The next component of our strategy is to modernize delivery by liberating our content.
Now we've historically gone to market leading with product rather than our content. This means we've developed products that were designed for specific use cases and such limited with our customers are able to do with our content.
In addition many of our products sit on hard to update platforms and haven’t evolved as customers need to change. So we're going to liberate our content, so that our customers can decide how and where they will use it.
We’re listing it out of old heavy weight products and legacy distribution channels and moving it to light weight API’s and mobile delivery. We’re building simpler more elegant user interfaces to make it easier and more intuitive for customers to do more with our content.
We want our customers to rely on our content for their business decisions and define new use cases beyond risk management or even sales and marketing. The idea of liberating content also means improving data as a service or DaaS as we call it.
To increase the capacity and widen the pipes to get a much greater volume of data to our customers. Today we are working with some of our largest customers to co-develop solutions to embed our content deep in their systems to meet their unique needs.
More of our large global customers want this ability and through our DaaS investments we will be able to do this on a bigger scale and expand the used cases for our content. This does not mean that we’re not committed to maintaining our leadership position in the risk space, far from it, we’re putting our flagship risk platform DNBi in the cloud to make it global and better integrated in our customer’s end to end sales workflow.
Modernizing delivery also means more alliances, like the one we have with salesforce.com to provide content through data.com. Our content is embedded into the salesforce.com CRM applications to help our joint customers succeed and is working.
This relationship has generated thousands of new D&B customers and salesforce.com reports customers of data.com are achieving 19% higher attainment of sales quarters, 21% increase in CRM adoption and 33% shorter sales cycles. This translates into big dollars for both our joint customer and our alliance partners.
By working through alliances we can get more of our content into more customers hands than we can reach today. And we’re taking the product development off of our platform and onto our alliance partner’s platforms where they have already got a relationship with the customer.
The third part of our strategy is to globalize the business. Our large customers are shifting for truly global integrated operations and we need to be organized to serve them.
We have over 230 million businesses in our database that span more than 200 countries around the globe, yet our current structure doesn’t fully capitalize on this unique competitive advantage. The vast majority of the businesses in our database are international, yet only 25% of our revenue is non U.S.
We have a big opportunity to grow globally, and are setting out on a path to create one integrated global organization. A shift like this takes time and are starting at the top with a simplified leadership structure of six direct reports, all with global responsibilities.
Our strategy requires that our data, product and technology initiatives are all on the same page and all of our investments stay focused on delivering that strategy. To maximize operational and strategic effectiveness I have made Josh Peirez our new Chief Operating Officer.
In this capacity, Josh and his team will ensure our global development initiative whether delivered directly or through alliances are 100% aligned to further our strategy. And as I said we must face the customer as one company, so we're moving to a global sales structure to breakdown regional silos and serve our customers in the way they are structured whether local, regional or global.
In that context we eliminated the regional president’s role and the insular companies within a company that we had in each market and created the new position of Chief Sales Officer. I promoted Mark Geneste from our European leadership team to take on that responsibility.
Mark has only been with D&B a few months but comes from a large global sales leadership position at Thomson Reuters, where he led the development and expansion of their global accounts group. Mark has lived and worked in all of the major markets we operated in from the U.S., The London, the Brussels and bring a global prospective to his new role.
The fourth area of the strategy is to modernize the brand. Now given my experience in marketing and media, I am personally very passionate about redefining who we are and what we stand for in the years ahead.
Now almost everyone has heard of the D&B brand but we need to make sure that our brand is understood for what it is becoming not for what it has been. We will be more progressive in our marketing approach and leverage digital, social and mobile channels in ways that D&B has not done in the past.
Always it have been a big part of my personal past experience. Last night we announced that we have hired a new Chief Marketing Officer, Rishi Dave, who previous ran digital marketing for Dell's B2B business.
This is a new position at D&B and Rishi will report directly to me. But just as we have a new style and tone externally, it’s important that our culture also reflects the same energy, which brings me to the fifth element of our strategy.
We are going to create an outside in forward leaning culture. We want everyone on our team to be externally focused, active in social media, plugged into the market to identify new needs we can fill for our customers.
We are flattening the organization structure and removing bureaucracy to create more speed and agility. To lead this important initiative, we have just hired a new Chief People Officer, John Reid-Dodick, who is a best-in-class leader in cultural transformation, most recently at AOL.
I hope you are getting a sense that there is a lot going on at D&B today with a lot of new positive energy and a faster tempo. We're acting quickly to operationalize the strategy.
To bring our strategy to life, we are investing 70 million to 80 million in 2014 on the growth initiatives I just described. Over 80% of these investments will go directly to further developing our content and delivering it to customers in a modern and secure way with the remainder supporting the global structure and the brand.
And finally, we are going to tighten our focus to ensure execution, that means there are things we are going to stop doing. In the earnings released last night, you saw that we took a $28 million charge to write-off the Max CB data supply chain.
We've decided that continuing deployment of the new data supply chain is not a necessary component of executing our strategy. It’s been distracting and we want to stay focused on our customers, not on our own platform.
So, as we look forward to 2014, our guidance reflects what I believe are the right things to do to set the company on a path for long term growth and what I would call a responsible approach estimating revenue growth as we implement our new strategy. With that said, we plan to deliver revenue of flat to up 3%, a decline in operating income of 5% to 9% and EPS declines of 1% to 5%.
And we expect to generate 250 million to 280 million of free cash flow. I expect the revenue growth this year to come from the areas that drove revenues in 2013 namely continued growth in our alliances and DaaS businesses as well as the acceleration in our strategic, large customer channels.
And while the top line benefits from the strategy really lie in 2015 and beyond, we need to invest now to accelerate execution of our strategy. As a result of those investments we expect operating income to decline in 2014 before returning to growth in 2015.
I came to this company to deliver long-term sustainable growth and I believe the strategy I have outlined today will do just that. As a data and analytics company, our business model is highly scalable.
So, looking out beyond this year as our strategy helps us deliver higher revenue growth, we plan to expand margins as well. And we are just embarking on our new strategy.
I am not going to provide specific multi-year guidance at this point. However, I hope you have gotten a sense of our commitments to being decisive and acting with urgency to get us to that growth.
My team and I are committed to our strategy to become one global company delivering indispensable content through modern channels to serve new customer needs. I'd now like to turn the call over to Rich to discuss our performance in the fourth quarter and provide more detail on our guidance for 2014.
Rich?
Rich Veldran
Thank you, Bob and good morning everyone. Last night we reported our fourth quarter and full year 2013 results.
Core revenue was up 4% in the quarter and 1% for the year. Operating income was flat in the quarter and down 6% for the year.
EPS was up 16% in the quarter and up 10% for the year and we delivered full year free cash flow of $278 million. These results were in line with the expectation and with the guidance that we issued at the beginning of 2013.
In North America revenue was up 4% in the quarter with about 1 point of that growth coming from the timing of the few large deals that shifted from the third quarter in 2012 to the fourth quarter in 2013. Beyond the expected timing benefit, the North America performance was driven by continued momentum in our DaaS products and by an uptick in project spending.
You will notice that our performance over the past three years has been concentrated in the latter part of the year particularly in the fourth quarter. This can be attributed to the fact that our project revenue is growing faster than our subscription based businesses.
Projects tend to book late in the year as our customers are getting ready for the next business year. Project work consists of things like a Risk Manager, rescoring them entire customer portfolio or a Chief Marketing Officer preparing new marketing campaigns for the year ahead.
You should expect the same pattern to occur once again in 2014 with the second half of the year stronger than the first in both revenue and operating income. North America RMS grew 1% in the quarter with a 3% decline in DNBi more than offset by continued strong performance from our new products led by our DaaS D&B Direct.
New products contributed 2 points to RMS growth in both the quarter and in the full year. S&MS was up 8% in the quarter with about 2 points due the timing that I just mentioned.
The strong S&MS performance was driven by optimizer which was up double digits and our new DaaS products primarily data.com or alliance products with Salesforce.com. New products contributed 2 points S&MS growth in the quarter and 3 points to the year.
North America differed revenue was down 3% as our fourth quarter revenue was driven in large part by growth in projects which have very little differed. As I mentioned last quarter, committed sales of our data.com products sold to our alliance with salesforce.com are not reflected in the differed balance and would have added about 2 points.
Our international business was up 2% in the quarter, in line with expectations with 7% growth in Asia pacific offset by 1% decline in Europe and other international markets. Shifting to profitability, operating income was flat in the quarter as ramped up investments in data and analytics and product development offset the contribution from revenue growth.
And finally, diluted EPS was up 16% in the quarter primarily due to accretive impact of share repurchases. For the year, we repurchased $325 million of shares under our $1 billion discretionary share repurchase authorization, at an average price of $91.68 per share.
As of December 31, we completed $835 million of our $1 billion authorization and expect to complete the remaining $165 million around the middle of this year. So, overall, the quarter and the full year played out about as we expected.
Turning to 2014, Bob already talked about the revenue drivers. So, I’d like to give you a little more color on the bottom line.
As Bob mentioned, we expect 2014 operating income to be down between 5% and 9%, a reduction of around $25 million to $45 million year-over-over. This reduction is due entirely to the $70 million to $80 million of incremental investments that we’re making behind the strategy.
It will be partially offset by the benefits from revenue growth and savings from stopping the deployment of the data supply chain. Now, beyond our strategic investments, we have other operating cost increases of roughly $40 million from things like employee and retiree benefits, contractual increases and outsourcing arrangements and other normal inflationary items.
We are covering the impact of these operational cost increases to streamlining and restructuring several low return areas of the business and we expect to take a charge of around $10 million during the year related to those efforts. You can see that a restructuring charge and savings amounts are lower than in the past.
Going forward, while we will continue to run the business to expand profitability, our main focus is to do that through sustainable revenue growth. In the past everything was done through a lens of taking cost out of the business.
You can still expect us to keep cost in line but the level of restructuring is likely going to be lower in the future. With that, we’ll be happy to take your questions.
Operator?
Operator
[Operator Instructions] And our first question comes from Andrew Steinerman with JPMorgan.
Andrew Steinerman - JPMorgan
Good morning everybody. December is often a very important renewal season for DNBi, could you go over how the renewal season went and how pricing has been involving in the DNBi product.
Bob Carrigan
Let me ask Josh to talk about DNBi. Josh?
Josh Peirez
Hey Andrew, we were pleased with the fourth quarter and December results for DNBi, we saw on a trailing 12 months basis our capture rate’s up a point, so we are pleased with that and look forward to the results which will flow through due to the ratable nature of the product primarily and through the latter part of next year.
Andrew Steinerman - JPMorgan
And capture rate you mean pricing up a point.
Josh Peirez
The capture rates for us are the combination of retention plus pricing, so when you take those two together it’s the capture of the dollars from the previous year. So we captured in the mid-90s of the dollars from last year into this year, which is a point higher than what we have seen in the previous 12 months.
Andrew Steinerman - JPMorgan
Super, and then just one more quick question, on North American risk, there was a comment that 2 points of growth came from new products, were those the new products that were introduced in May or new products that go further back from before May.
Josh Peirez
No, it's primarily D&B Direct which has been in the past year. It's been doing quite well for us.
Operator
Our next question is from Minaz Patnaik with Barclays Capital.
Minaz Patnaik - Barclays Capital
Hi, good morning, I just wanted -- I know you mentioned that you weren’t providing sort of any multiyear guidance at this point in time but just wanted to get a sense of relative to I guess what the company stated on its July investor day, if those sort of long term targets at least in the top line seemed reasonable or just some color on that.
Josh Peirez
Right, so, look, you’ve got the sense very focused on revenue growth and while I’m not prepared to give specific multiyear guidance, I certainly envision getting to -- getting the growth and I expect that with growth we’ll get margin expansion as well.
Minaz Patnaik - Barclays Capital
Okay and then if I can somewhat -- towards looking longer term are there any change in plans at the company in terms of you know using M&A as part of this strategy to sort of go above and beyond what you guys have been doing.
Josh Peirez
Sure, we’ll evaluate M&A in the context of our strategy to grow the business and rest assured we’ll be very careful about making choices that are mapped very directly to the strategy.
Minaz Patnaik - Barclays Capital
Okay fine, and then I guess just one from me, maybe Rich. In terms of just the leveraged levels, are you guys -- any color on you know, what levels you guys aspire to be at or are comfortable at that, any commentary around that today.
Rich Veldran
Okay, here’s what I'll tell you, obviously we have a 165 million left in the report as [indiscernible] and we’ll continue to do that. In terms of leverage, I’ve said often and I’ll repeat it, it is important for us to be investment grade, have a strong balance sheet, you always want to be prepared in uncertain economic times, so access to capital matters, but we will as always make very good use of the cash that we generate, we do generate a lot of cash and our priorities remain the same which is invest first and foremost into the business organic growth, secondly to do smart M&A where it makes sense and foster the strategy and then any excess free cash flow we will return to shareholders and you see that we have a pretty strong track record of doing that.
Operator
Thank you, our next question is from Shlomo Rosenbaum with Stifel Nicolaus.
Shlomo Rosenbaum - Stifel Nicolaus
Of the investment that you’re going to be making this year are pretty significant investments, how much of it or I don’t know if you want to talk about qualitatively or quantitatively, are you putting into new product developments, and then secondarily are there going to be significant changes in the sales force either composition or restructuring or incentives, can you talk about those items?
Josh Peirez
Hey Shlomo, it’s Josh, I’ll start with the product investment question and then Bob can take on the sales one. So as I think Bob laid out in the script we’re looking at about 80% of the investments going directly into the content and the delivery of that content, so if you think of those two things combined that is our product, so it’s the underlying assets that we bring to customers in the form of the analytics, the insights, the data as well as the new modern delivery mechanisms that Bob referred to.
So those things combined are about 80% of the investment and our leading composition is the value of the underlying content. Not any individual use cases delivered to the product, so Bob you want to?
Bob Carrigan
So regarding your sales question, I have spent a lot of time with customers in the last few months and it's apparent that we needed to reorganize to meet their needs which are becoming increasingly global, so we want to actually be able to work with these customers on a global basis but certainly also on a regional and local basis as well without making changes as we’ve seen in sales organization, at least it’s top level to make it more purely focused on sales and servicing our clients and that’s where the focus has to be. This is obviously an area that’s near and dear to my heart as I said to you I have a pretty strong sales and marketing background, so I’m very focused on that and generating new business and figuring out ways to also automate renewal to make it easier for our customers to do business with us and free up our sales force to focus on new business.
And then finally on the sales piece you know, we talked about alliances and growing indirect partnerships to be able to reach more customers to alliance.
Shlomo Rosenbaum - Stifel Nicolaus
So is there going to be a hiring of maybe an augmentations of the sales force to work with some additional partners or is that a capability that you guys feel comfortable that you have in house right now?
Bob Carrigan
We’re obviously evaluating that and as we get more aggressive about pursuing alliances, and you should know that I have moved alliances under Josh and the operating group, so Josh is the new COO. And the reason for that as I want to align alliances more tightly with our technology and product and data groups.
So that’s the first big step. And then as we kind of up the tempo in terms of trying to get new alliances, we’re certainly going to need to develop better business development skills and make sure that we’ve got the right teams to be able to pursue those alliances and deal with those very large strategic customers in a proper way.
Operator
Our next question is from Brett Huff with Stephens Inc.
Brett Huff - Stephens Inc.
Two quick questions. One, you mentioned a little bit on the DNBi color.
Can you give us -- I think you said your capture rate was a point better. Can you give us a sense of how the -- where things are getting better?
Where things are saying getting more et cetera among your various customer segments? I know that there has been a lot of focus on the smaller side of that.
So can you give us an update specifically on that sub-segment of DNBi?
Josh Peirez
Sure Brett, DNBi primarily targets our small and midsized customer base, so it’s really not a big product set for our larger strategic customers which Bob discussed a big focus around. So for us we are still focused on both the small and the mid-market sized area.
The numbers I gave were the combined number across the two groups, and we’re seeing the mid-market perform a little better than the small, and so that’s been good. Those are generally bigger deals.
But the primary efforts have been around moving our customers into multi-year arrangements and getting into their renewal cycles earlier before their contracts are expiring. And so we've seen good progress on those drivers as well, would help us moving into next year to really be able to focus our efforts on the new business as Bob discussed.
Bob Carrigan
I’ll add one point on that, because as we did talk about the fact that we are moving towards these multi-year deals to increase retention, the retention rate within the uplift that Josh talked about, actually hit our highest level in the last two years. So we are seeing progress there.
But as you know pricing has been a little bit lower this year than we've seen in the past and some of that’s been a cautious trade off, because ultimately the retention piece really matters to us.
Brett Huff - Stephens Inc.
Okay and then one other question, just bigger picture. You talked a little bit about this; I want to make sure I heard you right.
The 70 million to 80 million that we’re going to invest this year sounds like I think 80% of it is focused on the actual product and delivery. How much of that do you envision recurring?
I mean you mentioned that maybe 15 years further down the road we should see some margin expansion as a result of some of the investments. Can you give us a sense of how that -- does it stay the same?
Does it taper? What’s your vision on the shape of that spending going forward?
Rich Veldran
This is Rich, I’ll take that. I mean a couple of things.
Most of the investments that we’re doing this year is really cost that will in a sense stay in your base, because you are investing in people, you are investing in the analytics, you are investing in content. So there is a large chunk that’s recurred in that sense.
Where the expansion will come is in a couple of places. First of all as revenue ramps, there will be very little variable cost with that to speak up.
And although we’ll continue to invest -- this -- in some way this is a bit of a step function. So we’re getting our data and our content capabilities up to a level that we need to be at.
Again, we’ll continue to invest but the revenue will certainly outpace the spending increases as we go forward.
Operator
Thank you. Our next question is from Jeff Meuler with R W.
Baird.
Jeff Meuler - Robert W. Baird & Co.
Bob I don’t anyone is going to accuse you of not being hard at work and Josh congratulations on the promotion, much deserved. Just a question first on DNBi, I guess given the revenue trends versus your commentary.
Should we view the revenue trends as kind of being the result of the decline in terms of the capture rate that you saw, call it a year ago. And now it sounds like you are seeing retentions up, pricing is down a little bit but that’s probably due to moving clients into multi-year arrangements but on a net basis the capture rate is up.
So we should see the DNBi revenue trend improve from here now?
Rich Veldran
This is Rich. Couple of things, yes the retention has improved which is good.
The lower pricing I think will remain for a period of time because the reality is, it’s a tougher marketplace and -- but our biggest challenge has really been in new customers and bringing new customer acquisition. I think over the longer term if you think about the growth drivers for us DNBi I believe will stabilize, it’s never going to be the biggest growth driver in the company going forward.
It’s really going to be all the new things that we’re doing. So we’re expecting stabilization as we go forward but not have a big growth driver into the future.
Jeff Meuler - Robert W. Baird & Co.
And then Bob maybe if you could tie it together in terms of how does the new sales force better address new customer acquisition, the new sales force structure.
Bob Carrigan
Right, so this is obviously a big topic one then I am pretty involved with. Look, we’re overly focused on renewals right now and the first thing we got to do is make sure that we've got a sensible approach that we’re automating some of the things today that are very manual.
And so we want to make sure that we free up resources. We also want to make sure that all of our sales folks, especially in some of the more successful areas of our business been a vertical strategy, vertical categories of our larger strategic clients.
We want to keep graduating accounts into this vertical category because the more we know the category, the more that we are consultative in that category and understand it, the more successful we have been, that’s been a real highlight of our business. So, getting increasingly strategic with these guys and then making sure that within each category we are doing business with everybody in that category, so that’s certainly a big focus story.
Operator
Our new question is from Peter Appert with Piper Jaffray.
John Crowther - Piper Jaffray
Hi, this is John Crowther on for Peter. First question is just about the EPS guidance and your commentary on share repurchases and obviously it seems like the 165 that’s still left in the authorization, is likely built in the EPS.
Is there any expectations for further repurchases as we move through the year?
Bob Carrigan
Yes, so, look at this stage it’s premature to talk plan posted, you can try and do your math and figure out what may be figured in but as I said we are intending to finish the 165 this year and we will really come back to at a later point once that’s done with any feature.
John Crowther - Piper Jaffray
Okay, great. And then just as I look at the incremental 70 million, 80 million in investment that you guys are going to deploy this year.
Should I be, as we are looking at how that sort of progresses in terms of our ability to judge the potential return on that investment, obviously you are updating and brining up to standards your data and delivery technologies. Will this be sort of a rolling process where we might start to see some of the returns as we progress through ’14 or is there is a little bit of sort of a pre-loading period before we might be able to sort of judge the impact of that investment?
Bob Carrigan
Yeah, I mean a couple of things. What you will see is most of what we are really focused on with the investment this year are focused on revenue growth beyond ‘14 so driving ’15.
That said you should expect a bit of a ramp door in the course of ‘14 as we go but the biggest impact because things take time to really bring the fruition you are going to see in the years beyond.
Operator
Our next question comes from Andre Benjamin with Goldman Sachs.
Andre Benjamin - Goldman Sachs
Thank you, good morning. My first question in terms of the core DNBi product, what would you view as the priority in terms of pricing strategy going forward.
Is it really to maintain the premium spot in the market place, continue to push for a price increases and just kind of accept what market share come with that or would you say kind of looking to maybe give up a little bit of price particularly at the low end to regain share sooner and then maybe refocus on establishing price increases later on?
Josh Peirez
Hey Andre, it’s Josh. I am going to frame your question a little differently because our focus for DNBi as Bob commented is actually to move it to a cloud-based globally consistent product.
We actually think we have significant opportunity for growth both on numbers of customers as well as on price by providing the ability for our customers to have the product in cloud where we can more easily innovate and add value props beyond the pure trade credit proposition, connecting with their sale forces in other parts of the business and be able to provide it in a global way. Today DNBi is only available in a very limited set of markets and by moving it into the cloud-based version we think we can do relatively quickly.
We will be able to offer the product more broadly. So, our focus is on, for the existing base, while we are making this transition we do expect to continue to give them more value, lock them into multi-year deals and be able to have some modest price increases with that.
So, it’s a balance of the two which is a strategy we saw worked in the back half of last year. So, we will continue that strategy and we expect it to be something that allows us to then bring value to version as we move through our transition.
And I should not because some of the prior questions were there, as we do that we will then be able to take cost out of the base regarding supporting the older products and that’s a consistent theme. So, while the 70 to 80 we are outlining will mostly be recurring for the ongoing investment in the new products we will be able to take costs out related to the old products as we get those customers migrated in the next year or two.
Andre Benjamin - Goldman Sachs
Thank you, that’s helpful. And then I know you’ve launched a number of new products in the last, call it three to six months, take advantage of the new technology platform.
I just wonder and see if we can be understand maybe how the new platform helps you with the actual development time of those products say D&B 360 or Direct 2.0, any others you like to highlight and how we should think about the cycle time for new products coming out in the future just as we try to, I guess, understand the return, as others have put it on the incremental investment you are making?
Rich Veldran
Thanks, Andre. I can give you a little bit of color.
So, if I compare to sort of three years ago before these platforms were available, our cycle time for a new product was greater than 12 months, our cost was generally running into seven figures. Our cost now is lower in six figures and our time frames are more in the three to six months.
Our timeframe to put out a product we expect that to only accelerate as we have more and more capability in our services layer. Separately for our analytic products which we launched this year, we were launching generally one score a year if that.
In this past year we were able to put out four different analytics score which was a huge part of what the platform investments provide us the ability to do and those analytic scores are also accessing and using data sources that while we had them we were not able to actually use them in our models prior to these investments. So, hopefully that gives you a little bit of color, we expect an even greater acceleration on the analytics side as we launch globally consistent scores over the next 12 to 18 months [indiscernible] markets.
So it should be something you’ll see [we have and it's even] faster.
Bob Carrigan
I'll just add to that, this is Bob. We talked about this idea of kind of liberating our content and finding new places to deliver that, whether it's through alliances or directly into our customer environment.
So, you’re thinking about product perhaps in a traditional sense of building a software application, actually what we want to get away from is get out of the business of building heavy software apps on our own platforms and taking modern technologies, modern capabilities to be able to find new places to distribute all this content that we’re investing in, that has tremendous value for our customers and when we can deliver that in the customer environment in their work flows leveraging their interfaces and all the things, all the technologies that they have, we find that that’s a very powerful combination.
Operator
Thank you. And at this time there are no further questions.
Kathy Guinnessey
Okay. Thank you.
Bob
Yes. Thanks everyone for your interest in D&B.
Just in closing I’d like to say that you can expect to hear us report on our progress against the strategy over the course of the year. I look forward to getting out and meeting as well and I’ll be presenting at several investor conferences over the next few months in addition to conducting meetings on the road.
Thanks again for participating on the call today. Bye-bye.
Carrigan
Yes. Thanks everyone for your interest in D&B.
Just in closing I’d like to say that you can expect to hear us report on our progress against the strategy over the course of the year. I look forward to getting out and meeting as well and I’ll be presenting at several investor conferences over the next few months in addition to conducting meetings on the road.
Thanks again for participating on the call today. Bye-bye.
Operator
Thank you everyone for participating on today’s conference. The conference has concluded.
You may disconnect at this time.