May 5, 2016
Executives
Marty Cohen - VP, IR Barak Eilam - CEO Sarit Sagiv - CFO
Analysts
Shaul Eyal - Oppenheimer Dan Bergstrom - RBC Capital Markets Paul Coster - JPMorgan Tal Grant - UBS
Operator
Welcome to the NICE Systems Conference Call discussing First Quarter 2016 Results. [Operator Instructions].
I would now like to turn this call over to Mr. Marty Cohen, VP of Investor Relations at NICE.
Please go ahead, sir.
Marty Cohen
Thank you, Operator. With me on the call today are Barak Eilam, Chief Executive Officer and Sarit Sagiv, Chief Financial Officer.
Before we start, I would like to point out that some of the statements made on this call will constitute forward-looking statements in accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Please be advised that the company’s actual results could differ materially from these forward-looking statements.
Additional information regarding the factors that could cause actual results or performance of the company to differ materially is contained in the section entitled Risk Factors in Item 3 of the company's 2015 annual report on Form 20-F as filed with the Securities and Exchange Commission. During today's call we will present a more detailed discussion of first quarter 2016 results and the company's guidance for the second quarter and full year 2016.
Following our comments, there will be an opportunity for questions. Let me remind you that, unless otherwise noted on this call, we will be commenting on our adjusted results of operations which differ in certain respects from Generally Accepted Accounting Principles as reflected mainly in accounting for acquisition-related revenues and expenses, amortization of intangible assets and accounting for stock-based compensation.
The difference between the non-GAAP adjusted results and the equivalent GAAP figures are detailed in today's press release. We would also like to remind you that we’re hosting our Investor Day on May 23 and 24 in conjunction with our Annual User Conference in Orlando called Interactions.
A special program for analyst and investors will include meeting with nice executives, presentations from customers, product and technology sessions and access to the solutions showcase. If you haven't registered and would like to do so please email us at ir.nice.com I will now turn over the call to Barak.
Barak Eilam
Thank you, Marty and welcome everyone. I'm glad to be on the call with you today.
We’re pleased to begin the year on a high note with a strong Q1 as we reported revenue of $226 million, we also continue to execute operationally as reflected in the 15% growth in operating income which led to Q1 operating margin of 25.6%. These represents a solid growth although the 23.3% operating margin reported in Q1 last year.
The stronger loss [ph] on both top line and for operating income produced another good quarter on the bottom line. We reported earnings per share of $0.81 which represented an increase of 17% compared to the first quarter of 2015.
As I described last quarter we’re focused in our long term strategy moving forward in our transformation to become a true enterprise total company with a large and growing portfolio of solutions. A portfolio that we have tied together for our analytics platform and a portfolio that is also extending through the cloudification of our solution to further extend our total addressable market.
Our continued strong quarterly performances is attributed through the progress we’re making on all fronts, we’re on a rapid path to align our businesses across all dimensions including technologies, customers and markets. We’re pleased with the execution of our strategic and go to market plan which has empowered has to continue to capitalize on many growth opportunities and expand our market share.
As to our growing portfolio of solutions this can be attributed to our continued emphasis on innovation which I believe is one of the things that set us apart in this industry and is also an underpinning our expanding market leadership. For instance just this last quarter we announced the launch of total voice of the customer we leverages together our voice of the customer and interaction of latest solutions.
We also launched Actimize's AML Essentials, which is an Anti-Money Laundering cloud offering designed specifically for the unique need of mid-sized financial institutions. This will help us further extend our reach into additional market segments.
One of our recent innovations, holistic surveillance continued to do well. As you probably know this unique solution combined with technology of our customer interaction and financial crime and compliance businesses.
In Q1, a major global financial institution built [ph] our holistic surveillance solutions in a seven digit deal. We won this deal against our competitors due to our market channel capabilities along with our alignment to the customers' business objectives of its increased need for surveillance in regulated markets.
As of the holistic surveillance deal just mentioned the expanding regulatory environment continued to provide great opportunities, for example the market of [indiscernible] continues to drive this from global and EMEA based financial institutions with the regulations becoming enforceable in July 2016. In one such seven digit deal the large global financial institution purchased our mobile solution for fixed income.
We’re also starting new release related [indiscernible] with $15 billion global hedge funds as they want to make sure they have adequate tools in place to detect and prevent market manipulation, insider trading and other prohibited activity. As our portfolio of solutions continues to expand this is also driven market solution deals or what we refer to as portfolio deals and an increase in deals of $1 million, a trend that has continued into Q1.
Our ability to sell more and more portfolio deals has led to a number of competitive replacements. In one such example, our portfolio deals which also involves competitive replacement, a large healthcare company extended our foot print with NICE in seven digit transaction.
This company acknowledged that they choose NICE for having the most comprehensive portfolio of solutions in the market to support a significant growth they are seeing. In another portfolio deals we replaced the incumbent in a seven digit deal for remote banking and commercial banking fraud.
The third leg of our transformation a portfolio that is tied together to our analytics platforms was just recently reinforced with the closing of Nexidia acquisition at the end of March. Nexidia provides us with unique capabilities that no other company has in our industry.
We introduced this to the market and analytics with no limit. Because Nexidia [indiscernible] and speech processing technologies they are no longer limit placed on analytics when it comes to accuracy, scalability, speed, cost, use cases and ease of deployment.
We have already seen great reception from customers and prospects who are embracing the endless possibilities of analytics with no limits. These technology provides us another competitive advantage in the rapidly growing market for analytics and we see evidence of it in our pipelines.
In that regard with another strong quarter for analytics, analytics grew double digit in Q1 and represented the majority of our bookings. For example a large telecom company which is already an existing customer purchases our real time analytics in a seven digit portfolio deal.
These company is embarking on a new and innovative customer experience program focused on an omnichannel and customer first strategy. We also signed a seven digit deal for one of our customers analytic [ph] solution with the large health insurance company.
Healthcare in the U.S. is rapidly changing as more customers now have more choices, as a result this company needed to quickly improve their customer experience.
However they had limited visibility into the customer interactions. With NICE they now have the visibility to see whether customers are having problems through digitization of customer journey along with dashboard to how their operation is performing.
This solution will be deployed in the cloud and that brings me the fourth pillar of our transformation, the cloudification of our solutions. Along with growth in cloud business in Q1, our cloud strategy was further enhanced with the announcement of our new AML Essentials cloud solution which I’ve already mentioned.
In closing we’re pleased that we continue to perform well and that we expect another yield of growth and profitability as our strategic and operating plans are progressing. Our markets are strong, innovation is accelerating and our go to market approach is working well.
Before I turn the call over to Sarit, as most of you saw today we announced that he will be leaving us in the coming months. On behalf of myself and the entire company I want to thank Sarit for her dedication and support during her time with NICE.
As CFO and a [indiscernible] of our management team she has made great contribution to the success of our business. I wish her the best for the future.
I will now turn the call over to Sarit who will review our financial results.
Sarit Sagiv
Thank Barak and good day everyone. I'm pleased to provide you with an analysis of financial results and business performance for the first quarter of 2016 as well as our outlook for the second quarter and full year of 2016.
Please note that the financial results represent operations and exclude the divested intelligence and physical security businesses for Q1 2016 and the comparative numbers for 2015. These two businesses are presented as discontinued operations.
However, the cash flow statements include the results for both divestitures. And I will review the results, revenues for the first quarter were $226 million which represent an increase of 4.3% from $217 million in the same period of last year.
Customer interaction revenues for Q1 2016 were $172 million, a 3% increase compared to Q1 2015. And financial crime and compliance revenues increased 8% to $54 million for Q1 2015.
On a regional breakdown, revenues in the Americas region were $155 million for quarter similar to last year. Revenues in EMEA increased 12% to $45 million for Q1 2016 and revenues for the Asia Pacific region were 19% to $26 million for the first quarter.
Looking at revenue s by business line, product revenues accounted for 29% of total revenues in the first quarter of 2016. Maintenance revenues accounted for 44% of total revenues in the quarter and professional services, including Cloud, accounted for the remaining 27% of total revenues in the first quarter 2016.
Gross margin in Q1 reached 70.6%, compared to 69.8% in Q1 last year. The gross margin improvement is mainly a result of [indiscernible] and continued efficient utilization of the services organization.
Operating profit in the first quarter increased 16% to $58 million and operating margin improved to 25.6% compared to 23.3% last year. The improvement in the operating margin is the result of a higher gross margin combined with disciplined expense management.
In the first quarter we had financial income of $3.8 million, this included an additional $2 million or $0.03 per share above our expectations mainly from foreign currency exchange rate impact on monetary asset. The effective tax rate for the quarter was 19.5% which was in line with our expectations.
We expect the tax rate to remain at this level in 2016. Earnings per share increased 17% to $0.81 in Q1 2016, compared to $0.69 in the same period last year.
First quarter cash flow from operation was a record of $113 million which reflects a healthy business and good execution. Total cash and financial investments was $755 million at the end of March 2016.
This amount is net of payments for physicians closed in the first quarter. The start of our share repurchase plan we bought back a total of $23 million during the first quarter.
in-line with our dividend plan our Board of Directors approved a dividend of $0.16 per share for Q1 2016. Before I turn to guidance I would like to mention that similar to prior years we expect 2016 results to be second half weighted.
For the second quarter 2016 we expect total revenues to be in the range of $229 million to $239 million and fully diluted earnings per share to be in the range of $0.72 to $0.78. For the full year 2016 we expect revenues to be in the range of $995 million to $1.16 billion.
For earnings per share we increased our guidance for the full year 2016, we now expect full year fully diluted earnings per share to be in the range of $3.41 to $3.65. That concludes my comments.
I will now turn the call over to the operator for questions. Operator?
Operator
[Operator Instructions]. Your first question comes from the line of Shaul Eyal from Oppenheimer.
Go ahead, please.
Shaul Eyal
I want to start Barak or Sarit to weigh the product, just slightly below our expectation is it just a mix shift seasonality? How should we be thinking about it down the road?
Sarit Sagiv
If you remember in Q1 2015 we had a very product quarter with a 27 increase in the product that quarter. So it's basically tough comparison this quarter compared to the previous one.
Shaul Eyal
Barak, on Nexidia so how would you characterize the contribution and performance since you closed that acquisition. Did it come in line a little better with your initial expectations and I understand its early days but how would you characterize the performance so far?
Barak Eilam
Actually we’re very, very happy with what we see so far. It's obviously still early we just closed the acquisition at the end of March so we have bout give or take a bit more than a month into Nexidia part of NICE.
I can speak about the reception from the markets both from customers but also prospects, very strong, the concept of analytics is no limit. The possibilities enables customers are pretty much mind blowing to many of our customers.
So the level of engagement, the level of dialogue as a result of that as I mentioned also the pipeline is very strong, our integration both on the product side and also on the operational side and the Nexidia team themselves have been welcomed in a great way and we will working - they are working very, very close together so so far it was very positive about the progress.
Operator
Your next question comes from the line of Dan Bergstrom from RBC Capital Markets. Go ahead please, Dan.
Dan Bergstrom
So I’ve noticed recently you seem to be taking the new message to customers and by that I mean there has been a lot of road shows with Nexidia and analytics, several pop up events and a number of webinars. Just curious to the customer response to these events and then you know is that part of the ongoing messaging strategy or is it more centered around communicating what Nexidia is bringing to the product offering?
Barak Eilam
So I would say it's two things, first of all you know we would like to be out there with customers who think that we have a great value proposition and close to our portfolio both as a full portfolio but also each product by itself and on all the market segment where we operate and we invest a lot in reaching out to customers and to prospects. Specifically on the messaging that in the context of the acquisition of Nexidia and analytics is no limit, this is exactly what I talked about, about the logic behind such an acquisition.
They have just a phenomenal technology, great team but as they come under the umbrella of NICE we have the go to market brand and marketing capacity that can take these technology that used to be owned by relatively small startup and in a much broader way so this was different [indiscernible] the messaging that we see in that regard of out of the integration bandwidth with Nexidia, some of these events are on different things and as I mentioned on my opening remarks our innovation in the last couple of years is accelerating. You can see that every quarter with at least couple product if not more I have mentioned couple of them earlier on the call and as we release them each one of them can't reach a certain campaign.
So you saw just a couple of data and think it was yesterday or the day before, we announced four part event in the context of financial crime and compliance, we had some great offering over there and we are fine tuning our marketing events to a different seasonal [ph] to the different reaction we see from our customers.
Dan Bergstrom
And then as far as accelerating innovation you talked in the call about optimize anti-money laundering solutions on the cloud, I think it's on Amazon Web Services. It seems like this is you know maybe a move to bring those solutions to community and regional financial institutions or part of the move down to Tier 2 financial institutions you talked about at analyst day last year.
Just curious about the response to that and what type of demand are you seeing for maybe Tier 2 customers in financial services or potential Tier 2 customers for services through the cloud and AWS?
Barak Eilam
I will split my answer into few parts, so first of all it's no secret that our financial crime and compliance solutions tagged under Actimize considered to be you know the market standards and we’re the market leader in the hand of the market both for [indiscernible] trading surveillance and enterprise risk case management. And this has been our comfort zone for many years and as we go and I feel that - last year during the analyst day we had, as we go down market, it takes somewhat of a different go to market but also a more effective of delivery to the second and third tier of the market.
So the recent announcement of the AML Essential is just one component out of many that are expected in order to exactly tackle this market segment and expand our total addressable market. So we’re taking the high-end product if you would like and it is becoming much easier for us to go to that market segment and through the cloud easing the delivery, easing the consumption and the time of deployment for this customer.
So you’re right, in terms of number of customers, it expand dramatically. We offer these solutions in variety of flavors so it can definitely go with the public cloud and we’re comparable with AWS, but for those customers that have other needs and would like to go with the different hosting options we have our own data centers so basically all the way of customers are on premise, private cloud, co-location, and complete public cloud.
Operator
Your next question comes from the line of Paul Coster from JPMorgan. Go ahead, Paul.
Paul Coster
Few quick questions, first up Barak, perhaps you can give us some sense of what you think the end market penetration is for anti-money laundering solutions?
Barak Eilam
Sure. Absolutely, every financial institution out there today and here to the [indiscernible] AML comes to goes beyond just the classic bank and financial institutions, so we need to look at it in a much broader sense.
As we want - that is actually dealing with payments or moving money is today under the either policies directive or full regulation of AML. So it's expanded first of all beyond those financial services and its big alternative money, other payments forum and so on and so forth.
So just a beginning. All of them has a certain AML processes anywhere from just internal policies, manual processes and all the way to best in class solutions like Actimize.
So it's hard to quantify exactly that regular penetration but the interesting thing is not necessarily the penetration of the basic AML solution but rather the evolution of what's going on in the market. Several years back it was relatively easy to deploy a pretty simple AML solutions, the rules were pretty simple, you know every transaction above a certain amount need to display within so and so forth but it became way more complex.
So it's no longer just about - I will give you an example it's no longer just finding very large amount moving from one site to another and whether it's legit or not, there are many way today to launder money and every day there are new ones. So all of a sudden instead of looking for the single the large transaction in AML scheme, sorry, money laundering scheme can be 1000 if not 10s of 1000s of $1 or less transaction going to different dozens of accounts.
So every data process, every month of the year sophistication level is going and one of the challenges of our customers is while enforcing AML in a more effective way, how do you do that without increasing the full [indiscernible] because you don’t want to stop obviously transactions of legit customers and legit transactions. So I would measure the penetration basically in a way that almost everyone has a very, very basic solution, manual or not but the requirement today is analytics into AML and over there the penetration is still very low.
Paul Coster
Yes sequential decline of HTC segment was more pronounced than prior years, this is just a function of the budget cycles or is there something else going on?
Sarit Sagiv
The revenue growth was 8% of reducing a good - we had a very good quarter for booking and received very good pipeline so it's just a matter of timing.
Paul Coster
And the EPS guidance for the year, was raised but only by the magnitude as it be in the first quarter, does that mean moving forward we shouldn't really expect this gross margin uplift to continue, what are your assumptions in raising the guidance in that manner?
Sarit Sagiv
So I think you’re asking two separate questions, with regards to the guidance we increased the EPS for the year, again $0.03 of beat this quarter was due to the additional $2 million in finance income which was above our expectation and this was connected to foreign currency exchange, the impact on monetary assets. With regards to the gross margin we do see a continuous improvement and we attributed to several things among them is our confirmation is to two enterprise software together with the fact that we’re an improving our efficiencies we pointed out service - gross margin which is showing a gradual but continuing improvement which obviously contribute also to the bottom line.
Operator
Your next question comes from the line of Greg McDowell from JMP Securities. Go ahead, Greg.
Unidentified Analyst
This is Rishi [indiscernible] dialing in for Greg McDowell. First I just wanted to get an idea for how your offshore consolidation of R&D and service centers have been trending?
Do you think you're still on track to maybe realize the future cost savings that you initially anticipated?
Barak Eilam
The answer is absolutely yes, we have introduced variety - many different aspects of initiatives throughout the company with respect to the way that we operate it was one of the, one of very large one and we’re actually very happy with the progress there and then I believe that as we continue moving forward it is becoming strategic as for the company which impacts two things first of all our financial in a positive way but not less important in our ability to have more qualified manpower to fuel those roles.
Unidentified Analyst
And with interactions happening later this month at the company analyst day, I guess can you give us a quick idea of what to expect out of the day and out of the conference?
Barak Eilam
Absolutely, so we’re actually looking forward to event and will be preparing to the event. I think it was two to three years ago when we decided to combine our user conference events which is in our industry became the largest almost the largest event in our industry and you can expect to see there are hundreds more than a thousand of our customers from variety of vertical joining.
So that's one thing the ability to actually instead of hearing it for myself and from other executive in the company to hear it directly from customers. And during the event itself first you'll be able to hear different presentations from myself and from the other team members of the management team.
You'll see presentation of our customers of how they are using our different solution. You'll also be able to enjoy a different demonstration, we have a great [indiscernible] of demo where we have all our products being presented over there.
And obviously almost the entire management team is going to be there so besides meeting myself and Sarit and Marty, you'll be able to spend time with other and hear directly from and some [indiscernible] between everyone and enjoying the debate together. It is in Orlando and it is in the week of the 23rd.
Operator
Your next question comes from the line of Tal Grant from UBS. Please go ahead.
Tal Grant
Just a couple of ones for me. So on Nexidia I was wondering - so first of all the originally deal was set for 135, it looks like 150 outgoing cash, is that M&A fees or was there another tuck-in acquisition or something?
And also what is the contribution or the expected contribution from Nexidia this year? What have you got in your revenue guidance for Nexidia and in earnings as well?
And then finally if you could just - two more, sorry, so one is about the services, the services and product growth rates were you know completely opposite just wondering what the driver for the services growth was? You’re still not spitting out cloud, I assume that it's still not about 10% and then finally just on the financial income bit, so could you just give us an idea of the split in currencies within that $415 million of marketable securities?
Sarit Sagiv
So just answer one by one, in the deal you do see $150 million which comprise mostly of Nexidia consideration that we paid in Q1, but we had also another small acquisition and this is why you see higher amount and it doesn’t include anything other than this. With regard to Nexidia contribution and your question regarding guidance, as we communicated also in the previous quarter our guidance includes Nexidia.
This is still the case that we look at the businesses together, we do see them integrated quite nicely so far and quickly going forward and therefore the guidance include Nexidia, we did not disclose the specific number from Nexidia. Obviously the impact of Nexidia for Q1 is immaterial, it was in the last few days of the quarter so you can - it's more relevant to future quarters than to Q1.
You had another question regarding financial income, we did $3.8 million of financial income and adjusted income include the interest and the gains from the portfolio. This stays more less the same as previous quarters, we had a little bit better return because we had more cash but the significant impact for or the reason for the main reason for the increase of the 2 million in the Q1 was actually that evolution, the impact of the foreign exchange rate of monetary asset, this has to do with the fact that reporting dollar but we for example accounts receivables and renewals and other [indiscernible] and this contributed the gain for Q1.
And I will now let Barak answer the question regarding services.
Barak Eilam
See the last one was the, you referred to the what you saw in the quarter a growth in services versus a decline in the products. So few things over here first, sorry deferred before [ph] as I said Q1 of last year we had an leap in products and it's the goal of 27% in Q1 of last year versus '14 but really tough comparable but I wouldn’t read too much into it I think that moving forward this should be more stabilized and with respect to the services it's a growth in all of the different retail we have there which is [Technical Difficulty] professional services and the cloud in all of them growing very nicely in Q1.
Operator
So your next question comes from the line of [indiscernible]. Go ahead, Jeff.
Unidentified Analyst
I'm wondering if you could give us a little more detail on the revenue growth write-down by geography also by line of business. We know - you obviously gave us the numbers, the question is now what were the characteristics of those growth by both geography and by line of business meaning obviously enterprise business and your AML business.
Barak Eilam
You heard from Sarit, obviously the regional breakdown and you’ve the information on the line of businesses, we don’t break the line of businesses by region but I will give you general comments on what we see from the different geographies and again that’s one quarter and we should look on trends on a longer, you’ve seen a very nice growth in both EMEA and Asia Pacific, when we report in Americas it's a combination of North America and Latin America and I will say that we had this is probably second or third quarter in a row. We see from obvious reason of the economic situation over there, we see Latin America a bit struggling, the market itself obviously, we go to market in according to that but we don’t see a major shift in the different trends and dynamics, in the different trend dynamics and different territories to what we have seen in the past.
Unidentified Analyst
Okay and with regard to why was EMEA and Asia so strong.
Barak Eilam
We continue to see good businesses in both those territories, we have the good execution and our markets over there are healthy and I think it goes to my opening statement and it goes to the portfolio accepted very well by our customers. We see more and more opportunities coming in all market but also in EMEA and Asia Pacific, we believe also we are impacting the market share as a result of that and altogether combination of innovation, good portfolio, and solid go to market.
Unidentified Analyst
Okay, I'm also interested in your comments on I guess what holistic surveillance, how are you going to present and how you’re going to market if you want to call it a fully blown surveillance solution incorporating all of your capabilities to clients, is this going to go - this will go beyond - this is going to go beyond obviously security. It will go beyond, anti-laundering compliance and fraud and then we will go beyond customer service so I'm just wondering how you’re going to package that and to which customers, to what type of customers is this holistic surveillance package going to be sold to?
Barak Eilam
Let me explain what we mean by holistic surveillance and as you heard on this call but we also gave some color in previous call, this is not just future further things that are happening to us right now, we have very large deals going on with many of our customers. So the addressable market is obviously the large financial services, not just the large but financial services specifically banks who are challenged by the fact that they have a variety of monitoring and surveillance to meet the regulation of the different regulatory bodies but one of the biggest challenges is today misuse inside trading or any type of problematic activity become more complex and the only way to really find out any real time those type of activities is by combining together all the different sources of information.
We have been fortunate enough as a company throughout the years with the past acquisition from more than nine years ago of Actimize 8, 9 years ago and the progression of our analytical capabilities on our customer interaction business will be in the sweet spot of actually bringing the two technologies together. So beyond the fact that the customer base very strong customer base in financial services the factors that we have married couple of years ago together the technology on both sides allow us to come today to these customers and bring together information from all the variety of communication channel whether that will be the voice, the chat, the email, social media, I'm thinking of messages like WhatsApp and others.
And to that or married to that market data comes from our financial compliance business, transactional data and bring it all into one case management tool analytics platform that enable us to alert in these times, the things that are happening between the different communication channels and the transactions. This is the only way to actually find those business activities in real time and avoid the reputational risk very significant reputation risk that you see that the banks carry and as we opened a new, we all read the same newspaper, we see more and more find, very big find and other things that monetary, the occupational [ph] risk coming together when you’re not doing this type of monitoring.
So these are couple of years ago we talked about the future - thought about it, today [indiscernible] and every quarter and in the last few quarters and we bought more and more customers on-boarding that platform.
Unidentified Analyst
So one quick follow-up to that is that does this take you up the chain of command in the type of conversation you’re having with your customers, in another words you’re not just talking compliance officers but you’re going up to the sea level, is that fair to say?
Barak Eilam
Absolutely, I can tell you from a personal experience meeting lot of customers on a weekly basis that when it comes to holistic surveillance because it's married together different responsibilities between the bank which are beyond compliance, it goes to the compliance team, it goes to the legal team, it goes the CIO, it goes to the CTO and some other aspects, sometimes all the way to the CEO, it alleviate us and allow us to get more often into it.
Operator
Your next question comes from the line of Tal Grant from UBS. Go ahead, sir.
Tal Grant
Just missed one, I just wanted to double check something - I posted a question earlier about the deceleration in financial crime and compliance and you said the pipeline is good and it was just timing. So does that mean there was some deals which didn’t get quite signed in Q1 which have now signed in Q2?
Barak Eilam
I think as we already mentioned actually booking was very strong in this line of business in Q1, it's just a matter of timing of deployment, revenue recognition but all in all we have very continue to have very strong business dynamics in this business from all the reason we have mentioned before and every day we wake up in the morning and we find out about new regulation and new opportunities, so we all are confident with the pipeline moving forward.
Operator
I would now like to turn the call back to Barak Eilam for closing comments.
Barak Eilam
Thank you all very much for joining us. I'm looking forward to see you all at our User Conference event which will have also the analyst day with that in Orlando and have a great day.
Thank you.
Operator
Thank you. Ladies and gentlemen that concludes your conference call for today.
You may now disconnect. Thank you for joining and have a very good day.