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NeuStar (NYSE:NSR)

Q4 2013 Earnings Call

January 29, 2014 4:30 pm ET

Executives

David Angelicchio

Lisa A. Hook - Chief Executive Officer, President, Director and Member of Neutrality Committee

Paul S. Lalljie - Chief Financial Officer, Principal Accounting Officer and Senior Vice President

Analysts

John F. Bright - Avondale Partners, LLC, Research Division

Sterling P. Auty - JP Morgan Chase & Co, Research Division

William V. Power - Robert W. Baird & Co. Incorporated, Research Division

Paul B. Thomas - Goldman Sachs Group Inc., Research Division

Jonathan Ho - William Blair & Company L.L.C., Research Division

Operator

Good afternoon, everyone. Thank you for standing by. Welcome to the Neustar Fourth Quarter and Full Year 2013 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. For opening remarks, I would like to turn the conference over to Dave Angelicchio, Head of Investor Relations. Please begin, sir.

David Angelicchio

Thank you, and good afternoon, everyone. Welcome to today's conference call. Joining us today from Neustar are Lisa Hook, President and Chief Executive Officer; and Paul Lalljie, our Chief Financial Officer.

Our call today will begin with comments from Lisa Hook and Paul Lalljie followed by Q&A.

Before we begin, I'd like to remind everyone that today's discussion contains forward-looking statements based on information as of today, January 29, 2014, and as such, is subject to many assumptions, risks and uncertainties that may cause actual results to differ materially from those anticipated.

Additional information concerning these risks and uncertainties can be found in our earnings release and our filings with the U.S. Securities and Exchange Commission, including our last quarterly report on Form 10-K and subsequent periodic and current reports. We assume no obligation to update any forward-looking statements.

As you listen to today's call, we will discuss certain non-GAAP financial measures and supplemental key performance metrics by revenue categories, headcount and additional expense detail. These non-GAAP financial measures may not be comparable with similar non-GAAP financial measures used by other companies and should not be considered as a substitute for financial information prepared in accordance with GAAP. Supplemental materials and non-GAAP reconciliations can be found under our Investor Relations tab on our website, www.neustar.biz.

With that, I'm pleased to introduce Neustar's President and Chief Executive Officer, Lisa Hook. Lisa?

Lisa A. Hook

Thank you very much, Dave, and thank you all for joining us today. We issued 3 releases this afternoon: one, announcing our 2013 results; another providing an update on the NPAC renewal process; and the third, announcing our new share repurchase program.

I'll comment briefly on all 3 of these, as well as our 2014 priorities, and then turn the call over to Paul for more detail. We'll leave ample time for your questions.

Let's start with the NPAC. We wanted to share more information with you about the process because the timeline published by the NAPM estimated an SEC conclusion to the vendor selection process by January 20, 2014. Well, that day has come and gone and we know you've got questions about where things stand. As part of the ongoing process, a few months ago, Neustar requested the opportunity for all bidders to submit additional revised proposals, and we submitted our own revised proposal at that time. Last Friday, we were notified that our revised proposal would not be considered. The NAPM did not, however, address our process request for an additional round around their proposals. We feel strongly that revised proposals are an appropriate and necessary next step in this process. We don't believe that we're at the point where proposals are optimized for all industry members, including those not represented in the NAPM. We clearly want what's best for our company. At the same time, we're concerned about and want what's best for our customers and the end users they serve.

As you know, the NPAC ecosystem sits under the U.S. telecom infrastructure and operates so seamlessly, no consumer ever thinks about it. A consumer walks into a retail store and walks out minutes later with the same phone number on another carrier. This happens in none of the other 60 countries with number portability systems, and no country has ever attempted to make a transition from a functioning numbering platform to a new and untested system. To even contemplate moving from a system as large, complex and well run as the NPAC to a new and untested provider is literally unprecedented. Any scenario involving a transition to another administrator would introduce massive consumer disruption and transition risk. In fact, the Standish Group, which accurately predicted the problems with the healthcare.gov launch, is predicting a similar outcome if there were to be an NPAC transition. Standish further estimates transition costs to the industry of up to $600 million.

Another key issue is innovation, which is essential to the industry and U.S. economy but will be delayed for years if the new vendor were to attempt to replicate the infrastructure and capabilities of the current system. One of the most important areas of innovation, as FCC [ph] has just recently highlighted, is the coming PSTN to IP transition. We believe any participant in the NPAC renewal process must demonstrate its capabilities to support this important national priority, which had not been fully articulated at the time the RFP was issued. Disruption, delayed innovation and costs of this magnitude are in nobody's best interest. We feel strongly that these issues need to be addressed, appropriately and as part of the process, as the industry moves forward to a conclusion.

I'll turn now to a brief review of our 2013 performance and 2014 priorities then turn the call over to Paul for more details. You'll recall that in the beginning of 2013, I set out 4 priorities: to achieve our financial targets; to position ourselves for a successful renewal of the NPAC contract; to further our strategy for becoming a leading provider of commercial insights and analytics; and to continue to invest in our employees and platforms to drive growth and shareholder value. We achieved our financial targets for 2013 with particularly strong results in the fourth quarter. For the full year, total revenue was up 8%, non-NPAC revenue up 10% and adjusted EPS up 16%. For the quarter, total revenue and non-NPAC revenue were up 11% and 15% year-over-year. Fourth quarter adjusted EPS was up 25% year-over-year. I've already given you an update on our second priority, continuing to position the company for a successful NPAC contract renewal. With regard to our third priority, the Aggregate Knowledge technology acquisition added a key component to our suite of marketing analytical capabilities, enabling us to provide full workflow solutions for our clients. Our marketing services revenue was up 18% in 2013.

With regard to our fourth priority, investing in our people and platforms, we made good progress on realigning our organization to improve our understanding of client needs and to bring services to market more quickly. We also made progress on migrating from 26 platforms to a single next-generation platform. And today, we announced a new $200 million share repurchase program.

Now let me turn to our top priorities for 2014. Clearly, our top priority this year will be to continue to advance our bid for a successful NPAC contract renewal by reinforcing the overall value proposition we bring to the industry and consumers, as well as the very significant risks the transition will pose to the industry, to innovation, to consumers and to the overall economy. Our second priority is to continue to put in place the capabilities, infrastructure and corporate culture to advance our strategy to become a leading provider of real-time information services and analytics. Our third priority, of course, will be to achieve our financial targets as we aim to do every year.

With that, let me turn the call over to Paul.

Paul S. Lalljie

Thanks, Lisa, and good afternoon, everyone. Lisa just focused on the NPAC renewal process. Let me focus on the results, the share repurchase program and guidance.

Let me turn to 2013 results. As I indicated in our third quarter earnings call, we have changed the presentation of our financials to match our organizational structure and how we manage the business. We now present our revenue in 5 categories: Data Registries, Data Services, Security Solutions, Marketing Services and Business Assurance.

In Data Registries, we have the NPAC, caller ID, Internet registries and common short codes. In Data Services, we capture revenue from workflow solutions that enable the exchange of essential operating information across multiple carriers to provision and managed services and this includes our Order Management Services. In Security Solutions, we have our DNS offerings. In Marketing Services, we capture revenue from our services that help our clients plan, target, engage and measure effectiveness of marketing campaigns across multiple channels. In Business Assurance, we capture UltraViolets and website performance monitoring.

As you've seen in our announcement, 2013 was another strong year. We generated revenue of $902 million and delivered a 26% adjusted net income margin or $3.53 of adjusted net income per share. We refinanced our outstanding debt, executed $285 million of share repurchases and acquired a marketing analytics platform. To put this into perspective, we had a return on assets of 15% and a return on equity of 37% while investing in the technology refresh for the Number Portability Administration Center and building out of our broader service portfolios.

Now turning to our performance and starting with revenue for the quarter. Revenue totaled $237.6 million, an increase of 11% over last year. Non-NPAC revenue grew 15% compared to 14% in the fourth quarter of 2012 and 9% in the third quarter of 2013. Data Registries revenue totaled $155.5 million, a 4% increase, driven by revenue from our fixed-fee NPAC contracts. Data Services revenue totaled $19.5 million, a 63% increase, driven by the increase in demand for our Order Management Services. Marketing Services revenue totaled $38.7 million, an increase of 27%, driven by strong demand for our workflow solutions. Revenue for the year totaled $902 million, an increase of 8%.

Non-NPAC revenue grew 10.4% and has gone from 41% of revenue in 2011 to 52% of revenue in 2013. Data Registries revenue totaled $622.1 million, a 5% increase, driven by revenue from our fixed-fee NPAC contracts. Data Services revenue totaled $64.2 million, a 26% increase, driven by greater demand for our Order Management Services. Marketing Services revenue totaled $126.2 million, an 18% increase, driven by strong demand for our workflow solutions. As you can see, the pivot in 2011 to become an IS&A company, measured by growth in our non-NPAC revenue, is beginning to materialize. To put this into perspective, Marketing Services, Security Solutions and Data Services grew at a combined rate of 18% in 2013.

Now turning to the balance sheet. We generated $234.6 million in free cash flow and ended the year with cash of $223 million. In addition, we spent $285 million to repurchase $5.9 million of common stock, representing 9% of shares outstanding. As Lisa mentioned, in keeping with our focus on returning capital to shareholders, our Board of Directors has authorized a share repurchase program for up to $200 million of our shares in 2014. We have $616.3 million in outstanding debt at year end, and as a reminder, we refinanced our debt in early 2013 at a lower rate with increased flexibility and liquidity, while enhancing our maturity profile. This resulted in approximately $10 million in annual interest expense savings. Capital expenditures for the year totaled $53.2 million, flat from last year, and headcount at the end of 2013 totaled 1,623 compared to 1,543 at the end of 2012.

Overall, we had another good year. We're particularly pleased with the 18% growth in our core information and analytics services and intend to build on that momentum in 2014 and beyond.

Now for a discussion of guidance. Our 2014 guidance calls for revenue to range from $945 million to $970 million, representing a 5% to 8% increase over 2013. Adjusted net income is expected to range from $233 million to $243 million, or $3.64 to $3.80 per diluted share. Our annual effective tax rate is expected to be approximately 37%, and our fully diluted weighted average shares outstanding are expected to be approximately $64 million. This estimate does not contemplate share repurchases.

To provide some context for our guidance, in 2013, our non-NPAC revenue totaled $465 million and grew at 10%, including 18% growth in Marketing Services where the core IS&A services reside. We expect to accelerate our Marketing Services growth in 2014, building on our strong fourth quarter bookings our expanded platform capabilities and demand for our services. This growth will be somewhat offset by slower revenue growth in our data services registries, which continue to provide important data elements to our other services. As part of our organizational change, we began implementing a restructuring plan in January 2014, and we were expected to record approximately $12 million in charges over the first half of 2014. We intend to complete our internal transformation in the fiscal year 2014. It is important that we have the right organizational structure, the right people in the right positions. And we have also entered into a long-term lease for new office space in San Francisco. This space will be occupied by employees from 3 locations in the Bay Area and will allow us to be more efficient, as well as attract talent. This potential restructuring charge is contemplated in our guidance.

Capital expenditures are expected to range between $60 million and $80 million, slightly above our annual run rate. We're spending more this year as we invest in our infrastructure to accommodate future growth. Specifically, this spend includes the buildout of a data center that will improve both efficiency and capacity, and the buildout of space in San Francisco I mentioned a short while ago.

To conclude, we are pleased with our strong performance in 2013. Total shareholder return of 19%, return on equity of 37% and return on assets of 15%. We bought 9% of our shares outstanding and made meaningful investments to become a leading provider in Information Services. We expanded our next-generation number management platform and provided impeccable service.

With that, operator, we'll open the line for questions.

Question-and-Answer Session

Operator

[Operator Instructions] And we'll first go to John Bright with Avondale Partners.

John F. Bright - Avondale Partners, LLC, Research Division

Lisa, why did Neustar request the opportunity for all [indiscernible] to submit additional revised proposals?

Lisa A. Hook

In prior rounds in this agreement, in private, we've always gone through several rounds of negotiations with the industry. We felt that, that was appropriate here given prior practice, given best practices in any complex negotiation process and given that the final RFP implicitly recognized that there would be several rounds.

John F. Bright - Avondale Partners, LLC, Research Division

Did you find something out, that, that would be the case? Was there a piece of information you learned? Or is this something that you proactively did without additional information?

Lisa A. Hook

It's something that we had always assumed. Again, it's sort of -- in the draft RFP, there was a change of process. So the draft RFP had language restricting the bidding to one round of final offers, and the draft RFP also said that participants couldn't request another round. That language was removed in the final RFP, indicating that the RFP process would be more like sort of past practice. So I think we had always assumed it and wanted to -- and continue to want to ensure that that's the case.

John F. Bright - Avondale Partners, LLC, Research Division

So should we assume that the -- if that's the case, that, a, if nothing else happens, the April 13 initial proposal will be the one considered, and b, per your comments in the press release, that you're going to pursue the opportunity to submit new and revised bids? And if that's the case, how are you going to pursue that?

Lisa A. Hook

So the April bids were the initial bids, then you may recall that BAFOs were submitted. So the first round of BAFOs are the currently standing bids from September. We will continue to pursue additional rounds of bidding.

John F. Bright - Avondale Partners, LLC, Research Division

Do you have an idea of when a decision on the vendors and/or the financial terms of the contract might now conclude?

Lisa A. Hook

I sure wish I could tell you differently, John. The only public timeline out there is now outdated. So that public timeline, which was published by the NAPM, had the SEC concluding the process on January 20, oddly a day when the government was always going to be closed. There's not been any updated public timeline.

John F. Bright - Avondale Partners, LLC, Research Division

Any chance that you happen to know how many bidders, 1, 2, and who they might be?

Lisa A. Hook

No.

John F. Bright - Avondale Partners, LLC, Research Division

Okay. Paul, a couple of questions, if I could, on '14 guidance. You talked about 5% to 8% top line growth. Can you still break that out for us in terms of NPAC and non-NPAC growth?

Paul S. Lalljie

Yes, the NPAC portion of that is probably $466 million, $465.6 million or something like that, the remainder of it being the NPAC -- the non-NPAC growth, if you will. I'm going to go one layer deeper for you because I kind of know where you're leading me here. Data Registries, for example, the category of revenues that has the caller ID, the common short codes, the domain name registry, international numbering and Pathfinder, that category of revenue had onetime revenues, if you will. You may recall the revenue for the Statement of Work in our international numbering contract. I think we recognized that in third quarter and fourth quarter of '13. Those things will not repeat themselves in '14. So we're seeing slower growth in that category of revenue, and that category of revenue is the category of revenues that drive the source of data for our other services where our guidance for 2014, expect strong growth year-over-year in Marketing Services, for example. Marketing Services grew 18% in 2013. We expect '14 to be better than that. But we're -- that is offset by the slower growth in Data Registries.

John F. Bright - Avondale Partners, LLC, Research Division

Final question. On your EPS, you have a lower percent growth on the bottom end of your range. Why is that the case on earnings?

Paul S. Lalljie

So a few things. The EPS year-over-year growth number is compared to a 2013 EPS number. The 2013 EPS numbers consist of a 9% reduction in weighted average shares outstanding for the share repurchases. So that number in 2013 is higher. Now remember, our 2014 guidance on EPS does not include the $200 million of share repurchase that we announced today. So to some extent, it's a little bit of apples and oranges. When you include the share repurchase in that, it would probably be normalized. However, it's a dangerous game to be forecasting share repurchases and EPS guidance.

Operator

And we'll now go to Sterling Auty from JPMorgan.

Sterling P. Auty - JP Morgan Chase & Co, Research Division

I'm still not completely clear as to what you needed to cover in the new proposal that was not in the original proposal.

Lisa A. Hook

So I think that there are a number of things. I think that we can all sharpen our pencils on overall value. As I said in my prepared remarks, multiple rounds are always important in complex negotiations. We think that there should be particular attention paid here to transition cost and risk for all members of the industry, as well as a focus on the transition to IP, which is becoming more and more urgent. Any transition would necessarily disrupt that innovation.

Sterling P. Auty - JP Morgan Chase & Co, Research Division

But if you go through multiple rounds, doesn't it become a race to 0 in terms of pricing?

Lisa A. Hook

Not necessarily, no.

Sterling P. Auty - JP Morgan Chase & Co, Research Division

What would be the preventative measure that keeps it from just becoming a price war?

Lisa A. Hook

We think, frankly, that our skill sets are unique. There's nothing like this system anywhere else in the world, anywhere. You can walk out of a store in this country, having switched providers and you all have seen the competition at the consumer level most recently with these buyout offers and walk out with your phone number working. You cannot do that in any other country. The average time to move your phone number from one carrier to another elsewhere is 7 days. So you can choose 7 seconds, which is what the American public is used to, or you can choose 7 days. So there are big differences in terms of having built something, having operated something so perfectly it's like clean water, nobody pays attention to it. That's very different from a theory.

Sterling P. Auty - JP Morgan Chase & Co, Research Division

So in some of the disclosures from the FCC, it looked like there were some communication between yourself and the FCC and, I believe, one of your senior technical people in terms of the presentation and discussion about the transition from circuit switch to an IP network. Are you suggesting that, that was not considered or included in the RFP and that's something that's separate?

Lisa A. Hook

So we are talking to the FCC outside this docket, or outside this proceeding on both general numbering issues and on the PSTN to IP transition, which the FCC is going to be addressing tomorrow at its public meeting. They'll be putting out an IP order. So yes, one of our technical folks has been talking about the technologies involved in the IP transition.

Sterling P. Auty - JP Morgan Chase & Co, Research Division

When you say an IP order, is that another RFP? I'm a little confused.

Lisa A. Hook

No, no, no, I'm so sorry. So they have a rule-making addressing the PSTN to IP migration. That's completely separate from the NPAC renewal process. It's a general policy order addressing a number of issues involved in migrating from PSTN to IP. So for instance, in an all-IP world, how do people get 911 service? What should universal service look like? Those types of issues. We've been talking to the FCC at the technology level about IP networks, seamless interconnection and how that might be achieved in the very near term.

Sterling P. Auty - JP Morgan Chase & Co, Research Division

Got you. And one last one for Paul. I guess I didn't quite understand or hear it. I think in the non-NPAC part of the business, some of the headwinds on revenue growth was in registry services outside of NPAC. What's causing that?

Paul S. Lalljie

So in the new categorization of revenue, which is called Data Registries, we have the caller ID, the common short codes business, domain name registries, international numbering and Pathfinder. The 2 components of that, caller ID, as you know, is normally flat to slightly declining on a year-over-year basis. International numbering is the one that is a little bit more dramatic on a year-over-year basis because of Statement of Works that were included in 2013 and not in '14. And then just general common short codes is not something that we predict very well as an organization. So we've continued to show our level of conservatism there.

Operator

Our next question comes from Will Power from Robert Baird.

William V. Power - Robert W. Baird & Co. Incorporated, Research Division

I'll probably continue on the same path. I guess, Lisa, just so I'm clear, you talked about one of the reasons for trying to submit an additional bid being to address transition costs and the move to IP. I guess I'm not totally clear. Wouldn't that have been part of the initial proposal? Or did something change between when the best offer would've been made, I think, in the September timeframe and October?

Lisa A. Hook

Well, you need to recall that the original RFP was drafted in 2011. While it's finalized in 2012, the drafting of this is now actually fairly stale. So we are concerned that enough attention has not been paid to the focus on IP, the focus on innovation, which has actually come upon us fairly quickly. And then again, when you're used to something operating flawlessly, I think sometimes the difficulty of provisioning service every 7 seconds to thousands of providers is understated.

William V. Power - Robert W. Baird & Co. Incorporated, Research Division

Okay. And then -- I mean, any thoughts as to why October to try submit an additional bid as opposed to later September, November? I mean, is there anything to read into the timing there? And did you try to make any additional bids past October or any other correspondence with the FCC between then and January?

Lisa A. Hook

No. We submitted our first BAFO in September. We figured we'd hear directly after that when the next round was going to be initiated. When we didn't hear within the next week, we decided to go ahead and ask formally. And so we requested another round in October of the NAPM and then requested again in November. But basically that -- kind of where that is, we were then hoping to see what happened with the FCC on the 20th and having not heard anything at all about this and then getting the unsolicited bid back. We're still frankly waiting to hear what's going to happen with another round.

William V. Power - Robert W. Baird & Co. Incorporated, Research Division

Okay. I mean, do you have any sense for just hearing, I guess, at the end of last week as to the timing there? I mean, any other color from the FCC as to why they chose that date to respond?

Lisa A. Hook

The FCC did not respond. I'm sorry, I may be confusing. The NAPM -- we submitted the request for additional -- an additional round or rounds for all bidders, which we can't imagine any bidder objecting to, to the NAPM and then we reconfirmed that request to the NAPM. So we have heard nothing from the FCC at all. The return of our unopened bid came from the NAPM.

William V. Power - Robert W. Baird & Co. Incorporated, Research Division

Right, okay. And just -- I mean, out of curiosity, given the response of the NAPM, what's your perspective as to why the government wouldn't consider accepting additional offers?

Lisa A. Hook

Well, the NAPM is not the government.

William V. Power - Robert W. Baird & Co. Incorporated, Research Division

Or the NAPM, I'm sorry. Other than that, they wouldn't...

Lisa A. Hook

They haven't said that they wouldn't and I would not speculate on what they're reasoning would be one way or the other. Again, we continue to think that this is the way you get the best value, that it's hard to believe that any other bidders in the process would object, if they believe in their bids to another round, to get the best value for the NAPM, for other players in the industry and for the public.

William V. Power - Robert W. Baird & Co. Incorporated, Research Division

Okay. Just -- maybe just following up on an earlier question to Paul, just so I'm clear. I think the difference between the revenue growth and the net income growth, I mean, I guess you addressed the earnings side, there's buyback, which helps there. I mean, I may have missed this, but bottom line is the net income growth in '14, it looks like is forecast to trail the revenue growth. What's the primary driver of that, Paul? Is that just an...

Paul S. Lalljie

That's -- yes, that's a good observation. The adjusted net income number has a lot to do with taxes. The projected tax rate is 37% in '14. In 2013, it's about 36-point-something. And the primary driver of that is R&D tax credits expire, as well as we don't forecast or project additional tax benefits that we may get in the coming year. And in addition to that, we have a little bit increase in depreciation and amortization, especially amortization of acquired intangibles. As you know, we acquired Aggregate Knowledge earlier in the year and then the depreciation associated with the CapEx spend.

Operator

And we'll now go to Paul Thomas with Goldman Sachs.

Paul B. Thomas - Goldman Sachs Group Inc., Research Division

Lisa, you mentioned that other bidders wouldn't object to another round of bids. To your knowledge, have -- has anybody else requested it or has it only been you guys?

Lisa A. Hook

I don't know and I suspect that we wouldn't know. And let me clarify, I didn't say other bidders wouldn't object. I said I can't imagine other bidders objecting. I mean, when we're in negotiation, if there's another round, we always welcome the ability and the opportunity to prove that we have the outstanding bid. I would imagine that everyone would feel the same way here.

Paul B. Thomas - Goldman Sachs Group Inc., Research Division

Okay. And then just to be clear on the request that you'd sent to NAPM, that's the one that you had returned, there was no specific reason given why the revised bid was sent back?

Lisa A. Hook

No. So we submitted 2 things in October. We said there should be another round of bids for everyone involved in the process and we stapled an unsolicited bid to that, unopened. The NAPM returned the bid unopened. They did not address our request for another round of bids.

Paul B. Thomas - Goldman Sachs Group Inc., Research Division

Okay. Then I guess, with regards to the timeline also, you don't have any knowledge if a vendor recommendation was made in November?

Lisa A. Hook

No.

Operator

And we'll now move to Jonathan Ho from William Blair.

Jonathan Ho - William Blair & Company L.L.C., Research Division

I don't want to beat this to death either, but could you clarify whether the IP and systems that are related to the NPAC outside of number portability conveys with the contract or whether that belongs to the NPAC? So I mean, you guys have historically talked about 90% of the transactions being non-number portability related. And does that belong to you guys? Does that belong to the NPAC? Can you just maybe clarify that point?

Lisa A. Hook

So the IP, that is the software that is related to the NPAC, the number portability belongs to the NAPM. I would submit to you, however, and I'm sure many of you on the call have run services, that the software is very flat without the people who have the experience in running it and that's something that we've developed over the past 18 years and of which we're very proud. Those people and that experience are the folks who have been there designing and helping us build other analytic services, other complex databases, so they're part of the future of our company.

Jonathan Ho - William Blair & Company L.L.C., Research Division

Okay. And when you said that the FCC did not address another round of bidding, does that still sort of leave open the possibility that they could have another round? Is there any sort of determination on whether there would be regional bids or whether this would just be a sole provider?

Lisa A. Hook

So let me reiterate again. We did not ask the FCC.

Jonathan Ho - William Blair & Company L.L.C., Research Division

I'm sorry, the NAPM, right.

Lisa A. Hook

Okay, I just -- I want to be very precise. We asked the NAPM, which is a group of 10 companies, to negotiate this contract. We did not ask the FCC. We asked the NAPM and we have not -- the subsequent question on the process has not been answered.

Operator

That does conclude our question-and-answer session. I will now turn the call over to Ms. Lisa Hook for closing remarks.

Lisa A. Hook

Thank you all so much for joining us on today's call. As we've said, our top priority for this year will be to continue to advance our bid for successful NPAC contract renewal. We will also continue to strengthen the capabilities, infrastructure and corporate culture to become a leading provider of real-time information services and analytics. We look forward to updating you on our progress, and I thank you.

Operator

This concludes today's presentation. Thank you for your participation.

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