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Executives

Marty Cohen - Investor Relations

Zeevi Bregman - President and Chief Executive Officer

Dafna Gruber - Chief Financial Officer

Analysts

Daniel Ives - FBR

Jonathan Ho - William Blair & Company

Greg McDowell - JMP Securities

David Kaplan - Barclays

Shyam Patil – Wedbush Securities

Jeffrey Kessler - Imperial Capital

Nice Systems Ltd (NICE) Q4 2013 Results Earnings Call February 5, 2014 8:30 AM ET

Operator

Good day ladies and gentlemen, and welcome to the NICE Systems Conference Call discussing Fourth Quarter and Full 2013 results, and thank you all for holding. All participants are at present in a listen-only mode. And following management's formal presentation instructions will be given for the question-and-answer session. As a reminder this conference is being recorded February 5, 2014.

I would now like to hand this call over to Mr. Marty Cohen, VP Investor Relations at NICE. Please go ahead sir.

Marty Cohen

Thank you, operator. With me on the call today are Zeevi Bregman, President and Chief Executive Officer, Dafna Gruber, Chief Financial Officer and Eran Liron, Executive Vice President, Corporate Development.

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 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 Risks Factors in Item 3 of the company's 2012 annual report, on Form 20-F as filed with the Securities and Exchange Commission on March 25, 2013.

During today's call we will present a more detailed discussion of fourth quarter and full year 2013 results and the company's guidance for the first quarter and full year 2014. 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 differs 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.

And now I will now turn the call over to Zeevi.

Zeevi Bregman

Thank you, Marty and welcome everyone to our fourth quarter and full year 2013 earnings call. We are pleased with the very strong finish to 2013 in both booking and revenues which was driven by continued market demand and the strong performance of our analytics-based advanced applications. We reported revenue growth in all business segments and geographies for both the fourth quarter and the full year.

In our financial crime and compliance segment we reported 55% revenue growth for the fourth quarter and nearly 30% revenue growth for the full year. Our booking surpassed the $1 billion amount for the first time which represented a double-digit growth compared to 2012 and resulted in our book-to-bill ratio being greater than one for the year.

Non-GAAP total revenues for the fourth quarter were a record $271 million, up 13% compared to the fourth quarter of 2012. Full year non-GAAP revenue increased 7% to $951 million. Non-GAAP EPS for Q4 was $0.75 and full year non-GAAP EPS is $2.58.

In 2013 we continued to further execute on our strategy. We’re making significant advancement in technology to help provide our customers with the capabilities to better operationalize big data and transform their businesses. With our analytics based advanced application, real-time solutions, cross channel analytics and our solutions that support the full life cycle of an event, we are giving our customers the tool they need to help them become more operational efficient, customer-focused, performance and revenue driven, security aware and compliant.

In fact, compliance continues to be a major driver for our business and we expect this to continue into 2014 as well. Helping to support these business transformations are large integrated solution sales. Booking of advanced applications which are the foundation of these large transformative deals grew more than 20% for both the fourth quarter and the full year. In addition advanced applications represented over 50% of new business for the fourth quarter and close to 50% for the full year.

Our customers are also increasingly looking to the cloud to help them meet their business needs. And most of our solutions are available in the cloud. During 2013 we had an almost 50% increase in the annual contract value of our cloud orders. We expect to continue to see strong goals in our cloud business in 2014.

In our customer interaction business we reported a solid quarter. In 2013 we focused on the launch of our customer engagement analytic platform, which is a major milestone in the evolution of our business offering.

This internally developed cloud platform enabled our customers to combine interaction, transaction analytics across multiple channels. For the first time it enables our customers to have a complete view of the entire customer journey across touch points and to connect in the real time multiple touch points of interaction such as connecting the web and the mobile channels to the contact center.

In Q4 we signed an eight digit deal with a major telecommunication company that will be deploying our call volume optimization solution on this platform to help the better understand why customers are calling, the task at which customers arrived at making those calls and to prevent the next call, all to help reduce call volume. This solution will be integrated with our performance management solution to drive continuous improvement by thousands of employees.

We plan to continue to launch additional solutions for our customer engagement analytics platform, with new analytics and reporting capabilities to further enhance the tools to analyze the customer journey.

Earlier I mentioned that compliance continue to be a major driver for our business. Our trading floor segment had a record year in 2013 and the main reason was that banks continued to invest in compliance due to regulatory pressure. In Q4 alone we closed key wins with top tier banks for our proactive compliance suite for trading floor. In addition we’re seeing demand for our proactive compliance solutions for consumer protection. For example in APAC we won few deals with leading global insurance companies to help them comply with these regulations.

Other 2013 innovation in the customer interaction business include our workforce optimization suite for the cloud giving our customers the choice to more quickly deploy our customer interaction solutions in the cloud for a lower total cost of ownership.

We’re also seeing momentum for our real time authentication and contact center fraud prevention solutions which use voice biometrics and our patent [vetting] passive enrollment technologies. In Q4 we closed additional orders for these solutions. One such deal was with a bank in EMEA, which bought the solution to improve security in the contact center, reduce average call time and improve customer experience. A major driver for the win was our patent pending passive enrollment technology which we believe provides us a significant competitive advantage.

In our financial crime and compliance business we had a very strong finish to the year, in both bookings and revenues. We reported revenue growth of 55% for the fourth quarter and 28% for the full year. We saw strength across the board in all solutions and regions.

The strong performance we witnessed was the result of strong market demand around our compliance related products and floor platforms, new generations of our software being made available to our existing clients, our unique market position and great execution across the business.

Significant enforcement actions in the growing and expanding market continue to be the key driver for this business, and industrial events are a driving force as well. Just this past quarter there were headlines about large consumer credit and debit card data breaches at major retailers drawing more attention to potential fraud losses.

These types of headlines continue to increase demand and drive sales of our fraud solutions. Also driving sales are the newest versions of our financial crime solutions and platforms which are prompting customers to upgrade their existing products and enhance the coverage and functionality they get from us.

We added functionalities for both bank fraud coverage and for futures and options trading surveillance analytics. This resulted in an upgrade cycle that drove some Q4 deals and we expect more deals like these in the future.

During 2013 a major U.S. bank transformed its financial risk platform around our solutions. It included many of our AML and compliance modules. This resulted in our largest business ever from a single customer. In fact including this deal we had three customers generating eight digit deal throughout 2013.

In our security business revenue were up 4% for the year. We had strong record bookings in the fourth quarter and the full year and we expect this to translate into revenues in 2014. In this year we signed a strategic deal with one of the largest bank in Latin America. It was a 7 digit deal for our situation management solution as the bank is looking to improve its security operations efficiencies by reducing fraud and of course optimizing response time improving the effective work time of the operators and optimizing branch security and maintenance routine operations.

Mobile video is an area that is gaining traction. We have developed a mobile video solution and won our first bid in Q4, the customer is a municipality that will be using the mobile video solution for its new bus fleet. The solution will significantly enhance the customer's investigative efficiency while dramatically offloading this video recording wirelessly and integrating them in various added video and audio sources to create a unified event timeline.

And lastly in surveillance we are pleased to be helping secure the operations of several major events in 2014 including the Winter Olympics in Sochi and Superball. For the Superball several of our security solutions and analytics tools were used by New Jersey transit to help protect and secure the safety of the events.

In intelligence we had a record quarter for bookings. We closed a few eight digit deal in the quarter, two of them with two separate agencies for a government in Latin America. Both of these deals were competitive replacements. For these customers we are providing an end-to-end solution for local interception that includes a collection analytics and application layer. The solution will cover all telephony and IP networks.

In summary 2013 was another yield of success marked by increasing operation and financial goals. The innovation resulted in many new products and technologies that have already achieved the initial success in the market. Financially we reported further growth in revenues and bookings driven by strong growth in our analytics base of those applications.

Our double-digit growth in bookings led us to cross the $1 billion market booking for the first time in our history. I am very pleased we were able to reach this significant milestone. And I would like to thank the Nice team for their hard work and effort in helping us to get there.

2014 is expected to be another year of profitable growth driven by strong market demand for our products and technologies, enhance the backlog and sales pipeline. I will now turn the call over to Dafna Gruber, our CFO. Dafna?

Dafna Gruber

Thank you, Zeevi. I am pleased to provide you with more data on our financial results and business performance for the fourth quarter and full year 2013, as-well-as our outlook for 2014.

Revenues for the fourth quarter were $271 million, up 13% from $240 million in Q4 last year. Revenues for the full year 2013 increased 7% to $951 million. Fourth quarter revenues were up 18% sequentially. This is in-line with the shift in our business model in which our business has become more weighted towards the second half of the year and even more so in the fourth quarter. We expect this seasonality to continue.

Customer interactions revenues were $169 million in the quarter up 7% from Q4, 2012 bringing full year revenues to $594 million, up 3% from 2012.

Financial crime and compliance ended the year very strong with Q4, 2013 revenues of $55 million, up 55% from Q4, 2012. And for the year revenues were $163 million, an increase of 28% from $127 million in 2012.

Security revenues were $47 million similar to the fourth quarter of last year. Full year security revenues were $194 million, up 4% from 2012. For the full year 2013 customer interaction accounted for 63% of total revenues, financial crime and compliance 17% and security 20%.

Moving to the regional breakdown, revenues in the Americas in Q4 increased 12% from the fourth quarter of last year to $175 million. Full year Americas revenues increased 7% to $598 million. Revenues in Europe, Middle East and Africa increased 22% to $64 million compared to the fourth quarter of last year.

Full year EMEA region revenues increased 5% to $224 million. Revenues from Asia-Pacific region increased 6% from the fourth quarter of last year to $32 million. And full year APAC revenues increased 8% to $129 million.

For full year 2013 the Americas accounted for 63% of total revenues, EMEA 24% and APAC 13%. Product revenue accounted for 43% of total revenues in Q4 and 40% for the full year. Maintenance revenue accounted for 34% in Q4 and 38% for the full year, up from 36% for the full year 2012. Professional services, including SaaS and hosting, accounted for the remaining 23% of revenues in the quarter and 22% for the year.

Gross margin in Q4 was 66.5% compared to 67.7% in Q4 last year and for the full year gross margin was 66.5% slightly higher than in 2012 and in-line with our model. Operating margin for the fourth quarter reached 19.8% of revenue and 19.3% for the full year. We expect to continue to gradually improve our operating margin as we expand our business.

Income tax paid for the year represented 15% of pretax earning -- of pretax income sorry. For 2014 and thereafter we expect to be impacted by a major change in the tax legislation that was recently adopted in Israel. Beginning in January 2014 Israeli taxes increased for the rate of 12.5% to a rate of 16% on our business. We therefore expect that our effective tax rate going forward will be in the range of 18% to 19%.

Earnings per share were $0.75 in Q4 compared to $0.70 in Q4 2012. For the full year, EPS was $2.58 compared to $2.48 last year. Cash flow from operations was $47 million in the fourth quarter and $155 million for the full year, excluding a one-time tax payment of $31 million reported in Q3 for the release of trapped profit and the settlement of multi-year tax audit. This is up 15% from $135 million in cash from operation in 2012.

Our total cash and financial investment were approximately $443 million at the end of December 2013. Headcount at the end of December totaled 3,584 people compared to 3,399 people at the end of December 2012.

During the fourth quarter we bought back almost a million shares for a total considerations of close to $40 million as part of our share repurchase plan. During January 2014, we purchased an additional 335,000 shares and almost completed the share repurchase program announced last year. Our Board has just approved a new buyback program to buy up to $100 million which we will begin executing in Q1 and plan to continue throughout the rest of the year.

In line with our dividend plan announced last year, Nice's Board of Directors approved a dividend payment of $0.16 per share. The record date is February 18 and the payment date is March 4, 2014.

Going forward we expect first quarter 2014 total revenues to be in the range of $230 million to $240 million and fully diluted earnings per share to be in the range of $0.58 to $0.63. We expect total revenues for the full year 2014 to be in a range of $1,010 million to $1,035 million and fully diluted earnings per share to be in the range of $2.73 to $2.85. This guidance already takes into account the increase in effective tax rate I described earlier with an impact on earnings of approximately $0.10 per share. As for buyback the guidance takes into account the share repurchase until today.

That concludes my comments. I would now like to turn the call back to Zeevi, Zeevi?

Zeevi Bregman

Thank you, Dafna. As announced yesterday I decided to retire for my position as President and CEO. I have been with Nice for close to five years and have enjoyed opportunities and successes that I encountered during this time.

Nice is industry leader with strong market position, solid financial and great people and technology. I am very pleased with the nomination of Barak Eilam as my successor. Working with Barak for many years I witnessed firsthand his talent, skill and many achievements and I am confident that Barak together with Nice's strong management team will continue to lead Nice on the path for future growth and success.

I will now turn the call over to operator for questions. Operator?

Question-and-Answer Session

Operator

Thank you. Ladies and gentlemen, your question-and-answer session will now begin. (Operator Instructions). And our first question comes from the line of Daniel Ives from FBR. Please proceed.

Daniel Ives - FBR

Yes, thanks and Zeevi you have been working together. Could you talk about acquisitions especially with the freed-up cash and just building cash in the balance sheet. I mean is there a more immediate urgency or maybe a change in terms of doing deals in 2014 versus ' 13 given where the company is?

Zeevi Bregman

First, thanks for your initial note. Secondly we are continuously looking at the right opportunities for acquisition to complement our offering and enhance our strategy. We have to look for deals that we believe are the right deals for us. I don't think that we expect a change in this strategy going forward. So I believe that the new management will continue to pursue acquisition down the road.

Daniel Ives - FBR

Could you just talk, I mean obviously Q4 strong quarter and 2013 some ups, some down but seems like you have momentum going to 2014. Does it compare, going into 2014 versus going in 2013 just in terms of like opportunities, pipeline just feel internally, I know you just had a kick off meeting, may be just from a high level of that, I'd appreciated, thanks.

Zeevi Bregman

We did have a great kick off meeting and the atmosphere and the energy and the level of engagement, level of presentation, the content, the solution was extremely high and positive with high energy. When we look at the pipeline our pipeline today is larger than the pipeline at the last year. And we are still confident as shown in the guidance that the next year is going to be another year of growth in the profits.

Daniel Ives - FBR

Great, thanks.

Marty Cohen

Operator, next question?

Operator

Okay. Thank you. And our next question comes from the line of Jonathan Ho from William Blair. Please go head.

Jonathan Ho - William Blair & Company

Good morning and congratulations on the strong results. Just wanted to start off a little bit with your cloud business, you guys talked about some pretty strong growth there, just trying to understand, number one if you could give us may be a sense of how large that business is today? And then number two does this start to impact sort of the revenue growth rates as people you elect a SaaS model versus the traditional license model?

Zeevi Bregman

Thank you. In terms of SaaS we have said it's below 10% and this where the SaaS business is indeed its growing fast. In terms of revenue obviously the transformation of the business to more of a SaaS model has an impact, a short-term impact on revenue. And we believe long-term the company will benefit from this position and therefore we continue to pursue it aggressively.

Jonathan Ho - William Blair & Company

Got it and then just in terms of the financial crime and compliance business I mean obviously very strong growth for the quarter, also for the year, how should we be thinking about the growth rate going into 2014. I know you guys don't necessarily provide segment level guidance but would it be sort of similar? I mean would you expect a significant deceleration or would it sustain at sort of the current levels?

Zeevi Bregman

We current see a momentum in the business and we expect the business to continue to grow. We believe that the growth rate will be more, actually we are not believing, we are focusing that the growth rate will be more moderate than this year but we still are expecting very strong growth rate in this business.

Jonathan Ho - William Blair & Company

Got it and then just lastly on your security business I mean this seems to be one that was a little bit slower during the quarter. Can you just give us a sense of what happened there, whether you're expecting it to pick that up or whether this is just sort of timing of large deals?

Zeevi Bregman

I think we said it but the quarter was flat on a revenue level year-over-year but it was a very strong booking quarter. And the book-to-bill for the quarter and for the year was larger than one. And we expect therefore we are expecting to translate this booking into revenues next year and we're now expecting it to grow.

Jonathan Ho - William Blair & Company

Great, thank you.

Operator

Okay. Thank you. Our next question comes from the line of Greg McDowell from JMP Securities. Please proceed.

Greg McDowell - JMP Securities

Great, thank you so much. Great quarter and Zeevi congratulations on your retirement. I only have one question for you Zeevi as you pass the CEO title and reflect back on your time as CEO, could you just talk a little bit about how the business is evolving and as you give advice to Barak looking ahead, what do you think Barak's biggest opportunities and biggest challenges are as he takes the helm? Thank you.

Zeevi Bregman

First, thank you for the initial note. Secondly, when it comes to Nice evolution over the year, past years financially we expanded the business in all parameters and by the numbers, you have the numbers but in fairly significant growth over the past four years and quantitatively and we increased -- we launched many new products and introduced many new solutions to the market. And we've been transforming the business more into integrated solutions, and developed a lot our analytics base, integrated solution business and create the scalability within the organization for future growth.

When it comes to the future I believe that Barak will share his strategy in three months and I am still, by the way didn't -- I am still the -- we have a transition period which is going to be lengthy and this is right now the focus that we have is ensuring a smooth transition. And I am still, I will be -- the transition will take up to three months and right now the focus is on the ensuring the transition.

In terms of the focus I believe that we have tremendous opportunities within our market. In terms of the value propositions that we have it is compliance, it is customer experience, it is security and safety and it is driving business results. Demand is not going to disappear, on contrary it's going to increase, in securities probably unfortunately. And so we have plenty of opportunities within the market.

When it comes to the technology product and installed base I think that we have strong foundation to capture on. And I believe that these are the major opportunities that are presented for us. In terms of challenges we are obviously -- we are in the technology business and we have to be ahead of everything all the time, which I am sure and confident that Barak will continue to lead the company in this direction and ensure that the company will continue to be ahead of the market and competition.

Greg McDowell - JMP Securities

Great. Thank you very much.

Operator

Okay. Thank you. And our next question comes from the line of David Kaplan from Barclays. Please proceed.

David Kaplan - Barclays

Hi, everybody. Good afternoon. And congratulations Zeevi and good luck on the future, I know as you said it's a lengthy process, but nonetheless. Dafna you talked a little bit on the call about the seasonality and you see that continuing.

When I look at the guidance that you guys gave for 2014, the full year guidance was little bit ahead of where consensus was, ahead of these results but yes the first quarter it seems to be on the weaker side. So can you talk a little bit about what's changing or what has occurred that the seasonality has become so much more pronounced?

Dafna Gruber

Yes, absolutely we've been talking and experiencing seasonality over a certain period of time. So and I think this is really new here. I think if you look at 2013 this is where we experienced a significant impact of that where the first three quarters of the year were relatively flat in terms of revenue, and then we had a major jump in revenues in the fourth quarter.

This is a clear result of the transformation in our business to sell much more applications, analytic-base applications, we are selling much larger deals that combine a few technologies together. These deals are driven by not only by compliance and regulation but also because of the need to be more efficient or to deal with the aspect of the customers [inaudible]. While this is very interesting and includes a lot and we have also the new technologies to support it in terms of the sales forces within the organization these are usually longer sales cycle, and hence there’s is compelling reason at the end of the year to conclude it.

So this is a major reason why we’re seeing more and more business push to the end of the year. I must say that I know that there were lots of concerns last year regarding our ability to prove that this assumption is correct and I think with the result of Q4 we definitely show that this is a clear trend.

Another element is the fact that the more complicated the deals are it takes longer time to even when we get the deal, some of the deals take much longer to conclude in terms of deploy and get the acceptance and recognize the revenues and this is also the reason why we see a certain shift in the business.

So overall I think it’s a clear plan. We continue to see this year as well also based in our budget and plan and to your comments regarding the first quarter we’re showing in the guidance we’re giving nice growth in Q1, 2014 compared to the first quarter of 2013 and we’re definitely focusing on growth. I believe the growth year-over-year would expand as we move forward in 2014.

David Kaplan - Barclays

Okay so when you talk about -- so again just to be clear so do you expect 2014 in terms of the first three quarters being relatively flat and the fourth quarter being a big quarter, that to occur again in 2014, that’s the first part of question.

The second part of question is the mix of sales because I think where you really saw the big bump came actually from the product segment, not so much from the services segment. So is there also renewal of licenses and renewal fees that are taking place in that fourth quarter and are you kind of grouping those altogether in that quarter?

Dafna Gruber

No, no, actually the service and maintenance part will be stable, they grow over time in a quite I would say a predictable way. The big swing is on the product and as I said the more we close deals towards the end of the year we see an increase in the product line. And we’re definitely forecasting the same phenomena for 2014.

Regarding the growth throughout the year what I said is that last year it was kind of flat. I think that this year we will show a gradual or moderate improvement throughout the year with a big portion of the revenues of 2014 to be generated in the fourth quarter.

David Kaplan - Barclays

Great, thanks very much.

Operator

Okay, thank you. And our next question comes from the line of Shyam Patil from Wedbush Securities. Please proceed.

Shyam Patil – Wedbush Securities

Thank you. Congrats again, Zeevi on your accomplishments and best of luck with your retirement. First question Zeevi you talked about the customer engagement analytics product in your prepared remarks. How should we think about the ramp for that product? I guess first in terms of bookings and then revenue, when do you think it becomes a 5% to 10% contributor to either revenue or booking?

Zeevi Bregman

When we look at the customer engagement analytic product, it’s a cloud-based platform. So therefore the ramp up in terms of revenue is going to be slower than the ramp up in terms of the booking. When you look at booking, we’re seeing with secured we started to secure business and we’re seeing both with secured and we are seeing by plan of a fairly large deal. It provides the local value for the customer.

In terms of the pickup of the product and we are in the initial stage of the launch and the deployment and it will take time to get to 10% of the revenue and it will take some time. Once we get more experienced with the product and its deployment we will be able to provide more details.

In terms of the market opportunity we believe that the market opportunity to this type of solutions is very large and the adoption depends on mostly on our execution.

Shyam Patil – Wedbush Securities

And then in terms of the bookings growth I know you don't guide to a bookings number but how are you guys thinking about bookings growth for 2014 versus what you guys saw organically in 2013?

Zeevi Bregman

So we are not guiding on booking growth and as we move more to the cloud also booking is a more tricky element and when we look at the -- as we said between 2012 to 2013 we had a double-digit growth in the bookings.

Shyam Patil – Wedbush Securities

Is it reasonable to expect similar type of performance this year you think?

Zeevi Bregman

I think, yes.

Shyam Patil – Wedbush Securities

Okay, and just my last question is on the tax rate, I know it's a moving target but is the rate you are guiding for Q4 ' 14 the right way to think about it kind of further out as well?

Dafna Gruber

Yeah, so 18% to 19% should be used as the range going forward.

Shyam Patil – Wedbush Securities

Thank you.

Operator

Okay. Thank you. And our next question comes from the line of Jeffrey Kessler from Imperial Capital. Please proceed,

Jeffrey Kessler - Imperial Capital

Thank you and again it was great working with you Zeevi. I have a couple of questions here. First with regard to -- besides the revenue model what are the cost factors coming to play as you move from a quality standard bookings model to a SaaS model, what is the -- what costs come in at the front end and what lesser costs obviously we are expecting on the back end, how do you characterize that?

Zeevi Bregman

We already, if you are following our announcement, we already announced that most of our services are also on the cloud, are available on the cloud and we, I think last quarter announced the opening of our hosting center in EMEA, a world class hosting center in EMEA. And when we are having our hosting center and most of the upfront costs on a CapEx basis are coming with the opening of the center and then the fixed cost are depreciated over time.

When it comes to -- and then there is the fair deal and fair business increment and this [inaudible] in terms of the cost and the amount of services that we are providing there are differences between different products and between different customers and size of customers. So it's difficult at that point to give an exact model.

Jeffrey Kessler - Imperial Capital

Okay, with regard to your excellence, the excellence numbers coming out of the financial crime and compliance area, obviously this area is attracting a lot of -- this is a very high profile area, attracting a lot of competition, folks like Navigate and K2 and Kroll and a number of these firms. What do you believe that you are tactical as well as your technological advantage is and continuing with these other firms that either have begun to move into it or have already been in it for some time?

Zeevi Bregman

So firstly on the financial crime and compliance business we are the world leaders in providing these services. In compliance it serves well to our benefit because people would really like to take a proven technology and de-risk and therefore we are seeing part of the momentum is coming from us being already the market leader in this field.

When it comes to what is unique about our capabilities in solution is the fact that we are providing a point solution and the sophisticated analytics solution that will not on the one end can cater and sell for point solution but on the other end can also expand that, they expand themselves the entire enterprise, different development, different cases and different modules and the fact that we are not -- this is not only services offering it's based on a strong product provide us a lower total cost of ownership and a lower time to deploy when new regulation is coming.

And this is a key factor because when the new regulation is coming people are usually late to deploy and then they have to deploy things in a fairly fast time and our products approach with be a customization tools and the policy manager on top of it enable us to provide the solutions with an appealing time to market.

So the combination of being the market leader, the technology and the product approach altogether are making us a natural choice for the larger leading financial institutes for this type of technology.

Jeffrey Kessler - Imperial Capital

Great, thank you and again good luck.

Operator

Okay. Thank you.

Zeevi Bregman

Thank you.

Operator

So ladies and gentlemen I would like to hand back to Zeevi for any further remarks.

Zeevi Bregman

So thank you everyone for joining us today and have a nice day.

Operator

Ladies and gentlemen this concludes the conference call for today. Thank you for joining us and you may now all disconnect. Thank you.

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