JoAnn Horne - IR, Market Street Partners
John Amster - CEO
Ned Segal - CFO
Danielle Coker - Stephens
Jeff Meuler - Robert W. Baird & Co
Matthew Galinko - Sidoti & Company
RPX Corporation (RPXC) Q4 2013 Earnings Conference Call February 11, 2014 5:00 PM ET
Good day, ladies and gentlemen, and thank you for standing by. Welcome to the RPX Corporation's Fourth Quarter 2013 Earnings Conference Call. During today's presentation, all parties will be in a listen only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions) This conference is being record today Tuesday, February 11, 2014.
I would now like to turn the conference over to our host Ms. JoAnn Horne, Investor Relations. Please go ahead, ma'am.
Thank you, operator, and good afternoon everyone. And welcome to RPX Corporation fourth quarter 2013 financial results conference call. Joining the call today are John Amster, Chief Executive Officer, and Ned Segal, Chief Financial Officer. The agenda for today's call include commentary to John, followed by discussion of the financial results from Ned and then Q&A.
This afternoon RPX issued a press release announcing its fourth quarter 2013 financial results which is available on the company website at www.rpxcorp.com. This call is being broadcast over the internet and the audio of the call will be available on the Investor Relations page the company's website. Also, please note that there are slides corresponding to the information on today's call available on the IR website.
I'd like to remind everyone that the conference call will contain forward-looking statements that are not historical facts but are rather based on the company's current expectations and belief. The forward-looking statements include, but are limited to, expectation regarding the growth of the company's business and the development acceptance of the products and initiatives. RPX's actual results may defer materially from those forward-looking statements. Please refer to the company's SEC filings for detailed information.
In addition, non-GAAP financial measures may be discussed during the call. Reconciliations to the most directly comparable GAAP financial measures are included in the table attached to the earnings release on the website.
Now I'll turn the call over to John.
Thanks, JoAnn, and good afternoon everyone. As usual, I'm going to give a brief overview of the business before handing it to Ned for details on the quarter and 2013. RPX finished 2013 with a solid fourth quarter, we performed well against expectations for the quarter and the year, made good progress in all areas of the business, and had a number of developments that position us well for the future.
In short, and as I never get tired of saying, our collaborative market based approaches to reducing the cost of patent risk are working and we are proving that the RPX platform can be leveraged by both our clients and patent owners to create more efficient patent market.
In Q4, revenues were $60.3 million, up 17% from the same period a year ago. Non-GAAP net income was $9.7 million or $0.18 per pro forma diluted share. Revenues for the full year were $237.5 million. Non-GAAP net income was $52.7 million or $0.98 per pro forma diluted share.
On the acquisition front, RPX remained one of the most active buyers in the patent market. We completed 19 transactions in the fourth quarter and our growth acquisition spend was $41.1 million. For the year, we did 47 deals and our growth acquisition spend was around $132 million. We have now done nearly 170 patent acquisitions since starting the company investing more than $500 million of our capital on a net basis and over $750 million on a gross basis.
In Q4, we added eight net new members including two net new insurance clients to end the year with 168 total members in the RPX network, up from 140 a year ago. This includes 25 insurance clients, up from 6 at the end of 2012. Our renewal rate in the quarter and for the full year remained above 90%. So the metrics of the business remains strong and we are pleased. Beyond the numbers there are a couple of other developments that I want to quickly call out.
To start with, we had our first client renewal above the cap in our rate card. We alluded to this effort at our investor day last year. We believed early in RPX's development that it we could effectively quantify the cost savings we deliver for each dollar of membership that many of our larger clients would be willing to pay more than their contractual rate.
As I have mentioned in the past, there has been consistent evidence of this willingness to pay more. First, in the form of syndicated acquisitions, as seen in the size of our gross spend, then in the form of transaction fees and most recently as payments for other new initiatives that we developed. So seeing that clients recognize the value we can provide with additional capital deployed I'm feeling confident about how our track record could quantify the cost savings RPX delivers.
We began conversations with several of our larger clients to establish higher membership fees that more clearly reflect all of the value they get from membership. It is hard to predict if or when other clients will follow suit but based on our current level of dialog we are optimistic that this first above rate card deal was no fluke.
Another piece of client news from Q4 is our signing of Wells Fargo into the RPX network, our second member that is a large financial services company. This has played out pretty much as we anticipated. We entered a new vertical with a large anchor tenant and then saw increasing penetration in the space around 12 to 18 months later. We are pleased that we got another major player over the finish line in that timeframe and we are really excited to deliver for them.
There are a couple of other areas of the business that also illustrate our operating progress. First in our insurance business. I have talked to some length in the past about our crawl, walk, run approach. 2013 was the transition from crawl to walk, and we achieved internal and external validation, a key element of the offering that we could price insurance in such a way that it could be profitable and that the data and actuarial models could conservatively predict frequency and severity of patent risk.
These two attributes alone are entirely revolutionary in the patent market and no other provider has ever been able to combine them and deliver a policy that works; we have. Perhaps the most important validation we have seen is the clear synergy between our core business and the insurance product. That synergy and the success it has engendered has attracted attention from major industry players and this is enabling us to improve the offering. Specifically, we expect that we will soon be able to sell an A rated product as opposed to the current policies issued by our unrated risk retention group.
A ratings are the norm for mainstream insurance offerings. For RPX Insurance to address the largest possible audience and to offer a product that is as widely accepted as D&O or cyber security policies, we believe we need to offer policies that carry an A rating. Obviously, this would be a very positive step for our insurance product and discussions with several providers are well underway. We hope to have a more definitive announcement of our plans in the first half of the year.
We talked about how insurance is a natural and complementary extension of our core defensive acquisition activities and both activities exemplify our core value proposition of limiting unnecessary patent litigation and reducing the legal cost associated with patents. Importantly, we believe being an insurer and in effect walking in the shoes of our clients reinforces our position as a trusted provider to our member network. That understanding is the driving force behind some of the new services we are rolling out.
For example, there are significant wasted legal expenses in the patent market caused by multiple companies duplicating the same activity to do things like challenge the validity of patents. To address this market inefficiency, we have become more active in our efforts to provide a single widely leveraged solution to improve patent quality and increased transparency for our network.
In Q4, we filed our first Inter Partes Review or IPRs, a petition with the PTO to challenge the validity of a patent. We have been and will continue to attract MPE litigation and where we see justification we may file IPRs. We will continue to do this in our discretion as an independent third party where we think we can demonstrate value to our client network in the same way that we demonstrate value after we complete a patent acquisition.
A similar new initiative is our prior art pilot program which we will launch in March. In this program, we will conduct a prior art search for most new MPE campaigns targeted at our members over the next several months. Our goal here two-fold. One, we want to save our clients' money because companies almost always conduct a prior art search when hit with a litigation we can save each of them that cost. The second goal is to demonstrate the power of a centralized platform for basic legal activities associated with the [searching] [ph] campaigns. By consolidating the prior art function and making a single search available to all the members of our network who need it RPX can eliminate this duplicative cost.
For the IPR and prior art initiatives we expect to drive value in several ways. We believe that many clients and prospects will attribute a quantifiable cost saving that will drive prospect to sign and existing clients to renew. We also think that these initiatives will support our effort to get clients to pay above the rate card.
A third initiative is to make parts of our client portal available to the public. One section of the portal would be an MPE litigation search tool. This is a starting point for any company targeted in a monetization campaign and offering a portion of our proprietary data at no cost to the public reinforces our leadership in the space, and like our other initiatives it will help lower legal costs. We will share more about the portal as we come out of beta and release to the public in the second quarter.
These initiatives around patent quality and transparency are management's vision for a broad-based patent clearing house. RPX can now provide in-depth information on litigations, MPEs and patent ownership and assignments. Add to this our proprietary statistics on cost which we glean from running the MPE cost study and from being responsible for nearly 20% of our client dismissals and our extensive underwriting activity and you have the data foundation for a more transparent market.
You've all heard me talk about how that kind of open centralized information resource can and should become a kind of multiple listing service for patents. There is no reason why the patent market can't be just as efficient and rational as the market for residential real estate. And it isn't just operating companies that are ready for this of standard need to prevail . Policy makers in Washington and state capitals are too. You all know about the push for patent reform in Congress and there should be no surprise to know that RPX has engaged and that many others here at the company have been talking with lawmakers and regulators.
Our position on all this by the way hasn't changed. We continue to support any initiatives that increase patent quality and reduce cost for our clients. As part of our active involvement, we have been providing law makers with data and analysis including access to our client portal. The current reform effort is focused largely on litigation reform and transparency and we think our data, infrastructure and tools can help guide the effort to eliminate some of the abusive behavior in the patent market. For example, one of the major issues of concern for federal lawmakers and state attorney general is large scale abusive assertion campaign that target very small entities including mom and pop businesses.
Policy makers and legislators are concerned and have been looking for ways to arm these only small businesses with tools to defend themselves. One idea has been the creation of the website where these mom and pop businesses can get basic information about the MPE and the patent in question and possibly connect with other recipients of the assertion letter. If that sounds a lot like a clearing house to you we couldn’t agree more. So RPX is going to make available a version of our assertion letter management tool in the second quarter.
We expect that this step will be very well received by state governments as well as the PTO and it should dramatically well across for small businesses if they leverage this tool. It's also a pretty compelling illustration of how RPX's platform and resources with minimal incremental investment beyond what we are already doing for our clients can support regulatory efforts to improve the patent procedure.
At the same time, we know about regulatory reform at the national or state level camp and won't make the MPE problem just disappear. So we would use the opportunity while briefing policy makers to explain RPX's market-based approach to reducing MPE costs and how our efforts to make patent risk a reasonable and predictable cost of doing business should be part of any long term solution.
And by the way, that solution is still very much needed and this problem is still very, very large. Consider just a few fourth quarter MPE numbers from our market sectors alone. More than 580 unique companies were named in MPE suits, more than 500 of which are not yet RPX clients. Almost 90 companies were sued by more than once by MPEs during the quarter. Of these more than 40 are not yet RPX clients. More than 225 non-client companies were sued by MPEs for the first time. Again, this problem is not going away.
So that will do it for me. Clearly, there continues to be a tremendous amount of activity at RPX and we're both pleased with our progress and excited about the opportunities ahead. Here's Ned with more detail on the quarter.
Thanks, John. We posted a slide deck on our IR site to illustrate our financial discussion today. As usual, I'm going to focus our discussion on non-GAAP metrics which excludes stock-based compensation and amortization of acquired intangibles. In each case, these items are net of their respective tax effects. A complete reconciliation from non-GAAP metrics to our associated GAAP metrics can be found in our press release and on the slides on our website.
First, let me echo John's satisfaction with our strong Q4 and full year performance. As you know, we gauge our progress on an annual basis and we counsel investors to evaluate RPX the same way. There can be fluctuations in our client additions in various financial metrics on a quarterly basis. So we believe our achievements in the past 12 months demonstrates why we maintain our long term approach.
Starting with the P&L, fourth quarter revenue totaled $60.3 million, a 17% increase over last year's Q4 revenue of $51.6 million. For fiscal 2013 revenue totaled $237.5 million, up 20% compared to $197.7 million from fiscal 2012.
Subscription revenue for the quarter was $57.9 million, up 18% over the year ago period. Subscription revenue for fiscal 2013 totaled $224.7 million, up 21% compared to $185.6 million for fiscal 2012. We added eight net clients to the RPX network this quarter ending Q4 with 158 clients. The composition of our new clients was generally consistent with recent trends. We ended the year with 25 insurances subscribers up from 23 last quarter. We anticipate that at least doubling in 2014.
As expected, fee related revenue contributed $2.4 million to our total in the fourth quarter and $12.8 million to our total revenues in fiscal 2013. We began 2013 expecting fees of $8 million to $10 million and were thrilled to have exceeded $12 million for the second year in a row. As always, timing will be unpredictable but we continue to focus on fee business to deliver value to the network and put high margin revenues on the income statement.
As we move down in the P&L, the non-GAAP cost of revenue, which is primarily the amortization expense from our patent assets, was $32.6 million in Q4 2013 compared to $21.8 million in fourth quarter of 2012. Expressed as a percentage of total revenue, non-GAAP cost of revenue was 54% in Q4 compared to 42% in the year ago period.
As we noted in last quarter's call, there were some very short-lived assets acquired in the second half of the year that moved all the way through the P&L by the end of the year. And in Q4 and for the full year new patents acquired had an average amortization period of 39 months.
Non-GAAP cost of revenue for the full year was $110.5 million as compared to $82.1 million in 2012. As a percentage of revenue, cost of revenue for the full year was 47% compared with 42% in 2012. This number can clearly move around quite a bit based as much or more on amortization periods for assets acquired and the cash we spend in a given period.
As we've often said, we focus primarily on cash expenses which are better reflected in our net acquisition spend. This was up about 9% year-over-year and was 1% higher than anticipated for the full year.
As John noted, we ended the quarter with renewals above 90% as they have been from inception. The hard work we did in 2013 leaves us in a favorable position for the year ahead as well. Like last year at this time, we had about 30 renewal events in the core business ahead of us, but because we successfully executed several early renewals of larger clients in 2013 our renewal book for this year represents fewer dollars on a larger base of business. As was the case last year, the second and third quarters are important renewal periods for us.
On the transaction front, we completed 19 acquisitions of patents assets during the quarter. Our gross patent acquisition spend in Q4 was $41.1 million and our net acquisition spend was $40.4 million. For fiscal 2013, net acquisition spend was $126.5 million, slightly above our guidance, as we took advantage of some attractive opportunities we saw very late in Q4. Remember, our patent spend is a difficult number to predict even on a yearly basis.
We're pleased with the savings we delivered to our network in 2013 on 9% patent spend growth and will continue to be opportunistic on spend in the future.
Our non-GAAP SG&A expenses which excludes stock-based compensation and the amortization of acquired intangibles were $12.3 million in Q4 of 2013 compared to $10.5 million in the year ago period. For fiscal 2013, non-GAAP SG&A expenses which were $44.7 million compared to $41.9 million in fiscal '12.
Our operating expenses which are largely tied to employee costs were below our expectation but we ramped hiring in the second half and we are tracking very qualified high quality candidates. This boosted total head count at the end of Q4 to 137. We will continue to boast for the team with people who can both support and build our network and drive the new initiatives John discussed. We anticipate ending 2014 with between 155 and 160 employees.
Non-GAAP net income for the fourth quarter which excludes stock-based compensation and the amortization of acquired intangibles, in each case net of tax, was $9.7 million or $0.18 per pro forma diluted share. This compares to $12.3 million or $0.24 per pro forma diluted share in the fourth quarter of 2012. Non-GAAP net income for fiscal 2013 was $52.7 million or $0.98 per pro forma diluted share compared to $47.1 million or $0.90 per pro forma diluted share for fiscal 2012.
You will notice our cash prevalence and short term investments balance has risen to more than $290 million including $10.8 million in free cash flow in Q4 and $82.5 million of free cash flow for the full year.
Normalized for a receipt of a large receivable from late 2012 in Q1 of 2013, free cash flow was still almost $49 million for 2013, up from about $8 million in 2012. Due to the timing of acquisitions and payments we won't be guiding to free cash flow but we believe we are clearly at a point where we can run the core business to generate excess cash on an annual basis.
Our deferred revenue balance at the end of the quarter was $137.7 million compared to $104.4 million a year ago and $105.2 million in Q3. As a remainder, our deferred revenue balance does not simply reflect the timing of new client signing. In fact, and usually more significantly, it's a function of the billing cycles of existing clients on the previous six years which makes it a difficult metric to read anything into. This is just one of several reasons that RPX's progress is difficult to evaluate on a quarter to quarter basis or just by looking at financial statements from one period to the next. Put in another way, our deferred balance could be up during the quarter where we add few new clients and down in a quarter where we add many.
To sum up, this was a real validation year for us. Now more than ever we have the means to capitalize on our mission including execution of the new initiatives John described and perhaps more. While we can always model these, we're quite excited about the opportunities in front of us.
Looking ahead for the first quarter of 2014, our current expectations are as follows. Subscription revenue in range of $60.8 million to $61.3 million. Fee related revenue of $1.1 million which represents completed transactions. Total revenue in the range of $61.9 million to $62.4 million. Non-GAAP net income in the range of $11.8 million to $12.4 million, and $54.3 million diluted share is outstanding on a pro forma weighted average basis.
Looking at 2014 overall, we are providing the following outlook for the full year. Subscription revenue of $246 million to $258 million. Fee related revenues of $8 million to $10 million. Total revenue of $243 million to $268 million. Non-GAAP cost of revenue of $120 million to $124 million. Non-GAAP SG&A of $51 million to $55 million. Non-GAAP net income of $53 million to $57 million, and 54.6 million diluted shares is outstanding on a pro forma weighted average basis for the year.
Lastly, on the acquisition front, net spend is expected to be $135 million with some variability depending on our growth, as I noted earlier. All else equal, we maintain the philosophy that patent spend also grows slower than subscription revenues, but remember acquisition opportunities present themselves at unpredictable intervals and having a strong balance sheet allows us to evaluate them as they arise.
With that, we would like to open it up to your questions.
Thank you, Mr. Segal. Ladies and gentlemen we will now begin the question-and-answer session. (Operator Instructions). Our first question comes from the line of Danielle Coker with Stephens. Please go ahead.
Danielle Coker - Stephens
So congratulations on the quarter and thanks for taking my question. We saw the press release about your transaction with Boston University. Can you give us a little more color on how that came about, and would you be able to quantify the aggregate value you created for your clients on that deal?
We really can't go into detail beyond what was in the press release about that deal and as we often is the case we don't go into specifics of transactions. There were a lot of businesses in that case, which was a good thing, and we were excited about the fact that it was really our first transaction with a major research university.
Our next question comes from the line of Jeff Meuler with Robert W. Baird & Co. Please go ahead.
Jeff Meuler - Robert W. Baird & Co
On the SG&A expense guidance, I guess I was a little bit surprised when I initially saw it but then, John, when you spent all the time running through the initiatives that seemed to make sense. So I guess I just want to verify that the core business you are seeing SG&A expense leverage as well, it's just that you've kind of stepped up the pace of investment in all of these initiatives, is that a fair characterization or…?
Hey Jeff, it's Ned. I might say it a little differently. Some of these new initiatives are meant to benefit the core business whether it's our conversations with clients about paying us above the rate card or renewal discussions or discussion with prospects. But I don't want to place too much importance from an SG&A perspective on the new initiatives. The expense on them is really minimal. The SG&A expense just probably speaking is that hiring across the board for us to support the growth that we had over this past year and to support the growth that we intend to deliver over the course of the next year. It's not really focused in one area.
Jeff Meuler - Robert W. Baird & Co
Okay. And then in terms of incorporating a fee revenue assumption in the full year guidance of beyond the quarter out, are these transactions that you feel that you have line of sight into specific transactions or is it more that now that you have a couple of years of good fee revenue under your belt and you have some sort of pipeline that is just a number that you feel fairly confident that you can achieve, it's not necessarily specific line of sight into specific transactions?
Yes, I am glad you asked that question. So the philosophy on a rolling - going to one quarter at a time will be to guide to what we outlined [inaudible]. That's that $1.1 million for the first quarter. I really say you are right in the latter part of your comment as we think about the $8 million to $10 million that we guided to for the full year. Remember $12 million in each of the last two years suggest that there is a cadence to our fee revenue, but it is unpredictable on a quarter to quarter basis and we don't yet have line of sight into the exact transactions that will compose that but we do have a sense for what a year tends to look like based on the business or the initiatives that are underway.
Jeff Meuler - Robert W. Baird & Co
Okay. And then can you just – you’d called out last quarter that the impact of M&A in terms of your client partners and how that can impact the business, thanks for all of the detail in terms of how the year out looks in terms of the renewal base. How does it look from a known M&A perspective in terms of clients that you know are going away because they got acquired? Is it similar to 2013, more or less etc?
Let me answer it this way. So one I think the same thing as was true last year continues to be the case which is when you got the types of contracts that we have with [inaudible] you can see things coming far in advance than you can forecast around them, and so our guidance incorporate anything that we do know about this year, number one.
And then two, I guess I just say if you have 168 largely technology focused clients as your client base, it's realistic to assume that at any given time one or more of them are in the process of being acquired and that just has been and will continue to be a normal part of the business, but I think getting into specifics probably doesn't make a ton of sense, but you should know we obviously think about it carefully when we put together the guidance.
(Operator Instructions). And we have a follow up question from the line of Jeff Meuler with Robert W. Baird & Co. Please go ahead.
Jeff Meuler - Robert W. Baird & Co
That was quick --
I didn't even know you can dial in that fast.
Jeff Meuler - Robert W. Baird & Co
As sell siders we work hard at it. I guess obviously encouraging in terms of both Wells Fargo as well as the first client renewal above rate card above the prior the contract, can you just talk about both of those and I'm particularly interested in how the conversations are going with other clients in terms of getting them to renew above the prior cap as well as how the pipeline is looking for financial institutions and [not let] [ph] the second dominos fall but you would expect an acceleration?
I will go in reverse order. I will hit the last part of your question first. I don't think we would necessarily expect an acceleration, I think that we were really happy about it, 12 to 18 months, we're sort of at the beginning of that time frame that we always expected and we would hope that the level of dialog is going to increase. And certainly our focus from a delivery standpoint in terms of acquisitions we have now got more incentive to go do things and hopefully that will play out to our advantage in our discussions with prospects going forward. So we are excited about it; we’re excited to have more financial incentive to buy in the space as well.
To the first part of the question about clients paying above their current contractual rates, I think the key, and Ned mentioned this, I mentioned this, 2013 was important validation on a lot of fronts for us. I think probably the most interesting thing from our perspective about the dialog we have with our clients was really validating our ability to explain to clients the savings that we deliver to explain to them that were the only dollars they spend in the patent space that can generate a saving. And just getting really good at or better and hopefully we continue to prove that marketing the acquisitions we do and quantifying that cost savings for them. Beyond that we are having that dialog with a small group of companies that tend to be at the larger end of the rate card. And again, really as always is the case with things in our business highly variable, highly hard to predict the sales cycle but we like the level of dialog that we have going on.
Jeff Meuler - Robert W. Baird & Co
And then, John, sorry if I make you fall asleep with this question but, Ned, what are you assuming in the guidance for average amortization periods for the patents that you buy in 2014?
Sorry if I frustrate you with my answer. So I think there are a couple of ways to attack it. First is we recognize that this is a challenge that you guys have to deal with which is forecasting it. We obviously have put up with it as we've come up with the guidance that we provided today. But I just want to point out we focus on the cash spend when we think about saving money for our clients then when we think about the impact on our business and our shareholders of doing transaction. The amortization is something that falls out of it and we want to do the transaction to save our clients the most money.
We can't predict when short-lived patents are going to present themselves as the right transaction for us to be doing at any given time. And so this is a number that, if you think about all of the things we shared today, this is the one where there is just a ton of variability on it. It just -- I don't think it makes sense for us to talk about a specific number from a guidance perspective, but it is important for us to caution you that look, just as it happened last year when we had millions of dollars that ended up being spent on short-lived assets that could happen again, and we just need to be aware of it.
Jeff Meuler - Robert W. Baird & Co
So since that could happen again it sounds like you would want to incorporate that possibility in your guidance range.
Yes, we've incorporated in our guidance range for sure. And based on what we've seen in the past we don't use historical number that we saw as of a year ago to put the guidance range together anymore. So we try to be cognizant of what's happened in the recent past as we put together our guidance.
Jeff Meuler - Robert W. Baird & Co
And then, John, if you're still awake, could you just comment on the cross-licensing deals that are out in the market? It seems to us like we are observing more articles about them. I don't know if that's because we're seeing more articles of them or because they're happening more frequently; you have a lot better data than we do. So if you could just talk about kind of if there is a trend towards increased cross-licensing deals in the patent market.
I think the reason that there's been more articles there's been a flurry of activity of some big companies trying to clear risk, and we actually look at that as a really positive thing. I think one could argue that it represents a bit of a shift in strategic thinking from arms race to instead of having big détente to having actual contractual détente that's certainly the advice that we've been giving to our clients. We've been talking about this at pretty much every key note that I give to our client network in our spring conference is focusing on this idea of transacting patent and clearing risk by doing transactions as opposed to waiting for risk.
And we see the example of Nortel all the time which is to the extent you didn't do a cross-license with Nortel because you figured you had a need to you could rely on détente. That works until they go bankrupt and divest their portfolio. And so we think this strategically makes a lot of sense. I think it’s consistent with a lot of the philosophy we preach about clearing risk, and I wouldn't be surprised if you see more of this activity.
Our next question comes from the line of Matthew Galinko with Sidoti & Company. Please go ahead.
Matthew Galinko - Sidoti & Company
So I had just one around guidance. Do you factor any renewal above the rate card into your full year guidance?
It's a good question. We factor a lot of things into the guidance. One of the nice things about having a business with 168 clients and when you know what the renewals that are in front of you and what the prospect opportunities are in front of you that you can build it one by one as opposed to having to put a broad handicap on some large number of opportunity. So we take all kinds of things into account and it probably doesn’t make sense to get into detail on how much of one versus another.
Ladies and gentlemen, if there are any additional questions (Operator Instructions). And Mr. Amster, there are no further questions at this time. Please continue with your closing remarks.
Thank you all for joining and we look forward to speaking with you next quarter. Thanks.
Ladies and gentlemen, this concludes the RPX Corporation fourth quarter 2013 earnings conference call. Thank you for your participation. You may now disconnect.
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