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RealPage, Inc. (NASDAQ:RP)

Q4 2013 Earnings Call

February 24, 2014 5:00 PM ET

Executives

Rhett Butler – Director of Investor Relations

Stephen Winn – Founder, Chairman, CEO and President

Timothy Barker – CFO, Principal Accounting Officer and Treasurer

Analysts

Nandan Amladi – Deutsche Bank

Brendan Barnicle – Pacific Crest Securities

Michael Nemeroff – Crédit Suisse

Brandon Dobell – William Blair

Operator

Good day, ladies and gentlemen, and welcome to the RealPage Q4 2013 Financial Results. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded.

I would like to turn the call over to your host, Rhett Butler, Director of Investor Relations. Please go ahead.

Rhett Butler

Thanks Patrick. Good afternoon, and welcome to the RealPage financial results conference call for the fourth quarter and year ended December 31, 2013. With me on the call today is Steve Winn, our Chairman and Chief Executive Officer; Tim Barker, our Chief Financial Officer and Treasurer; and Bryan Hill, our Senior Vice President of Finance.

In our remarks today, we will include statements that are considered forward-looking within the meaning of securities laws. In addition, management may make additional forward-looking statements in response to your questions. Forward-looking statements are based on management's current knowledge and expectations as of today, February 24, 2014, and are subject to certain risks and uncertainties that may cause actual results to differ materially from the forward-looking statements. A detailed discussion of such risks and uncertainties is contained in our annual report on Form 10-K previously filed with the SEC on February 27, 2013, and our most recent quarterly report on Form 10-Q filed with the SEC on November 12, 2013.

RealPage undertakes no obligation to update any forward-looking statements except as required by law. Finally, please note that on today's call, we will refer to certain non-GAAP financial measures in which we will exclude certain non-cash or nonrecurring items, depending on the measure, such as acquisition-related and other deferred revenue adjustments, depreciation and asset impairments, amortization of intangible assets, net interest expense, income tax expense or benefit, stock-based compensation expense, any impact related to Yardi Systems related litigation, stock registration costs and acquisition-related costs.

We believe that these non-GAAP measures of financial results provide useful information to investors regarding certain financial and business trends relating to our financial condition and results of operations. Please refer to today's press release announcing our financial results for the fourth quarter and year ended December 31, 2013, available on the Investor Relations portion of our website for a reconciliation of these non-GAAP performance measures to our GAAP financial results.

With that, I'll hand the call over to Steve.

Stephen Winn

Thanks, Rhett. Today, I will review our performance for the fourth quarter and the year as well as our outlook and strategy for 2014. Our fourth quarter financial performance was mixed. Adjusted EBITDA grew 19% reflecting a solid expansion of 140 basis points compared to the prior year quarter.

In addition, non-GAAP earnings per share of $0.16 grew 14% compared to the same period last year. So we are generally pleased with our profitability performance for the quarter and the year.

However, our revenue performance was below our expectations especially in the fourth quarter. Let me start with some perspective related to our full year revenue performance, I will then provide more details surrounding the factors driving the disappointing performance in the fourth quarter and finish with some indicators for the business going forward that lead us to believe the soft revenue performance in Q4 is temporary.

On-demand revenue for the first three quarters of the year trended at 20% organic growth and the full year came in at 18%. Despite this fourth quarter organic on-demand revenue growth slowed significantly to 12%, some of the factors driving fourth quarter performance will take time to turn around and we expect other factors to show improvement more quickly.

Here is what we believe happened. First, the traditional version of the MyNewPlace iOS underperformed our expectations in the fourth quarter. We believe clients are moving off our traditional iOS that are faster pace than we expected.

For the year, revenue from MyNewPlace was down $5.5 million compared to 2012 with a significant portion of this occurring in the fourth quarter. Our Premium Listing Solution or new version of MyNewPlace and our organic lead generation software solutions are all growing nicely.

For 2014, we expect the traditional iOS business to deteriorate some more in the first half of the year and with continued traction from our premium listing solution run well and start to expand in the second half. When we remove the drag of the MyNewPlace business in 2013, our on-demand organic revenue growth would have been 20% versus 18% for the year.

Second, leasing velocity appears to have taken a downward turn in the fourth quarter with leased renewal rates higher than expected. Leasing trends track the previous year for the first three quarters of the year, but started to decline unexpectedly late in the third quarter. The fourth quarter showed a 9% drop in seasonally adjusted leasing activity within our statistically relevant sample size of apartments in our database.

Record levels of occupancy are being driven by extraordinary levels of demand and inadequate supply, especially in the middle market assets as the majority of new construction is high-priced Class-A properties.

What seems like a perfect environment to push price, thereby increasing churn is - and improving total revenue per unit the majority of operators seem to be focusing on renewals instead.

As a result, we are seeing a decreased number of new leases. In order to succeed in this environment it is critical that we continue to educate the market regarding the importance of revenue management and produce the best overall value in terms of cost per lease.

Our goal is to be the rental housing provider of choice for the most cost-effective lead generation and management tools and to provide the only holistic view of demand price and risk which I’ll momentarily speak to later in my presentation.

The third factor driving fourth quarter performance relates to execution of our sales and implementation teams. During the year, we added fewer sales reps than we wanted increasing full-time equivalent sales positions only 12%.

Bookings per rep improved slightly, but the number of reps was inadequate to drive the amount of new sales bookings necessary to support our revenue growth objectives. We believe had we expanded the number of sales reps at historical growth levels organic revenue growth would have been higher.

With respect to our implementation teams, we expected to implement more of our backlog in Q4 than actually occurred. We believe that some of this is attributable to the reorganization of our implementation teams to present fewer faces to our client.

We still believe this approach is correct, but given that we shuffle relationships that had a negative impact on the short-term.

It has been difficult repositioning our sales and implementation teams to prepare us for the next phase of growth, while I am generally satisfied with our progress, I believe the under expansion of sales reps shift away from our traditional iOS, lower implementations of our backlog than we expected and a general slowdown in leasing velocity, all contributed to disappointing revenue performance in the fourth quarter.

Now three of these factors are correctible in 2014 and between them should enable us to return organic growth back within our target operating model by the fourth quarter of next year.

However as I mentioned, the slowdown in leasing velocity is not fully understood yet, only time will tell so we intend to reflect the lower leasing velocity in our projections going forward until we have reason to reevaluate them.

As I review 2013 overall, it was a solid year for the company non-GAAP total revenue grew 18% compared to last year, adjusted EBITDA expanded 100 basis points and non-GAAP earnings per share grew 26%.

With the exception of the fourth quarter performance, we reported 13 consecutive quarters of organic on-demand revenue growth of 20% or more since our IPO, while also doubling our ACV from $165 million at IPO to $378 million as we exit 2013.

During the year, we also took several steps that we believe will help reaccelerate our revenue growth in 2014 and beyond. First, we are expanding the sales force which we expect to be near completion by the middle of the year, providing benefit in the back half of the year.

Second, several product families are adding powerful product centers and features that we believe will fuel growth from existing clients and help capture new clients for years to come.

For example, our asset optimization division is introducing three powerful new products, YieldStar 3D optimizer which optimizes the complex relationship between price, demand and credit simultaneously. Revenue Forecaster, which will provide macro and microeconomic tools to predict revenue growth and a sensitivity of growth to key variables.

Performance Analytics will compare asset performance against our benchmark of millions of units to help owners determine how well their assets are managed compared to their peers.

And finally a new generation of business intelligence is in beta testing that will allow owners and managers to more quickly evaluate operating performance trends in their portfolio.

I am also pleased to report that we’ve entered the vacation rental market through the acquisition of a great product called InstaManager, a platform used by professional vacation rental managers for inventory management pricing, online bookings, payment processing, insurance sales, syndication of two vacation listing services, mobile websites and web management.

We estimate InstaManager generates about 56% of their travel bookings in the U.S. 21% in Europe and 23% in other countries. We issued a separate press release describing InstaManager which provides more detail, but the vacation rental opportunity is attractive to us because we believe leasing velocity is as much as 16 times higher in vacation rentals then single-family rentals resulting in higher RPU.

This is a global opportunity and we believe expanding our ancillary services into this market will continue to drive RPU growth for the future.

To summarize, 2013 dropped to 18% organic growth, primarily due to a $5.5 million drop in MyNewPlace revenues, slowdown in leasing activity and slower growth of our sales force compared to historic levels. We do expect MyNewPlace to level out in the second half of 2014 as our premium service picks into full gear and the 2014 sales force expansion will be near completion.

We believe by the fourth quarter of this year, we will have fully recovered from the dip in organic revenue growth and expect the business to continue to grow within our target operating model going forward. We compete in a giant market which has grown with the addition of vacation rentals and we believe RealPage is better positioned than anyone to capture a significant portion for this opportunity.

With that, I’ll hand the call over to Tim.

Timothy Barker

Thanks, Steve. During this discussion, some of the financial measures I will use are non-GAAP measures currently used to manage our operations. Our earnings press release issued earlier today provides a reconciliation of these non-GAAP measures to the most comparable GAAP item.

Total revenue for the fourth quarter was $96.4 million, an increase of 12% compared to the fourth quarter last year. The details on the components of revenue are as follows: On-demand revenue for the fourth quarter was $93 million, an increase of 14% compared to the fourth quarter last year.

Organic on-demand revenue growth was 12% during the same period; ACV or Annual Customer Value grew 14% during the fourth quarter to $378 million compared to the prior year quarter. We ended the quarter with 9 million units, representing an increase of 11% compared to the same quarter last year.

Excluding units added through acquisitions, we added approximately 686,000 unique units or an increase of 8% compared to the prior year period. Based on average units of 8.9 million, Revenue Per Unit for the fourth quarter was $41.91, an increase of 2% compared to the prior year quarter and it diluted by the variable revenue decline.

On-premise revenue for the fourth quarter was $900,000, a decrease of approximately $400,000 from the same period last year. Professional and other revenue for the fourth quarter was $2.5 million, a decrease of approximately $100,000 compared to the same period last year.

Moving on, I would now turn the discussion to gross profit, operating expense and profitability. Our gross profit for the fourth quarter was $63.7 million or 65% of revenue compared to gross profit for the fourth quarter of last year of $57.4 million or 67% of revenue. The gross margin compression is primarily related to increased datacenter cost to support customer growth and our implementation in account management investment.

Total operating expense for the fourth quarter was $41.1 million compared to $38.5 million in the fourth quarter last year. As a percentage of revenue, operating expenses were 42.6%, representing a decrease of 230 basis points compared to the prior year.

The details on the expense components are as follows: Product development expense for the fourth quarter was $12 million, up 3% compared to the fourth quarter last year; product development expense as a percent of revenue declined 120 basis points to 12.4% compared to 13.6% last year. The continued leverage was positively impacted by the efficiency of our offshore development operation.

Sales and marketing expense for the fourth quarter was $17.9 million, an increase of 8% compared to the fourth quarter last year. The increase is primarily related to increase sales force headcount and related compensation.

Compared to the prior year quarter, we added 24 sales FTEs, aggregating to a total of 226 sales reps. Sales and marketing expense as a percent of revenue was 18.5% compared to 19.3% last year contributing 80 basis points of leverage.

General and administrative expense for the fourth quarter was $11.3 million, an increase of 9% compared to the fourth quarter last year. The higher expense relates to headcount increases for administrative functions. General and administrative expense as a percent of revenue was 11.7% down 30 basis points compared to the same period last year.

Operating income for the fourth quarter increased 20% to $20.8 million or 21.6% of revenue compared to the fourth quarter last year of $17.3 million or 20.2% of revenue. Net income for the fourth quarter was $12.4 million or $0.16 per diluted share compared to $10.2 million or $0.14 per diluted share in the fourth quarter last year, reflecting 21% growth and 14% growth, respectively.

Adjusted EBITDA for the fourth quarter was $24.8 million or 25.7% of revenue compared to $20.8 million or 24.3% of revenue in the fourth quarter last year, reflecting 19% growth and 140 basis points of margin expansion. Adjusted EBITDA margin expansion for the 12 months ended December 31, 2013, was 100 basis points compared to the prior year period.

Now turning to the balance sheet and cash flow metrics. Cash flow from operations for the fourth quarter was $17.6 million, up 2% compared to the prior year.

Cash and cash equivalents were $34.5 million at December 31, 2013, compared to $33.8 million at December 31, 2012. We ended the quarter with accounts receivable of $66.6 million, DSO for the fourth quarter was 60 days.

This was primarily driven by the timing of specific large contract billings and larger annual pay clients. As of today, we have collected the majority of the receivable balances driving the DSO increase.

Capital expenses were $33 million for the year, higher than anticipated. The drivers were IT related, primarily attributed to improving our back-end technology platform, our disaster recovery initiatives and improving developer productivity.

Secondarily, leasehold improvements were up associated with our workforce expansion initiatives domestically and internationally. We expect 2014 capital expenditures to be approximately $30 million consistent with 2013 levels due to a continuation of our disaster recovery performance and developer productivity initiatives as well as additional leasehold improvements related to headcount growth.

As Steve mentioned earlier, we made 3 acquisitions after quarter-end. Collectively, RealPage paid $16.8 million net of tax benefit for these companies. In addition, incremental contingent consideration payments can be earned by the acquired entities if certain performance milestones are achieved. These acquisitions will not have a material impact on the fourth quarter and are expected to contribute to our target operating model beginning in 2014.

Our guidance for 2014 considers the deteriorating performance with the traditional iOS and decreased resident churn levels within the multi-family housing sector that Steve talked about earlier. And accordingly, we expect our organic revenue growth to fall below our long-term target operating model of 20%, 25% in the first half of 2014, but improve in the second half of 2014.

Looking at the first quarter ended March 31, 2014, we expect the following; non-GAAP total revenue in the range of $101 million to $102 million, reflecting total growth of 14% to 15% and suggest on-demand organic growth of 13% to 14%. Adjusted EBITDA in the range of $24 million to $24.5 million reflecting growth of 16% to 19%; and non-GAAP net income in the range of $11.8 million to $12.1 million or $0.15 to $0.16 per diluted share.

For the full year ended December 31, 2014, we expect non-GAAP total revenue in the range of $440 million to $450 million, reflecting total growth of 16% to 19% and suggest on-demand organic growth of 15% to 18%.

Adjusted EBITDA in the range of $105 million to $110 million reflecting growth of 16% to 21%; and suggest adjusted EBITDA margin that is flat to up 60 basis points compared to the full year 2013. And non-GAAP net income in the range of $51.1 million to $54.1 million or $0.65 to $0.69 per diluted share.

With that, I'll turn the call over to Q&A.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from Nandan Amladi with Deutsche Bank. Your line is open.

Nandan Amladi – Deutsche Bank

Hi good afternoon. Thanks for taking my question. So the first question is to the point that Steve made about sales headcount growth. What were some of the factors that contributed to slower headcount growth in the sales headcount growth?

Stephen Winn

Turnover was higher than prior years. When we simply – we are not able to hire as quickly as we wanted and should have hired. The net increase in reps was 24 which worked out to about 12% increase in FTEs and that number should have been hired.

Timothy Barker

I think it was also that we were focusing on our product specialty reps thinking that they would increase productivity more than they did and that would have taken some pressure on filling in with feet on the street and they did increase productivity but not at the level that would relieve that pressure so we needed both of those factors to come into play.

Nandan Amladi – Deutsche Bank

Okay, fair enough. And then what gives you the confidence that in the second half of the year, as your new products start to kick in, I mean, how many more sales people you need to hire to make that happen and are you on track to achieve that?

Stephen Winn

We are on track to increase the sales force 20% to 25% range with most of that hiring occurring in the first and second quarters.

Timothy Barker

We also saw very strong bookings in Q4. They were back-end loaded. So, more of the bookings came in December, but Q4 was the highest sales force bookings that we track in the company history and was definitely the strongest for 2013. So that helps provides the visibility also.

Nandan Amladi – Deutsche Bank

Okay, thank you.

Operator

Our next question comes from Brendan Barnicle with Pacific Crest Securities. Your line is open.

Brendan Barnicle – Pacific Crest Securities

Thanks so much. Steve, I remember it was – I think the last year or the year before where Q4, Q1, you saw more pronounced seasonality and you just called out the seasonality and seen it before, what’s different with the velocity of renewals now versus what you were seeing back then?

Stephen Winn

Well, it was 2011, the fourth quarter of 2011 that we saw the first decline and that stabilized and has been tracking at about the same renewal rate since then on a seasonally adjusted basis, it does vary from quarter-to-quarter or on a seasonal basis.

But this year, the occupancy levels have reached a point where there is just not enough supply to cover the demand and what ordinarily you would expect is people would raise price and generate churn and we were candidly shocked that the renewal rates jumped in the fourth quarter the way they did.

Our economist does not have an explanation for this. He believes - he was surprised by it. Clearly owners are renewing leases at a higher rate than they have and as a result, we have fewer new leases and a significant – well a portion of our business is tied to leasing velocity.

So we see it when that velocity declines and of course we’ll see it on the other side if the velocity comes back.

Timothy Barker

Nandan if you remember back then we described that about 18% of our on-demand revenue can be impacted by that leasing velocity, primarily leasing velocity and we said at that point in time the variability on that 18% was 8% to 10%.

We are seeing the same thing here and it’s within those ranges and it’s still 18% to 19% of our on-demand revenues. So the other 81% to 82% if you were to back this out continues to grow at our expectations. So you are isolating this piece that can be variable, but it’s still a manageable piece within our business but we don’t like the impact it had and surprised it had to us on Q4.

Brendan Barnicle – Pacific Crest Securities

And then Steve, I was interested in your – a little more in your thoughts about moving into the vacation rental market. You got HomeAway that’s been in that market for a while, what do you think you guys can bring or differentiates you against that and why choose that market as opposed to some of the other adjacencies?

Stephen Winn

Well, HomeAway generates leads; we are the booking engine for those leads in HomeAway as well as TripAdvisor and many other large vacation listing services use the InstaManager where we’ve syndicated content to them. So they are our partners, not our competitors.

The goal here is to have a prospect find a vacation home and when they want to look at more detail, they look at a InstaManager website and they can lease that rental online and collect payment and buy insurance and over time will be pushing as many of the ancillary services that we offer into that channel and really quite optimistic that there is a big opportunity here.

Brendan Barnicle – Pacific Crest Securities

Great and then some folks have expressed concern to me about Zillow starting to get into the rental market more and potentially getting into the management market. Do you see them starting to make any noise about becoming competitive with you guys?

Stephen Winn

They bought a company called RentJuice and that really hasn’t gone anywhere since they bought it. They are not generating an enormous number of apartment leads at this point, but I fully expect that they will become a more significant generator of leads and we want to syndicate content to Zillow and partner with them like we do the other Internet listing services in this space and I think they will compete with MyNewPlace but not with rest of our offerings, at least not where they are positioned now.

Brendan Barnicle – Pacific Crest Securities

Great, and then Tim just quickly on gross margins, I think you said that to expect them to stay at the same level you saw at the end of the year; are we looking for another down tick in the first part of the year?

Timothy Barker

Yes, they should stay at that level when they would down tick is – you seasonally get a little down tick in Q3, but overall for the year, we’ve given a target before of 64 to 68. So it should stay in that range.

Brendan Barnicle – Pacific Crest Securities

Terrific, thanks guys.

Operator

Our next question comes from Michael Nemeroff with Crédit Suisse. Your line is open.

Michael Nemeroff – Crédit Suisse

Hi guys. Thanks for taking my questions. Steve, I just want to – I think you said that the vacation rental market has about 13 times velocity of the apartment rental and I just want to think, how should we think about the ARPU of the vacation rental industry?

And on the increase in the number of sales people that you plan, I think it was 20% to 25% increase that you plan in 2014, what percent of those sales reps will you focus on this vacation rental, new venture?

Stephen Winn

It’s a little early for us to calculate ARPU expectations for rent – for the vacation rental markets. So we have not projected that. By the way, the 13% or the 13 times is not what our data is showing, what we are showing that rental – vacation rental will lease on average about 16 times a year if it is professionally managed at least that’s what the InstaManager database is showing.

It’s still very early for us to know whether that number is going to hold and we are not prepared to give RPU and so we got a little more experience with the market. With respect to reps, the plan is to add a small number relative to the overall sales force, but it will still be in the 6% to 12% depending upon how we do.

Michael Nemeroff – Crédit Suisse

And then on the – just going back to the ARPU question, do you think that the vacation rental ARPU is going to be around roughly the same as the apartment rental or is it going to be significantly higher or lower just help us understand the dynamics in that…

Stephen Winn

Well, the data that we have given is a conventional property could generate $350 of ARPU if they bought every product and service that we offer can venture or affordable properties about 150 single-family the rental is about 150. I don’t think vacation rentals will hit 350, but I think they easily could exceed the 150.

Michael Nemeroff – Crédit Suisse

Okay, that’s helpful. And then on the on-demand revenue, you said you had some issues with a couple particular products. Has the competition against those – against you changed at all over the last couple of months and the customers that churned away – where are they going? And who are they using? Do you know?

Timothy Barker

Well, the main attrition we talk about is in MyNewPlace, since the listing service and that was a decision we made a year ago to just pushing that product and so it’s been running off early with the MyNewPlace acquisition we are pushing it. But it was telling a confusing story when we were telling our customers to buy our software tools and our tracking tools and go for organic websites and then we were selling this listing service.

So we have a base listing service that we have added a premium content to it. But we are really wanting to focus on the software tools for managing that. So they went away to other listing services would be my guess, which is – that was our biggest attrition area. The other revenue items we talked about, they didn’t go anywhere, it was just that volumes were down due to the leasing activity.

Michael Nemeroff – Crédit Suisse

Thanks, that’s just helpful and one other for you if I may. In the guidance, the total revenue guidance for the year, I don’t know if you had said this, but what is the implied organic growth in that 2014 revenue guidance?

Timothy Barker

15 to 18 diluted in the first half of the year with the iOS and then stepping up in the second half of the year and by Q4, getting back to our target the 20% to 25%.

Michael Nemeroff – Crédit Suisse

And that’s organically you are talking about?

Timothy Barker

Yes, yes.

Michael Nemeroff – Crédit Suisse

Okay, and then – just one further one on the acquisition of Bookt, how big was that. To us it looked like it was more of a regional play down in the south?

Timothy Barker

It’s very small, the revenue less than $1 million historical and run rate, but I think it can add some nice growth, so it was a small acquisition.

Michael Nemeroff – Crédit Suisse

And then just one last one for Steve if I may. The acquisition strategy, you guys have been pretty acquisitive in the past on bringing in some new units and products. Do you expect that that acquisition velocity is going to continue the pace through 2014?

Stephen Winn

Yes, we have an active M&A group and I do expect that we will continue to do acquisitions in 2014. We haven’t done a large one for sometime, as you know.

Michael Nemeroff – Crédit Suisse

Okay. Thank you very much for taking my questions.

Timothy Barker

Okay, thanks.

Operator

(Operator Instructions) Our next question comes from Brandon Dobell with William Blair. Your line is open.

Brandon Dobell – William Blair

Good afternoon. Couple of quick ones. Maybe, how do we think about the impact of the variable revenue on ARPU I guess, I am trying to get at, if we normalize for that, are you still seeing the same kind of high single, low double-digit year-on-year ARPU growth from the non-variable part, the on-demand part of the business is not variable or is there anything going on within the customer base that’s either holding ARPU growth back or helping you to accelerate it?

Stephen Winn

It’s primarily the variable. It does go north of 5% if you normalize out that variable piece. But we did about implementation seen below. So…

Brandon Dobell – William Blair

Yes.

Stephen Winn

And also the unit growth was high. So, when the unit growth is higher, it dilutes the RPU. But it would have been closer to historical levels without that variable decline.

Brandon Dobell – William Blair

Okay, so then taken that concept going forward, what kind of assumptions you guys made for 2014 in terms of ARPU growth particularly in the first part of the year, should we see – the first and second quarter look a little bit like Q4 given the impact of the traditional iOS for a one-off?

Stephen Winn

Yes, with the guidance that we’ve given, it will be – the RPU will be lower because we expect to continue to grow units. So that’s what you would see. There is some other metrics that I typically give, which is our top 50 RPU clients.

Those clients average 136 as of the end of Q4 which is significantly north of our 41, 91 average that range in those 50 clients is $108 to $211. So that continues to step up quarter-after-quarter and gives us the visibility that we can’t drive RPU much higher.

And where we are at today and where we are at today is just being diluted by the volume of new units coming in at a much lower initial RPU. That is that 50 customers have customers in the segment that are 20,000 and above – in 5,000 to 20,000 and 5,000 and below. So it has a cross section of our full markets.

Brandon Dobell – William Blair

Okay. I think in the last couple of calls, you guys have talked about some of the products that have grown either faster or slower or kind of ranked order them in terms of contribution. Maybe give some color on that for the fourth quarter and then perhaps some of the assumptions you are making on those product sets as we think about the 2014 guide?

Stephen Winn

Yes, from a percentage growth standpoint for the fourth quarter, the LeaseStar software products were some of the highest growth, so not the iOS but the software products. Payments continue to be strong, property where our single-family solutions needed to be strong, our resident portal continue to be strong in the online we think.

So, I’d say YieldStar is right there. YieldStar had very nice bookings in Q4, so if it continues to be strong, when you get the absolute dollar amounts OneSite is still leading the top. It’s a big product family and it doesn’t grow as fast, but it’s one of the largest absolute dollar drivers and the same thing with leasing does screening even with some of the declines in the leasing velocity that the screening product continues to be a strong grower of total dollar growth. That’s some color there.

Brandon Dobell – William Blair

Okay. And then a final one for me, looking at the companies that which you guys acquired in the latter part of 2013, had those the owners or managers the guys that came over with the deal – or deals I guess, are they still with you guys? Or what kind of capacity are they operating in? Just trying to get a feel for – I guess management retention post the acquisitions?

Stephen Winn

Well, most of them are still with us, which acquisitions are we talking? Rents…

Timothy Barker

They maybe ActiveBuilding, MyBuild.

Stephen Winn

ActiveBuilding, they are all,,

Brandon Dobell – William Blair

Okay.

Stephen Winn

There and Windsor, everybody is there. Actually, I don’t think we’ve lost anybody in the 2013 group.

Timothy Barker

My feeling is they are here and excited and kind of the grow their businesses with the help of RealPage and our larger capacity larger sales force.

Brandon Dobell – William Blair

Okay, great. Thanks.

Operator

This ends the Q&A and the call for the day. Thanks for participating in today’s program. You may all disconnect.

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