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Attunity Ltd (NASDAQ:ATTU)

Q1 2014 Results Earnings Conference Call

May 01, 2014, 10:00 am ET

Executives

Garth Russell - KCSA Strategic Communications, IR

Shimon Alon - Chairman of the Board and Chief Executive Officer

Dror Elkayam - Chief Financial Officer and Secretary

Analysts

Richard Baldry - ROTH Capital Partners

Chad Bennett - Craig-Hallum

Mark Gomes - PTT Research

Don Besser - Manchester Management

Operator

Good day, ladies and gentlemen, and welcome to the Attunity Q1 2014 earnings conference call. For your information, today's conference is being recorded.

At this time, I would like to turn the conference over to Mr. Garth Russell. Please go ahead.

Garth Russell - KCSA Strategic Communications, IR

Thank you. Before turning the call over to management, I would like to make the following remarks concerning forward-looking statements. All statements in this conference call other than historical facts are forward-looking statements. The words anticipate, believe, estimate, expect, intent, guidance, confidence, target, project and other similar expressions typically are used to identify forward-looking statements.

These forward-looking statements are not guarantees of future performances and may involve and are subject to risks and uncertainties and other factors that may affect Attunity's business, financial condition and other operating results, which include but are not limited to the risk factors and other qualifications contained in Attunity's annual report on Form 20-F, quarterly reports that are filed in a 6-K and other reports filed by Attunity with the SEC to which your attention is directed.

Therefore, actual outcomes and results may different materially from what is expressed or implied by these forward-looking statements. Attunity's expressly disclaims any intent or obligation to update these forward-looking statements.

During this call, we may also present certain non-GAAP financial measures such as non-GAAP net income and certain ratios that are used with these measures. In our press release and the financial tables issued earlier today which is located on our website at www.attunity.com, you will find our definitions of these non-GAAP financial measures, a reconciliation of these non-GAAP financial measures with the closest GAAP financial measures, as well as the discussion about why we think these non-GAAP financial measures are relevant to our results. These financial measures are included for the benefit of investors and should not be considered instead of the GAAP measures.

At this time, it is now my pleasure to turn the call over to Shimon Alon, Chairman and Chief Executive Officer of Attunity. Shimon, the floor is yours.

Shimon Alon

Thank you, Garth, and thank you everyone for joining our call today. With me today is Dror Elkayam, our Chief Financial Officer. We will begin by providing an overview of our financial results and adding some detail regarding our performance during the first quarter of 2014. After our prepared remark, Dror and I will be happy to answer any questions you may have.

With that said, let's get started. We entered 2014 with strong momentum, growing and expanding upon all aspects of our business. As we announced this morning, total non-GAAP revenue grew 57% to $7.2 million, with 140% growth from our Attunity Replicate product and total license growth of 102% year-over-year.

During the first quarter, we established a solid foundation for continued growth. We gained new customers, accumulated greater market share, developed innovative products for the Big Data market and expanded our global sales force and broadening market awareness. These key growth drivers are critical to our success in order to capture the total addressable market in 2014 and beyond.

Our flagship solution, Attunity Replicate continues to drive the majority of our revenue and revenue growth and makes up the major part of the license revenue. One of the largest Replicate deals that closed during the quarter in one of the world's most prominent international banks, which needed to manage Big Data between data centers across the world. The bank relies on accurate pricing and risk data for their global trading operation, sharing information from single point of origin to many data target across four main worldwide centers. Since the information is required in real time, the bank needed a superior performance solution to make accurate and timely decisions, seamlessly and efficiently.

In this competitive case, the bank selected Attunity Replicate to replace a competing solution due to the Replicate's unparalleled performance and heterogeneous support. The current replication solution would have required software to be installed on each of the many databases across the world, a costly and destructive process. Attunity Replicate was the preferred alternative to implement the customer data sourcing strategy.

To further strengthen our portfolio of solutions and build a leadership position in the industry, we continue to introduce new solutions to support the challenging Big Data environment. One such new product is Attunity Maestro, our new and innovative master data flow and process management platform.

It is designed to help organizations automate the complex process of composing, conducting and monitoring information flow across the entire global enterprise. It essentially helps customers to build a topology of data flow, manage the end-to-end process, optimize the transfer of data from many sources to many targets and monitor the entire end-to-end enterprise information flow.

Maestro is a brand-new addition to Attunity's suite of solutions that will elevate our ability to deliver enterprise value with a higher average selling price. The platform has been optimized to complement our existing solutions and we installed as an end-to-end enterprise solution as well as an additional platform to complement existing file and database replication solutions for existing customers.

Earlier this month, we demonstrated Maestro at the National Association of Broadcasters, NAB, conference, the world's largest digital media show. As a result of this show, we gained immediate momentum and expected to close our first deals during the third quarter of 2014. Looking ahead, Maestro will enable the transfer of files between the enterprise and the cloud, manage the distributed integration of Hadoop files. We plan to launch Maestro for partial data later this year.

To extend our market reach, we are extended the Attunity Replicate capabilities even further. We recently introduced the newest version of Attunity Replicate to support data replication for multiple non-relational sources and for MySQL, one of the world's most popular open-source database.

In addition to the growth generated by Attunity Replicate, we also increased our revenues through the acquisition of Hayes Technology Group, which closed in December 2013. We are very pleased with the integration of Hayes and their performance. We believe that there is a large opportunity to cross-sell these solutions to our Attunity Replicate customers, as well as to sell Replicate Gold Client existing customer base the Attunity replicate.

As an example, we already closed the deal with SMART Modular, a leading electronic manufacturer and an existing Attunity Replicate customer, who is now the Gold Client for their SAP system.

In March this year, we announced that Attunity Gold Client has achieved certification to run on SAP HANA a premiere in-memory platform for Big Data analytics for SAP customers. We are excited to receive this SAP certification, enabling new analytics capabilities which will facilitate greater adoption of our software within the SAP market. We expect to continue growing this business by penetrating into the addressable SAP market.

In effort to fully capitalize on the demand for our growing portfolio of product and diversity of our resources, both domestically and abroad, we have made strategic hires o strengthen our sales force and better support target area. By the end of the first quarter, we had reached a total of 25 quota-bearing sales people, compared to 15 at the end of the same period last year.

In addition, upon hiring our VP of Sales in EMEA, Mr. Paul Kelly late last year, we extended our presence in to Germany, France and the Nordics. Since Paul joining us, momentum in EMA has been building rapidly and we anticipate consistent growth throughout the remainder of 2014.

The activities of the marketing team during the quarter resulted in increased lead generation of Attunity Replicate, which grew 125% year-over-year. To achieve this impressive lead generation, the team delivered important webinars and widely distributed social content to educate the industry about our solution and the benefits. In addition, we recently presented and showcased the breadth of our Attunity Replicate product in key industry tradeshows such as the recent Percona MySQL Conference.

During the quarter, we also hosted a unique Big Data thought leadership event together with Forrester Research, discussing how The Industrial Internet of Things, a critical Big Data driver is poised for tremendous growth.

During the first quarter, we continued the momentum with our Big Data partners, generating a record of new pipeline opportunity with Teradata, Pivotal, HP Vertica and Microsoft. These new opportunities include (inaudible) referred to us directly by the partners. This growth in demand is driven by the ongoing success of customers benefiting already from our unique value proposition, enjoying demand generation activity.

While growing the pipeline, we continue to close key customers with our partners. During the first quarter, for example, Pivotal continued to refer customers to us and brings Attunity into deals. In one case, Attunity Replicate was brought in to proof of concept for a multi-billion dollar semiconductor company who needed to process tremendous amount of machine data to help continually improving their quality and production yield. The previous datawarehouse and the replication solution provided by one of our competitors didn't do a good job. They could not meet the performance requirements, preventing business users from being able to make timely and informed decision. This customer was evaluating Pivotal Greenplum together with Attunity in order to cut the process to minutes.

Attunity Replicate enabled the customers to transfer and analyze massive amount of data about eight times faster, meeting the best reported deadline. As you can see, we are a critical enabler to our partner's success, providing their customers with a high performance solution for loading data to the datawarehouse, enabling real-time analytics.

Turning to the cloud. Our momentum is growing with Amazon Web Services partnership. We continue to collaborate on joint marketing activities, as evidenced by our recent joint webinar hosted by Amazon featuring Attunity and a customer highlighting disaster recovery yielded record of almost thousands of registration. Amazon Web Services continues to promote the need for Attunity technology to their customers.

Recently they released a video featuring joint customer, Etix, a national online ticketing company and their ability to accelerate the Oracle database to Amazon Redshift data loading project from months to just minutes, demonstrating a significant faster time to value. In the video, the system analyst at Etix, Daniel Heacock, communicates the solution's high ROI along with benefits of working with Attunity.

As businesses continue looking for effective ways to optimize the cloud computing solutions, Attunity CloudBeam is now covered in the Gartner's Magic Quadrant report and has been named one of the top 100 Coolest Cloud Vendors of 2014 by CRN Magazine. We plan to expand our Amazon Web Services partnership with new offerings, during the second quarter of 2014, including the introduction of brand new versions of Attunity CloudBeam to be available as an Amazon Machine Image, AMI, offered within the Amazon Marketplace. Amazon Web Services Marketplace is an online store that helps customers find, buy and immediately start using the software services that runs in Amazon EC2 Cloud, and we would be there in the next few weeks.

We feel that we are well positioned to continue growing revenue into 2014. We expanded and strengthened our sales and marketing team, enhanced our product portfolio within our Big Data replication and cloud suite of solution, impacting the industry as a prominent driving force in enabling Big Data analytics. Most importantly, our solid balance sheet allow us to execute our plan effectively.

I will now turn the call over to Dror Elkayam, our Chief Financial Officer to discuss details of our financials, Dror, please.

Dror Elkayam

Thank you, Shimon, and good morning, everyone. As reported this morning, we had a strong quarter of organic growth as well as strong sales performance from our recently acquired company, Hayes Technology. Our total revenue on a GAAP basis was $7.1 million which grew 54% on a year-over-year basis, mainly due to the growth experienced from our Attunity Replicate solution. We are also seeing an improvement in our legacy file offerings which I expect to return to growth by the end of this year. This included license revenue of $3.5 million, an increase of 102% year-over-year.

Total maintenance and service revenue was $3.6 million which grew 26% year-over-year. On a non-GAAP basis, our total revenue were $7.2 million which exclude acquired maintenance revenue from Hayes that were not recognized due to business combination accounting rules. As a result, non-GAAP total maintenance and service revenue was $3.7 million.

The cost of revenue increased by 30% to $0.7 million for the first quarter of 2014 from $0.5 million for the same period last year. This increase is mainly attributable to the amortization of Hayes' acquired intangible assets.

Gross margin was 90% this quarter, compared with 88% for the same period last year. We expect our margins to grow with our revenues. Non-GAAP gross margin was 93% compared with 91% last year, which excludes amortization costs associated with acquisition.

Total R&D expenses increased by 16% to $2.3 million from $2 million in the first quarter of 2013. This increase is mainly due to the Hayes acquisition, salary updates and the lower U.S. dollar to Israeli Shekel exchange rate. Total R&D expenses were 32% of total revenue for the first quarter, compared with 43% for the same period last year. While we increased investment in R&D, this decrease as a percentage of total revenue is a result of higher revenue during this quarter.

Sales and marketing expenses for the first quarter increased by 50% to $4 million from $2.7 million in the same period last year. This is mostly attributable to the increase in headcount of our sales and marketing teams during the last few quarters as part of our strategy to increase our global footprint. This includes the increase in the number of quota-bearing people to 25 from 15 in the end of Q1 last year, the additional investment in marketing activities to support this expansion and the acquisition of Hayes.

Sales and marketing expenses as a percentage of total revenue were 56% compared with 58% for the same period last year. We expect to continue to increase our investment in sales and marketing during this year.

G&A expenses for the first quarter were $0.8 million or 11% of total revenue, compared with $0.7 million or 16% of total revenue from the same period in 2013. Later this year as revenue continues to grow, we expect G&A to slightly decline as a percentage of total revenue, while we plan to make minor investments supporting our expansion efforts.

Net operating loss for the first quarter was $0.7 million compared with $1.3 million for the same period last year. Non-GAAP operating loss, which excludes $0.7 million in expenses and amortizations associated with acquisitions and equity-based compensation expenses were $24,000. This is compared with non-GAAP operating loss of $1 million which excludes $0.4 million of similar expenses for the same period last year.

Net loss was $0.8 million or $0.05 per share, compared with $1.4 million in the first quarter of 2013, or $0.12 per share. Non-GAAP net loss for the first quarter was $0.1 million compared with a loss of $1 million for the same period last year. Non-GAAP net loss for the first quarter excludes a total of $0.6 million in expenses mostly attributable to expenses and amortization associated with acquisitions and equity-based compensation expense. Non-GAAP net loss for the same period last year excludes $0.3 million in similar expenses.

As of March 31, 2014 our headcount was 141, which includes an increase of five people from the end of the previous quarter and an increase of 20 people from the end of the first quarter of 2013, mainly in sales and marketing.

Moving to the balance sheet. This quarter, we generated cash flow from operations of $1.5 million compared with $0.2 million in the same quarter last year. As a result, we reported cash and cash equivalent of approximately $18.1 million, up from $16.5 million as of December 31, 2013.

The quality of our accounts receivables remains consistent. DSO was 48 days in Q1 which demonstrates how quickly we collect our revenue, an encouraging indication of customer satisfaction.

Our shareholder's equity remain at the same level at $30 million as of March 31 as compared with $30.1 million as of December 31, 2013.

Now, I would like to turn the call back over to Shimon for some closing comments.

Shimon Alon

Thank you very much, Dror. In summary, we have taken important steps to strengthen our team and support growth throughout the course of the year. We have just begun to scratch the surface of this market as the increase in Big Data generated by people, application and machines cause enterprises to face the challenge of what to do with all this data.

Aside from the volume of data, there is a much greater need to address data analytics and business intelligence, which requires data replication, integration and flow management. Our ability to address this market need was highlighted in a recent Forbes article discussing the data flow bottleneck in which Dan Woods wrote, and I quote, "Attunity is a perfect example of how technology is built for moving, replicating, and synchronizing data".

Before we conclude our prepared remarks, I would like to thank all of our investors, customers, partners and dedicated members of Attunity team for the firm support. We would like now to open the call for questions. Operator, please.

Question-and-Answer Session

Operator

(Operator Instructions). The first question comes from Richard Baldry of ROTH Capital Partners. Please go ahead.

Richard Baldry - ROTH Capital Partners

Thanks. Looks like your lead generation is up a lot at the same time as your quota-bearing sales reps count is coming up. So could you talk about how quickly you expect the newer hires to ramp and whether they could be meaningful contributors in the second quarter? If you feel like it's more of a second half ramp for those people? Whether you think the sales cycle to changing with the higher publicity or visibility you are getting in the marketplace? Thanks.

Shimon Alon

Thank you, Richard. As we can see, the other thing is, we plan everybody is very busy in the territory. We definitely expect them to start to contribute, actually two of them already contributed in Q1 and I feel we expect all of them to contribute in Q2 and beyond.

Richard Baldry - ROTH Capital Partners

And how about geographically? Because you have been putting people into regions over the past 12 months that were new. Can you talk about how many of those are productive now or you believe we will begin to start to see some traction as those people have had a few quarters in their seats? So again, could they begin contributing by the second quarter? Or do you think some of the international is more second half?

Shimon Alon

Very good. The major territories that we have today, they are both the EMEA and the United States. In EMEA, we added people to handle Germany, France and the Nordic countries. We added additional people for U.K. which will take better looks than others. I will say that so far we are very pleased with what we see in the EMEA. The combination of bringing in great people, great product and lot of needs from the market.

Already one of the new guys closed his first deal in France. We expect deals in other territories in Q2. And by percentage of course, the growth in EMEA would be the most impressive one, as we had a smaller team the last year. The new management is very strong and that EMEA would be contributing a lot to our total growth and profit.

In the U.S., we added new territories. We added people in Canada as well as split certain territories in California and Dallas and others. I will say they are all busy. Focus is strong for them. So there we added I think four people on top of the six we had. So percentage wise, they would be very nice, though not as much as we expect in EMEA on percentage, on absolute dollars there would be a nice competition between the two region.

Richard Baldry - ROTH Capital Partners

Then could you talk about the service capacity? How to serve or support the new deal pipeline? I know you have been adding a lot to the sales headcount. Do you e feel that your ability to implement those as those deals close, you have the capacity to do that? Do you think that capacity has to ramp this year as well? Thanks.

Shimon Alon

So far for what we have now, we already added few technical support people, both in EMEA, we hired, as you know, EMEA required different language speaking technical people, we added that people in Germany and French-speaking person and in the U.K. In the U.S., we added people nicely that came to us from Informatica and from Oracle. They know the market very well. They are actually helping the sales people to explain the differentiation and our unique value proposition.

Right now we have, I would say, on average the right number of people with some (inaudible). We are moving people around the world. The good news is if we continue with the same trend towards the end of the year we will have to hire more technical people, but it's only for good reason.

Richard Baldry - ROTH Capital Partners

Great. Then looking at the seasonality, we typically look at companies doing hiring early in the year and then ramping the P&L through the rest of the year. You are roughly breakeven this quarter. So do you think that this is the low mark for earnings on the year and that it should scale up from here as the revenues scale for the rest of the year, even as you do some incremental hiring?

Dror Elkayam

Hi, Richard. This is Dror. Yes. We expect, as I explained, to increase our investment, mainly in sales and marketing. We expect as we, in accordance to our guidance, to increase our revenues throughout the year. So the answer to your question is yes.

Richard Baldry - ROTH Capital Partners

Okay. The last thing would be then, because you did add significant cash to the balance sheet in the fourth quarter of last year. It actually grew in Q1. Could you talk about what you intend to do with that? If there are some acquisition targets you think, how they would fit? Would it be e more like a Hayes with strategic technologies or are there some other like go to market or regional expansions that could help you more on the sale side of the table or incremental customer basis? Thanks a lot.

Shimon Alon

There is no question that with the market demand, market opportunity, and very dynamic Big Data market, adding now Internet of Things, in that we are already supporting, we are being also approached by different companies with attempt to us acquiring them or we are we are looking at some companies.

We have a very simple model. Very easy to understand. We are looking only for synergy, strategically aligned with us. We are not moving in to different spaces. It has to be accretive and it cannot be a large acquisition that our cash will now be sufficient. So we would know how to grow it by acquisition. We know how to grow the technology.

We did very well with the previous five replications which bring us so many customers today. We definitely start to see a very nice activity with Gold Client. They are very happy to be part of a very strong market for SAP. And we will follow by another smart and accretive acquisition.

Richard Baldry - ROTH Capital Partners

Great, and congrats on a nice start to the year.

Shimon Alon

Thank you.

Dror Elkayam

Thank you, Richard.

Operator

We will now take the next question from Chad Bennett of Craig-Hallum. Please go ahead.

Chad Bennett - Craig-Hallum

Good morning, guys. Nice quarter.

Shimon Alon

Thank you.

Chad Bennett - Craig-Hallum

So, Dror, do you have a specific kind of percentage or range of how much of license revenues are Replicate today?

Dror Elkayam

Replicate revenues is our major product. That consist the majority of our license revenues, more than any other product, and it continues to grow. We do not break down the revenues per product, but this product is the largest in terms of license revenues.

Chad Bennett - Craig-Hallum

Okay, and then, I don't know if I missed it on the call, but are you essentially reiterating in the year guidance that you gave last quarter?

Dror Elkayam

As you know, Chad, our annual guidance of revenue between $34 million to $37 million and non-GAAP operating profit of between 9% and 13%. That was effective when it was given and that's consistent with our policy. We would not update it until we publicly announce updated guidance, if at all.

Chad Bennett - Craig-Hallum

Okay, and then what was the Hayes contribution in the quarter?

Dror Elkayam

As I said earlier, we do not break down revenue per product but we are very pleased with integration and very pleased with the performance. The activity was very accretive to us and compared to the same quarter last year, they performed much better. Much, much better.

Chad Bennett - Craig-Hallum

Okay. Maybe I will try a last one then. So you have grown the sales force, headcount wise, 70%, 75% year-over-year, pipelines are doubling, Replicate is doubling, Web Maestro coming out or starting actually to generate some revenue in the third quarter, EMEA is growing rapidly. So is there any reason why license revenue growth, certainly north of 50%, would that be a rational way to think about the business this year?

Shimon Alon

I would like to differentiate, if possible, between activities, forecast and actual sales. Sometimes, mainly when average sales price goes up, Maestro type of product, the sales cycle, in some cases, takes longer than what we are used to. We right now are very happy with all the activities we have.

I can tell you that one of the busiest persons in the company is Dror department looking at new agreements with new customers, more than ever before. We are talking about current quarter. To say that all of them will be closed in this quarter, I cannot right now. I cannot say they will not. I cannot say they will.

Therefore I would be little conservative in changing anything before we see the impact of what we do. We are definitely happy with what we see. But we don't know the quarterly definitions or the timing of close. On the Maestro front, I said it before, I would say it again, I never forecast a product that we never sold before.

We expect to see the first Maestro closed. We already have very successful installation and we expect to see the order coming, but before we see three, four, five orders, we don't know how bit it will be (inaudible). So we may look at what we are getting and giving you later additional updates about it, but it's too healthy right now.

Chad Bennett - Craig-Hallum

Okay. Thanks.

Shimon Alon

Thank you, Chad.

Operator

And the next question comes from Mark Gomes of PTT Research. Please go ahead.

Mark Gomes - PTT Research

Hi, guys. Nice progress on the quarter. Wondering what early feedback on Maestro specifically do you see feedback from customers that suggest that your product roadmap could give you greater advantage as customers evaluate your existing products versus competitive offerings? Thanks.

Shimon Alon

Absolutely. So far, we had two very successful installations, both of them existing customers, it's both on file replication. The first one had about 60, 70 different nodes for different areas in United States. We went there, did the installation. Within an hour, the guy start for the first time in his life, visibility into all the file transfers and finally could manage them as well, and he was very impressed with what he saw and we believe that this customer definitely will buy from us. We got from them additional comments.

The second one was done yesterday and actually this week, finished yesterday. If not the largest bank in United States, it's one of the largest bank in United States. They acquired from us before 10,000 RepliWeb nodes, distributed all over United States, all the branches and so on. The feedback I didn't receive yet, the final product but the feedback has lot of wows and we want it now and that's exactly what we were looking for and so on and so on and so on.

So again we expect this customer to buy as soon as possible. Yet they didn't necessarily have the budget for this. So now it's a questions when and how it's getting the budget, but at the same time, he is also giving us lot of new requests, new ideas. So we have in R&D, people from R&D sitting now in his location and getting all the necessary feedback. But the morale of the research and development and the people who went to the site is very high and we believe that based on these two first experiences, next week we are going to have another two installations. We will definitely make a major difference between us and everybody else.

I will add one important thing that Maestro today, as we launch it carefully, we started with the file replication. When we are going to have a Maestro for data replication, for database and structured data, the ability to do both of them, structured and unstructured definitely will give us the highest competitive edge in this market.

Mark Gomes - PTT Research

Sounds great. Congratulations, again, and looking forward to further updates. Thanks.

Shimon Alon

Thank you, Mark.

Dror Elkayam

Thank you.

Operator

We take the next question from Don Besser of Manchester Management. Please go ahead.

Don Besser - Manchester Management

Can you describe the selling price of Maestro? Is it significantly higher than the typical Replicate product, the old Replicate product? Or is it just able to handle many more nodes?

Shimon Alon

The Maestro can be sold in two options. One is as an add-on complimenting existing Replicate customers. The price for Maestro to an existing customer will go between hundreds to $600, $700 depend on the number of nodes the customer has. So it's basically depend on the size of the Replicate units you already have. If you try to think about a customer, look at a customer that is a retail shop. It has one center somewhere around the world with hundreds of thousands of stores around United States.

So this one will be very high priced. Some will have 20, 30, 40 and so on. So the average price, again, the average, right now the way we look at it, we see about $100,000, $50,000, $200,000 to $600,000, $700,000.

When we talk about RepliWeb file replication, as you know, the price was very low. The file replication product doesn't have the huge average price that we are experiencing in the data area. So there the price for Maestro, in many cases, would be 10 to 20 times higher than what they paid today for each of the file replication product. We also expecting it to be, the proposals we gave today were in the range of about, the lowest one was about $250,000, the highest one was $800,000.

Don Besser - Manchester Management

But that didn't reflect any data capabilities. Is that correct?

Shimon Alon

No. This was just for files.

Don Besser - Manchester Management

Okay. Have you had any sales in AWS yet to-date?

Shimon Alon

Yes, of course, many. As I mentioned in my presentation, in my speech, for example, Amazon Web Services issued a video. You can find it on YouTube, and this video features a customer called Etix. We had the webinar that drew thousands of people of the customer who told the audience how we improved his refresh time form 12 hours to 15 seconds, together with Attunity, on what was disaster recovery. We had a nice list of customers with the introduction and the implementation of our new version that will support the Amazon Marketplace, what they call AMI. We know that a lot of people are waiting for that. And we are going to introduce it in the next few weeks and it will open the gate for many more that are expecting us to do it.

Don Besser - Manchester Management

Good. Thank you very much. Thank you.

Shimon Alon

Thank you.

Operator

We will take a follow-up question from Richard Baldry of ROTH Capital Partners. Please go ahead.

Richard Baldry - ROTH Capital Partners

Thanks. Two on the for Maestro side. Can you talk about whether in the long run, you expect it to mostly to open up new customers or new use cases or do you think really its more about going back to the base of installed users? And then maybe, looking at the base of installed customers you have got, what percentage or maybe number do you think it would be applicable to sell to? When do you really think you focus on going back to that base of customers? Thanks.

Shimon Alon

As I said, Maestro is geared, focused on two audiences, new customers, new cases, as well as existing customers. In the data area, so far, even though we are going to use the product later this year, we already demonstrated the product to many new use cases of what we call, distributed data integration. Look at retail shops and others. So we know that the product will go to new use cases, new customers who could not do before, what's called the distributed integration. In the file replication, the demand for Maestro came to us over the last year and a half. We know there were a lot of the people waiting for it. And I would say, today we have 50%, 50%. 50% of the opportunities we have today are with existing users and 50% are with new users. The interesting thing that the new users are very important household names that will go big.

Richard Baldry - ROTH Capital Partners

Thanks.

Shimon Alon

Thank you. Okay. Operator?

Operator

There are currently no further questions in the queue.

Shimon Alon

Very good. With that I would like to thank everybody for taking the time to join us. We are very pleased with our performance in Q1 and will continue to grow during the year. We would be presenting at B. Riley in Santa Monica on mid of May. We would be at Craig-Hallum conference at the end of May. Please if you are there, come and see me. Thank you very much.

Operator

That will conclude today's conference call. Thank you for participation. Ladies and gentlemen, you may disconnect at this time.

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