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Bottomline Technologies Inc. (NASDAQ:EPAY)

F1Q2011 Earnings Conference Call

October 21, 2010 05:00 pm EST

Executives

Robert A. Eberle – President and Chief Executive Officer

Kevin M. Donovan – Chief Financial Officer

Analysts

Jon Maietta – Needham & Company

George Sutton – Craig-Hallum

John Kraft – D.A. Davidson & Co.

Tyler Bonzynski - Stephens

Gary Prestopino – Barrington Research

Richard Davis - Cannacord

Melissa Moran - Stifel Nicolaus

Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Bottomline Technologies first quarter 2011 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session. Instructions will be given at that time. As a reminder, this conference is being recorded.

Statements made today may include forward-looking information subject to risks, uncertainties, and other factors that could materially affect actual results. For further information, please see Bottomline's report filed with the SEC pursuant to the Securities Exchange Act of 1934, which are available at SEC's website, www.sec.gov. During their remarks, references to Bottomline's financial results relate to non-GAAP or core financial results. These results are also referred to as core operating income, core EBITDA, core net income and core earnings per share.

A reconciliation of GAAP net income to core net income is provided in the earnings release. These results exclude amortization of intangible assets, impairment losses on equity investments, equity-based compensation, acquisition-related expenses and restructuring related costs. Throughout this call, when they refer to their financial results, it has this meaning. Bottomline will be providing forward-looking guidance on the call. A summary of the guidance provided during the call is available from the company upon request.

I would now like to turn the conference call over to our host Mr. Rob Eberle. Please go ahead.

Rob Eberle

Good afternoon. Thank you for your interest in Bottomline Technologies and welcome to the first quarter fiscal '11 earnings call. I'm delighted to report on what was another strong quarter for Bottomline.

I'm joined by Kevin Donovan, Chief Financial Officer, who will provide a detailed review of the quarter's financial results and our guidance going forward. We'll be available for questions following Kevin's remarks.

Q1 was another strong quarter for Bottomline. Revenue growth was a clear highlight of the quarter, with revenue of $42 million or 15% from the prior year. Subscription and transaction revenues of just over 11.5 million were up 39% from the prior year. Our focus on SaaS or software as a service platform is paying off as evidenced by this growth. EBIDTA was $9.5 million, up over $1 million from the prior year. Operating income was $8.2 million, also up over $1million from the prior year and operating income as a percent of revenue was 20%, a meaningful milestone from Bottomline. EPS was $0.27, a $0.03 increase from last quarter.

The first quarter was a strong quarter across our business. Two of our most strategic offerings are WebSeries and Paymode-X and I have exciting news to report on both.

We have seen particularly strong demand for our WebSeries cash management platform from leading global banks, financial institutions and corporations. This past quarter, we signed a new deal with the top five global banks for WebSeries to provide a multi-lingual, multi-currency payment solution. With our technology, the bank is better positioned to support its global customer base, attract new customers and enter new markets. In fact today, three of the top five US global banks use Bottomline Technologies to deliver leading-edge capability and service to the most important corporate customers.

Our success with global banks has attracted the attention of other industry participants. We recently formed a strategic relationship with CGI group to jointly market to leading Canadian banks and financial institutions. Headquartered in Montreal, CGI is a $4.5 billion dollar IT consulting firm with an impressive customer base. If we are successful with working with them as we hope we will be, it will mean large deals and significant revenue growth for Bottomline.

Given the demand and market opportunity we see in front of us, we are increasing our investment in our WebSeries platform to incorporate new personalization, including mobile phone banking and smart phone access and usability features that provide a flexible, sophisticated but easy and intuitive to use customer experience. We also will be incorporating links to Paymode-X providing access to our order-to-pay capability and the largest supplier network also wants solution.

The integration of Paymode-X functionality and the WebSeries will allow banks to enhance their payment applications and capture additional business by offering their clients and prospects unmatched capability in a single solution. With Paymode-X, bank customers and suppliers realize dramatic savings in processing cost by converting to electronic payments and remittance information.

For banks’ customers, the migration away from manual paper processes to electronic allows them to better control and predict their cash optimize working capital, improve performance metrics and strengthen their supplier relationships. For banks providing Bottomline’s leading platforms means market differentiation; which drives customers, revenues, profit and growth. And for Bottomline and out shareholders being the provider of choice for major banks means increased revenue growth, profit and strategic value.

The Paymode-X network has now grown over 125,000 suppliers. We have seen increased sales activity from Bank of America, increased sales proposals and increased new customers, helping to drive the growth and strategic significance of the Paymode-X network. We are also in active discussions with several new bank partners who could potentially adapt and resell the Paymode-X platform.

Finally, after my comments to M&A activities with over $130 million in cash, we are well-positioned to pursue strategic acquisitions. My first comment is: We are disciplined buyer focused on the right acquisitions at the right price. Our target areas include product extensions, geographic expansion, and healthcare and bank carve-outs. We have a deliberate process and are actively investigating properties that would make attractive additions to our business. I am confident that we will continue to drive incremental growth, bring on new product capabilities, add new customers, and drive increased shareholder value through the right acquisitions. I look forward to reporting back to you on the positive results to these efforts.

So in closing the first quarter, we grew top line by 15%, gross subscription and transaction revenue by 39%, generated EBIDTA of 9.5 million, grew operating income by over a million and generated EPS of $0.27. The business is strong and we have a number of very positive opportunities on the horizon. We enter fiscal 2011, confident we will produce continued strong results in the quarters and years ahead.

With that, I will turn it over to Kevin Donovan for a detailed review of the financials and then we will both be available for any questions you may have.

Kevin Donovan

Thank you, Rob.

We had a very good first quarter highlighted by strong revenue and profit growth. Both revenues and operating income grew by 15% over the prior year reflecting continued customer demand for our solutions. Highlighting several other strong financial results in the quarter, subscriptions and transactions revenue increased 39% to $11.5 million. Operating income of $8.2 million represented 20% of revenue up 110 basis points from last quarter. EBITDA was $9.5 million, a 16% year-over-year increase. EPS was $0.27 and cash flow from operations was $6.3 million for the quarter. Our first quarter financial performance represents a great start to the fiscal year. I will now provide a more detailed look in the several key financial highlights of the quarter.

First revenue growth, during the quarter we grew revenue 15% to $42 million. Our revenue growth was highlighted by the 39% growth in subscription and transaction revenue. Subscription and transaction revenue was a major focus for our business as we are providing more of our offerings in this type of model and we are investing in our SaaS based platforms. We expect our newest subscription and transaction base offerings to be one of the key drivers of our future margin expansion as they grow as a percentage of overall revenue. Subscription and transaction revenue growth was the primary driver behind the $2.5 million increase in recurring revenue. Recurring revenue was $25.4 million in the quarter were 60% of overall revenue.

At the start of the quarter, the combination of our recurring revenue in back log provide visibility to approximately 85% of the revenue we record in the quarter which provide the basis for the predictability of our financial model.

Turning the margin expansion and profit, operating income was 8.2 million in the quarter representing 20% of revenue. Our growth and profit during the quarter was driven by the $2.5 million increase in gross margins. The year-over-year gross margin growth was primarily attributable to our subscription and transaction based offerings as well as increased professional services revenue associated with customer implementations. From an operating expense standpoint, we have an increase in our investment in areas that will drive future revenue growth like sales and marketing and development expense.

Sales and marketing expense increased 7% from last year and is in line with our focus on the revenue growth. And development expense increased 20% from last year reflecting additional investments in our Paymode and WebSeries product offerings. We expect to accelerate our investment in technology during 2011 as we build out the products driving future growth. The combination of gross margin expansion and greater leverage and operating expenses drove the 20% operating margin.

As I look towards our longer-term model, we expect to continue to expand our gross margins into the low to mid 60% level over the next three years and drive operating margins of 25% plus. We have a high degree of confidence in the financial model in our ability to ultimately achieve and exceed this longer term target.

Turning to the balance sheet, we generated significant cash from operations during the quarter. Cash at the end of June was $136 million, a $13.6 million increase from last quarter, which puts us in a great position to pursue future growth acquisitions. During the quarter, we generated $6.3 million of cash from operations, up $1.7 million from last year. Over the past 12 months, we have generated $28.2 million of cash flow from operations and $24.3 million of free cash flow. DSO was 59 days, in line with last year and last quarter. Backlog at the end of September, excluding guaranteed Paymode revenues from Bank of America, was $65.5 million. The backlog was driven by orders of $39.9 million, which were up $6.1 million from last year. We ended the quarter with a cash balance of approximately $4.26 per share.

As we look forward, we are very well positioned and we are increasing our revenue guidance to a range of $172 to $175 million to reflect the stronger first quarter results. During the first quarter, we are lower than expected tax provision. We expect our tax provision to increase by approximately $1.3 million or $0.04 per share in the second quarter and beyond. Taking into account the higher tax provision, our second quarter earnings guidance is $0.23. Guidance for the remainder of the year is earnings of $0.25 in Q3 and $0.27 in Q4 yielding (phonetic $1 to) in earnings per share for the fiscal year.

In summary, we had another very good quarter, with 15% revenue growth, 39% growth in subscriptions and transactions revenue, $9.5 million of EBIDTA and 20% operating margin. We look forward to building a plan of Q1 want success as we deliver growth throughout the remainder of 2011. We will now open up the call for any questions.

Question-and-Answer Session

Operator

(Operator instructions) Our first question will come from the line of Jon Maietta with Needham & Company. Please go ahead.

Jon Maietta - Needham & Company

Thanks very much. Well, I was hoping you would talk a little bit about CGI and did you find them, did they find you or have you known each other for a period of time?

Rob Eberle

No, first I would make a general comment. We have been fortunate through the success we have had with customers and the technology we bring into the market, that we have gone from an unknown name to a much more of a known name in financial services and particularly in global banks so we chatted with a number of different candidates or partners to bring into – they will bring Bottomline into senior relationships in the Canadian market and we chose CGI on a mix of their existing customer base and culture as well as success they have had with other partners. So I couldn’t where it will go today. I have some confidence in the near term that we will certainly have success if this turns out as we hope it might, this could be very big relationship that brings us into a number of different customer situations and allows us to drive incremental revenues through a business partner that is well-positioned and highly regarded in these markets.

Jon Maietta - Needham & Company

Do they more of focus on financial services vertical as compared to (Inaudible) and (phonetic Accentures) firms like that?

Rob Eberle

The difference that they have is, they are more classic systems integrator (where there is a less build in there) and the folks was shifted away. And I am not here to comment on their businesses but for my competitive stand point I am delighted from a Bottomline stand point that the ship is move away from building it in-house or building it with a partner off-shore. The absolute today major global banks and corporate alike are looking for proven solution, product solutions. So where we used to see competition 5 years ago and even 3 years ago from either building house efforts or building house with an emphasis of a like. That is just not the road taken anyone today. It’s a longer more expensive, we have immediate product that can immediate impacts. We are in a much better position from a competitive standpoint that any of pure build-up off-shore. CGI is more of a system integrator, has a confidence of a number of their leading banks, Canada and existing working relationships so they match up to Bottomline well and that they are not – we are not competitor.

Jon Maietta - Needham & Company

Understood, that makes sense. Then with regards to integrating WebSeries and Paymode-X, Is that something that had been the plan all along or is that something that is more driven by customer as of later?

Rob Eberle

Yeah it is interesting. It is more driven out in customers because we – what’s happened is this: We talked to banks about the capability that we had on WebSeries and we say “We also offer this pay mode”. What is kind of come together in – with customers is the vision of full cash management platform and not only manages money in-house today whether the -- my cash balance and balance in transaction report into national payments and the like but also how to extend in my entire supply chain so that I can see what vendor are making payments to and send purchase orders, receive invoices and all of that on single cash management system.

That is well beyond in the scope of any of the competitors we traditionally see in a cash management space and if I take a back to your earlier question, it is well beyond frankly impossible for – in emphasis to setup a settlement that will work with 125,000 vendors on it. So it is a very interesting way for us to provide more value to the bank’s customers, to provide more differentiation and value to the bank but most importantly to position Bottomline with the unique competitive advantage that no one else can match.

Jon Maietta - Needham & Company

That was helpful, thanks very much.

Rob Eberle

Thank you.

Operator

Thank you. Our next question in queue that will come from come from the line of Richard Davis with Cannacord and your line is open.

Richard Davis - Cannacord

Hey, thanks very much. (Has been) beyond the call, so the question I had for you is: Some of your customers, the bank is kind of been hit by (Inaudible) things and so I figured some companies – some firms will freeze their decision making. The kind of this you were touching on just a second ago and also with seem to me to give an incentive to go to you, to outsource, to not build in-house. And so the balance that you are seeing and you see that changing as people kind of get their feet under themselves with the regard to regulation and then the second thing is -- relevant to that question is. You are working shoulder to shoulder with Bank of America for another year if let us say, one of another firm says we have a similar asset or analogous asset to Paymode-X’s we want to sell that to Bottomline. Is there anything in the relationship with regards to the go-to market agreement that you could – that you can bring in-house because I know you are trying to work closely with B of A at least for the moment to kind of get that thing up and running at full speed.

Rob Eberle

Richard, great to have you and your multi-part questions.

Richard Davis - Cannacord

You like that?

Rob Eberle

I loved that, yeah.

Let me start on the in-house piece. There are number of reason around it and it really isn’t a cost over cost. We certainly cemented that cost reduction efforts we saw on 2008 and like really cemented that pendulum swing. There is a whole bunch of reason that building in-house does not make sense now, what they do – wanted to get leverage of one, otherwise you are building a platform for one organization. You get the benefit of your own thinking but you do not get the benefit of the industry expertise and the main knowledge the Bottomline brings which is a cumulative product setup, ideas from different customers, different arenas.

China market is much slower China market. We have product available today. Many times their deadline is driven by either IT upgrades, customer situations or just simple desire to be out with a new competitive offer and sooner the favor of existing product and then the experience on the other has always been difficult. Delays, deadlines not met longer and more expensive than anticipated so that is really – I have not seen a major bank go to a building house in several years now and that is really cemented.

Second question you asked was the possibility of bringing on other banks it actually – you put it in terms of buying other bank’s platform. We are very interested in that and we would look at that. There is some contractual limits now that would run – have less than a year to run on those for 10 major global banks but the phase at which the banks move, if we would have those discussions we would not have something signed within a year at this point anyways. The contractual restriction while there is in your term obstacle but nothing from a longer term strategic perspective. The question that you ask there really leads to ultimate ambition and that is we believe the Bottomline is well position to run this type of capability for all major banks. Run a single network to which banks could channel. We also believe that is the optimum way for businesses to pay each other that the paper checks do not make sense nor is the credit card. Correct and appropriate way given the relationships and balance of power and risk is to a settlement network like Paymode. We like to, not only bring other banks on but we absolutely open to buy another platforms from banks and integrate them with Paymode network.

Richard Davis - Cannacord

And then basically you could talk and then you got the time that would settle. It would be (inaudible).

Rob Eberle

Contractual restriction on signed and banks take a long time to put some. These are outsourcing deals too so there is lot around us always. There is a lot to it, so I would not expect to see anything within the year but I absolutely believe we will sign other banks and buy other platforms and add them to this network.

Richard Davis - Cannacord

Great. That makes sense. Thanks so much.

Operator

Thank you, our next question in queue that will come from the line of John Kraft with DA Davidson. Please go ahead.

John Kraft – D.A. Davidson & Co.

Hey Rob. Hey Kevin

Kevin Donovan

Hello there.

John Kraft – D.A. Davidson & Co.

I will ask my question in parts. How long this implementation of the top 5 global bank – how long would that to implement?

Kevin Donovan

It will be an implementation in 6 months.

John Kraft – D.A. Davidson & Co.

Six months, and presumably that is in the 65 million background number or no?

Kevin Donovan

Yes there is a component of it in the back log, correct.

John Kraft – D.A. Davidson & Co.

Okay. And on the -- looking at some of the direct cost – the subscription line in particular was pretty high. Is that some of the development you are talking about?

Kevin Donovan

Yes, reflects the increase investment in Paymode.

John Kraft – D.A. Davidson & Co.

And do you think it would be similar sorts of investor mates going for you soon, maybe accelerate a little bit but…

Kevin Donovan

We would see at least this level of investment as we go forward.

John Kraft – D.A. Davidson & Co.

Okay. And you came in a bit better that you were guiding to, any of the outperformance coming from deals the you expected to sign in out quarters or is it just maybe a better overall environment?

Kevin Donovan

I think it’s just the better overall environment. It was not any specific one deal that we were not expecting the quarter that came in.

John Kraft – D.A. Davidson & Co.

Okay and lastly, the sales activity on the pay mode side sounds like things are pretty active there. You notice any particular successes - in particular verticals?

Rob Eberle

It is really a mixed across industries we have come. Without getting too much in the Bank of America strategy and verticals (Inaudible). Government entities sign on of significant size as well as mix across verticals. One question I come at when you asked about the general environment. I would tell you that no question was seen more pipeline activity and more enthusiasm in ability to purchase new platform which is – what gets me excited about where our businesses is headed as we have now the relationship we have the proven technologies. We dialogue at the highest level system of what this customer wants and investment we are making in product was not speculative – it is not a boy wonderful selling you this if we build it rather. This is directly in line with what customers are requesting from us and very close to committing on purchases. It is a different level of risk and this clear return, it will be coming around from this investment.

John Kraft – D.A. Davidson & Co.

Clear enough. That is helpful. Thanks guys

Thank you. Our next question in queue that will come from the line of Gary Prestopino with Barrington Research and your line is open.

Gary Prestopino – Barrington Research

Hi guys. Hey Kevin the acquisition related expenses – where exactly is that in the income statement? Is that in GNA expenses?

Kevin Donovan

I should be in operating expenses but primarily would be GNA craft.

Gary Prestopino – Barrington Research

Okay so, if you backed that up and looks like – and with the – when you back that out and the stock (Inaudible) it is look like it is about 3.5 million in GNA. Is that pretty much good range to you throughout the year.

Kevin Donovan

Yeah, but it just under 3.5 million craft.

Gary Prestopino – Barrington Research

And that is good range to use for the year?

Kevin Donovan

Yeah I think it is a pretty good range.

Gary Prestopino – Barrington Research

Okay then in terms of pay mode acts. You put our press release when you have increased the vendors or suppliers on that. Could you also maybe address -- were there any – did you guys sign-up any new users outside the Bank of America channel this quarter.

Rob Eberle

We did, we signed up two new users. It is not to be clear and fairer – our focus today is been on the Bank of America channel. It also been on the technology, incorporating a number of things. One, bring in across that technology to our own; hosted platforms to integrated with our invoice capability. And three it is a back log of suppliers that we have been able to address and bring on and generate more values so were – we sold two deals this quarter but we are not at a position yet that we are aggressively marketing Paymode access a direct offering from Bottomline. We will be doing that in near term but we got a couple of other pieces we want to clear out from the product stand point before we think we got the optimal offering that aggressively target sales in that direction.

Gary Prestopino – Barrington Research

Is it correct to assume that as you have more suppliers that obviously going to drive more transactions?

Rob Eberle

It does drive more transaction. The other piece (Inaudible) in today’s model is adding many more payers so that -- which were added as well but you want to build both sides to that equation.

Gary Prestopino – Barrington Research

Okay then when you are integrating this pay mode with WebSeries and you are selling it to the banks. Are the banks can they also maybe try and sell that the WebSeries integrated with Paymode out to their clients or you going to white label with the bank if you strictly sell to a bank you can only sell Pay mode.

Rob Eberle

The bank will do as actually as host WebSeries and we are not hosting Paymode platforms but they sell that service to their customers, so typically in a web series we are not part of it. It is not a transaction price model but Paymode absolutely is.

Gary Prestopino – Barrington Research

Okay. Fine. Thank you.

Operator

(Operator instructions) Our next question in queue will come from the line of George Sutton with Craig-Hallum and your line is open.

George Sutton – Craig-Hallum

Hi guys my question were also be less for those (Inaudible) . The first relates to the 125,000 vendor number you threw out Rob. I know that it is very important with respect to percentage of vendor overlap when you go to a bid for business. Can you give us some sense of what goes 15 pointer is for most potential customer on that number and where you are relative to that?

Rob Eberle

Let me make sure that I understand question. When we go in to a customer what percent in their vendor be?

George Sutton – Craig-Hallum

Potential customer, so what percentage of their vendors do you already have in your network?

Rob Eberle

That can range from industry but the sweet spot where we typically would hope to land will be above 50% level. It certainly can be lowered than that if we got depending on what industry or geographical location and the like but overtime that will continue to increase.

George Sutton – Craig-Hallum

Okay because traditionally I think their number has been 30 so you actually have cases were 50% already…

Rob Eberle

Cases, we have cases of 50. Yes.

Okay, because traditionally I think the number has been 30 so you actually have cases where 50% are already—

George Sutton – Craig-Hallum

Okay. And you again called out healthcare as a specific vertical and particular success is there. Can you give us a sense of how significant that is for the total in terms of your business? And give us a sense of that opportunity?

Rob Eberle

The way I would frame that is it is not significant to the proportion of Bottomline’s business today but we see such a – we see a tremendous opportunity there and the model I look at is five years ago. We saw a big opportunity in finance global banks and financial institutions and we set about step by step in creating its particular niche that we could identify and be competitive and actually dominate the second that we went around the relationships and the conferences and marketing.

Now we are really just beginning that path in healthcare. The thing that is attractive about healthcare is our technology which allows the automation of different payment streams allows the balance and transaction reporting allows verification of business the right amount of pay. There are so many different streams of payments within health care so we continue to look at the right place to apply Bottomline’s technology and expertise quite likely in – a most advantageous scenario would be in combination with the customer in domain expertise acquisition but it is a very attractive area for us. We have significant – we have over 1,500 healthcare customers today but I don’t feel we – I feel we are just beginning to tap the opportunity in that market.

George Sutton – Craig-Hallum

Okay. Perfect. Thanks.

Operator

Thank you. Our next question in queue that will come from the line of Brett Huff with Stephens and your line is open.

Brett Huff – Stephens

Yes, this is actually Tyler in for Brett this afternoon. How is everybody doing?

Rob Eberle

Very good.

Tyler Bonzynski - Stephens

I think most of my questions have been answered. I was just wondering on the balance sheet – just wondering if you will have any thoughts on other types of capital deployment if you don’t mind the compelling acquisition here in the near medium term.

Kevin Donovan

Now, we are right now focused on using the cash from an acquisition standpoint. That is the primary focus today.

Tyler Bonzynski - Stephens

Okay. Then just on the Paymode competitive market place, any sense of – any progress somewhat like [inaudible] might be making out there just any other players that you are seeing in the kind of how the marketplace is shaping up.

Rob Eberle

Yes, [inaudible] actually signed a bank to come on to their platform which is fantastic. It shows that this is the way the direction of banks will go. The key core fundamental flaws in [inaudible] approach is the emphasis on the purchase card and the idea that a vendor or supplier in a big existing business relationship should pay 2, 3, 4, 5% – percentage points for the privilege of getting the payment for someone that they have been doing business with for 5, 10, 20 years. That is a very appropriate model between a consumer and a retail organization when the consumer is unknown and they partly take on those percentages as [ ] substantial risks. That risk does not exist in a business to business relationship and while it is certainly profitable it doesn’t get a lot of penetration and we believe Paymode is a much better solution for that – a business to business payment.

Tyler Bonzynski - Stephens

And then Kevin, can you just briefly kind of tell me about the tax rate as you [ ] in one [ ] kind of how that fixes itself going through the rest of the year.

Kevin Donovan

It was lower than projected related to the releases of evaluation reserves so it all correct itself in the second quarter and going forward now will give rise to a higher tax provision as we go forward.

Tyler Bonzynski - Stephens

Okay, great. Thanks.

Operator

Thank you. The next question on queue will come from the line of Melissa Moran with Stifel Nicolaus and your line is open.

Melissa Moran - Stifel Nicolaus

Hey, good afternoon, guys. I was wondering if you could talk about the travel commission service and give us an update on your efforts there.

Rob Eberle

Yes, we [ ] signed an agreement with Bank of America to bring those customers on to Bottomline. We have not yet brought them across as we are still working through the technology pieces that need to be dealt into Paymode and some of the other combinations that need to be made to bring that service into Bottomline so it will certainly occur in this fiscal year but that it will also most certainly occur in the latter half to the end of this fiscal year.

Melissa Moran - Stifel Nicolaus

Okay, great. Thanks. And because I know you are pretty good, you [ ] growth in the subscription and transaction line but I have to think on the last call you said that you expected that revenue to be absolutely and I was just wondering if there – if that was just kind of typical volatility or there was something that didn’t quite meet your expectations there?

Kevin Donovan

I think that was just typical seasonality on some of the transaction of volumes for the summer quarter.

Melissa Moran - Stifel Nicolaus

Okay, great. Thanks a lot.

Operator

Thank you. And at this time, we have no additional questions in queue. Please continue.

Rob Eberle

Very good. Well, I think as we said it our business is strong. We have a number of positive opportunities in the horizon and we look forward to reporting back to them at the conclusion of the second quarter. Thank you for your time and interest in Bottomline Technologies.

Operator

Okay. Ladies and gentlemen, this call will be available for replay after 7 p.m. Eastern Time today through October 28, 2010 at midnight. You may access the AT&T teleconference reply system at anytime by dialing 1-800-475-6701 and entering the access code of 143789.

International participants may dial 1-320-365-3844. Once again, those numbers are 1800-475-6701 and 320-365-3844 using the access code of 143789. And that does conclude our conference for today. Thank you for your participation and for using AT&T Executive Teleconference Service. You may now disconnect.

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