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Guidewire Software Inc (NYSE:GWRE)

Citi Technology Conference

September 06, 2012 02:00 pm ET

Executives

Karen Blasing - Chief Financial Officer

Analysts

Karen Blasing

Thank you very much. I apologize. Marcus Ryu, who is our CEO was planning on being and joining with me today, and he did have a family emergency last night, so he was originally planning and taking the red eye out last night and called just before he was getting on the plane. He finds them as fine, but it did preclude him from being able to join us today. If you are out in the San Francisco area please stop by, have an opportunity to Marcus directly there as well, and we are actually trying to be pretty investor-friendly, so their special needs questions and we are fairly buckled up.

Guidewire Software, since the company public in late January, Citi bank was one of our core underwrite and we are very happy actually to have them represent us, so I'll give you brief overview of Guidewire. The insurance industry is a property and casualty interest industry. It's a $1.2 trillion industry is still using three-year old technology. It's extremely hard to believe, but they really still are using three year-old technology. Our founders started this company in 2001, so we're 11 years old, actually in the month of August, and they went after this industry to really modernize it and bring it into the current decade.

Customers we are targeting are the global industrial world, restaurant, property and casualties. There are 7,000 property and casualty insurance industry insured worldwide. We target 1,200 of them as kind of mid-size to the very largest and we target the most industrialized world, so it's the U.S. and Canada. It's Europe and its Japan, Australia and we have a operation starting in China.

Fiscal highlights. We just reported our fourth quarter two days ago. We were proud to accomplish $67.6 million in revenue, and we had non-GAAP operating income of $9.6 million. We are on a recurring revenue base. We sell term licenses to our customers rather than the old kind of software model of signing perpetual license and that's the only time you ever get a license fees for the sale of your product. We instead sell on average five-year contract. We charge licensing fee to our customers to use our products. We ask them to pay as a fee for license and maintenance annually every year and we have an incredibly high almost 100% renewal rates.

Looking at the businesses last year, we added 30 customers, which is a record high for us. The high in the prior year with 17 customers, so we are very proud to add 30. We also had a significant increase in traction in the two additional products that we've released over the last several years, and that is PolicyCenter and BillingCenter.

Guidewire was always known as really the leader in the ClaimCenter management, but we have a hard press actually to consider ourselves as leadership position PolicyCenter and Billing. We changed our go-to-market strategy with the release of our 7.0 product, and about 18 months ago really has a sales team go after selling both PolicyCenter, PolicyCenter and BillingCenter, so the strategy actually worked. We were now successful at having 35 PolicyCenter customers, 17 of those PolicyCenter customers came to us in last fiscal year.

As far as investment, we think now is the time to invest. While we still have quite good operating margins and have been GAAP profitable for the last three year, when we look at the traction we've got in the marketplace today, we still believe that this is a land grab opportunity, and so we are investing still quite heavily in research and development in our professional services team and most importantly in our sales and marketing teams as we expand our footprint worldwide. We have about 850 employees today, a nice headcount growth. We've actually been contributing to the economy and the unemployment rank, and hired people last year.

So, who is our market? Insurance really is everywhere. The insurance industry is the fourth largest industry in the world, and so it's based on kind of like two or three different segments, personal lines, which all of us buy insurance for our own autos and home. Commercial lines, where people buy insurance for cars and for building and then also really what's considered kind of workmen's comp, which is a segment of the commercial lines, where you pay for insurance for your employees.

It's a huge industry. In 2010, we think it's about $1.2 trillion industry, and really in this market, the Americas which includes Canada and South America, EMEA and then Asia-Pac, and that's our go-to-market strategy as well. We've built these products actually to be able to service this global industry and has been successful actually in being able to capture customers around global.

This industry spends a tremendous amount of money on IT. Now, most of it today is still going to services. It's going to the system integrators, it's going to IT shops, it's going to the BPOs, and our goal is to take some of that wallet share and actually sell it as software instead, which should be a most much more effective way for the insurance industry to run its core applications, so this is legacy.

Now many of us haven't actually seen this kind of green screen, because it's hard to believe that the insurance industry is still running on it, but this is a real life shot for one of our customers. Three year old technology, most of it is still run on IBM mainframes. It's COBOL, which is something they used to teach when I was in college. They don't even teach COBOL programming in college any more these days, and it's very paper-intensive. This is the Guidewire offering.

PCs, the laptop computers that doesn't look so modern, because that certainly been around for a while, but in the insurance industry it's incredibly novel to be able use something like this on a personal computer and we branched out and actually are building Edge applications that will allow the insurance carriers actually to be able to use mobile devices whether it's pad-like devices or is a iPhones or Android phones as well.

So what's the insurance suite? We have three core products, PolicyCenter, BillingCenter and ClaimCenter, and those products are really wrapped around how and insurance industry runs its functional operations. There's a policy and underwriting group, there's a claims group and there's a billings group, so it's market through our CEO would say, we are very [remains] associated with their description of our products, but we thought they'd be useful in helping sell our products to our customers.

It's on one unified technology program. It's all jobber based, and we've actually open sourced that jobber based platform, so our intent is full legacy replacement integrated suite where you can go in, in a lower point of entry if you just want to buy one of the products, or if you want to buy for a single line of business. It gives an opportunity to actually low and then be able to up-sell into our customer base as well.

This is a sample of some of our customers. As you will notice on the top left, there are some very large global customers that we have been able to secure including Allianz, headquartered in Germany. AXA, headquartered in France, and then Zurich, obviously headquartered in Switzerland as well.

We have been proud to add to that customer base over this last year. We have customers in 16 countries now. Some of the most recent ones are Santam in South Africa, Pacifico in Peru PZU in Poland, are some of the recent one.

So we are really delivering on strategic goals that help meet the customers' objectives, and I mean the customers' objectives at the very highest level. Our sales team and markets through, particularly our CEO has met almost all of the CEOs of our major customers. This is definitely a board level decision to be implementing the Guidewire product, so we go after it in three different ways, trying to help them grow revenue, trying to help them retain customers, because once an insurance carrier gets the customer, it's very expensive if they have to replace that customer, so customer satisfaction is very important to them. We help them do that and then we also help them reduce expenses.

Why have been successful and others have failed at this? From the very beginning, the company's mantra has been around customer satisfaction. We have 202 implementations, we had zero project failures. We are hard pressed to find another software company who has those kind of statistics.

So what's the Guidewire business model? We sell licenses and maintenance to our customers on a recurring nature basis. The average contracts are about five years. We bill each of those customers annually in advance for the license and the maintenance portion of it, so it tells the licensing fee just to use the product. That licensing fee is recognized one a year. Just like our [heart] base. We recognize that the contract signing on the in-voice due date and then again on each anniversary day. The maintenance stream is recognized ratably over the subsequent 12-month period and the services is then recognized on a time and material's basis.

It's incredibly predictable for us, because we have a large and growing annuity base of our existing customer contract and their expected renewal rates, so when I am predicting revenue on a per guidance basis or to communicate to our board, I actually have a very good visible amount of revenue that I expect to get from that customer base. Then we can handicap really the new sales that are expected to come in that year.

On the services side, we do have a fairly high element of service revenue today. It's profitable. The average margins on our services are somewhere between the mid-teens and into 20s, but its purpose in life is to get successful customer implementations. It's also purpose in life is to help serve as good references as well. When a customer is looking to buy from us, they want to make sure that what our services team telling them is going to be accurate in the amount of time and the cost structure around getting a successful implementation as well, and we've been very successful at doing that.

Now we get down for us this loan, we try to do kind of between 10% and 15% of every project. The rest is left for the system integrators who we partner with EY, IBM, Capgemini and Deloitte. We have many multiple up-sell opportunities. If you look at the customer base, starting in 2009 from the first ClaimCenter win at one of these large multi-nationals, each year they've been buying more from us and this last year, this one particular multi-national customer, we actually did a $3 million sale to one of their divisions and another $5 million to another. We have a large Canadian insurer who first bought ClaimCenter in 2007, and then added PolicyCenter and BillingCenter.

We have a large regional carrier that in 2006 signed up the ClaimCenter and PolicyCenter, and then in 2010, added BillingCenter. Last, a Tier-1 U.S. insurer who bought ClaimCenter from us in 2011, and just a short year later bought PolicyCenter and BillingCenter for various sizable set of fees. We've got great sustained momentum. We added 30 customers as I mentioned in fiscal year '12. This was the fastest increase in new customer count that we've had in our company's history.

We have 12% of the total global, what's called direct written premium, which is how an insurance carrier measures its revenue and its fees from its customers. Using at least one application, but we've got a long way to go. There are 1,200 customers that we are targeting, we've got about 130 of them today, but we are very low penetrated into that markets. We've got a lot of opportunities for new customer sales and old as well.

We've had the revenue growth in both, license and maintenance and services over the last year. Talked a little bit about our licensing model already, so won't dwell again on that, and then recurring revenues, I have talked about this kind of growing customer installed annuity base that we have. I tend to think of this is kind of like layers on the cake, so as of the end of FY'12, for the last year, we have a $104 million in revenues that I expect to be charged as fees to our customers again just for the license and maintenance portion, so I think it as layer from the cake as we continue to add new customers.

We are globally distributed. We've been very successful in the U.S. and Canada and English-speaking world, Australia and U.K., but we have a large number of customers who we serve in both, multi-bite as well as multi-currency, and we've been successful really against many tiers of the insurance industry from the very largest kind of the $20 billion carriers to the smaller ones which are kind of $200 million size, so nice meaningful revenue from all those tiers.

That's the kind of long-term model that we expect kind of an adjusted EBITDA or adjusted operating income of 20% to 24% over time, so I hope that gives you kind of a quick snapshot of Guidewire's offering to the market.

Unidentified Analyst

Great. Thanks, Karen. That was a great quick intro. Maybe we can start the Q&A just talking about, you are largely competing against legacy solutions, green screens and so forth and I'd imagine some customers moved pretty quickly to recognizing that we need a product like this and they buy it and others don't. Can you talk about sort of the sales process and what are the hooks that get the customers that you end up signing up in a meaningful way to that pretty quickly.

Karen Blasing

Sure. Happy to do that, so the insurance industry feels like it moves at glacier speed, right? It does. I mean, we started selling product really in 2003, and to-date now have 130 customers. There's no single prospect that we talk to that doesn't recognize any to replace the legacy system. The question is when. The biggest catalyst actually is for people feeling comfortable to buy the Guidewire products and replace the legacy is each individual successful customer implementation, so our customers aren't buying just because somebody else is buying, so that is an element to get us recognized in their sales process, so they evaluate the process, but the real key is 100% satisfied customers in there what they would define as a cohort of peers and that is really the thing that's the catalyst actually for velocity in our business.

Unidentified Analyst

What are sales cycles…

Karen Blasing

Sales cycles are still quite long, so we are in a discussion process or a thought leadership process with our customers. Sometimes two to four year. By the time they actually get ready to buy and have put an RFP together have started to do some proof-of-concept really look getting an active bid from Guidewire on what the cost structure to do replacement and mobilizing their team. It's about a 12 to 14-month process. What's unique about our business is, at the time they are ready to buy, they are also ready to sign our customer service agreement and they are also ready to line-up their system integrators as well, so we don't have shelf-ware out there.

From the minute we sign those agreements, the customers projects are really ready to go, so we have a swap team on board, EY or Pricewaterhouse who want to really partner is ready go out there as well.

Unidentified Analyst

Got it. Can you talk about you put up some of the customers showing success in Claims and then some of the other products. Can you talk about the relative either market sizes or opportunities with customers if Claims versus Policy versus Billing, and how you've seen that play out as you've expanded the product line?

Karen Blasing

Absolutely, so the go-to-market strategy was always to build and sell claims that are first. It was an area of insurance that was easy to kind of get a toehold and first it could be segmented off easily and replaced more easily, and then like PolicyCenter with was well, so got back the toehold, got our leadership position in ClaimCenter and then went back into build out the fuller, richer PolicyCenter and billing projects with that as well.

The PolicyCenter is really the big cohort for us. It's the price point for PolicyCenter is kind of 1.5% to 1.75% higher price than ClaimCenter is, and it's also really the anchor point for the insurance industry, because that's the gout of they are managing their policy in underwriting process, so we have been very pleased since we've changed the go-to-market strategy over the last couple of years, where are going out with not to trying to Claims first and then try to up-sell into policy and billing, we are now going out equally and into the marketplace very aggressively selling the policy too, and it's worked. We have 35 PolicyCenter customers as of the end of this fiscal year, 17 of which I mentioned were acquired in this last year.

Unidentified Analyst

What about BillingCenter? How big is opportunity there?

Karen Blasing

PolicyCenters are little bit smaller and it's not as strategic as the PolicyCenter as the claims world is, but most IT organizations within the insurance world tend to think of policy and billing kind of together, like it's not if we are going to sell policy, the will want to include the billing center portion of it as well. Simply unified strategy.

Unidentified Analyst

Okay. Got it. Then we've sort of tracked your progress with the larger insurers though the A.M. Best 100, which is kind of the Fortune 100 in the insurance business and you have pretty good share there. Still the top-10, some of those guys see I'll say the larger customers, they are not your customers yet. I am wondering as we think about the opportunity here in the growth of the company, are you very dependent on the larger carriers in signing those up or how to look where the growth may come from across the spectrum of potential customers?

Karen Blasing

We would also like to have Allstate and State Farm's customers as well, and would say probably four years ago, I wouldn't have thought it's possible. They, both of them were in the middle of large custom rebuilds with a significant customer competitor of ours.

I think that that's not the case today. I think that with the recognition that we've had in other Tier-1 carriers, there isn't anybody who wouldn't consider Guidewire solution that would be faster and cheaper and certainly more upgradable for them to run the corporations, and they are not customers today, we would certainly like them to be.

Unidentified Analyst

Got it. Then just relative to the competition, you mentioned one there and it sounds like in general, but the biggest competition is legacy you are doing nothing, so I think the audience understands that, but maybe you can talk through a bit who the competition is and we could start there.

Karen Blasing

The competition really comes in kind of three flavors. One, obvious players who aren't competition. Everyone who think that SAP and Oracle as a same big software application providers would have gone after this market. Quite honestly they just dabbled at it for the last years. They have treated it with a horizontal application rather than the specific needs for very complex processes, so they don't have traction really in this marketplace.

Other ones came out really at the start-ups, many of them came off the insurance industry themselves. They were IT professionals who were looking to do a point solution for solving a unique problem within the carriers. They branched out, they had domain expertise about insurance, but they really didn't know very much about software and the products and services that they built never really got much traction. We don't think any of them really got over kind of $20 million to $30 million in revenue a year. We've pulled significantly away from those actually even rarely see them in competition today.

The biggest competitor that we have today is really the Accenture. Accenture is a large provider of services to this market, and they actually have a lot of large custom results that they had been in the process of completing and they've tried to go after this really from a software place. They go out in a very different way. They go after the kind of the tools component for the claims and then they bought a very small one of our competitors that great about a year ago, so they have some traction in the small end of the markets predominantly in the U.S. the PolicyCenter, but quite frankly we really lose to them. We have lost a couple of times over the last probably 15 months, they've even put out press releases on those two kind of two probably smaller carriers, so we don't underestimate them. No one should underestimate a giant like that, but we have been successful in many instance.

Unidentified Analyst

Got it. I think there was some litigation there. Most of it has been settled or settled in your favor and I think there is an outstanding appeal that's still awaiting. Any news on that or when should we expect to hear anything around that?

Karen Blasing

Yes. That's right. There was a litigation that was settled almost a year ago now. Guidewire did make a settlement payment of $10 million to Accenture. There is no more contention between the two companies. The only thing that's outstanding is Accenture did have their right of an appeal. If they win that appeal, Guidewire would have to pay an additional $20 million as well. We don't believe that their appeal will prevail and we don't have a definitive data as to when that would be settled. It is not reserved and considered probable.

Unidentified Analyst

One other avenue of growth here that we haven't talked about is, you showed a slide there, but we haven't explored it yet. It's just penetration within the installed base. Could you talk about just maybe simply something like ClaimCenter your oldest product. How far penetrated are you in the base of your existing customers today with that product?

Karen Blasing

In target market of about 1,200 customers. We've got 116 customers who have bought ClaimCenter today, and typically many of those customers will have bought a good size of their population, so probably around the 10% mark is the penetration rate we have on ClaimCenter.

Now, PolicyCenter and Billing, while we have grown the existing customer base for both of those products, we think we are on the infantile phases from that. It's probably 3% or 4% penetrated today.

Unidentified Analyst

You mean the customers come in and buy small piece of that and rollout one in the future?

Karen Blasing

Exactly.

Unidentified Analyst

Got it. Just on the business and it has an obvious impact on the numbers on services revenues is quite high as a percentage of the total. Where do you think that steady state in terms of your long-term business model and so forth when you are three to five years out? Where does services end up as a percentage of revenue and what you need to do get it to that level.

Karen Blasing

Yes, so services is a relatively high component of it. It helps in our sales process. It certainly helps in adding successful customer implementations as well, so it's running around about 45% of total revenue today. I think it's going to settle out at about 30% to 35%, and that will trail down over the next couple of years.

We have had active program to get the system integrators up and running and successful with implementation of ClaimCenter, and we are in the process of actually doing the same thing with PolicyCenter today. It's important that they get actually trained, but it's also important that they gain experience in implementation of those projects.

Unidentified Analyst

Got it. I am going to ask, Karen, one more. I have a number of other questions. I was going to ask you one more and then if there's any question from the audience, go ahead and raise hand. We'll bring the microphone around. That question is, I guess, software analysts are conditioned at looking at these companies in different ways and you have a predictable business model, but one that's a little bit different in terms of the revenue flows sort of on and off the balance sheet and into the P&L, and one thing we noticed this year is your revenue growth in the 30s and your billings growth is I think just under 20%. There's a fairly large disparity between those two numbers and I think a lot of investors are condition to almost look at billings as a leading indicator for revenue. We certainly do that in the SaaS world for example, and I am wondering as it relates to that dynamic in your business maybe you could explain that little bit further and the relationship between those two metrics.

Karen Blasing

Sure. I am happy to do that. I am encouraged to just to look at this business kind of on an annual basis, because we don't sign the same number of customer contracts each quarter nor are those customers customer contracts uniform in size. We have customers that give us $100,000 a year and we have customers that give us over $6 million a year, so depending on when the in-voicing due dates are for those customers, the amount of build revenue and the amount of earned or deferred revenue can vary kind of significantly quarter-to-quarter.

Now, there are some differences even if you look at it over a full year basis. Just so happens that in Q4 of FY'11, we had two pretty significant size contracts that were perpetual licenses, which now we recognize the license revenue just once with a much higher maintenance stream. Those were actually build in the fourth quarter of FY'11 and then recognized for earned revenue in the first quarter. We didn't have that same pattern of those two perpetual contracts in Q4 of FY'12, so in this case you need to really kind of stretched over a little bit longer than a 12-month period to really have the Billings growth equal the amount of revenue growth that's in there as well.

Unidentified Analyst

That is a relationship that should converge over time.

Karen Blasing

It is actually relationships that were converged over time, sometimes there are a couple of outliers that can make a little bit of differences when you are looking at those exact time periods.

Unidentified Analyst

Okay. Got it. I'll pause here and see if there is questions in the audience. Go ahead and got a question over here in the back.

Question-and-Answer Session

Unidentified Analyst

Thanks. I was just surprised as it on a per seat basis and can you tie that back? You mentioned something about 10% penetration and then you use another term I would ensure quite what that meant.

Karen Blasing

Sure. I am happy to do that, so rather than doing user-based pricing, which the core founding team considered pricing their products on, they didn't want to make it user-based at disincentives to be used within the insurance world didn't get into with user based pricing. They also looked at kind of like box based pricing which is how some of the software companies would do that as well, so kind of capacity are box based, and with the benefits to lower cost and hardware, they didn't want to use kind of a box or capacity based pricing with it as well, okay? So they went after a metric that was very familiar to the insurance industry which is how they measure their customers, which is the direct written premium, so it's the amount of fees that they charge their customers for originally underwriting a policy for them, okay? They said, "Well, what sounds like it would be then fair to those customers so that a large customer would end up paying more if they wrote a larger amount of premiums versus the smaller customer?", and so what the set the pricing model on was on a basis point value against that direct written premium, so depending on kind of like the size, because again there are very large carriers and then some medium size carriers, so typically we earn kind of 10 to 30 basis points on every $1 billion worth of premium, and actually it's helped us quite well actually in insurance industry. We have very little discussions about kind of the pricing mechanism there.

Unidentified Analyst

I was wondering in one of the charts you had that time at $1.2 trillion and you are showing also slide that picture where you have premiums license of your company get $200 billion, so does that mean the revenue potential is 6x what you are doing today? Is there some relationship in terms of the time and your revenue?

Karen Blasing

Not quite. We think the opportunity is actually there than that, because the DWP is the amount of direct written premium of those carriers and we can sell three individual products into that same DWP, the direct written premium, so the total available market would be kind of the 10 to 30 basis points on that $1.2 trillion industry. Now, we don't expect to get there. I don't think there's a single software vendor who ever expects to have a 100% penetration that market, but quite frankly if we were at 35% or 40% of that available market and we sold all of our products to them and there isn't any large company.

Unidentified Analyst

Any other questions out there?

Unidentified Analyst

Will you have a deviate on the pricing model you outlined, so if a customer said they I really want to pay a fixed fee or something along on those times, will you deviate from the percentage of premium written model?

Karen Blasing

We have in a couple of cases, particular when it's dropped around the specialty insurance market, so instead of doing broad personal, commercial or workmen's comp, maybe they just do very specialty D&O insurance or maybe they just insure jewelry, and in that case to ascend that percentage of DWP kind of married against the amount of transactions if they are running through the system, have a little bit of a mismatch, and so in those cases we certainly will work with our customers to come up with something that seems fair to both parties.

Unidentified Analyst

Karen, maybe I'll ask you on the renewal side. I think you said you are near 100% renewal rates. I think a lot of your customers have yet to come up for renewal in that's something that will happen here over the next several years. How do those renewal discussions go. What's been your ability to hold pricing and what have been sort of the dynamics around those contracts when they have come up?

Karen Blasing

Yes. Through the end of FY'12, we actually have had a fair number of contracts that have not come up for renewal. The average terms of our contract is five years, but we had a number of the earlier contracts that were kind of a three-year duration, so with that a good, a couple of dozen or so contracts that have come up, but pricing is pretty well set even on renewal basis for our customers, because they were very interested in securing their cost basis going forward of these systems, so in our contracts typically there are prices that are pre-negotiated that can go up on a kind of a CIP index. If that changed, if they are now writing a lot more written premiums for that one particular line of business, we will charge more for those as well. If they are adding additional lines of business, we charge more or if they make acquisitions then we have an opportunity to charge more as well.

Unidentified Analyst

Got it. Is there any as we look forward to fiscal '13, is there any particular concentration of renewals, or this just sort of a business that will ramp as we go forward?

Karen Blasing

Pretty much the business is going to ramp, and we are in such close communication with all of our customers, because it's just our mantra that we know where all of their customers are in the renewal cycle. We know that they are happily using the products today and quite honestly today I can envision that they are not going to renew, because that would mean that they would lose some tiers licenses as well.

Unidentified Analyst

All right there is a question in the back.

Unidentified Analyst

Can you talk about how you pay our sales guys. Is it just on new bookings or are those based on the total five-year contract? Thanks.

Karen Blasing

Yes, so no confusion. I am going to press at all. The sales guys for commission get paid just on new bookings, and we have a bonus structure within the company that goes to every employee as well, and the bonus structure for that is all just hit new bookings as well. Nobody gets paid on service revenue. Nobody gets paid on the installed base. It's all about growing and finding new customers and up-selling additional products to the existing base.

Unidentified Analyst

Okay. May I'll close out with the last question, because we are into the end of the time here, but you reported on Tuesday night, I think. One thing you talked about in your guidance for fiscal '13 was spending more to drive the growth on a top line. Could you talk about where you are deploying those resources, what areas of the business and what you are going to watch in terms of the return to get on those resources and determining to spend more or not?

Karen Blasing

Absolutely, so about three years ago, the sales actually really started ramping in 2009, and Guidewire won several key customers. That year, we got cash profitable and so at that stage really have the confidence to really start investing additional money into the business. First place was in research and development, and we've added a large number of people to the R&D team and have successfully produced very good product with those additional resources.

The second place to start investor in professional services, and that is as our growing sales were happening and the number of projects we were managing, we clearly needed to ramp up and make sure that a lack of service personnel was not going to be inhibitor to sales or the successful customer implementations as well.

The third area really has been with the joining of John True, who is our Senior Vice President in charge of sales and services. His assessment of the company when he joined us last November was, it really is the time to try to expand geographically and to get better coverage on the 1,200 customers that we have, so we've really now started to really ramp-up the sales and marketing efforts for that, and predominantly in the U.S. and Europe, but a smattering of additional sales and sales support and age as well.

Unidentified Analyst

Got it. Well, with that we are going to close it out. Karen, thanks a lot for coming, for doing this and for doing the one-on-one. Thank you all for attending.

Karen Blasing

Thank you.

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