ANSYS Inc (ANSS) 2011 Q1 法說會逐字稿

Good morning and welcome to the ANSYS first quarter 2011 earnings call. All participants will be in a listen only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Jim Cashman. Please go ahead.

Good morning and, again, thank you everyone for joining us to discuss the ANSYS 2011 first quarter financial results. As you probably noticed, we are doing things a little bit differently today. All of the information and topics we have historically covered are included within the earnings release and in the new prepared remarks document that we have posted on the home page of our investor relations website this morning. There is, however, one thing that remains the same, so I will introduce Maria Shields, our CFO, for our Safe Harbor statement. So, Maria?

Thanks, Jim. Good morning everyone. I'd just like to remind you that in addition to any risks and uncertainties that we highlight during the course of this call, important factors that may affect our future results are discussed at length in our public filings with the SEC, all of which are also available via our website. Additionally, the Company's reported results should not be considered an indication of future performance. If there are risks and uncertainties that could impact future. These statements are based upon our view of the world and our business as of today, and ANSYS undertakes no obligation to update any such information unless we do so in a public forum.

Consistent with our standard practices, during the course of this call and in the prepared remarks, we will be making reference to non-GAAP financial measures. A discussion of the various items that are excluded and a full reconciliation of GAAP to comparable non-GAAP financial measures are included in this mornings earnings release materials and the related form 8-K. So, Jim, I'll turn it back over to you for some brief commentary before we jump into Q&A.

Thanks, Maria. Before the Q&A though, I would like to briefly underscore a few points about our Q1 results and about our 2011 outlook. Let me begin by saying that Q1 was a strong quarter in virtually every aspect. First, it continued the momentum that we have been building. Secondly, it exceeded the upper end of guidance for revenue and earnings that we have previously provided, bringing us back to mid to upper teens revenue growth. Finally, it maintained all the historical strength of ANSYS over a multi-year period. We had double-digit growth in each of our three major geographic regions and also double-digit growth in each of our major product units. This, in turn, yielded strong margins, cash flows and deferred revenue balances.

Our industry composition was also strong as we maintained our normal broad base of diversity. While leveraging the continuing strength that we have been seeing in a couple of sectors, notably the energy and electronics sectors. We added new customers to our base of almost 40,000 customers, while we actually grew disproportionately in our major accounts where virtually all of the top 100 industrial companies in the world.

Most importantly, this was accomplished while we maintained the core tenets of our long-term vision that is supported by an environment where our customers just simply can't afford to compromise on depth, breadth and quality of the stimulation tools they use to solve their design challenges, and that works out well for us. The result of this is that we increased our outlook on revenue and EPS for 2011, as discussed in our earnings release. I would also like to provide some qualitative context around the guidance we provided for Q2 and the remainder of fiscal year 2011.

While the recent weakening of the dollar, particularly against the Euro and the British pound has positively contributed to our increase to the 2011 guidance, this increase has been somewhat counterbalanced or offset with some caution if you will, by the recent catastrophic events in Japan, our second largest market. Not unlike what you may have been hearing from a number of different reporters, the uncertainty, at least in the next several quarters around not really the nature of the business but the predictability and the timing of deal closings, is a reality that we have to be cognizant of and build into our guidance.

I guess the final point I would like to briefly highlight is around our record cash flows from operations in Q1 and our thoughts around future uses of the cash. Consistent with what we have been saying for the past several quarters is number one, first and foremost, we plan to continue to invest in our business for the long-term. Number two, in Q1 you will notice that we took advantage of what we consider to be attractive prices and repurchased around 250,000 shares of ANSYS stock. And then finally, with the heavy lifting of the Ansoft acquisition comfortably behind us, we have been and will continue to step up our activities around strategic M&A. With this, I really want to continue to emphasize the word strategic because that is really the only context in which we M&A. We will remain laser focused on our long-term strategy and the creation of value for all of our stakeholders. It won't be just for the sake of buying something for buying something sake. With that, we will now open up the phone lines to try to field any questions you may have.

We will now begin the question and answer session. (Operator Instructions) The first question is from Steve Ashley of Robert W Baird

Congratulations on the strong execution and thank you for all of the detail you provided ahead of the call, very helpful. I would just like to talk about Japan. Obviously, the revenue in the first quarter, very strong, just wondering if you are seeing any impact on the pipeline build and if you are seeing any tangible effects that might impact the future quarters?

The bottom line is -- the one thing I would like to emphasize is that if you recall in Q1, which again is the final fiscal quarter of the Japanese fiscal year, the earthquake and all the subsequent disruption happened in the later part of the quarter. So, one thing I would say is that most of the selling process and, in fact, much of the paperwork and, in fact, much of the orders were already in for Q1. There wasn't a huge exposure in Q1, albeit there was something and our Japan team and our customers really did a stellar job.

To answer the second thing, in terms of pipeline build and overall confidence, no, we are not seeing any kind of downturn in that. But the one thing I would say is that they either have been rolling disruptions in power and logistical issues for some of the customers there. The second part is that now, and these things are the selling process, travel has been slowed down and basically decision freeze for the approval processes that these order normally go through, they are going through at a slower level temporarily and that's while people are trying to figure out how to maintain production lines, part lines, logistical chains and the like. The main thing that we have been testing and our Japan team has said that they have really not seen any decline in the interest or the demand for those types of products. But, some of the overall processing of things, again, we are watching that very carefully because there are a lot of things that can slow up.

I would just like to drill down on the large deals. You continue to grow that nicely, you had 17 deals greater than $1 million. I'm trying to understand the growth in those large deals year over year. Our people buying more seats? Are they adding new products? Is there any kind of normal evolution where they start with FDA and then tend to add some of the fluid stuff after? Any general comment about the growth and the nature of the large deals?

The answer is yes, yes, and yes. Now since you asked several questions. First of all, this is a natural building. As I mentioned earlier, all of our more established accounts, the bigger industrials, are actually growing disproportionately. They are on that accelerating part of the ess curve that we talked about at times. As they do that, A, we are adding more seats, in fact, we even talked about the issue with those large deals, a lot of it went into deferred balances, which means its ongoing accumulating run rate type of revenue. But there is obviously a nice component of new seats going in there. So, A, the base of the historical use is expanding.

Secondarily, yes, additional products are being added across the board. As Multiphysics starts to pick up steam. The one thing that I would say, though, is that it is not necessarily a uniform thing where people start with say structural and move to fluids, people start from the area of concentration that drove them in the early thing, some of the chemical and flow a processing type of things, it might have been more of a fluid thing. In the electronics world, it might have been more of a power conservation, signal integrity and electromagnetics. But, then all products will have to be simulated against extreme physics in all cases. So, people will tend to grow along a path that makes the most sense, but at all points towards a long-term objective of the Multiphysics. They just tend to be very need and situational driven, largely customer specific, somewhat industry specific.

Thanks so much.

Our next question is from Richard Davis with Needham of Cannacord.

Thanks very much. Congratulations on not reading the press release, that's worth at least two multiple points on the stock. Two quick questions, you called out energy and things like that and you are adjacent to this space in terms of seismic, I have talked to people in that space, is that just a wholly different simulation effort and mathematics, and methodology, and customer base that you cannot port you're existing functionality over there? Or is it just customer relationships or something like that? I'm just trying to figure out if and when there's an opportunity there?

Basically nuclear and seismic and things like that has been something we have been doing for years. It's really not -- physics -- we have said all along, physics is physics and the strength of our physics as opposed to these collections of little spot solutions is the one reason why we have been in a very good position to handle that. In the case of earthquakes, all that is putting a seismic, a shock spectrum as your loading factor into the structure so you can see how the structure survives, how the vibration, it's a force response form of vibration and we have done that for years. So, it is clearly an issue.

On the function of energy, the one thing I would say is that while energy has been a wave of great interest, probably since about 2008, the one thing we see where the winds can shift from quarter to quarter is that portfolio of what the current hot buttons of energy are in any given moment in time, sometimes tend to change for personal, emotional, or political, or tactical requirements. At one time it was very heavily into oil and then it went to the alternative (Inaudible) some combination of some people got spooked by nuclear, some people are saying that's 40 -year-old technology and we want to make sure the new technology is safe. There is a whole balance of different things when we say energy.

Every one of our industries have a huge subsection of that, but the basic concept is that physics is physics. Everything in the real world behaves along that line. So, when it comes to that type of thing, like a seismic or shock spectrum type of situation, the physics covers it, it's just that what are the driving factors that might induce customers to use something to start to introduce it or more heavily along those lines.

Got it. This is a more nuance question, maybe for Maria, but when you talk about margins and things like that and spending for investment. So, the question is, do you think about we've got these projects, we are going to spend X dollars, and then the margins kind of fall where they may, in other words, if you get revenue upside then that causes, like we saw in this most recent quarter, modest upside to the margin number? Or do you say, we are managing to a margin so that if you get a windfall you go, we've got some more money to spend, let's go spend it? How do you think about it?

More along the lines of scenario A that you depicted. We don't run the business to a margin. Would put together a plan at the beginning of the year that gives us the range relative to revenue of margins and typically, as you've seen historically, when we exceed on the top line, it disproportionately drives leverage in the margin structure because we don't just say it's the end of the quarter, let's spend it because it's here.

Got it. That's what I thought, I just wanted to make sure.

Remember, some of those investments that we're -- it's a balance between things that we think will have pay offs, perhaps in shorter periods, balanced with things that are truly R&D, it may not have pay offs per se three to five years down the road.

Got it. Okay, thanks a lot.

The next question is from Sterling Auty of JPMorgan.

Hi guys, I agree the prepared remarks is a big step in the right direction so thanks for that.

Glad you liked it. We felt it would be more efficient, so we plan to continue it.

In terms of looking at the big jump in the total paid up vis-a-vis the low double-digit growth in lease, what I'm wondering is, talk to us about -- since you said it was a big penetration of your larger customers, are you still seeing the same customers that just want paid up? Are the larger customers eventually going to migrate to lease do you think or are they always going to be on the paid-up side? And the follow on to that is, with the paid-up, how sustainable do you think the demand and the growth in the paid up can be? Should we start to see a shift back towards a better growth in lease next quarter, or could paid up continue at this pace?

Keep in mind, the lease growth is a actually very, very good. When you consider that our normal composition has always been about three new licenses for every new lease, lease rates are a lower annual amount, but they tend to accumulate over time and they tend to be very sticky in terms of renewal rates. So, the fact is that you are growing that continual base, think in terms of many of the other people that have these recurring revenue models. The one hallmark of them, they might grow a little bit slower, but they are steady, they are an expendable trend. So, really, that doesn't surprise us at all. The fact is though, the leases grew quite nicely and then they tend to be a very renewable one, so what paid ups do and grow on those, you have to replenish an equivalent amount to what you sold the previous period, and then grow on top of that. With the lease, you just grow on top of what normally tends to be a very sticky kind of base.

Now, as the paid up thing, as we have talked many times, the general long-term penetration by engineers, by -- you'll notice we continue to mention the high-performance computing, the multiple effect for user, all of those trends are way there, so we are so far on the shallow end of the overall opportunity curve, we don't see anything that tends to force those down and, in fact, that's one reason why the quote, unquote our most installed, most established, most advanced customers are the ones that tend to grow the fastest. That's the one thing where they have gone through an awful lot of the internal validation thing and they are continuing to ramp up. So, I think I covered every aspect.

I guess the only other aspect I would throw out there is that you had mentioned about would we see a resurgence in lease. In general, the trend has normally been that when large accounts are involved, finance is involved and in general, paid up makes the most sense from a financial perspective, maybe very similar to the way people view do you want to continue to rent or do you want to own something? That type of dynamic we still see in place.

My follow-up question would really be around the electronics comment. Were you saying that it was Ansoft electronic solutions that did well or were you saying the electronics vertical where you still might get good demand for FEA example?

Actually, I was referring to the latter of what you said based with the totality of Ansoft business, but to be sure, the historical Ansoft business as well, as I mentioned, each of our major product units were part of that -- participated in that double digit growth. When we talked about the electronics sector, you have everything from drop shock kind of simulations to overheating, and moving into signal integrity power management stabilization. There is a whole range even into the generation of motors and the electronics and things in there for energy conservation. So, when we see that, it got involved in a whole race of things.

The other thing I would point out is the electronics industry is one where we recently introduced the HP, the high-performance computing multiprocessor type of simulations, and that has taken off very quickly, very strongly in that aspect to. So, obviously, Ansoft always plays well in electronics, I was talking from an industry, from an overall industry basis and that is the totality of our Multiphysics products.

Thank you.

Our next question is from Dan Cummins with ThinkEquity

Thanks very much. I wanted to ask about new customers. You have been asked everything else and you are doing great, so I thought I would try to move on to an area where it's amazing. I echo what Steve said about the large deal counts. I'm curious how often you see a new logo on the million dollar list? How often does that list turn over quarter-to-quarter? And definitely appreciate these comments here about energy and electronics, if you could give us, perhaps some more color on the services contract you are referencing around nuclear safety? And in general, if you look among all the end of markets, where is ANSYS most successful near-term and going forward in terms of getting new customers? Thanks.

The bottom line is, A, we are adding a reasonable, a good number of new logos. But keep in mind when you have that first initial penetration of almost 40,000 customers, that base is already big. So, proportionally, it's not that big. I would say one thing you mentioned is that very seldom, not never, but very seldom does a totally new logo pop up with a million dollars right off the back. So, in general, we don't see that type of progression. People always tend to try to build it in, grow, validate it, make sure their internal -- if somebody is using this software, they normally don't have the dozens or hundreds of users that would be required to burn up that much stuff.

One place where that does tend to change is if you get into some very volatile industries which may, at the same time, have gone through a major disaster and all of a sudden now they are in a major mitigation standpoint, and you are comparing a huge price tag for software for something a hundred thousand times greater for than that in terms of overall damages, you can see that happen. When those have happened as of recent, though, they are usually people that at least have sister divisions that have utilized this type of thing.

The only other thing I would mention is you mentioned one thing about a specific customer. We are always a little bit sensitive about this. In this particular standpoint, there is an NDA in place and we fully honor those things when they are in place. Did I cover all of your -- did I?

Yes, thank you, Jim. In general, are there any particular verticals? Where you seem to be having more success than usual in terms of getting in the door where perhaps it's taken a long time or whatever?

I think in general, since we had a broad footprint we had already done some of the headbanging that is sometimes required over an amount of time, but if you remember in the previous years, we talked about different aspects where the new generation of requirements in the automotive industry tended to drive us into that. We are starting to see, quite frankly, in the biomed biosciences aspect, however, things where before it used to be very regulatory controlled, very process locked. Now they are starting to look at that type of device.

If you want additional color, I think I kind of hammered energy pretty well over the last few questions, but one thing that's obviously starting to get a lot of glamour or a lot of buzz is if you look at all of the increase in mobility devices on the electronics side, everything from tablets to 4G SmartPhones, in addition to the data transfer standards which are skyrocketing, all of those have tended to change things quite a bit. With all that extra power, if you have ever seen these new phones, one thing is they do drain batteries real quick, power management, a whole range of things. So, almost with every new advance, every new good thing that comes out, it always kind of peels back the next layer of the onion of the next set of problems which need to be attacked and that tends to renovate the uses for the software.

Our next question is from Steve Koenig with Longbow Research.

Good morning everyone. I would like to -- actually wanted to ask you about the mobile devices area, Jim. I am curious to know, number one, can you help us size roughly what percentage of your sales into electronics vertical is driven by mobility? And who do you compete with on that type of work and how fast do you see it growing?

One question is I don't know if I can slice it up that much. I don't know if I can slice it up by taking the overall electronics market and saying what part is that. But, I could say that if you look at all the major players in that, that this is an area of focus that our technology is used in these type of situations. I would probably say that this is one place where we see relative -- on a relative basis, we see not a lot of competitive pressure. What you wind up with is you wind up with -- for these devices to function, they have to handle all the situations, but it's also a balancing act, again, balancing all of these things, again, versus commercialization cost and therefore, the batteries cannot blow up. The signals have to pass FCC compliance. They cannot overheat. If they are dropped, they can't fail every time that they are done.

So, that whole range. When there are issues where we see other players, they largely tend to be maybe niche providers that might tackle some very small narrow, but deep type of focus. In terms of the growth, I'm probably not the right one to project growth of the market, but all I know is the amount of effort that is going in with our customer base toward trying to project and propel these new devices, it really is not a significant advance.

Okay. Great. Thanks for the color. I guess for my follow-up, I will ask you about large deals. How big was your largest deal in the quarter? You had a really good number of large deals obviously --

It was upper seven figures.

Upper seven figures. Okay, and any large deals so far this quarter?

I can't really talk about that right now. Also, it's very early in the quarter, so a lot of these things tend to percolate over time.

Thanks a lot for your help, Jim.

Okay.

Our next question is from Mark Schappel of Benchmark Company.

Good morning. Jim, in the past you have talked about the trend where single users are using multiple engineering simulation seats, if I could just ask you if it's fair to assume that you are seeing this trend continue to build?

There are two dimensions of the multiple seats. One of which is people who are using, essentially unit physics, a single physics, but what they are doing is it's like a dog sled team, they are harnessing multiple ones together to be able to get more power and get done in a shorter time. As we've commented and I think we even made some commentary in some of the outline remarks that we posted on the web, that continues, that has continued to be a growing aspect.

The other thing that is exciting for us is that as some of the shortcomings of the cloud for these type of calculations go, we have already tackled the tough issue in terms of how do you get your software to spread over multiple processors and so we are in good shape on that. We are pretty pleased about that.

The second part really focuses on a single user using multiple products. Whether they are using them in rapid fire succession sequentially or whether they are using them in a pure time standpoint simultaneously. That is continuing to grow, but as we've always said, that's one of those things that is going to be a longer-term kind of standpoint as people start to get comfortable with that. People might have to get comfortable across multiple branches of physics and applying those kind of problems.

So, both of those are in place, they are both undeniably in the trend versus spike category. They are more than a glacial creep, but it's not this huge sea change of people changing in a three to six month period, it is just one of those things where we see a multi-year progression and that progression has been keeping on pace. It has been augmented, particularly in the last four to six quarters, by this growth in high-performance computing. Basically what it gets down to is, the hardware is already there, the software is relatively cheap compared to the value of the problems they are solving, and those economics are becoming more apparent, I think, every day to customers.

Thanks. Finally, with respect to your 2011 outlook, the full year outlook, how much of the increase in revenue growth is influenced by your foreign exchange assumptions?

There is a large part that is in there, but like I said, this is such a juggling act. There is so much turbulence and speculation that is going on in there, combined with some of the different geo-economic situations, combined with, obviously, as I mentioned, the part in that natural market. The net net is the guidance is going up, but it is a wind aided in some standpoint and is also -- we are also sitting there trying to hit multiple moving targets with the other aspect. But, like I mentioned, it was a significant contributor on top of guidance which still net net, has been increased.

Thank you. Nice job.

The next question is from Ross MacMillan of Jefferies.

Thanks a lot and congratulations from me as well. I have a three part question relating to your deferred growth and by implication, your bookings growth. I think both were up about 24% or 25% year-over-year, and my question is what drove that? Second of all, and I'm sorry I don't have the release in front of me, but is that all current year deferred or is there some beyond 12 month deferred in that number? And third, if I could, Maria, maybe you could help me understand what the FX sequential, ie, relative to the December quarter? What benefit there was from FX deferred?

First thing is, yes there is long term, I think it's in the $8 million to $10 million range. Secondarily, keep in mind that there is a couple things. One of which is some renewals, they can come in a little bit early, that can spike things a little bit. Secondarily, if you remember coming out of the permafrost of 2009, in that area, some people were actually reinstating there tax, so you might just see a denominator kind of factor that could be a small perturbator in there.

But the bottom line is, as we mentioned, the renewal rates of lease and maintenance have continued to climb in that standpoint. That in essence is what we saw. We talked, of course, about the mega deals that came in and the mega deals while they had a nice license component, they also had a very strong deferred component in there. You have the last question?

The last question, Ross, I will give you two, because I'm not really sure what you're question was. The first thing, if you were talking about what was the currency impact to Q1, it was $2.4 million compared to last year's Q1.

No, what I was looking for, sorry, Maria, you may not have the number, but, obviously the deferred balance at the end of the quarter is based on the currency rate on that --

I don't have that number, Ross.

I will get that off-line. That's helpful. Maybe just one clarification for me, what is the long-term element of deferred on Q4? It was $10 million at the end of Q1, what was it at the end of Q4 if you have that?

Somewhere around $7 million to $8 million is my recollection, but I don't have the Q4 data in here.

Okay, all right. That was really it for me. Thanks so much. Congratulations again on a strong quarter.

Thank you.

The next question is from Jason Rodgers of Great Lakes Review.

Good morning. Looking at the service contract and not getting into detail on that specific contract, but I was wondering if you could talk about how big you think this opportunity could be as far as providing nuclear services? And then I have a follow-up.

Jason, in this particular case, I think it's going to be -- at least my understanding is it is going to be a multi-year project. So, the initial phase is roughly about $250,000, but no doubt, given the unfortunate events of Japan, it has sparked a whole new interest and now not necessarily kind of the momentum that was all around the new nuclear plants, but now around understanding safety and sustainability of the existing plants.

We are also seeing that in other industries with this general standpoint of end of life and maintenance type of situations. Like we mentioned on some of the ones related to oil, some of these things have been around many, many years before this technology was available in the design process. But they are undergoing continual renovation, retrofits, upgrades and this is one aspect of starting to merge the new technologies to make existing things better.

That sounds great. I did not see it in the detail you provide good. But, did you give the growth in the business intake for the quarter?

No, but I believe someone commented earlier on bookings growth, which was largely in the 20% plus range.

It was roughly comparable, if you net everything out, it was roughly comparable with revenue in that mid teens area.

Finally, looking at your ASPs, wondered if you could provide a comment on where those ended up for the quarter?

The ASPs, they -- I call them stable, even though if you looked at the pure graphs thy kind of ticked up a slight amount.

Okay. Thanks a lot.

Our next question is from Brad Reback of Oppenheimer.

Jim, you alluded to your comments, your prepared comments around strategic acquisitions. Can you give us any sense of areas you might be looking at building out?

In general, like I said, if you look at those family of physics, we have the main pillars of physics in place, so in general, branching out all of those different capabilities. But again, same thing that I think I have mentioned this each of the last seven or eight calls, is you get down to the issue of right now the technical leadership in terms of depth and breadth we have, there isn't too much out there that is comparable. What we get down to now are the abilities of companies to comprehend it. Organizationally and process relate to it and also help them validate and import best practices into their companies.

As a result, things that relate around engineering collaboration, knowledge management, process transferral, development of best practices, those type of technologies, in addition to the expansion of all the things we are doing with our own internal investment, those are areas that will tend to help increase the penetration rates of the software, which is already pretty able, but now it's a matter of making it bridge to a broader range of users. The old paradigm was that we come with lower-level capabilities or we work on ease-of-use, but we have already seen that you cannot compromise on the solution, therefore you need different bridging strategies that allow people to get up to that full industrial strength usage. Those will be some of the directions that we also continue to look at. Both for internal and external investment.

Great. Thanks a lot.

Your next question is from Sterling Auty of JPMorgan.

I liked it so much the first time, I though I would come back for more. Just a follow up, I did not hear in the prepared remarks, the 17 deals over $1 million, what was the breakdown of those both geographically and by vertical industry, even if you are not quantitative, just by color? I can imagine I can expect some of the vertical strength, but can you give more color on that?

The funny thing is it's pretty much related -- it's almost a microcosm of the Company. We saw a balance across geography. We did see balance in the industry standpoint. Obviously, the more longer standing customers that we have talked about, so it wasn't like you could grab it and extrapolate to any one geography or any one industry pulling those things. We just kind of crank through a lot of those things, a lot of energy, a lot of automotive, electronics, aerospace, and defense -- what I call the chemical materials and processing things, so as you can see, it is pretty much a microcosm and breadth of that. I just did a quick scan and I did not have those numbers organized in that way.

Okay great. When you look at the sales pipeline, how is the pipeline for those large deals versus last quarter? And then versus last year?

At this point, again, the one thing we've said, is if you went back through about 10 years of these kinds of calls, the one thing we said is we don't try to live and die by mega deals. In other words, we are not a team that either swings for home runs or strikes out. It just so happens that from our model and with the growth trajectory that has been in front of us and continues to be in front of us, these things tend to build over time and then people tend to add on. So, it's really more a function of maturity and therefore, each quarter we tend to have people that graduate or grow into that standpoint, even though it's not like we are going after quote, unquote a multi-million dollar type of engagement. It's one of these things where it's like there is no quick fix on this kind of thing, it is just something that you build the foundation and you continue to grow on.

Let's put it this way, we don't see anything stopping the overall trend towards this, but we also don't sit around and say okay, how many of these can we do? It's more of the ultimate measure of customer confidence and our own business success.

Thank you.

Sir, at this time, I am showing no other questions.

Okay. Then I guess I will take over. I guess as a closing, I would say I want to emphasize, and this won't be any surprise to you folks that have known us for a while, but the emphasis for 2011 will be continued execution, growth and customer development. As I mentioned, the customer receptivity to our long-term vision continues to strengthen. We continue to be propelled by a strong combination of this vision, also with a strong business model, that I think we have demonstrated through numerous economic cycles. Loyal customers, we talked about the recurring and repeat business rates. Our partners' great technology that is world class leading. And our growing base of exceptional employees.

I guess the other thing, before we end the call, I would like to give a special thanks to our employees, customers and partners in Japan. There is no doubt that have faced a real terrible tragedy and we are thankful that our employees are safe and basically look forward to helping them rebuild in this very important market for us. With that, I will thank you all and hope to talk to you next quarter.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.