Blackbaud Inc (BLKB) 2012 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Blackbaud first quarter 2012 earnings call. Today's call is being recorded. (Operator Instructions). I would like to turn the call over to Mr. Tony Boor, Chief Financial Officer of Blackbaud. Please go ahead, sir.

Thank you, Jo. Good afternoon, everyone. Thank you for joining us today to review our first quarter 2012 results. With me on the call is Marc Chardon, our President and Chief Executive Officer. We both have prepared remarks and then we'll open up the call for your questions. Please note that our remarks today contain forward-looking statements. These statements are based solely on present information and are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements.

Please refer to our SEC filings, including our most recent annual report on Form 10-K and the risk factors contained therein, as well as our periodic reports under the Securities Act of 1934 for more information on these risks and uncertainties and on the limitations that apply to our forward-looking statements.

Also please note that a webcast of today's call will be available on our Investor Relations section of our website. With that, let me turn it over to Marc to review our high-level financial performance and business highlights. Then, I'll come back at the end to provided greater details our first quarter results as well as guidance for the second quarter. Marc?

Thank you, Tony, and thanks to all of you for joining us this afternoon to review our first quarter results, which represented a solid start to 2012. Revenue was at the high end of our guidance. We continued to make progress evolving toward a subscription-based business model and our Enterprise business unit delivered very strong performance. We enjoyed a particularly strong quarter for our Blackbaud CRM offering. Following a record performance during 2011, we're off to a great start in '12 with Blackbaud CRM representing the largest contributor to our first quarter sales.

Of course, the biggest news came last week when we received regulatory approval to move forward with our acquisition of Convio which we expect to close tomorrow. Blackbaud is now well positioned to deliver the best of both worlds offering to nonprofit organizations including the most comprehensive CRM and online fundraiser solutions.

We believe our combined organization is much better positioned to meet the multichannel supporter engagement needs of nonprofit organizations and both teams are eager to move forward. In addition to being great news for our employees, customers and prospects, we're very excited to have the opportunity to become one of the largest subscription-based Software-as-a-Service vendors in the world.

Let me provide a brief overview of our first quarter financial performance. We delivered revenue of $94.7 million, which was at the high end of our guidance of $93 million to $95 million and represented a 9% growth on a year-over-year basis. The fastest growing component of our revenue continues to be subscriptions, which at $28.1 million grew 17% year-over-year.

The continuing evolution of our business toward subscription-based offerings means the subscription units outnumbered perpetual license sales' units by a ratio of over 5 to 1 during the quarter. We continue to see strong demand for our subscription offerings including our online fund raising solutions, our vertically focused package offerings, and also the hosted versions of the Raiser's Edge and the Financial Edge.

Turning to profit, our first quarter margin was down compared to historic levels, as expected and previously communicated. We continue to expect our profit margins to scale over the course of the year culminating in a 20% non-GAAP operating margin for standalone Blackbaud for the full-year 2012. We also believe our increased investments in the first half of 2012 will put Blackbaud in a much better position to scale effectively and efficiently in the coming years.

From a market perspective, fundraising activity levels remain above pre-recessionary levels and there is modest growth. We not characterize the giving environment as robust, but it's moving in the right direction. Moreover, we believe that non-profit organizations feel more comfortable moving forward with technology investment and many feel that it's become necessary to move their organizations to modern state-of-the-art solutions if they want to continue to be successful in their missions.

We believe that we are still in the early stages of addressing a $16.5 billion global market opportunity for delivering such solutions to the nonprofit industry. With our organic growth and the acquisition of Convio, we're not far from becoming a $500 million revenue run-rate company, which, while quite sizeable, still represents a small fraction of our total potential market opportunity.

We believe that roughly half of this market opportunity is in what we characterize as the enterprise segment of the market. The majority of the largest and most sophisticated nonprofit organizations in the world are still running their core operations on Legacy systems that are decades old. There is growing pressure to move to modern solutions that provide a true 360-degree view of their supporters and deliver coherent and coordinated multichannel communications in ways that were simply not available at the time these Legacy solutions were first put in place.

Now as I mentioned a moment ago, our Enterprise business delivered a very strong performance in the first quarter, particularly with our Blackbaud CRM offering. We closed six new Blackbaud CRM deals during the first quarter, including three in the higher education space; UCLA, University of California San Diego, and the University of Toronto, which is the largest university in Canada. Our growing momentum in the higher education market is particularly exciting because it represents the largest segment of the enterprise market opportunity. Our win rate and our growing momentum in this vertical are based on CRM capabilities specifically designed for large universities and on the growing number of large scale implementations now under our belt.

Along those lines, I'm pleased to share that the University of Michigan went live at the end of the first quarter, with a simultaneous launch of what is by far the most extensive implementation of our Blackbaud CRM offering and our Internet solution together. We're very proud of our joint success with one of the Bellwether institutions of higher education and we look forward to the Michigan team sharing their experience with prospects and customers including during our annual users' conference.

During the first quarter, we also closed Blackbaud CRM deals with the Shriners Hospitals for Children, Americares, and an international charity organization which collectively highlight that we're seeing demand from a global perspective, with hospitals and in human services and that we're leveraging our acquisition of PIDI. Americares made the decision to upgrade from PIDI to Blackbaud CRM.

I'm also pleased to share that we've made good progress on the four early adopter CRM deployments that we discussed on last quarter's call. One of these customers as you may remember was already in production at the time of our fourth quarter call. Another went live with two sites during the first quarter. We expect to move the third into production during this current quarter and with the fourth customer our plan remains unchanged to launch in the second half of the year.

As a reminder, this small handful of early adopter customers have truly unique characteristics that made their implementations significantly more challenging. While painful to go through, these experiences pushed our services and development organizations to grow in ways we will benefit from over the long run. Most important, we believe our current and future Blackbaud CRM customers will benefit from this learning as well.

To summarize the performance of Enterprise business unit, strong new sales activity, continued progress bringing customers into production, a healthy pipeline of opportunities, and an increasingly strong position within a multi-billion dollar market opportunity, particularly after we move forward with Convio and have a best of both worlds offering as I'll highlight in a moment.

Our General Markets business unit also delivered a solid performance for the quarter. We believe the mid-market which is served by this business unit represents another multi-billion dollar market opportunity that is just as large as the high end of the market. Blackbaud is well recognized as the market leader in this mid-market as we already serve approximately 25% of the available customers in this segment.

While meaningful, this still leaves a very large green field opportunity. What's more important is the fact we believe we only serve approximately 5% of the available revenue opportunity in this market as there is significant opportunity to expand our share of wallet with our existing customers considering the breadth and depth of our product sweep, as well as our range of analytic and other services.

Our General Market business continues to see a significant shift toward subscription-based offerings. As I mentioned earlier, total subscription units outnumbered perpetual licenses by over 5 to 1 in the quarter. While this can have a negative impact on reported revenue growth in the near-term, it's a very positive trend for our business from a long-term perspective as it leads to a higher level of revenue visibility and predictability.

We had solid growth in our Blackbaud Sphere offering during the quarter, which we were pleased with considering that our acquisition of Convio was pending during the quarter. Online fundraising solutions continue to be a key driver of the growth in our subscription revenue and we're also seeing growing contributions to our subscription business across the breadth of our product suite.

For example, during the first quarter approximately one-third of the Raiser's Edge units sold by the General Markets business were completed on a subscription basis, which is up from the high single-digit range during the year-ago quarter.

We also launched a new Financial Edge subscription offering at the beginning of 2012 and it performed very well during the quarter. Financial Edge units are up approximately 50% year-over-year with our new subscription offering being a key driver.

In addition, we believe that our new subscription offering is appealing to a wider audience. In the past, most of our Financial Edge units were driven by back-to-base sales through our over 26,000 customers. During the first quarter, our subscription-based offering drove approximately half of our total Financial unit sales toward brand new customers.

[All True], our integrated Software-as-a-Service offering for the arts and cultural vertical continues to enjoy solid customer demand and growth. We crossed an important milestone for All True during the quarter surpassing 100 unit sales since launching the solution with nearly 20% of those sales coming during this past first quarter. This unique offering is tailored to meet the specific challenges faced by arts and cultural organizations and we believe there's a long runway of growth for this attractive segment of the market.

Our eTapestry offering also enjoyed rapid unit growth in the quarter. eTapestry is our status-based fundraising offer. It's targeted at the over 1 million small nonprofit organizations that need a simple solution. Nonprofit organizations in this segment of the market face similar challenges as mid-size and larger nonprofits and they can benefit from leveraging easy to use and simple modern technology solutions to optimize their fundraising efforts. We've learned a lot since acquiring eTapestry from pricing, packaging, and a go-to-market perspective and we believe we're starting to hit our stride at the low end of the market.

In addition to continually improving from a go-to-market perspective, we are also pleased to have introduced innovations that we believe will benefit our General Market customers in particular. We recently introduced the first major update to the Raiser's Edge in two years with brand new capabilities such as our Giving Score analytic tool, as well as improvements in query, events, and duplicate prevention. In addition, in the next several months, we plan on introducing Raiser's Edge mobile apps for the iPhone, iPad, Android devices, and Blackberry.

Net Community, our online e-marketing and fundraising solution built specifically for Raiser's Edge customers was also recently upgraded for the more than 3,000 customers that use it to support their fundraising activities on a daily basis.

I'm also quite pleased with the performance of our International business unit during the first quarter. They delivered 18% growth in revenues, enjoyed strong adoption of subscription-based offerings, and closed their first CRM deal of the year. The leadership changes that we've put in place in the International business are having a positive impact and we continue to believe that we have significant opportunity to expand our presence internationally, both at the high end of the market, as well as at the low end. Our Everyday Hero acquisition, for example, delivered more than 40% growth over the same period last year on strong donation volume and the launch of our Corporate Giving portal.

Of course, we're very excited about our soon to be closed acquisition of Convio. As announced last week, we received regulatory approval from the government to move ahead with the acquisition. We've subsequently completed the cash tender process and, as I mentioned earlier, we plan on closing tomorrow.

We've already completed our preliminary merger integration plans and both companies are eager to begin working together to discuss the details of our future product road maps and strategic plans, not only internally but also with each of our respective customer bases. We've got a lot of work ahead of us, but this is truly an exciting time for us and for our customers as we believe this combination is great news for customers, employees, partners, and of course shareholders.

We believe our acquisition of Convio is happening at just the right time. Market demand has improved coming out of the recession. Both companies have solid market momentum and online fundraising is the fastest growing channel for donations. While still only a fraction of overall giving, it has reached the point of critical mass and it will only become more significant over time.

The amount of fundraising that's transacted through the combination of Blackbaud and Convio is over $6 billion annually. While this is quite substantial, it still represents less than 3% of the total annual donations raised in the US alone. The addition of Convio will significantly enhance our ability to bring value to this large and underserved market.

Convio is recognized as the leading provider of SaaS-based online fundraising solutions, particularly for large cause and cure nonprofits and advocacy-based organizations. This is a highly complementary offering to Blackbaud's area of strength in CRM for large enterprises, as well as complementary to our other verticals in which we've established very strong market momentum, such as our higher education vertical as I noted earlier.

Convio will bring over 1,500 customers to Blackbaud, many of which are good prospects for other complementary solutions from Blackbaud's broad portfolio suite. They also bring significant domain expertise, innovation, and thought leadership to Blackbaud in areas that include online fundraising, business intelligence, and scaling of Software-as-a-Service business.

In summary, the first quarter was a solid start to the New Year. We made great progress with our CRM business while expanding the breadth and momentum of our subscription-based offerings. As we look ahead, we're very excited about the prospects for our company post the acquisition of Convio. We're poised to deliver a best of both worlds offering combining best in class solutions for both CRM and online fundraising. We are also poised to become one of the largest Software-as-a-Service vendors in the world. $500 million in revenue is well within our sights and we have significantly improved our position to ultimately scale Blackbaud to our longer-term goal of $1 billion or greater in annual revenue.

With that, let me turn the call over to Tony to discuss our financials in more detail.

Thanks, Marc. The Company delivered a solid performance in the quarter. Revenue was toward the high end of our guidance and reflects a solid overall momentum of our business. At the same time, significant investments in our business brought margins down on the year-over-year basis for the first quarter, which was consistent with the commentary that we shared last quarter. As I will review in detail, we used some of the investments as nonrecurring and are confident that we will show improving bottom-line leverage over the course of 2012 and beyond.

Let me begin with a review of our first quarter non-GAAP results starting with the P&L. Total revenue for the first quarter was $94.7 million, an increase of 9% on a year-over-year basis and at the high end of our guidance of $93 million to $95 million. Subscription revenue was $28.1 million, or 17% increase from the first quarter of 2011. Subscription revenue continues to grow as a percentage of our total revenue, and while we had a relatively strong license revenue performance for the quarter, subscription revenue was still approximately four times the size of our license revenue.

The relative size of our subscription business will become even more substantial following the close of the Convio acquisition. To put this in further perspective, Convio subscription and usage revenue was over $15 million for the fourth quarter of 2011, which is more than half the size of Blackbaud's subscription revenue in the first quarter of 2012.

Blackbaud's maintenance revenue of $33.6 million for the first quarter was up 5% on a year-over-year basis and we continue to benefit in this area from our best-in-class renewal rates. When combined with our subscription revenue, our total recurring revenue was $61.6 million for the first quarter, or an annualized run-rate of over $245 million. This represents a year-over-year growth rate of 11%.

License revenue in the first quarter was $7.2 million, up 58% year over year. Our license revenue for this first quarter benefited from the strength of our Blackbaud CRM business, including the timing of revenue recognition from deals closed during the first quarter as well as prior quarters.

Professional Services revenue was $24 million, a 4% decrease year over year. We continue to see strong demand for Professional Services' offerings as we gain greater traction with Blackbaud CRM solution and our broader subscription-based offerings.

At the same time our Services' revenue and associated margin continue to be negatively impacted by the work being performed to bring several of our early adopter CRM customers into final stages of production. We are pleased with the progress made during the first quarter, though there is still more work ahead of us over the course of the next several quarters. We expect our standalone total revenue growth to accelerate in the second half of 2012 as Services' revenue improves.

Turning to profitability, non-GAAP gross margin was 59.3% compared to 61.1% in the first quarter of 2011. We expect our gross margin to improve over the course of 2012 as we continue to make progress on early adopter deployments.

From an operating expense perspective, Sales and Marketing was $20 million, or 21.1% of revenue. That compares to 21.8% of revenue in the year-ago period and 18.8% in the fourth quarter of '11. It is worth pointing out that we accelerated hiring in our Sales and Marketing organization during the first quarter to ensure that we had the resources in place to sustain our momentum, which became increasingly important as the Convio transaction was taking longer to close than we initially anticipated.

R&D was $12.7 million, or 13.4% of revenue, up from 12.8% of revenue in the year-ago period. R&D grew by approximately $1.5 million on year-over-year basis, as well as $1 million sequentially. This was due in part to the increased investments associated with completing work relating to the scaling of direct marketing solution for a small but important segment of the enterprise market that has the most demanding needs.

G&A was $10.3 million, excluding $2.2 million deal costs associated with Convio in addition to stock-based compensation expense. G&A was 10.9% of revenue, up from 8% in the prior year. Increase in G&A was primarily driven by increased investments to improve our back-office processes, including the business process reengineering program that we discussed last quarter. We took proactive action beginning last year and ramping in the first half of 2012 to better enable Blackbaud to scale efficiently from a long-term perspective. There is an upfront cost to this program that we expect will be offset by savings in the back half of the year.

Non-GAAP operating income was $13.2 million, slightly below our guidance of $13.5 million to $14.5 million, and representing a 14% non-GAAP operating margin. We would have been towards the midpoint of our guidance were it not for nonrecurring expenses associated with more frontend-loaded nature of our investments to improve our back-office processes. In addition, we would have been above the midpoint of our non-GAAP operating income guidance were it not for accelerating hiring in our Sales and Marketing organization, which we believe was the right thing to do for our business as the quarter played out.

From a big picture perspective, we knew the first quarter was going to be a period of investment and it was. We also view many of our stepped-up expenses as short term and nonrecurring in nature and expect our business to benefit from these investments from both a near- and long-term perspective. In addition, we continue to target a 20% non-GAAP operating margin to the full-year 2012. Therefore, there is no change to plans in this area. The variance to guidance in the first quarter was largely related to timing.

Our non-GAAP diluted earnings per share were $0.17 for the quarter. A minor point is that our non-GAAP EPS rounded down to $0.17 for the quarter, though it would have rounded up to $0.18 were it not for noncash write-offs associated with bank fees that ran through our interest expense line item.

Summarizing our GAAP results for the quarter, GAAP operating income was $5.3 million, net income was $2.8 million and GAAP diluted earnings per share was $0.06. This compares with GAAP results of $9.8 million, $7.3 million and $0.17 per share, respectively, for the first quarter of 2011.

Turning to the balance sheet and cash flow, we ended the first quarter with $46 million in cash and equivalents, a decrease from $52.5 million at the end of last quarter. We generated $4 million in cash flow from operations, used $5.4 million to pay our quarterly dividend, and invested $6.3 million in capital expenditures. Our total deferred revenue balance was $162 million, an increase of 12% from the year-ago period.

I'd like to finish with some thoughts regarding our second quarter financial outlook and would like to be clear upfront that my comments relate to standalone Blackbaud only. As discussed earlier, we expect to close on the acquisition of Convio tomorrow. As such, we plan to provide combined Company guidance for the full-year 2012 at some point during early June. This will provide us with adequate time to dig further into Convio's operational plans and the timing around certain integration efforts.

Our plan is to host a follow-up call with investors to discuss our combined Company expectations after we've completed this initial set of work. We will issue a press release in the coming weeks announcing the date of such a call.

For now, let me turn to Blackbaud's standalone second quarter guidance. We are forecasting revenue of $99 million to $102 million with non-GAAP operating income of $15.5 million to $17 million, resulting in non-GAAP earnings per share of $0.21 to $0.23.

Our second quarter guidance contemplates continued investments in R&D and G&A on a standalone basis, which we expect to decline in the second half of the year as we complete our R&D work on the direct marketing module, process remediation work is completed relative to our back office, and our business process reengineering program moves from an upfront investment phase to the benefits realization phase.

In addition during the second quarter, we have a full quarter of expense from our increased hiring in Sales and Marketing that occurred during the first quarter. Obviously, this hiring will be taken into consideration as we plan the future staffing needs as a combined Company.

All things considered, we expect our second quarter non-GAAP operating margin to improve by approximately 150 to 250 basis points sequentially with meaningful improvement in the second half of the year. That would bring our standalone non-GAAP margins to the 20% or great level for both the third and fourth quarters leading to a full-year non-GAAP operating margin of 20% based on full-year standalone revenue levels that are consistent with our prior guidance.

As I indicated a moment ago, we'll provide additional color on our combined companies' financial profile for 2012 on a follow-up call. We have previously shared that we expect the Convio transaction to be accretive to our non-GAAP EPS for the first 12 months following the close of the acquisition. We still need to complete our financial planning analysis, but we do already know that we're starting our integration efforts approximately one full quarter later than expected than at the time when we announced the acquisition due to unanticipated time taken for regulatory approval. As such, more of the positive impact from the first 12 months will be realized beyond the current calendar year.

From a long-term perspective we believe the acquisition will have a positive impact on both our revenue growth and our non-GAAP EPS. In addition, Convio will further enhance our overall financial profile, which will be increasingly highlighted by growing subscription revenue and higher levels of revenue visibility and predictability.

To summarize, we're off to a solid start in 2012 and we are excited about the breadth of opportunities before us. There's a short-term impact to our non-GAAP profitability associated with the investments we are making in our business. However, as we shared previously, we do not view these as recurring and we expect to begin seeing leverage in our business as early as the third quarter of 2012.

We believe we remain on track to achieve our standalone revenue and non-GAAP profitability guidance for the full year. Most important for the long term, we are very excited to move forward with the acquisition of Convio, which we believe will improve our market position, expand our realizable market opportunity and have a positive impact on our financial model.

With that we are happy to take your questions.

(Operator Instructions). Our first question today comes from Tom Roderick with Stifel Nicolaus.

Hello, guys, this is Chris Growe for Tom. Good afternoon and congrats on the pending closure of the acquisition and a good quarter. So Tony, just a quick question if I may on the Sales and Marketing commentary that you made. So it sounds like maybe because you weren't entirely sure when or if the Convio acquisition would close. Can you give us a sense of how much that cost you, either in nominal dollars or in percentage terms, in terms of Sales and Marketing spend over which you had originally planned for?

Chris, we're actually not breaking that out at this point. I would tell you and what I can say is we had the biggest quarter from a net higher perspective that we've had as a Company in Q1 with a large amount of those heads focused towards Sales and Marketing.

Okay and was the kind of strategic decision behind that worry that it wouldn't actually close, or was it something where you just felt even if it did close that was the prudent thing to do anyway?

The longer it took and the more steps there are you have to consider the possibility it might not. We were confident through the whole process, Chris. But on the other hand as we were going forward, both organizations I'm quite sure felt some pressure in terms of the ability to keep the bookings' momentum and the pipeline full. So, I think we're in a good position and I feel very good about the people we have in the Sales and Marketing we brought on board. It just means we did it a little earlier than we might otherwise have done.

Great, thank you. And then on the other issue about direct marketing investment in that product, just trying to get a sense in terms of what the margins wound up coming in at versus the implications on the previous guidance. Is that requiring a little bit more dollars than you had expected, or is it a timing issue, or is it pretty much on plan in terms of the direct marketing product investment?

The DM expense we've had is about $1 million and it's on plan and it was spread over the first two quarters and it's still spread over the first two quarters as originally intended. So no seasonality impacts.

Got it, great, thank you. Then, Marc on your commentary about maybe the overall nonprofit buying environment modestly improving, are you seeing any change in terms of the number of no decisions? I remember that was kind of a gauge that you guys used to look at in terms of trying to gauge how good the macro was doing. Are you seeing a pick up there, or is it roughly similar to the past couple of quarters?

I don't actually know the answer to that, so I'm assuming that since I wasn't told that there was a difference that there's not a difference, but that's an assumption not a fact.

Great and then one last one from me. In terms of the BCRM, you mentioned it was the largest contributor to the quarter in terms of sales. Is that actual sales from a revenue perspective, or is that a bookings' statement?

Bookings.

That's on bookings. Okay great, thank you.

(Operator Instructions). Will go next to Ross MacMillan with Jefferies.

Thanks a lot. Tony or Marc, that was obviously a strong perpetual license quarter. You mentioned some of that was driven by prior period deal recognition. Any way to parse that out so that we can get a sense what the kind of run-rate assumption on the license should look like?

Not that we're disclosing at this point, so we don't typically disclose that level of granularity. I would tell you we certainly had a positive impact on the quarter from sales within the quarter, as well as impact from those that were made in the prior quarter.

One question I had around that was there was a potential for you to be able to recognize license revenues faster as you move to a point that CRM got more templated. In other words, you could meet your BSOE obligations and so forth faster. Is that a point that we're at now, so is it possible we could actually see license growth this year?

So I would say that in the higher education space it's very likely that any higher education deal will be sold with a software license as opposed to a ratable recognition of any kind. So you're really more likely to see a variation depending on how many licenses were sold in that style in the higher education, or in a space where we've done that. So it's not about packaging it. It's just about the experience and the number of implementations and how far the product has gotten. In terms of talking about license growth, we've always told you I think subscriptions are going to keep growing faster than licenses, and in any given quarter it can be up or it can be down depending on the number of units that are in a recognition or a non-recognition sector.

Okay, that's helpful. I noticed the DSO was higher than we expected. Tony, any comments on the DSO?

No, I think we have some good opportunity I think from an overall working capital management perspective. It's something that I haven't had a lot of time to focus on yet with all of our other priorities, but I would say that there's nothing alarming to me in that perspective. I do think it's something we could spend a little more time focusing on and have begun looking at that more recently and have some actions in place to help turn that around a bit by next quarter.

Great and then last one from me just on CapEx. Are there any implications to the sort of run-rate CapEx you've got going on right now as you add Convio into the mix?

Convio's not obviously contemplated yet, so we'll close on that deal tomorrow and we will jump right in and get to work on the planning so we can get some numbers out to you guys in the market, hopefully early June. We currently are on a run-rate of $5 million to $6 million per quarter. Based upon what we know today about Convio's model I would not expect to have a significant impact to our CapEx as a result of combining the companies.

The other thing I'd mention is that I don't see as a first 100 or first 250-day priority any kind of datacenter rationalization across the two organizations. So, you're pretty safe in assuming that the IT datacenter side of the equation is pretty much a B+C, Blackbaud plus Convio equals the number, as opposed to lots of synergies or dis-synergies in that sector.

Okay great, and a very last one from me. Did you have an updated number on the total live ECRM customers?

I don't remember, but I think we only had one live go live in the quarter and that would be Michigan. So whatever I said last quarter plus one. I think it was the high 20s, 28 I believe. So my guess is that it's 29. It certainly is not more than one or two off of that. I do expect us to have several go lives, a couple go lives a quarter, so a couple-plus a quarter for the rest of the year.

Great, thank you.

(Operator Instructions). That concludes our Q&A session. I would like to turn the call back to Mr. Tony Boor.

Wow! That was a record short one. I was expecting a long one, gentlemen and ladies. Anyway, thank you very much for joining us on the call today. We will look forward to talking with several of you individually and then we'll talk again in early June when we have an opportunity to have digested some of the Convio numbers today.

This concludes today's call. Have a wonderful day.