Factset Research Systems Inc (FDS) 2011 Q4 法說會逐字稿

Welcome and thank you for standing by.

At this time, all participants are in a listen-only mode.

(Operator Instructions).

I would now like to turn the meeting over to Rachel Stern, Senior Vice President, Strategic Resources and General Counsel.

You may begin.

Thank you operator.

Good morning and thanks to all of you for participating today.

Welcome to FactSet's fourth-quarter 2011 earnings conference call.

Joining me today are Phil Hadley, Chairman and CEO, Peter Walsh, Chief Operating Officer, and Mike Frankenfield, Global Director of Sales.

This conference call is being transcribed in real-time by FactSet's CallStreet service and is being broadcast live by the Internet at @FactSet.com.

A replay of this call will also be available on our website.

Our call will contain forward-looking statements reflecting management's current expectations based on currently available information.

Actual results may differ materially.

More information about factors that could affect FactSet's business and financial results can be found in FactSet's filings with the SEC.

In an effort to provide additional information, our comments include non-GAAP financial measures.

The non-GAAP measures we will discuss today have been reconciled to the related GAAP measures in our earnings press release and our SEC filings.

Annual subscription value, or ASV, is a key metric for FactSet.

Please recall that ASV is a snapshot view of client subscriptions and represents our forward-looking revenues for the next 12 months.

Lastly, FactSet undertakes no obligation to update publicly any forward-looking statements as a results of new information, future events, or otherwise.

I'd like to turn the discussion now over to Peter Walsh, Chief Operating Officer.

Thank you Rachel and good morning everyone.

Here's how I plan to spend our time today.

First, I'd like to discuss one housekeeping item.

Second, I'll review Q4 results.

Third, I'll give guidance for the first quarter of fiscal 2012.

Finally, we'll end with Q&A.

Regarding the housekeeping item, fourth-quarter results included a pretax charge of $5.4 million, or $0.08 per share, from an increase in the number of performance-based stock options that will vest due to accelerated levels of ASV and EPS than previously expected.

We were pleased to hit the highest performance levels we set as goals two years ago through the strong efforts of our employees.

Remember also that included in our prior-year EPS is an income tax benefit of $0.01 per share.

The reconciliation between GAAP and non-GAAP numbers is included in our earnings announcement that was released today.

Now let's turn to the quarter results.

Q4 was a record quarter for FactSet.

ASV grew organically by $37 million, rising to $779 million at August 31.

Our organic ASV growth rate rose to 14%, up from 7% a year ago.

As in prior quarters, buy-side clients accounted for 82% of ASV.

The remainder of our ASV comes from sell-side firms, primarily M&A advisory and equity research

firms.

Non-GAAP EPS increased to $0.96 this quarter, up 17% from a year ago.

Our strong performance came from all geographic regions and product suites.

Our business model is validated by our continued healthy growth.

We think it is notable that FactSet is one of only six US companies that have reported 15 straight years of positive earnings growth.

Now let's review Q4 results.

Quarterly free cash flows, which is defined as cash generated from operations less capital spending, was $64 million, up from $63 million in the same quarter of last year.

Higher levels of net income and non-cash expenses were partially offset by higher receivables.

Accounts Receivables increased by $7 million compared to the end of the third quarter, primarily due to our Q4 ASV growth.

Our DSOs were an industry-leading 35 days at quarter end.

We spent $7 million in CapEx this quarter.

Of our total CapEx in Q4, about $4 million went to computer equipment and the remainder we spent on office expansions.

Over the last 12 months, our free cash flow exceeded net income by $6 million, which we believe illustrates the high quality of our earnings.

At the end of this fiscal year, our cash and marketable securities balance was $182 million, down $27 million from Q3.

During the quarter, we repurchased 890,000 shares of FactSet stock for $84 million.

At August 31, shares outstanding were 45.1 million and there was $142 million authorized for future share repurchases.

During Q4, we paid a regular quarterly dividend of $0.27 per share for a total of $12 million.

Aggregating dividends with share repurchases, we returned $261 million to shareholders over the past 12 months.

Let's now turn to the P&L.

FactSet's revenues rose 14% compared to the year-ago quarter to $191.9 million.

Q4 non-GAAP operating income advanced to $64.4 million, up 12% compared to last year.

Non-GAAP net income increased 16% compared to the year-ago period to $44.6 million.

US operations accounted for $533 million of ASV while international operations were responsible for $246 million in ASV.

International operations accounted for 32% of our total ASV.

US revenues expanded in Q4 to $132 million, up 15% from the same quarter a year ago.

Non-US revenue also rose over the last year by 12% to $60 million.

Revenues from Europe and the Asia Pacific region in Q4 were $47 million and $13 million respectively, with growth rates in each region of 11% and 17% respectively year-over-year.

Let's look at some of the reasons behind our ASV and revenue growth this quarter.

Our PA suite of products has continued to perform well.

In fact, over 50% of our new investment management clients signed on for portfolio analytics this quarter.

Within the suite of products, subscriptions to PA2.0 [VAR], fixed income in PA and particularly Portfolio Publisher were all in demand.

User count rose to 48,100 at quarter end, an increase of 2500 or 5% during Q4.

We experienced healthy growth in both Investment Management and Investment 'Banking'.

Advances in our real-time offering and credit analysis are improving our penetration in buy-side clients.

Sell-side firms increased the number of new junior bankers due to higher M&A volumes and a strong IPO environment over the past 12 months.

Market Metrics introduced a new local market share product for fund companies.

The product enables management to understand the value and penetration of their own products in local markets in greater detail than they have been able to examine before.

This product has already been successful.

Client retention has also been strong as we've retained 92% of clients at August 31 as compared to 90% a year ago.

Our annual client retention rate in ASV terms was greater than 95%, consistent with last year's rate.

These metrics together tell us that our clients continue to value the FactSet service and that our services are well embedded in our client workflows.

In addition to retaining existing clients, we've also attracted many new ones.

We gained 50 net new clients this quarter compared to 35 in Q4 2010, bringing our total client count to 2237 at the end of this fiscal year.

Let's take a look at the expense side now.

Non-GAAP operating expenses for the quarter were $128 million, up 15% from the same quarter a year ago.

Non-GAAP operating margins were 33.6%.

As mentioned in the beginning of our call, non-GAAP figures exclude a pretax charge of $5.4 million related to performance-based stock options.

Cost of services as a percentage of revenues increased 205 basis points over last year.

This increase was a result of higher stock-based compensation expense, the addition of employees in our Hyderabad and Manila locations to support our content operations, and the hiring of consultants in other locations worldwide.

These increases were partially offset by lower expenses from many of our VMS machines becoming fully depreciated over the past year, in addition to lower intangible asset amortization and data collection costs paid to third parties.

SG&A expenses as a percentage of revenues rose 135 basis points compared to the same period last year due to the vesting of performance-based options.

In addition, we had higher office expenses due to our increasing headcount.

[T&E] was lower this quarter in -- because in Q3 we held our internal sales conferences and two client conferences.

We surpassed the 5000 employee mark this quarter as our headcount rose by 446 employees during the quarter and was 5251 at quarter end.

Our headcount is up 28% compared to the same period a year ago.

Many new recent college graduates joined us to fill client-facing and software engineering roles.

We hired new employees in our content operations in Hyderabad and Manila, and [even why] improving streamlining our data collection capabilities.

Our two-year compounded annual employee growth rate is 33%.

We are excited by this fact because, as is typical with new employees, productivity increases at a rapid rate over the initial years of employment.

We expect that we'll enjoy the benefits of the recent new employee growth in the upcoming fiscal year.

The effective tax rate through Q4 was 30.9%, compared to 31.7% a year ago.

Now let's turn to our guidance for the first quarter of fiscal 2012.

Revenues are expected to range between $195 million and $198 million.

EPS is expected to range between $0.98 and $1.

We expect that capital expenditures for the full 2012 fiscal year should range between $22 million and $30 million, net of landlord [contributions].

We project that our annual effective tax rate will be 31%.

Please note that our annual effective tax rate would increase by 150 basis points if the US federal R&D tax credit, which will expire on January 1, 2012, is not extended for calendar 2012.

In conclusion, we delivered another solid quarter and a strong end to our fiscal year.

I think it's worth taking a moment to highlight some of our accomplishments.

For starters, during this past fiscal year, organic ASV grew 14% to $779 million.

EPS rose 15% to $3.61.

Free cash flow was $178 million.

Through dividends and share repurchases, we returned $261 million to shareholders this year.

The return on our equity was 34%.

We also hit some other high points this year.

We were again named to Fortune's 100 Best Companies to Work For list, our third time in four years.

We were named to one of the UK's 50 Best Workplaces.

We increased headcount by 28% this year.

These are simple metrics that demonstrate that we are growing.

We believe we're getting stronger and we're a full-fledged mid-sized company poised for future growth.

FactSet views success over the long term, which requires us to make new investments in our products and technology in every quarter of every year.

This philosophy has translated to our products becoming more competitive in the marketplace.

During the last year, the capabilities of our product suite for both the buy and sell-side professionals advanced again.

We continue to offer an expansive lineup of content.

Our employee base is relentless in proving to clients every day that we care through superlative hands-on service.

The accolades we've earned and the milestones we've hit this year are all indications to us of an engaged and committed workforce.

Our employees constitute our future, and we're pleased to see our employee base is growing and performing well worldwide.

In summary, for this year as a whole, all of our metrics were positive -- ASV, revenues, EPS, client and workstation counts and employee growth.

This past year has shown the strength of our business model achieved through serious hard work by our employees, from each team member to the senior-most manager.

We still have a long road ahead of us and we look forward to the challenges that we'll undertake in our new fiscal 2012 year.

Thank you for participation in today's call.

We are now ready for your questions.

(Operator Instructions).

Peter Heckmann, Avondale Partners.

Good morning gentlemen.

Nice quarter.

I wanted to ask, on the international operations, where do you see growth coming from there?

I'm still updating a few figures.

But on that smaller base, it seems to me that we can expect better growth or higher growth doubles from the international business.

Can you talk about the outlook there a little bit?

It's Phil Hadley.

It's kind of interesting you bring that one up because it was definitely one of those that we were looking at before the call.

I think we've basically concluded it was the first time really where directionally it wasn't the right answer from where the business really is.

I think right now my gut is our non-US growth rate is probably a couple hundred basis points greater than our US growth rate.

At an accounting level and the way we've been handling it, it has a lot more to do with where the billing is occurring as opposed to where the revenue is actually occurring.

So to answer your question, I think the opportunity for us there is a higher growth rate organically than the US just because of market opportunity and growth in certain regions.

Currently, it's probably supporting that.

We'll refine those numbers and in future periods give greater color.

Do you find that you're facing substantially the same competitors and the same type of competition in the international market, or are there vendors that have uniquely strong presence in certain markets?

The quick answer is it's the same vendors worldwide.

Remember Thomson Reuters and S&P would be the three biggest that are out there worldwide in the marketplace.

Certainly, market-by-market, there are local competitors that exist and might provide narrow solutions, but typically not global solutions to our clients (inaudible).

Okay.

Just lastly as regards your hedging program, the last time I looked, if I remember correctly, some of those hedges were expiring.

Can you talk a little bit about your theory of hedging and if we would expect to see you engaging in additional hedging activities here this quarter and next?

Sure.

Thanks for your question.

In our hedging program, I certainly encourage everyone to spend time looking at our Q and K because we really outline very carefully what our exposures are for every currency.

Philosophically, we'll only really hedge when we know that we can lock in a gain to give us confidence in allocating more capital to other expense areas like headcount.

So if you went back and looked at our hedges, our GBP hedges has completely rolled off.

Our euro hedge is scheduled to expire in this coming first quarter, so we'll be utilizing the same rate that would be available in today's marketplace.

Okay.

I appreciate it.

Thanks much.

Peter Appert, Piper Jaffray.

Thanks.

So you guys have had great success with your strategy of more ownership of data.

Can you help us understand where you are in that process?

Is there more to be done in terms of greater ownership of data?

How do we think about how that has translated into revenue growth for you guys?

This is Phil.

I don't think, in the technology business, you are ever done.

It's one of those where we just finished the fiscal year.

There is certainly part of you that would love to have high fives and say, hey, we are done, we won.

That's just not the way the marketplace works.

So on the content side of our business, obviously we've had significant headcount growth and we'll continue to invest in opportunities as we see them in the marketplace.

We compete against very large players in the space who have a greater scale than we do, so it's going to require a lot of investment from our part.

On the other side of it, I think it's materially changed the product in the marketplace and how we're able to sell it.

We live for decades in partnership with our data suppliers, but in some times they were very direct competitors of ours and it made selling very difficult.

So having ownership of our own content has really freed the sales force to provide a complete solution to our client and made us much more effective in that respect.

At the same time, we're still a large supplier of third-party content through our system, and will always be part of the business model.

So in the chapter of where we are, I'm not sure where it will ever end but there's still great opportunities for us as we go forward.

I guess I was hoping, Phil, you might be able to give us some specific metrics about -- because I have in my head that, if I go back ten years, a very small percentage of the content you were delivering was proprietary or FactSet-owned.

Today that percentage would be much higher.

Is it possible to think about what those percentages look like as a way to think about how much more revenue opportunity is left in that regard?

I'm not sure I could give you a clean metric.

I know in headcount it's over half of our headcount at this point.

But at the same time, for example, when it comes to real-time exchanges, we invest a great deal at this point loading real-time exchanges, which is really third-party content, that content we're collecting.

The same true with new feeds, so there's lots of content that continues to come on to the system that's not content that we create.

So it's really a combination in the value for our client.

Okay.

Does the pace of hiring slow in '12?

I think what I thought I heard Peter say was you get margin leverage from productivity gains from the folks you've hired this year.

Presumably those gains will only really flow to the extent that new hiring slows a little bit.

Is that how we should think about it?

I think, in summary, the short answer to that question is yes.

It's most likely to slow more consistent with our ASV growth rate.

That's really the beauty of our ASV model, that it provides us great visibility and time to adjust our investment rates quarterly.

If you look historically, it's not unusual for our ASV to closely track on an LTM basis our revenue six months into the future.

That's important and valuable, since compensation represents 65% of our total costs.

So if our ASV growth rates change is substantially up or down, our focus on ASV will allow us to be thoughtful and calibrate our headcount plans to adjust the expense levels so that we can maintain our margins.

Got it, okay.

Last thing, the pace of repurchase activity accelerated through the year.

I think you've got $140-ish million left of authorization.

How do we think about pace of activity going into 2012?

You certainly highlighted a high-quality problem that we have.

In summary, we have $181 million in cash and you can double that amount if you add the free cash flow that we generated over the last 12 months, so we have $360 million to think about.

Our objective is really maximizing EPS and return from deploying that capital towards M&A opportunities, share buybacks, and dividends.

We talked about the $261 million that we returned this year through dividends and buybacks because we've been quiet on the M&A front.

It's true that, in Q4, we were a little more aggressive on the share buyback, primarily because our price declines (inaudible) during the quarter.

So in summary, capital allocation is a decision that we constantly revisit and we take very seriously because it's important for us to maximize the opportunity that's in front of us.

Thanks.

Dave Lewis, JPMorgan.

Good morning.

The first question is just with regards to the financial industry right now and the layoff announcements that have happened.

Could you just give us a sense for what you're hearing in August and September?

Given that I think there's been a change in the subscription contract to about three months from month-to-month, how we should think about that in coming quarters?

This is Mike Frankenfield.

There's certainly a lot of press out there, but what we're experiencing isn't new.

We've seen these type of adjustments happen many times in our history at FactSet.

A couple of points I'd like to point out about the sell-side -- as Peter mentioned in his opening remarks, 18% of our ASV comes from the sell-side, so it's comparatively small when you look at the total mix.

Most of the headcount discussion that I think people are reading about doesn't necessarily affect our user base.

As you recall, our user base is focused on the corporate financing list and primarily in equity research.

That's not necessarily the users that are being focused on in the press.

We worked with our largest firms to put long-term agreements in place.

I feel like we're in a good place with our largest firms that have established good bases upon which we can build.

Really a lot of our strategy now is going into these firms and finding new pockets of users.

We have great opportunities amongst the senior bankers, in departments like sales, trading.

We continue to broaden the appeal of our products to attract more users.

So really, for us, the key is to focus on our execution, delivering good product to our end-users, and continuing to focus on what we do best.

Thanks Mike.

That's good detail.

So is it fair to take away from that that the commitment level from the positions that are more vulnerable on the sell-side and where you do have exposure, there's longer-term commitments there than perhaps three years ago?

We certainly worked hard to put those types of agreements in place.

The other thing I'll point out is that the typical marginal cost to the user on the sell-side is much lower than the average workstation cost amongst the asset management client base.

This is primarily because those users don't subscribe to the analytics products.

So if there are cuts, we think those will affect us proportionately less than they would otherwise.

Thanks Mike.

Then I guess this last one from me on this is are you seeing anything different in terms of pricing from competitors in recent months?

We haven't seen any material changes in pricing.

I would concur with that.

The marketplace is -- the players in the space stay pretty consistent through time, and their behavior and how they act in the marketplace is also pretty consistent.

Thank you.

Chris Kennedy, Oppenheimer.

Good morning.

Thanks for taking the questions.

Two -- can you go into a little more detail on the adoption rate of the portfolio analytics products, and kind of how that's been trending over the last couple of quarters?

What changed this quarter to get it over 50% for your new clients?

I think the metric that we gave that over 50% of new clients wasn't an increase relative to history.

It was just -- I thought it was an interesting fact just because the portfolio suite is certainly a positive contributor to our ASV growth.

It actually is not a metric we track historically so couldn't even really give you the context over a long period of time, but one I thought was illustrative of a mix of our new clients.

That's great.

Then on the macro environment, you touched on the sell-side, if you could just kind of talk about the buy-side, new firm formations or whatnot?

There's a steady rate of new firm creation.

I think that's reflected a little bit in our new client growth.

There's also a regular amount of firm failure.

Certainly, some of the volatility that's going on in the marketplace is affecting everyone, but it especially affects the smallest firms.

But the story is very much the same as it is on the sell-side.

We're really just focusing on the factors that we can control.

The PA suite that you just mentioned represents some very, very strong cross-selling opportunities for us.

Most clients only subscribe to one or two of the products in that suite.

We're seeing great uptake in terms of the publishing product, fixed income thus far, etc.

Great, thank you.

Shlomo Rosenbaum, Stifel.

Thank you very much for taking my questions.

Phil, I was wondering if you could comment a little bit about if you've noticed a change in your competitive win rate over the last quarter, and then if you could talk about over the last year.

I would say that if you look at FactSet and our product line and ask our clients, has the product changed in the last three to five years, I think the answer is we've put a lot of content in the product.

The interface has changed.

So I think we've become a much more competitive product in the marketplace.

The net impact of that is really twofold.

Certainly, when we're going toe-to-toe with an opportunity against one of our competitors, I think we definitely come out ahead more than we used to.

In addition, I think it's created a lot of greenfield opportunities with this as well.

We continually talk about the PA suite and the suite of products around that.

In many cases there, it's really value that we're creating and new workflows or problems we're solving for our clients and not necessarily coming out of a competitor.

So when I think of the way that you guys have been growing in both in terms of the users and the clients, would you say that your competitive win rate has been going up in the last year the way that you guys are tracking it?

I think we've always answered the question that we believe that we're gaining share.

It's hard for us to know exactly what is happening on the other side.

We could see the lens from just our seat, but I think our belief is that we gain share in the marketplace.

Let me ask a question maybe a little bit differently then.

The user count growth is certainly impressive.

I was wondering if you have a way of parsing it in terms of is it more from new client adds, or is that really reflecting a better penetration of the existing client base?

I think the new user account is almost always same-store sales for the bigger clients, just because of the population they have in the whole industry and the fact that when we sign up a new client, they traditionally sign up small.

So even if it is a big opportunity in a firm where there might be 100 seats available, we may only start with four or five in some cases and work our way to 100.

So they're looking at a particular quarter.

For the most part, it's same-store sales driving that seat count.

And that would be the same for this quarter as well?

Yes.

Then can you talk a little bit if you're getting -- what your sense is in terms of traction in the corporate space just outside the asset management industry?

I know, talking to a number of companies, that they've told me that they've been piloting FactSet versus some of the competitors.

It's Mike.

The corporate space is a small segment for us.

We don't dedicate any direct selling effort to that space and the way we think about that space is through partnerships.

We have partnerships with firms like NASDAQ and [IPRIO] and other firms and we allow them to resell either applications or data into that space.

Great.

So given the growth rate that you guys have, what would you say is your largest concerns in terms of looking about out three years and how you want to grow this company?

I guess I would characterize -- I spend very little time worrying about the macro environment.

We've gone through several cycles in my career.

Honestly, the business strategy in a downcycle and an upmarket are really very similar.

Certainly you have to manage the financials of the business and your investment, but the strategy that you're attacking the marketplace is very consistent.

I think, for us, we really look at ourselves and it's all about execution for us.

We've made a huge investment in content, and we'll be excited to see that pay dividends over a long period of time.

We continue to invest very heavily in our products.

As you can see, FactSet is really a people business.

It's all about our employees and how well they execute.

I couldn't be prouder of how we compete in the marketplace and the success we have, because it really comes from just good old-fashioned hard work and very talented employees.

Last question, just housekeeping.

A couple of times in the past, you've commented what percentage your ASV was coming from hedge fund type clients.

Last I heard, it was somewhere around the mid-single digits.

Is there any update to that?

I don't think that number has moved.

Relative to total, I would say it's exactly the same as it has been.

All right, thank you very much guys.

(Operator Instructions).

Robert Riggs, William Blair.

Good morning.

Thanks for taking my question.

How penetrated do you think you are at your existing client base?

If you were to use kind of a baseball analogy, is it third inning, fourth inning?

What's the runway for revenue growth among that existing customer base?

I guess the easy way to think about it is I think the industry is in the teens of billions, so at $700 million we still have a long way to go.

When we talk about our opportunity internally or even at the board level, market share is not the constraint we have at this point.

It's really just about executing on product in the marketplace.

As you continue to add more proprietary content, does that meaningfully expand the addressable client base, or is it still kind of around that 6000 institutions that are your key target markets?

I think we use the 6000 number just because it's a number that we feel comfortable identifying, but by definition, as we expand our product line in different dimensions, the potential client count increases.

Every workflow we change improves our opportunity to be able to sell a new client.

Great, thank you.

John Neff, Akre Capital Management.

Thank you.

Two questions.

One, I believe you mentioned earlier that there were some contracts in place at some of the larger firms.

I was just wondering if you could comment on to what extent or what percentage of ASV is currently under contract as opposed to the sort of more sort of real-time add, subtract or cancel kind of nature.

It's Mike.

I don't have that statistic.

We typically work on agreements with our largest clients very much on a one-off basis to meet the particular configuration that they're trying to achieve for their user community.

It's typically driven by the client.

They are looking for comfort in what price increases can be and scaling their deployments and used in other factors that come into play.

So it's really a mutually agreed-upon contract.

It's beneficial to both sides.

But would you say it's materially changed in terms of frequency or significance in terms of the overall ASV mix?

I wish I could give you a straight answer.

I think it really implies primarily to the bold sell-side firms would be very traditional in wanting contracts for the product.

Buy-side less so.

It would probably fall more on the traditional fact that contract of 90-day (inaudible).

Then second, last question.

I think mostly of your sort of market share gain probably coming primarily at the expense of Thomson Reuters.

I just was wondering.

As you continue to improve the product and think about product development and the roadmap looking ahead multiple years, if you could just sort of talk about how you think about competing versus Thomson Reuters versus, say, a Bloomberg.

Compare and contrast what do you feel like you need to do better in order to compete with Bloomberg versus a Thomson Reuters.

Just trying to get any sense of how you think about that competition.

Thank you.

We really spend our workflow trying to sell client product (technical difficulty) very sophisticated internal RPD product database that takes in all client suggestions for our product, and it gets funneled by product developers and eventually turned into product.

So we really spend our time trying to solve client workflows and improve the workflows that we currently have.

The side effect of that is we produce a competing product in the marketplace, so don't necessarily spend our time trying to pretend to be like Thomson Reuters or Bloomberg or S&P.

We really focus on being FactSet and delivering more value to clients, the belief being that if our client uses our product more, there's more value creation and ultimately it will monetize itself, and it gives us a competitive advantage in the future.

As we look forward, I think we feel very good that the investments we're making and allocating on our product side, the sales side and the content side of our business will deliver positive returns for the future.

Thanks very much.

Dave Lewis, JPMorgan.

Thanks.

I just have one quick follow-up here.

I think it is a question for Mike.

Mike, can you provide a little more detail on the traders' desktop and discuss the value proposition to the user versus competition and just help frame how big that opportunity is on the buy-side and sell-side?

Thanks.

The main thing we're doing to expand our footprint is adding content.

In particular, we're making content improvements in terms of real-time quotes and real-time news.

Those are -- the history effect (inaudible) comparatively new initiative, and we've worked on them for many years now.

But they are still new to our user community.

So we're working hard to push that product out into the marketplace.

The natural byproduct of doing that is that our existing users talk to other users within the firm, potential users, and we create head-on sales opportunities.

We're very, very small in that space.

We don't have any order execution capabilities, though we're partnering with several different (inaudible) providers to provide that type of capability.

So, in summary, the opportunity is extremely large, much larger than our current business, but we're in very, very early stages of rolling that product out.

Thanks Mike.

Thank you everyone.

At this time, there are no other questions.

This does conclude the conference for today.

Please disconnect your lines at this time.