Fair Isaac Corp (FICO) 2017 Q1 法說會逐字稿

Good afternoon. My name is Sarah, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fair Isaac Corporation quarterly earnings conference call.

(Operator Instructions)

Thank you. Steve Weber, you may begin your conference.

Thank you, Sarah. Good afternoon, and thank you for joining FICO's first-quarter earnings call. I am Steve Weber, Vice President of Investor Relations, and I am joined today by our CEO, Will Lansing, and our CFO, Mike Pung. Today, we issued a press release that describes financial results compared to the prior year. On this call, management will also discuss results in comparison to the prior quarter in order to facilitate an understanding of the run rate of our business.

Certain statements made in this presentation may be characterized as forward-looking under the Private Securities Litigation Reform Act of 1995. Those statements involve many uncertainties that could cause actual results to differ materially. Information concerning these uncertainties is contained in the Company's filings with the SEC, in particular, in the Risk Factors and Forward-Looking Statements portion of such filings. Copies are available from the SEC, from the FICO website or from our Investors Relations team.

This call will also include statements regarding certain non-GAAP financial measures. Please refer to the Company's earnings release and Regulation G schedule issued today for a reconciliation of each of these non-GAAP financial measures to the most comparable GAAP measure. The earnings release and the Regulation G schedule are available on the Investor Relations page of the Company's website at FICO.com or on the SEC's website at SEC.gov. A replay of this webcast will be available through January 31, 2018. With that, I will turn the call over to Will Lansing.

Thank you, Steve, and thank you, everyone for joining us for our first-quarter earnings call. I am pleased to say we are off to a good start delivering solid growth across our portfolio. In our first quarter, we reported revenues of $220 million, an increase of 10% over the same period last year. We delivered $38 million of GAAP net income and GAAP earnings of $1.16 per share.

Our GAAP earnings and EPS were positively affected by the adoption of a new accounting standard, which Mike will detail. Adjusting for that impact, GAAP net income and EPS were both up 7% from last year. We delivered $33 million of non-GAAP net income and non-GAAP EPS of $1.03 per share, both up 4% from the same period last year.

I am pleased that we are delivering growth throughout our business, both our scores and decision management software segments were up 6% over the same period last year. And our applications segment was up 12% over the same period last year. We are continuing to see positive signs in our cloud business, where revenues were up 14% and bookings were up 48% versus last year. In fact, it was the second largest quarter ever for our cloud business and the pipeline for our solutions remains strong.

As we sign more deals and grow our customer base, we are building a strong transactional revenue stream with recurring, predictable revenues. We are seeing more evidence every quarter for increased market acceptance of our decision management software. Bookings this quarter were up 31% over last year, and represented the largest quarter ever in that segment. The investments we have made in distribution over the last year are beginning to pay off, and we expect solid growth in this space moving forward.

In the scores business, we continue to make great strides towards maximizing the value of this cornerstone franchise. It has been two years since we announced the deal with Experian to add FICO scores to their premium consumer offerings. The first year of that partnership was dedicated to rolling out scores across the Experian platform. We continued last year to fine tune the program and pursue other opportunities with Experian.

That led to an agreement we signed this month to further expand our relationship. This new agreement broadens the content we provide to Experian's premium consumer offerings. It also includes licensing the FICO score as a key component in Experian's direct lead generation business. We believe in the value that this lead gen business can create for consumers and lenders by taking the friction out of the process.

By including FICO scores, the scores that are used by lenders to originate new loans, this lead gen business can instantly match consumers with the best pre-qualified offers. Furthermore, offering FICO scores can produce higher response rates, better conversion rates and increased consumer satisfaction.

We are excited about the possibilities of this expanded partnership, and we are also pursuing several other meaningful opportunities in the score space. In partnership with Experian, we are offering consumers world class financial products, in the lead gen channel and the premium channel. On the B2B side, we are continuing to seeing positive results. Originations continue to be strong, and we are seeing account growth in account management scores, as well.

In a rising rate environment, it is important to remember that our biggest point of leverage on the B2B side is in credit cards, which drives nearly two-thirds of our B2B scores revenue. Unlike other market participants, we price mortgage scores at the same rate as other credit card scores. Because of this, our exposure to mortgage is roughly only 10% of B2B scores revenue, so we are less affected by mortgage market headwinds.

With the current momentum, as well as visibility into new revenue sources, we expect scores growth to accelerate in the second half of the year. I will share some summary thoughts later, but now, I would like to turn the call back over to Mike for further financial details.

Thanks, Will. Good afternoon, everyone. Today, I will emphasize three points in my comments. First, we delivered $220 million of revenue, an increase of $20 million or 10% year over year. Cloud revenue was $50 million, up 14% from last year.

Second, we delivered $38 million of GAAP net income, which included the impact of adopting ASU2016-09, the new accounting standard related to share based compensation. Finally, we had $28 million of free cash flow this quarter, and we used $30 million to repurchase shares.

I will begin by breaking the revenue down into our three reporting segments. Starting with applications, revenues were $135 million, up 12% versus the same period last year. We also had a strong quarter in fraud solutions, originations and our customer communications services product lines. Our application bookings of $62 million represented an increase of 11% from the prior year.

In the decision management software segment, revenues were $26 million, up 6% versus the prior year. The increase this quarter was driven by services revenues in express optimization. Bookings were again strong in this segment, at $26 million, representing a 31% increase over the same period last year. As Will said, it was the largest bookings quarter ever in this segment.

Finally, in our scores segment, revenues were $59 million, up 6% from the same period last year. On the B2B side, we are up 8% versus the same period a year ago, and are continuing to see some positive trends. The B2C revenues were up a modest 3% from the same quarter last year, but we expect that to accelerate in the back half of the year as the new opportunities Will discussed go online.

Looking at revenue by region, this quarter, 77% of total revenues were derived from the Americas, our EMEA region generated 16% and the remaining 7% was from Asia-Pacific. Recurring revenues derived from transactional and maintenance sources for the quarter represented 70% of total revenue. Consulting and implementation revenues were 20% of total, and license revenues were 10% of total revenue.

Bookings this quarter were $96 million, up 12% from the prior-year quarter. We generated $21 million of current-period revenues on those bookings for a yield of about 21%. The weighted average term for our bookings was 27 months this quarter.

We continue to book more large deals. This quarter we had 13 deals over $1 million, versus 10 in the same period last year, and we booked 7 deals over $3 million compared to a total of 10 all of last year. We continue to drive strong bookings growth in our cloud-based products and built more backlog this quarter, as our transactional bookings were up 21% over last year.

Operating expenses totalled $185 million this quarter compared to $191 million in the fourth quarter. The investments we are making in delivery, support and infrastructure are proceeding as we discussed on our last call. As you can see in our Reg G schedule, our non-GAAP operating margin was 24% for the first quarter. We expect that operating margin to be between 26% to 28% for the full year.

GAAP net income this quarter was $38 million, and included a reduction to income tax expense of $17 million or $0.53 per share associated with the adoption of the accounting standard update 2016-09. Non-GAAP net income was $33 million for the quarter, up 4% from the same quarter last year.

Under the new accounting standard, excess tax benefits or deficiencies generated upon the settlement or exercise of stock awards are no longer recognized as additional paid in capital, but instead, recognized as a reduction or increase to income tax expense. Estimating this item is difficult because it is dependent upon our future stock price in relation to the fair value of our awards. However, the largest impact typically happens in our first fiscal quarter because our annual grant vests in December. We expect the quarterly impact going forward to be much smaller over the remainder of the year.

As a result of this change, the effective tax rate was negative 32% this quarter. We expect the unaffected or normalized tax rate to be about 29% to 30% for the full year before any impact of the accounting standards.

The free cash flow for the quarter was $28 million, which included the impact of the new accounting standard. On a comparable basis, free cash flow was $46 million in the prior year. For the trailing 12 months reflecting this impact, free cash flow was $168 million.

Turning to the balance sheet, we had $88 million of cash on the balance sheet at the end of the quarter. Our total debt is $621 million with a weighted average interest rate of 4.1%, and our ratio of total net debt to adjusted EBITDA this quarter is 2.3 times, well below the covenant level of three times.

During the quarter, we returned $30 million in excess cash to our investors, repurchasing 258,000 shares at an average price of $117.91. We repurchased another 158,000 shares in January at an average price of $122.90.

We have about $180 million remaining on the latest Board authorization, and continue to view share repurchases as an attractive use of our cash. We also continue to actively evaluate opportunities to acquire technologies and products that advance our strategy and strengthen our portfolio and competitive position.

Finally, we are updating our previously provided guidance to adjust for the first-quarter impact of this new accounting standard. We are not including any impact in the future quarters until they are known. We are now guiding for the full fiscal year as follows.

Revenues remain unchanged at approximately $925 million. GAAP net income, previously guided at $109 million, is now adjusted by this quarter's excess tax benefit of $17 million to a new total of approximately $126 million. GAAP earnings per share is now approximately $3.92. Non-GAAP net income remains unchanged at $158 million, and non-GAAP EPS is also unchanged at $4.92 per share. With that, I will turn it back over to Will for a final comment.

Thanks, Mike. As I said in my opening remarks, I believe we are well-positioned for success as we move into 2017 and beyond. Our scores business has never been stronger, and is now beginning to build market share on the consumer side to match the dominance we have had for decades among financial institutions.

And now, we are beginning to see the tangible impact of the investments we have made in our software business. We have developed product and we have invested in sales resources. Now, we are producing higher bookings and building a backlog of recurring transactional revenue. We are still working on getting our distribution up to speed as we train and deploy newly hired sales resources, but we are gaining momentum, and we are confident we are on the right track. I will turn the call back now to Steve for Q&A.

Thanks, Will. This concludes our prepared remarks, and we are ready now to take your questions. Sarah, please open the lines.

(Operator Instructions)

Manav Patnaik, Barclays.

Thank you. Good evening, gentlemen. The first question that I had was in terms of your expanded agreement with Experian and your commentary on B2C growth should accelerate because of that. Can you help us maybe just understand the change in the scope of that agreement? I know you said it was mainly lead gen, and does that include the Discover work that you are doing with those guys?

There is really two pieces to the expansion. One piece has to do with a broader use of FICO scores with Experian's paid products, and as you know, there is more than FICO score. And most of the Experian premium progress were wrapped around using the single FICO score, as opposed to a broader set of scores. And the new agreement contemplates the broader use of FICO scores so that consumers can get, effectively, a dashboard of multiple FICO scores and have a more comprehensive view of their credit position. So that is one part of it. And we have given Experian a great deal of flexibility to construct the products in the way that they see is most valuable to consumers. So that -- it is an expanded flexibility that we have tried to drive here so that the consumer winds up with a better offering, Experian gets a better offering and we obviously benefit for that.

The second part of it has to do with the lead gen piece, and that is a business that we have contemplated for several years now, as we have watched other players in the space build lead gen programs. We have always believed that FICO participation in a lead gen program would be more valuable to the lenders than the offerings by these other players because there is a lot less breakage and friction in going from a FICO score for a prospect to an offer of credit. And so working together with Experian, we are now prepared to offer a lead gen offering to the market that uses a FICO score, as opposed to so-called education scores. That is really the second part of it.

Okay, and does that include the Experian Discover partnership, or is that separate?

That is separate.

Okay, so it is an expanded Experian and then the Discover [work it in], okay. And then I do not know, maybe I am reading too much, but your commentary on evaluating M&A options, the technology and so forth, is that just standard commentary or is there something in the pipeline that we should be looking out for?

That is our standard commentary. So we continue to love buying back our own stock, and we set a very high bar for M&A activity. And at the same time, we are always on the prowl, always looking for opportunities. But as you know, and as we have said many times, the alternatives to investing in our own business, are obviously, being held to a pretty high standard because we are so happy with our own prospects.

Got it, and then just last question from me. Any initial read throughs or comments that are coming from your customers on the impacts on the new administration that you would want to point out?

No, I think it is a little early to say. But the obvious elements have to do with if there is a reform in regulation that eases the burden on our bank customers, they are likely to benefit from that, and if they do, we will.

Okay, all right. Thanks a lot, guys.

Bill Warmington, Wells Fargo.

Good evening, everyone.

Hi, Bill.

So congratulations on a strong quarter, and especially, on the strong bookings. So I wanted to start out by asking about the -- what is new on the affinity side? That is an opportunity that you guys have talked about in the past and see if we can get an update there.

Yes, Bill, we are not -- we are obviously in discussions with others about doing additional affinity programs and work. Those discussions are underway; we are not in a position to announce anything yet, but I think that announcements are coming soon. We feel pretty good about our prospects in the affinity space. And I guess connected with that, a little bit different from affinity, but related, is our activity in the paid education space. Where we have been exploring paid programs that go well beyond the free open access program, and some of those are imminent, as well.

So this is -- I have heard this referred to as open access-plus, sort of a hybrid between the traditional credit monitoring and the Open Access program. Is that the way to think of that?

I think that is the way to think about it. I think we are careful to distinguish between the two, only because Open Access is a completely free program designed to let the consumer benefit from a score that the bank is already purchasing. This program, it does go above and beyond Open Access, but we do not call it an Open Access program because it is not a free program; it is a paid program. It is paid by the bank, not by the consumer, but it is still a paid program.

So Discover had made some interesting comments on their call last week. It sounded like they are planning to increase their marketing investment to support an acceleration in the credit card loan growth from -- looks like they did about 4.7% growth in 2016, and they are talking about taking it up to 5.5% to 7.5% in 2017. The other comment they made was that about 75% of that loan growth is coming from newer card members. So I wanted to ask how that was going, insofar as you could talk about it, and then also ask whether you are in active dialogue with other issuers to replicate that type of an offering?

We cannot really comment on Discover, except to say that we are -- we have a program with them today that we are very happy with, and we continue to work on expanding it. Do not have anything to announce today, but we are obviously, always looking to expand and broaden our partnership with them. And do we have similar kinds of things in discussion with other players? Yes, we do.

Yes. And then separately, with Experian's Right Offer, you had mentioned that goal of better matching consumers with a brief qualified credit offer. With the thought that, that will produce a better response rate and a better conversion rate for the lenders. I guess my question is, how is that going? Is that actually -- is the goal of the program actually being met? Is it actually resulting in better conversion? And then how many lenders are working with it, and what kind of a revenue model is it using? Because it sounds like it is a different model than the traditional per subscriber, per month basis.

Okay, so it is early days to provide data. So our views about the lower breakage for lenders, and the higher utility for consumers that comes out of using a FICO score versus non-FICO score, we do not have data to present; it is more of a logic thing, where we just believe that if you give a consumer a real FICO score, and that is the basis for making the decision once the credit offer is made, there is going to be less breakage. That seems like kind of a basic; but do not have data to share there yet. And then with respect to the revenue model, it is a rev share kind of arrangement. I cannot go into a lot of detail on it, but basically, we have completely aligned interest with Experian on this, and it is a rev share model.

Got it. And then a question on the DMS Telecom deal that you guys had announced this past May. I think that was -- that had planned to go live in November, and I wanted to ask how that performed during the peek holiday season. And then I will also ask about the next piece of that implementation, on the marketing piece, how that was looking. And ultimately, how we should think about modeling the revenue for that?

Well, so just to take those questions in order. We have gone live; we have gone live without a hitch. We ran smoothly right through the holidays without any kind of outages or failures, although I will say that we were tested.

(laughter)

I mean, that is natural, and this represents a pretty big volume and a big infrastructure play for us. And so we had a lot of work to do to make sure that we were up to snuff, but we sailed through it and we are happy with the results. Too early to talk about the marketing, but we are feeling pretty good about the way that entire operation has gone.

Got it. And then one housekeeping question. Just on the B2C growth, how much -- how was the growth within the myFICO piece of that?

So this quarter, Bill, year-over-year, we had 3% growth across all of B2C, and myFICO was about mid- single digits, and all the rest, collectively, was a little bit shy of that.

Got it, thank you very much.

(Operator Instructions)

Matthew Galinko, Sidoti.

Hello, good afternoon, guys. You called out strength in customer communications. Curious, was there just a single large deal that was pushing on that, or did you have a number of deals? And just generally, what is your, I guess, outlook for that product?

It is across the board, it is not a single deal. That is ratable revenue, and so it kind of marches upwards smoothly, at least we hope it does, and it is now. That has been a multi-year journey for us, getting all of the offering onto a single code base, getting the infrastructure in place, globally, so that we can support customers around the globe. Leveraging AWS to get to places that we do not have operations, so it has been a journey. Right now, we feel like we are just hitting our stride; we think we have the best offering in the market by a fairly wide margin. Customers seem to believe that, too, and so it has gone very smoothly. But it is not one single thing; it is kind of everything working together, good execution across the board.

Got it, and if I am not mistaken, did you acquire that asset, and -- (multiple speakers).

We did.

So I think you had talked about -- (multiple speakers).

I am sorry, go ahead.

I was going to say, I think you had -- when you made the acquisition, it was somewhere around a low double digit growth rate, maybe around 15% to 20%. And you talked a little bit about the size of the market for you, there. Can you talk a little bit about -- I know you said that you are hitting your stride. Is there a substantial addressable market ahead of you on that, and do you see that as being a product that can drive your software business over the next couple of years?

Yes, good question. Okay, so just a bit of history. The company was called Adeptra; we bought it a bit over four years ago. It was a good, growing company when we bought it. It had reached some scale limits on the infrastructure on which it was operated. I would say that we spent several years in a retrenchment mode, and I do not think it is just kind of post-merger integration blues, I think we really had a lot of rework to do on the code base and the infrastructure. So we really did not have tremendous growth for several years in the middle. I feel like we are back onto a double digit growing kind of trajectory.

Where is the growth coming from? It is multiple areas. There is the growth that comes out of a pending customer communication services to our existing franchises, so that takes primarily two forms. One is fraud, where we have a very strong franchise, and now, we have opportunity to talk directly to our customers' customers about fraud alerts, and is that really you, and did you make this transaction, and those kinds of things. And then a second franchise where we have natural extension and have a lot of volume is in collections and recovery, where our debt manager nine products offering is naturally complimented by an ability to talk directly to our customers' customers. And of course, there is a feedback there that improves the efficacy and the -- improves outcomes.

Those are the more natural things for us, where we just build and extend from businesses we are already in. It does have the potential to open up doors in new areas like marketing. And particularly, since we now have this DMS platform that allows our customers to use the same data and -- from multiple data piece, but the same data to inform different kinds of activities. Whether it is originations, or line management or marketing solutions or customer communications. We now can kind of append this customer communications service to many other things. So we anticipate the demand will just grow beyond even the two franchises where it is strong right now.

Got it, thanks. Maybe a left field kind of question here, but insofar as you have a lot of products that you are -- I think, to some degree, experimenting with or testing, that you know are not necessarily core at this point. But if you find kind of a non-core product that you think you could better monetize through divesting the product line, I mean, do you think about that at all? Or do you still feel that everything you have today is better taken to market under the FICO umbrella?

Boy, that is a great question, Matthew. We have a fairly disciplined process here. We adopted GE's S1-S2 strategy process, where we review all of our businesses twice a year, kind of mid-year with a look to what the three-year outlook looks like. And we look at the competitive environment in the market, and the total addressable market, and what the headwinds are, and what -- how strong our product is, and what its prospects look like. And then we come back towards the end of the year, where we tighten down and lock up the budget for the subsequent year, and that is the S2 part of the S1-S2 process. And in that, we kind of have the buttoned-up tactical next year plan.

In the course of that strategy work, we always evaluate whether it makes sense for us to continue to be in the business, whether the business would be more valuable in someone else's hands. And whether we are adequately resourcing some of our young, not yet big and wildly profitable businesses. And of course, that is a challenge for a company like ours, because we have prospects that are really tremendous, far more than we can effectively resource. I think we recognized that we are -- we have this kind of feast of riches in analytics, and we cannot participate in all of the great opportunities we have around us.

I would say that the businesses that we are in, we have the half dozen or so core franchises, where we are typically number one or number two in the business. And if we are not number one or number two, we believe we have the industry leading product, and there is only a couple exceptions to that in our portfolio. And where there is an exception, we are usually in it for a different reason, or because we believe that there is an opportunity for us to improve it. And so, I would say that -- that is a long way of saying that we are pretty happy with the portfolio. There is nothing in the portfolio today that we are prepared to divest or that we are seriously contemplating divesting.

There are some growth opportunities that have to be managed carefully because we cannot do everything we would like to do, and so we have to pick our winners. For example, we are putting a lot of investment into cyber right now. That is a money-losing business for FICO because we are pouring in resources and the revenue is not there yet. We have every expectation that, that is going to be a great business in several years, and so we are resourcing it appropriately. But of course, that is going to crowd out some other opportunities, and that is what it is doing. And those are the hard decisions that we have to make.

Got it. I appreciate that color, and congrats on the quarter.

Thank you.

Brett Huff, Stephens.

Hello, guys, congrats on a nice quarter. This is Blake Anderson on for Brett. In applications, I know you briefly touched on your customer communications, but can you size the license sales in fraud management solutions? Was there anything, any outsized deals in fraud for to you call out?

Just one. We had a scheduled license renewal in fraud that hit this quarter. The scheduled renewal was quarter two, and it got signed by end of December at the request of the customer. Beyond that, it was kind of routine business in the numbers.

Okay, thanks. And then your gross margins were down just a little bit year over year. Anything to call out there that was driving that?

Not really. The mix of the margin is often dependent upon the mix of how much ratable and services business we have, in comparison to licensed revenue and scores revenue. The latter being higher margin, the former being lower margin. And we had a higher mix of services revenue because of some of the deals we booked last year. Beyond that, nothing.

Okay, and then for the margin guidance for the year, are you still attributing that range primarily to your investments in delivering cloud infrastructure? Or is there anything that has kind of popped up in the 1Q that might be driving that, that we should pay attention to more throughout the rest of the year?

No, nothing has changed from what we said in November when we set the guidance. It really is tied to two things. It is tied to the additional investments we built into our budget that we are making with respect to our infrastructure and our cloud, that is number one. And, number two, it is tied to the ultimate mix of business we have between lower margin, ratable and services business compared to the higher margin, license and scores, and thus, the 300 basis-point range. But nothing has changed from November.

All right, and then lastly, how does paying down debt kind of stack up in your uses of cash priorities? I know you said share repo is your number one, and you mentioned comments on M&A. But how do you guys think about paying down debt?

Well, so the current debt we have, the blend is at about 4.1%, so it is pretty cheap debt. More than half of it is in a revolver, which is under 200 basis points. And I guess we could pay that down, but we think we have a better use of cash than paying down 2% debt. On the other hand, the rest of it is in term notes that have scheduled maturities, and if we pay those off early, we have a penalty, a maypole penalty. And as a result, we have just simply let the maturities happen and we have rolled them into the revolver. So at least under the current regulatory environment and tax environment, what we have been doing is what we will continue to do until we reach a point where we think it is sensible to refinance the entire debt structure. And we are a little ways away from that, probably a year away from that.

We do not really think about it as paying off debt. We like our leverage where it is, in this 2 to 2.5 times area, and so to the extent that we have maturities, we replace it with lower-cost revolving debt. But -- and at some point, we could reevaluate that equation, but I would not expect a very big difference in our leverage position going forward.

Thanks a lot.

(Operator Instructions)

Adam Klauber, William Blair.

Hello, good afternoon, and thanks. When we look at the bookings, could you just give us a rough idea on the decision management? How many of those came from sort of the existing core of financials versus newer verticals?

Yes, they are probably -- I do not have the exact numbers, Adam. It is probably -- give me a second -- it is probably, this quarter, more slightly weighed towards financial services than it is outside of financial services. So of our total bookings, I can tell you 60%, 68%, 69% were with our kind of core financial services business; the remainder was outside. As it relates to DMS, I just do not know that level of detail offhand. It is probably similar.

Okay, that is helpful. And then just following up on the margin. Just on an absolute basis, as you mentioned, you have been investing in sales and delivery, and expenses are up compared to a year ago, but it looks like they are flattening out. So is that a way for us to think about it? Are they at a better run rate today compared to a year ago, but you will not see big jumps up over the rest of the year?

Yes, our current run rates are around $185 million, plus or minus. You often see a little bit of -- you usually see a little bit of uptick in our second quarter, the one we are in right now, simply because our annual salary increase happens in December. And so you see the first full impact of a 2% to 3% salary increase in our fiscal second quarter, and then oddly enough, you see a payroll tax reset. Most people hit their payroll tax maximum by the end of the year, and it gets reset January 1, and we so see, actually $2 million to $3 million of an increase in that. So that, kind of, will put the number up a little bit higher than $185 million, but we are kind of locked in, in this range, and are managing our business at that level as we pursue more top line growth.

Great, and that sounds like more normalized growth go forward than sort of jumps we have seen over the last couple of quarters then?

Yes.

Okay, okay. As then far as the Experian, obviously, a great sign. Is that a couple of quarters until we will see some of the impacts from those new agreements, or can we see that more near-term?

I think a couple of quarters is pretty near term, but I think you will see it grow throughout the year. It is going to start smaller and ramp up.

And remember, it is kind of tied to Experian's marketing budgets and plans, which are outside of our area of control. And so it can vary, the speed and pace at which the -- basically, tied to their new fiscal year coming up here in April.

Right, right. Okay. And then as far as cyber, you mentioned in the -- obviously, that is a long-term effort, and it is still very, very early. Any chance we will see even a little revenue this year, or is that probably more of an 2018 type occurrence?

It is really more of an 2018 occurrence, although little bits of revenue are trickling in. There is a lot of interest, there is a lot of interest. We have a lot of conversations going on, we have a little bit of business going, we have business going with our iBus partnership, so things are coming along. But it is way premature to expect any kind of revenue in 2017. Could it be meaningful in 2018? It will be visible. It will be visible in 2018, and meaningful in 2019.

Okay, great. That is great to hear. Thanks, guys.

Thanks, Adam.

And there are no further questions in the queue at this time. I will now turn the call back over to the presenters.

Thank you. This concludes today's call. Thank you all for joining.

This concludes today's conference call. You may now disconnect.