Forrester Research Inc (FORR) 2004 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Forrester Research first-quarter 2004 financial results conference call. [Operator Instructions] It is now my pleasure to introduce your host, Ms. Kim Maxwell, Director of Investor Relations for Forrester Research. Thank you, Ms. Maxwell. You may begin.

Good morning and thank you for joining our first-quarter 2004 conference call. With me today are George Colony, Chairman and Chief Executive Officer, and Warren Hadley, Chief Financial Officer. A replay of this call will be available until Wednesday, May 5th and can be accessed by dialing 877-660-6853. Please reference the confirmation ID 101859 and the confirmation account 2147. This call is also available via Web cast and will be archived in the Investor section at forrester.com until Wednesday, May 5th. Before we begin I would like to remind you this call would contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expects, believes, anticipates, intends, plans, estimates, or similar expressions are intended to identify these forward-looking statements.

These statements are based on the company's current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. Some of the important factors that could cause actual future activities and results to differ are discussed in our reports and filings with the Securities and Exchange Commission. The company undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise. Now I'd like to turn the call over to Warren.

Thanks, Kim, and good morning. Over the next several minutes, I will review Forrester's first-quarter results, the balance sheet at March 31st, our first-quarter metrics and the outlook for our business in Q2 and 2004. Please note that the income statement numbers I'm reporting today are pro forma and exclude amortization of intangibles related to acquisitions, reorganization costs related to redundancies in our work force identified in integrating our November 2003 acquisition of Giga Group SA and impairments of known marketable investments reported in Q1 2003. Also we have booked an effective tax rate at 35% for pro forma purposes. The anticipated actual effective tax rate for 2004 is 33.5%.

I am pleased to report that Forrester's first-quarter results met guidance we provided on our year-end conference call. Forrester's first-quarter revenue increased 30% to 31.7m from 24.5m in the first quarter last year. As a reminder, we acquired Giga Information Group on February 28th of 2003; therefore, Q1 2003 results include only one month of Giga's operations on a comparative basis. Net income increased 2% to 2.5m, and earnings per share were 11 cents on diluted weighted average shares outstanding of 22.8m compared with 11 cents and 22.9m shares outstanding last year. First-quarter research services revenue increased 24% to 23m from 18.5m last year and comprised 72% of total revenue for the quarter. First-quarter advisory services and other revenue increased 46% to 8.7m from 6m in Q1 of 2003 and comprised 28% of total revenue for the quarter.

We are holding three events in Q2 and expect advisory services and other revenue to comprise approximately 30 to 35% of total revenues for Q2. On a geographic basis, 34% of Forrester's first-quarter revenue was derived from international sales compared to 28% in Q1 last year. The increase is primarily attributable to Europe, which made up 23% of our revenue in Q1 2004 compared with 18% in Q1 2003. The European revenue increase is due to our acquisition of Giga Group SA in France in 2003 as well as a positive impact from currency translation. We expect international revenues to comprise 30 to 34% of total revenues in 2004. Operating expenses for the quarter were 28.6m, up from 22.3m last year, and in line with our planned expenses for Q1. Operating income was 3.1m or 10% of revenue compared with 2.2m or 9% of revenue last year.

Now I'd like to review the balance sheet. We continue to maintain a strong cash position. Our cash and marketable securities at March 31st were 127.8m. During the first quarter, we used 7.7m of cash to purchase shares on the open market pursuant to our stock buy-back program. To date, we have purchased a total of 2.4m shares for 38.5m. Our stock buy-back program allows for the use of up to 50m to purchase shares. We plan to continue to buy back shares on an accretive basis in the second quarter of 2004. We generated 9.5m in cash from operations during Q1. We expect to generate an additional 4 to 6m in cash from operations in Q2 and a total of 15 to 20m for the full year. Accounts receivable at March 31st was 25.3m, down from 40m at the end of 2003. Our day sales outstanding at March 31st was 84 days, up from 74 days last March 31st and 69 days at year-end. AR over 90 was 13%, up from 9% last year and 6% at year-end. Both of these metrics are above our internal goals. The increases in AR over 90 and DSOs are primarily due to larger balances in Europe where payments typically come in slower.

We expect these metrics to be back in line with our internal goals in Q2. Net property and equipment decreased to 7.8m at March 31st from 8.3m at the end of 2003. Our capital spending in the first quarter was approximately 530,000. Our capital-spending plan for 2004 is 4m. Deferred revenue at March 31st was 67.2m, down 2% from our year-end balance of 68.4m. Future accounts receivable, amounts to be billed in the future for clients with two year deals or no unstandard payment terms, was 16.8m at March 31st compared to 18.8m at year-end.

And now I'll review Forrester's first-quarter metrics. Agreement value, the total value of all contracts for research and advisory services in place without regard to the amount of revenue that has already been recognized or is yet to be recognized, was 120.7m at March 31st, a 3% decrease from last year and down 4% sequentially from December 31st, 2003. Forrester's retention rate for client companies increased to 71% at March 31st. Our dollar retention rate increased to 83% at March 31st. Both rates are calculated on a 12-month rolling basis and are our highest rates in three years.

At the end of the first quarter, our total for client companies was 1,806, down 6 from year-end. For head count at the end of the first quarter, Forrester had a total staff of 561, up from 560 at the end of Q4. Current head count includes a research staff of 197, up 4 from 193 at the end of Q4, and a sales staff of 177, down 13 from 190 at the end of Q4.

The last topic I'd like to cover today is our business outlook for Q2 and the full year 2004. Our pro forma guidance for Q2 and the full year 2004 excludes the following -- amortization of identifiable intangible assets which we expect to be approximately 1.4m for Q2 and 6.5m for full year 2004, any impairments of non-marketable securities, and any reorganization or lease write-off charges during the year. Lease write-off charges will include the relocation of our San Francisco office in Q2, which we expect to result in a charge of 1.5 to 2m in the second quarter. This relocation will also result in ongoing quarterly charges of 200 to 300,000 until we sublease the office space and negotiate a buyout of the lease.

With that, for Q2 we're aiming to achieve total revenues of approximately 32 to 34m, an operating margin of 10 to 12%, interest income of approximately 650 to 750,000, a pro forma income tax rate of 35%, and pro forma diluted earnings per share of approximately 11 to 13 cents. For the full year 2004, we are reaffirming our previous guidance of total revenues of approximately 133 to 138m, a pro forma operating margin of 11 to 13%, interest income of 2.7 to 2.9m, a pro forma income tax rate of 35%, and pro forma diluted earnings per share of 52 to 57 cents. We have provided guidance on a GAAP basis for Q2 and full year 2004 in our press release and 8-K filed earlier this morning.

Thank you and I'll now turn the floor over to George.

Thanks, Warren. Good morning everyone. I'll look at the first quarter and give a look ahead to Q2. After my remarks, Warren and I will take questions. Business continues to stabilize. As Warren mentioned, our dollar retention rate improved to 83% with client company retention rising to 71%. Retaining and emerging client accounts really continues to lead our recovery; however, given the demands of the Q1 migration, which I will outline in a moment, bookings especially for new business were more challenged in the quarter than we had expected. This means that the year will rent slower than we had planned, and this is reflected in our Q2 guidance, which Warren just outlined. The first quarter focused on migrating our clients to WholeView 2. In January our research and sales spent time in training sessions devoted to the creation and sales of WholeView 2, our combined Forrester Giga research product. In mid-February, we launched our US site, and began delivering WholeView 2 to clients. This was an intensive effort, which entailed bringing all legacy Giga and legacy Forrester clients over to the new site.

It was an all hands on deck effort, engaging our client care, technology and field staffs in the broad push to make the transition easy for clients. Call and e-mail volumes were high throughout February and March, and we continue to spend time helping clients become familiar with the new site. Just to remind you, WholeView 2 contains the research databases of legacy Giga and legacy Forrester. WholeView 2 features new document types, new ways of searching and new client experience. In addition to research, WholeView 2 members receive three other deliverables -- unlimited analyst inquiry, an event seat and access to all daily ForrTel conference calls. The goal of the WholeView 2 product is to build and maintain a close working relationship with our clients, helping them apply Forrester’s research findings to their specific business problems. WholeView 2 can be purchased in its totality and in two focused bundles, the IT View and the Business View.

The IT View, closely matching the value and focus of the legacy Giga Advisory product, helps clients tackle decisions both tactical and strategic. The Business View equates closely with the legacy Forrester research product. It is directed to our marketing and business executives who are using technology to satisfy customers and drive strategy. Of the research contracts sold in the quarter, 11% were Business View, 23% were IT View, and 66% were WholeView 2. On a seat basis, 71% of seats sold were Whole View 2, and we are pleased that most clients are choosing our unified offering. We had important wins in Q1. Client company renewals included Best Buy, Citigroup, Hewlett-Packard, Lockheed Martin, McGraw Hill, MetLife and Toyota. Win-backs included Coca-Cola, Ford, Marriott, Daimler Chrysler. New client companies included in the quarter Bound, Dollar Tree stores, Goodrich, LL Bean and Safeway.

Turning to the Oval Program -- this is our boards business -- this new product space continued to show strength the quarter. The CIO Group added members ending with 140. Technology councils, and these are our boards for technology titles below the CIO, now has a total of 102 members.

Our newest Oval Program announced in 2003, the Analyst Relations and Marketing Council, added members for a total of 81. For the five Oval Programs, we have total membership of 325. Members are from a wide range of 1B+ companies including Chevron, Deutsche Banc, McGraw Hill, Mitsui, MPS and Monsanto. In Q1, the CIO Group selected, and I'm about to give you a title here, “Emerging Technologies and the Benefits to the Organization”, as their next research topic, and this is a subject that taps directly into Forrester's thought leadership. CIOs look to the CIO Group for forward-looking insight, something that they tell us they cannot get at competitive CIO councils. The Oval Affiliate Program was launched during Q1. Affiliates are academics, authors and other experts that Forrester invites to join the Oval Network for a period of one year. 11 affiliates have become program members to date. We will add more affiliates throughout the year.

Turning now to our plans for Q2. 70 Oval members and affiliates will be participating in our Florida board meeting in May. As I mentioned on our last call, we have an ambitious mission for Oval in 2004. We are on track to launch two to three programs during the year. We will host three events during Q2. Both Giga World IT Forum and Giga World Forum Europe will focus on creating business value with IT. The forums will each feature more than 100 interactive sessions, including special sessions which will score five primary technology vendors: Microsoft, SAP, IBM, Dell and HP. The forum will be held in New York City in June. Outside speakers include David Pottruck, President and CEO of Schwab; John Breenan, Chairman and CEO of the Vanguard Group, and Arkadi Kuhlmann, Chairman, CEO and President of ING Direct.

So to conclude, the quarter was a busy one, migrating our clients to a new product with a new site and new deliverables. While there is still much work to be done in the year, I feel we are positioned to continue our recovery. Strategy being a push plus pull company, offering products which we push to clients like syndicated research, along with products which the clients pull them to them like Oval is on track. The sick economy is showing, and this should help Forrester as the year progresses. We look forward to seeing many of you while we unroll this quarter. Thank you for listening to our conference call. Warren and I will now take questions.

Our first question is from Mr. Fred McCrea with Thomas Weisel Partners.

George, maybe kind of a longer-term question. What are the kind of things you need to see in a broader macro environment that you believe will positively impact the overall business, particularly on the traditional core research?

I think the increase in tech spending is going to help a lot, Fred. There's a lot of –- there is the Google craziness that's going on right now. There's at lot of motion that tech is recovering in a big way. I would say when we serve a CIOs and completed a survey in December, they said they would increase tech spending 2.4%. We believe that number will be probably double that in the area of 5%. So that's helping. That's the modest recovery we're seeing in tech spending by large corporations. We need that number to be 5% this year to help us and even higher next year. That really is the driver of our business. I mean, if companies are making decisions on technology, they need research. So that -- not to simplify too much, but I think that is at the base in the macro sense of driving our demand, demand for Forrester Research.

Sure and then in terms -- did your survey approach that at all in terms of the corporate survey in records to strength and not particularly verticals but just by overall size of the businesses you were talking to? Specifically, would you expect -

This is not a size correlation. This was correlated to vertical markets. Any -- I said this on the last call, but I'll say it again. The consumer facing verticals tend to be doing better and spending more money. So retail is number one in our survey -- retail, insurance, consumer services and then, believe it or not, tech and telecom is next. Those are the biggest spenders. The lowest spenders are chemical and petroleum, utilities and primary producution and supply. It is kind of the base B2B businesses. If you want to look for recovery here, you are looking at the consumer facing first.

Perfect.

Hope that helps.

That's great. I'll follow up.

Thanks, Fred.

Our next question comes from Mr. Charles Trafton with Americas Growth Capital.

Hi. Thanks. Good morning. Your operating margin expanded year-over-year, but it looks like the incremental margin was about 13% versus last quarter's in the mid 20s. Are you reinvesting a lot of the excess profit that you're getting? And what are you investing that in if that's the case?

Really a couple of things. One is Oval. Obviously we talked about potentially two to three new Oval launches this year, so there's some investment going on there. There's some investment taking place in other products, which we haven't launched at this point. We haven't announced at this point.

And I mean overall I think that with the acquisition of Giga complete at this point, the client engagement with WholeView 2 is probably a little bit more expensive from a cost of research and fulfillment standpoint than it was two years or three years ago.

Yeah.

So when you're talking about investing I noticed the sales reps are down, the analysts are up just a handful. Is the utilization of client service higher? Is that what you mean by investing?

Yes. Exactly.

What was CAPEX in that quarter?

530,000. So the plan here is 4m for the full year.

Right. And how much longer are you on the hook for the -- how much longer is the lease in San Francisco, the 300,000 a quarter that you will --?

The lease goes through 2007, through Q3 of 2007.

Want some space?

We're working our way through that right now.

How quickly do you want to get that done? Like yesterday?

Yeah. We'd like to get it done as quickly as possible, but I mean the market hasn't fully returned in San Francisco. So finding a sub tenant hasn't been easy so far, otherwise we would have moved even sooner.

What do you think about head count through the year? Analysts are down year-over-year. I'm sure you've gotten rid of whatever cross-over you had with Giga, but what about head count?

I would head count, we are at 561 at the end of the first quarter. We may be up a few, but it will probably be a couple of handfuls at the most by the end of the year.

580 in that range.

570, 575 or so. As you know, we have a lot of leverage in the model right now. We can grow this thing and not hire many people.

How did you feel -- once you two went live, do you feel there was any pressure lifted off pricing once it went live?

Pressure off pricing? What do you mean?

Were you able to more often charge full price once it went live?

I would say there is no change there.

It is probably too early to tell when it was really just launched in the January/February time frame. A lot of the deals that came in Q1 were worked on back in December and January.

They were way in the pipeline before that.

That's a good question. Back in the good old days when things were growing sequentially all the time, deferred revenue was up from June to March. Are you too early in this recovery to make that statement at this point?

Yes. Definitely.

OK. Thanks.

Thanks very much.

Our next question comes from Ms. Sandra Notardonato with Adams Harkness & Hill. Please state your question.

Hi, thanks. A couple of questions. First, Oval. What did that represent as a percentage of revenue this quarter?

Between 4 and 5%.

And we're still on track to do something close to 10 for year-end.

We will be at 5 to 7, 6 to 8% of revenues by the end of the year. For the full year, I'm sorry. So we will be closer to 10% in Q4.

OK. And then just to recap, the WholeView renewals for 66%, can you tell me Business View and IT View again? I missed those numbers.

I'm clicking back here. Those are not renewals. Those are percentage of -

Right. Sorry.

It was --OK. So this is contracts sold in the quarter. And 11% Business View, so that's equates to the Forrester legacy products. Only 2% to IT View and 66% to WholeView 2.

And the comparable number in Q4 was 26% on the Business View side. Why do you think the dramatic decline?

From 26 to 23?

No. Well, I thought it was 26 to 11, 21 to 23 on the IT View.

I would say because the legacy Forrester clients are buying the whole package at this point.

That may actually be a case where they saw the product and said we'll take the unified product rather than one segment. As you know, the pricing is 20K for Business View, 25K for WholeView. If you remember, the Forrester WholeView 1 product was priced at 27; WholeView 2 was at 25. There's actually a price break for them for the same amount of actually a very enhanced product.

So the challenge is to get the IT View folks renewing on the WholeView platform. And this quarter we actually saw that number go up. What do you think is going on there?

It's a price increase for them. They are going from the 17-20 range to the 25 range. And I think if you look deeply at the Giga legacy client base, you'll find a very heavy IT slant there. Some of them may just not find relevancy in some of the vertical markets and retail, et cetera, et cetera. They just want help in IT.

Is that a function of the buyer of the IT View product?

Yes. Definitely. Now I think over time that will change. But I would say for a good four quarters you are going to see those numbers probably be in this range.

OK. A couple of other questions. You mentioned the international revenue benefiting from currency. What was the currency adjusted growth rate if you have it?

The growth rate of 30% of total revenues would have been 27% had it not been for the currency translation.

OK.

It was a 3% impact.

OK. And you were good to give the breakout of core research or research services and advisory for Q2. What should we be looking for in Q3 and Q4?

It really just depends on the timing of events, which we already know. But I would say it will be in the 30 to 35% range probably for Q3 and Q4 as well and in that range for the full year.

So when do you think we can get back to 75-25 so that we could start to see a little bit more of a profit margin that matches what we saw a few years back?

Well, I think you're getting to the fundamentals of demand here and the fundamentals of the behavior of the buyer, Sandy. It's not -- there is a demand for pull type services, be it Oval, where they are actually driving the research agenda, or consulting and advisory projects, projects where they are actually saying I have this problem, help us with it. Take your research search and apply that to our problems. And I'm not sure -- I mean obviously our business models are, you know, we may never return to 75%, but I think being in the 70% range is definitely possible.

70% of total revenue?

Absolutely. And I'm estimating here. But I'm just saying, there is a fundamental change in the behavior of the buyer going on which we have to, you know, obviously the buyer is driving our business model and where we're headed as well.

Sure. So you're seeing more demand for advisory type services?

Yeah. But that may also be a sign of the times, too. In these times, budgets are so tight, I can't double the receipts by research. But, gee, I have this small project I need you to help us with. But as tech begins to expand, I think what you are going to see there is a return to research to more seats to higher IQ to more people in these companies.

Have you noticed your ability given the increased demand for your analyst time, have you noticed the ability to deploy them at higher bill rates or higher rates per day as you --?

No, no, I have not seen that.

OK. Do you anticipate that changing?

I would say probably no. I'm going to the depth of our business here, but if you look at the bill rates for our analysts for advisory and consulting time, we get a good premium price for them if you compare them to Accenture, IBM, etc, etc. The only place where there's no pricing space is really in the Oval place. As you know, we have a big player in that space that is rising prices every year, so that gives us a good ceiling.

OK. And your plan longer-term for Oval, can I assume it is to expand to other functional areas of your organization, or do you plan on sticking with IT?

More functional areas.

OK. And can you give the timing? Is that a 2005 event or later 2004?

That is this year. That's this year. And within the Q2 call, we'll talk about that.

OK. And just one more question I think for Warren. How does the profitability on the Giga conference compare to Forrester? And what kind of profitability will the flagship Giga events be generating in Q2?

I would say the probability at the Giga and the Forrester conferences are pretty comparable. And as far as, you know, dollars dropping to the bottom line, you're looking at probably about 30% margin, 40% margin in the quarter on a million dollar event.

A million dollar event for the IT, and what's the Giga Europe?

The Giga Europe will be smaller than that, probably in the $400,000 to $600,000 range.

OK. But still 30 to 40%?

40% to 30%, yes.

OK. Great. Thank you.

Thanks.

[Operator Instructions] Our next question comes from Terry Lally with Kramer Rosenthal. Please state your question.

Hi, good morning. A few questions. George, you mentioned bookings were challenging in the quarter. Did you see any change in customer behavior, or do you think some of that might have been related to this distraction of rolling out WholeView 2?

I think it was really the migration, Terry. That was somewhat unexpected by us, that it would take so much time and energy in the sales staff and the client resource center and also some of our analysts working on the project. So that -- I don't think that's a behavior change on the part of the buyers. I think it really is about the migration. Of course, that's important because we're taking care of our existing clients. We are doing the right thing for them and making that transition easy for them. That's all the time we spent doing. That was the right thing to do.

When you look at Giga, it's been a year now. And maybe if you can look back at the key milestones with the integration -- what went well, what didn't, what's still left to do?

I would say this is kind of a high view, you know, 30,000-foot view. ’02 was really about the heart side of putting the companies to get, right? The structural, organizational sales force together, research together of WholeView 2. I really see this year -- you can divide business into the hard -- there is a hard side of business, substantial, etc., etc. organization, and there is a soft side of business -- culture, etc., etc.. This part -- 2004 is really about the cultural or the soft side of bringing the two companies together. And, you know, I don't know what your view is on this. But my view is that's usually the harder side of an acquisition. I will tell you I think it's going very, very well structurally, culturally and on the soft side. I don't know if you have any view on this, Warren.

I agree. I think things went pretty well last year in 2003 on the whole for the acquisition and the integration, and so far culturally I think things are moving in the right direction as well.

It's important to have us all on one Web site because the Giga almost never saw – never really looked at Forrester Research and dido when Forrester got done with the Giga research. Now it's all one place. We can see how the legs of Giga research is reinforcing the legacy Forrester type research, and now we really felt for one team going forward. But remember this is very new; it is only a month and half old.

How was sales force retention going at the -- it looks like a net decline of 13 sequentially.

The attrition rate in the first quarter is 5% in the sales force. Some of the drop was we did a reduction in Europe for the acquisition of Giga Group SA. So I'd say overall attrition is about at or below what we would expect and what normal levels have been for the past two or three years.

That's typical.

And turning over to the balance sheet and cash flow, it seemed like accounts receivable was a real strong driver of cash flow. Is that the normal seasonality?

Yes. If you look at our cash flow historically, you will see that Q1 is typically when we generate the better part of our cash flow for the full year. Typically anywhere between 40% and 60% of our cash flow will come in the first quarter.

Is this collecting the Q4 bookings?

That's right, yes.

The deferred revenue, is that also seasonal?

That is too seasonal as well. Again our bookings come in 20% each of the first three quarters and then 40% in the fourth quarter. So, you know, when we're growing fast, you'll see deferred revenue grow from quarter-to-quarter regardless of when the bookings are coming in. But as things have been flat over the past couple of years, this is more typical.

And on the dollar retention rate, 83% this quarter remind us what the Q4 was.

The Q4 dollar retention rate was 78%.

And so to pick up five points and given up the trailing 12-month calculation that Q1 will be pretty good to lift that whole number up five points?

Yes. It is a combination of Q1 being pretty good. But also again when we calculate the retention rates, we use a strict cut off period of 12-31. So, if we get some win-backs that are deals that come in, that slip into early January, that help us out for the 12-month roll as well that would not have been included three months ago.

Okay. The buy-back of 8m in the quarter, it seemed like you were a little more aggressive this quarter than you've been in the past?

That's right, yes. And we will continue to be active with the buy-back in Q2.

Great. So, do well. We see things turning. Well, thanks, George.

Thanks, Terry.

We have a follow-up question from Mr. Charles Trafton. Please state your question.

Hi, thanks. You mentioned two to three new Oval programs during '04, and on Sandy's question, you said there would probably be new functional areas. New functional meaning non-IT; is that right?

Yes.

And you'll talk more detail about them in the Q2 call?

Yeah.

Is that because they will be launched by Q2?

Yes. I mean at least formally launched -- better planned out, too.

Yeah.

We're launching right now, Charles, but we're not ready to go public as yet.

OK. And so the numbers you quoted us on the other members don't include any of these new ones?

That's all the CIO Group and the three tech force and then, of course, the Analyst Council, which has been very popular.

Right. The retention numbers you gave, those are annualized figures, isn't that right?

Those are 12-month rolling figures, correct.

12 months rolling?

April 1 through March 31st of this year.

And this might be what the previous question was getting at, but do you know what client retention was in the quarter?

We don't really give out the quarterly retention rate.

You can do the math.

Part of it is the math, but again part of it is clients renew a little bit after the cut off and etc..

Well, I went to Boston College, so don't assume anything about my math.

(inaudible).

OK. Thanks.

Thanks a lot.

Our next question comes from Daniel O'Sullivan with Sidoti and Company. Please state your question.

Good morning. Just a quick question. I think I may have missed it. Was it 71% for WholeView 2 total seats right now?

Yeah. On a seat basis.

On a seat basis.

Yeah, 71% of seats sold in the quarter were WholeView 2.

Do you break out as far as the retention rates, or do you have a sense of the mix between legacy Giga clients and Forrester clients?

No, the retention rate is done by total client companies, and it is not broken out either by legacy Giga and legacy Forrester and/or by WholeView seats or IT View seats or Business View.

We financially integrated really fast. (multiple speakers).

OK. Do you have a sense of when you may start breaking out the revenue from the councils and the boards as a separate line item, or will you ever do that?

Currently it is classified as research revenues. It's something that we certainly look at it. It's not material enough at this point to do so.

(Multiple speakers).

OK. Great, thanks a lot.

Thanks, Dan. Appreciate it.

Take care.

There are no further questions at this time.

Great. Thanks for joining the call, and we look forward to seeing many of you on the road this quarter.

Thanks very much.