Nice Ltd (NICE) 2009 Q4 法說會逐字稿

Welcome to the NICE Systems fourth quarter and 2009 year end results conference call and thank you all for holding. All participants are at present in a listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. (Operator Instructions) As a reminder this conference is being recorded February 17, 2010.

I would now like to turn this call over to Ms Daphna Golden, Corporate Vice President Investor Relations and Corporate Development at NICE. Ms Golden please go ahead.

Thank you, operator. Good day, everyone. With me on the call are Zeevi Bregman, President and Chief Executive Officer, Dafna Gruber, Corporate Vice President and Chief Financial Officer and Eran Liron, Corporate Vice President Business Development.

Before we start, I would like to point out that some of the statements made in this call will constitute forward looking statements in accordance with the Safe Harbor provision with the Private Security Litigation Reform Act of 1995. Please be advised that the Company's actual results could differ materially from these forward-looking statements. Additional information regarding the factors that could cause actual results or performance of the Company to differ materially is contained under the subheading forward-looking statements in the Company's 2008 annual report on form 20F as filed with the Securities and Exchange Commission on April 6, 2009. Such factors and forward-looking statements are based on the current expectations of the management of NICE Systems Limited only and are subject to a number of risks and uncertainties that could cause the actual results or performance of the Company to differ materially from those described herein, including, but not limited to, the impact of global economic environment on the Company's customer base, particularly financial services firm and the resulting uncertainty. Changes in technology and market requirements decline and demand for the Company's product, inability to timely develop and introduce new technologies, products and applications, difficulties or delays in absorbing and integrating acquired operations, products, technologies and personnel, loss of market share, pressure on pricing resulting from competition and inability to maintain certain marketing and distribution agreements. The Company undertakes no obligation to update or revise these forward-looking statements except as required by law.

During today's call, we will present a more detailed discussion of the fourth quarter and full-year 20009 development and the Company's current guidance for the first quarter and full-year 2010. Following our comments, there will be an opportunity for questions. Let me remind you that unless otherwise noted on this call, we will be commenting on our adjusted results of operations, which differ in certain respects from generally accepted accounting principles as reflected mainly in accounting for acquisition related revenues and expenses, amortization of intangible assets and accounting for stock based compensation. The differences between the nonGAAP adjusted results and the equivalent GAAP figures are detailed in today's press release. With that, I will turn the call over to Zeevi Bregman. Zeevi?

Good day, everyone. Thank you for joining us today to discuss our fourth quarter and fiscal year 2009 results. I am pleased to report that we ended the year with very strong business performance. First, Q4 was a very strong quarter with bookings, backlog, operating margin, and operating profit at an all-time high. Second, in 2009, after a slow start, our business improved to a quarter to quarter mutually across the board. Finally, all of the Company's gross engines enterprised on the analytical based applications, optimized financial time analytics and the securities solutions demonstrated a remarkable year-over-year accelerated goals.

I would like to provide would you with some of the key data on our performance in Q4. Our nonGAAP revenues reached $163 million, 11% higher than Q3. In nonGAAP, earnings per share for the quarter reached $0.45 at $0.07 on Q3. Bookings for the quarter hit a new record coming in higher than the focused quarter we had in our history. As a result, our backlog is the largest ever, exceeding two quarters of revenue. On a regional basis, our largest region, the Americas, continued to show strength, and we have also seen a significant improvement in EMEA bookings this quarter.

I would now like to refer to some highlights for the full year results. For the entire year, we achieved nonGAAP revenues of $589 million. NonGAAP earnings per share reached $1.54 and we generated $120 million cash from operations. In line with our growth strategy to compliment organic growth with our position, we made four successful acquisitions in 2009. Toward the ACTIMIZE side of the business, [Syfex and Fortent] and two on the security side Hexagon and [Osis]. I'm happy to report that they are all well integrated producing initial business results and creating good traction in the market.

Looking back at 2009 and as we enter 2010, I would like to highlight some market plans that clearly illustrate that NICE is well positioned for future goals. One, the total number of interactions enterprises are having with their end customers is growing substantially. While foreign interaction continues to grow, other means of communication between enterprises and consumer are gaining critical mass. [Down structure] nature and complexity of those introductions are creating new challenges for our customers. As a result, we see enterprise as adopting analytics based solutions so they can view the touch points with their customers in a holistic manner and to also better service while reducing unnecessary costs. Second, the total number of financial transactions is quickly increasing as well. We see web and phone transactions posing greater [fordrees] threats to financial institutions. Furthermore, the move to in-type payments has been [cleaving the number for the thing] and is pushing financial service institutions to adopt comprehensive analytics based enterprise risk management solutions. Third, the number and variety of physical securities systems is also growing substantially. With public and private organizations pulling many more systems, such as Slovenia's come around access control and intrusion detection system and their attempt to protect civilians and facilities to make the world a safer place. With many more different systems in place, the need for holistic unified analytics based management solutions is clearly on the rise. Finally, the number of internal and external [liquidations] on the business and security forms [small ride is going]. Organizations tempt to litigate forward better sales with customers, avoid conflicts and demand safety and security. This presents yet another important growth driver for our business as we enabled our customer to comply with liquidations whether internal or external.

All the above clearly indicate the increasing need of business and security organization for leverage analytic base and comprehensive management solutions. This type of leading solutions for NICE are deployed with customers worldwide to help them to sense and capture [different intents], gain insight as cross channels and glimpse insights across systems and we believe that to drive business performance reduced risk and safety. All of these growth drivers coupled with the strong momentum in our business lead us to believe the 2010 will be a year of growth.

Moving to our enterprise sector. Our enterprise business continued to show strength. We achieved record breaking booking in Q4 driven by market share expansion and increased adoption of our analytics based business applications, optimized and interaction analytics. Q4 was strong finish to 2009, a year which despite the challenging environment we successfully executed on our strategy to [shift to silo] to enterprise wide deployments across the [bottom of the] (Inaudible) within our customer base. We seldom solidify our leading position as a defect of standard in the market we serve and we have benefited from accelerated demand for our analytics based application. In summary, we continue to enjoy tailwinds in our tradition growth driver increasing goal volume, achieve voice-over IP and data center consolidation.

Furthermore, consolidation within the financial services industry accelerates many of these trends including enterprise-wide adoption of NICE analytics based application. Our customers continue to expect the challenge by which they interact with our customers and they require new solutions to address their former lead to ensure customer experience, comply with liquidation, fight for and optimize their operation. In December we officially launched our cost center analytics solution. This solution enables our customers to understand and act upon the customer economics, not only by analyzing their full interactions, but also for e-mail, shared and social media. I'm happy to report that we have already received several multimillion dollar holders for this solution.

Our optimized enterprise and financial times solutions including cross channel and anti money laundering and phone prevention as well as market abuse surveillance solution, those have been gaining significant traction. We believe the focus of acquisition has positively impacted decision making of certain customers. For example, in Q3, we received a very large order for a global top ten bank for our enterprise-wide [cross channel fraud solution]. I am happy to report that in Q4, the bank selected ACTIMIZE again. The bank placed yet another multimillion dollar deal this time to cover anti money laundering, including monitoring of the balance sheet.

In 2009, we have seen the first customers adopting our entire enterprise analytics base portfolio. One significant example was of an apg business security (Inaudible) that we will be disclosing now for the first time. The deal from another leading US bank was leading by a major M&A integration effort as the bank consolidated data centers and adopted new infrastructure. To support the effort they selected our NICE smart center suite including our analytics solution, displacing several competitors in the process. The same bank also implemented our optimized anti fraud and [broader edge] compliance solutions for cross-channel monitoring and analysis. Such more adoption is in its early stages. We see this as a major opportunity as we combine these market needs with our significant store base to create a major platform for more.

Turning to our securities sector. The security sector is another key gross driver for NICE and is driven by the ever growing need to make the world a safer place. Last month we closed the [Osis] acquisition. [Osis] is a loading provider of security management software solutions. The combination of technologies enabled us to enhance our addressable market and initial (Inaudible) is very encouraging. NICE now provides a comprehensive pre-integrated portfolio of security management solutions to protect city systems, transportation systems, physical infrastructure and enterprise [compasses]. This includes audio video investigation tools as well as ability to connect to any [serve faulty] central provider. We provide command and control centers with the framework for fusing data silos on distinct security and safety systems into a single holistic view and provide them with tool to automate security procedures and investigations. With the new cohesive and unified capabilities we now offer, we can impact the way security organizations around the world will deal with the growing number of security sensors deployed in the most complex environment. We already have several large unique opportunity in the pipeline.

In Q4, we continue to demonstrate success with large follow on orders for our intelligence solutions and significant (Inaudible). In line with our plans and continue to implement our large scale security project. Our security business continues to enjoy healthy backlog and firm pipeline and is key driver for the Company's future goals.

To summarize, 2009 started as a challenging year. I believe that NICE took balanced measures to align costs early in the year in a way that enabled us on one hand to protect our operating margin and on the other hand to successfully drive the business ending the year at record levels. The fact that we were able to achieve booking goals in such an environment is attributed to the strength of the Company, its vision, its product and most of all its people. I would like to take this opportunity to thank the entire NICE team for their work during the year.

Looking ahead, I believe that 2010 and beyond will be a year of growth for NICE. We will continue to grow our business organically and we'll also continue to pursue mergers and acquisitions as a natural extension of the Company organic goals. Taking into account the Company's goals drivers and strong performance in a challenging 2009, we are confident that our superior technology product and excellent team will drive NICE goals to new heights in 2010 and beyond. I will now turn the call over to Dafna Gruber, our CFO. Dafna?

Thank you, Zeevi. I am pleased to provide you with the analysis of our financial results and business to format for the fourth quarter and fiscal year 2009. The fourth quart was a strong finish of the year for a year that started with market uncertainties. I believe we navigated well through the challenges. We exited 2009 with an all-time record backlog. Bookings in Q4 were 20% higher than the booking achieved in the strongest quarter so far, Q4 last year. Revenues for the fourth quarter reached $163 million up 11% from $146 million in Q3 and similar to the record revenues of $163 million in the fourth quarter last year. Revenues for the full-year 2009 reached $589 million only 6% lower than $628 million in 2008. We continue to focus on including our operating profit and operating margins. Operating margin increased by close to 2% from 17% in Q3 to a record of 18.9% in Q4. We also reached a record on an an annual basis with operating margins for the year reaching 17.6%, which is up from 17.4% in 2008. Earnings per fully diluted share for the fourth quarter reached $0.45, up sequentially from $0.38 in the third quarter. For the year, earning fully diluted share reached $1.54, compared to $1.67 last year. We are very proud of the amount of cash generated from operations in 2009, $120 million. In the fourth quarter, 2009, we generated $29 million dollar cash from operations. And we ended the year with cash and equivalence of $549 million with no debt.

Our revenue by businesses as well as follows. Enterprise revenues reached $123 million in the fourth quarter up 13% from $109 million in Q3. After a challenging start in the year 2009, our enterprise business grew from quarter to quarter during the year. Enterprise revenues for the year reached $441 million, representing 75% of total revenues. We successfully executed on our strategy to leverage our customer base by including the portfolio solutions we filled in and continued to achieve from several products at enterprise wide solutions. We also benefited from the main growth engines of our enterprise business that accelerated adoption of NICE analytics based application including call volume, the migration to voice over IP and a trend of data center consolidation.

Security sector revenues in the quarter reached $40 million, 6% higher than the third quarter and 10% higher than the fourth quarter 2008. For the year, security sector revenues reached $148 million representing 25% of total revenues.

Revenue by geography was as follows. The Americas accounted for 63% of revenues in 2009 and we achieved all-time record revenues on both a quarterly and annual basis. We showed sequential growth from quarter to quarter through 2009 with Q4 revenues at $99 million and a total of $369 million for the year. These represent an increase of 6% from 2008. Europe, Middle East and Africa accounted for 28% of $45 million in the quarter, increasing 21% over Q3. For the year, EMEA accounted for $153 million. The EMEA started very weak in the first half of the year and is now showing signs of recovery. APAC accounted for 12% or $90 million in the fourth quarter and over $67 million for the year. Q4 revenues increased by 8% from prior quarter. Revenues for maintenance increased by more than 15% in 2009 over 2008 accounting for approximately one-third of total revenues.

Q4 gross margin reached 63.2% up from 62.9% in Q3. During the year 2010, we expect to generate gradual improvement in gross margins and we continue to target over 65% of our mid-term gross margin goals. Operating expenses in the fourth quarter of 2009 were $72 million or 44% of revenue. Down from 46% in Q3 2009 and 44% in Q4 2008. As mentioned earlier, we reached a record operating margin in the fourth quarter. We expect the consistent trend of annual improvement in operating margin that we have demonstrated in the past to continue in 2010 and we remain committed to our mid-term annual operating margin target of 20%. Net income for the -- in the fourth quarter reached a record for the year at $29 million, up 19% from the prior quarter. Net income for the year reached $96 million compared to $103 million in 2008. Consolidated taxes in the incoming Q4 were 11%. We believe the effective tax rate for the Company in 2010 will be approximately 18%. In line with our conservative investment strategy and the very low interest paid on risk investments, I can focus finance income on approximately $7 million on an annual basis for 2010.

Going forward, when providing the guidance for 2010, we assumed certain continuous improvements in macro economy trends. Obviously, changes in the environment can change our assumptions. We are currently focusing first quarter 2010 revenues to be in the range of $153 million and $150 million and earnings per fully diluted share to be in the range of $0.35 to $0.39. For the full year 2010, we currently focus revenues to be in the range of $652 million and $670 million and earnings per fully diluted share to be in the range of $1.66 and $1.74. The guidance provided assumes the share count in 2010 to be in the range of 64 million to 65 million.

Before opening the call to questions, I would like to take this opportunity to update you that we would be holding our investor and analyst day in New York on Tuesday, May 25. As in the past event, NICE executives will present our strategy and business line and we will of course have leading selective customers and partners share with you their successes. I encourage those interested in joining us that haven't received the save the date notice form our IR department to email IR at nice.com. That concludes my comments. I will now turn the call over to questions. Operator?

Thank you. Ladies and gentlemen, at this time we will begin the question and answer session. (Operator Instructions) Please stand by as we poll for your questions. The first question is from Shaul Eyal of Oppenheimer. Please go ahead.

Thank you. Hi, good afternoon, everybody. Congratulates on a good quarter and nice contract win. Quick question that relates to this eight digit bank deal. When you exclude that, what was the average deal size over the past quarter or so?

The way that we look at it, it's really difficult to [measure the insights] because our business is very diversified. If you are looking at the relevant business that we are making with our large customers on the enterprise sector and also on the security and the ACTIMIZE sector, we are seeing that the average deal size is growing. As we said, we are moving from silo solutions to enterprise-wide solutions and therefore the average business size is growing.

Got it and this contract win that you disclosed early, also a displacement, was this a win given ASPs or was that a win driven by technology, service, or all of the above?

It was driven, I think, by technology, by service, by customer satisfaction and by consolidation.

Got it. Thank you very much. I may come back later for more.

The next question is from Daniel Meron of RBC Capital Markets. Please go ahead.

How are you doing?

Are you in Barcelona, Daniel?

Barcelona was great. You should come there. There's lots of things that you can do with telcos on the application side. Anyways, just first of all, congrats on the good numbers and the outlook. Can you provide us with more granularity on the verticals that you see strength in? I think, Dafna, you mentioned the regional view, how should we think about the uptake of this into next year? Thank you.

When we are looking at the verticals, we have seen the second half of the year we have seen growth in the banking vertical, in the insurance vertical, in the outsourcing and health scale vertical and in the transportation vertical for the security solutions. The second part definitely was yours.

Yes, regarding the geographical distribution. I think that the Americas was significantly strong this year mainly because we saw more difficulties in EMEA and APAC. I believe we'll have the same or even more balance in this distribution of business in 2010. We do expect growth in the business both in EMEA and APAC in 2010.

Okay. If you can provide us a little bit of a sense what's the organic growth rate that you expect next year? I know all of these acquisitions were kind of small, but if you can just give us a little bit more insight on what is the organic rate and how much contribution you're getting from the acquisitions in 2010? Thank you.

The way we look at our business, the largest acquisition we had this year was the acquisitions of [Fortin], and [Fortin] is very much synergistic to our business and therefore starting this quarter, we look at this business on a consolidated basis we have a larger install base to sell our products to. We viewed this growth in 2010 as organic growth. As to the rest of the acquisitions, most of them were relatively small and contribute several millions in 2010. So internally, we look at all of the growth in 2010 -- most of the growth in 2010 as organic growth.

Okay. Thank you. Good luck.

The next question is from Shyam Patil of Raymond James Associates.

Hi good morning. Congrats on the quarter and the outlook. A few questions on my side. This is the first time I think I've heard you talk about analytics and referenced it this much in a call, especially around the enterprise analytics. Could you talk about how big this is currently, how big it could be sort of in the next year or two and how it might change your margin profile going forward?

Regarding analytics, we had, as we said accelerated growth in our analytics business and we are really pleased with our results. We are also encouraged we received the (Inaudible) deal that this is something that really shows strength in the business, that the solutions are really supporting the business of our customers. The unique thing about our offering that on top of our leadership in the voice analytics, we are also dealing with core channels as we said before. So we are putting analytics not only on the voice, but also on the combination of voice, chat, social media, web and e-mail. This provides additional insights to our customers. This is say very large market. We are seeing the business potential here is huge for our customers. Therefore we believe this can translate into a very large business for us.

Got it. Okay. Then the large bank you referenced as a customer, could you talk about how that sale occurred, particularly around, did they approach you for the call center solution and then decide to add on ACTIMIZE? Were they looking at the different pieces all at once? Could you talk about that a little bit?

First, there may be confusion on your side. It was separate deal for ACTIMIZE which was earlier and there was a different deal for the call center place, which was later. The deal is where we are presenting our solution. The customer is in place, and any signing development. The process is a normal process. We answered before, the driver behind -- the driver behind this deal. One is the need for analytics and the business case for analytics and the other is the consolidation of the financial market.

Okay. My last question, Dafna. Could you maybe kind of explain what the specific dilution is around [Osis] for 2010?

What we indicated when we announced also that it should contribute several million to the top line and would be slightly dilutive in the first three quarters and becoming neutral or accretive in the fourth quarter of 2010. Slightly accretive means very small -- slightly dilutive probably $0.01 to $0.02 of dilution every quarter.

We are currently on plan.

And we're currently on plan with the integration and the overall plan for this business. Actually, the solution is gaining a lot of traction from our existing customers that view it as a very important end all for the products that we are currently offering them.

Okay. Thank you.

The next question is from Brian Ruttenbur of Morgan Keegan.

Okay, thank very much. A couple quick house keeping questions and a real question. Cash plans in 2010, how much cash do you plan to have at the end of first quarter then at the end of fourth quarter in your guidance that you gave?

In general we model net cash from operations should somehow be not similar, but very close to the total operating profitability of the Company, and this year last year it was over $100 million. I believe, that there are good chances that it would be over $100 million in 2010 as well.

Okay. So in 2010, you're going to increase your cash balance by $100 million and how much in your estimates have you got paying out for acquisitions?

Acquisition is probably too early to tell at this point. We are, as you know, the Company has a good history of doing acquisitions both small ones and larger ones and the amount of cash would be highly dependent on the size of the acquisitions we would do next year.

Then on the gross margin target, you said it's going to be slightly up in 2010. Did you say a specific number like 10 basis points, 100 basis points? Can you give us some kind of perspective on that?

No. Gross margin especially now diverts business is kind of difficult to predict in basis point. Overall, the trend is a trend of improvement and overall the mid term target is to gross 65% gross margin for the Company.

Okay. Now those are the easy lay-ups. The real question is with Verint, your biggest competitor getting relifted. Your biggest relationship, as I understand is Avaya. Is Verint getting their feedback under them going to impact your relationship with Avaya or anyone else you have as a major customer?

Regarding Avaya, Avaya is a very important partner for NICE and will continue to be. We are moving more and more to direct business with our customers as we move more and more to application and to analytic based solution. As the solutions are going, and the need for support is the support of the customer that what they wish. Overall, we continue to have good relations with Avaya. This year because of the move to direct business, the move to be below 10% of our total revenues and we plan to keep and maintain this relationship.

Maybe stated another way, do you see Verint getting their financial footing back under them impacting you at all?

Verint is a competitor of ours and they are competitors with our financial and win financial.

Thank you very much.

The next question is from Daniel Ives of FBR Capital Markets.

This is actually Mike [Vedan]. Nice quarter. Can you speak to the backlog, maybe the break up between the enterprise and security? How does that mix looking and how has that changed over the course of this year?

I don't think we had significant change in the composition of backlog. We had certain large bills coming from the security form that includes the backlog, and we also had a very strong finish of the year also on the enterprise side that includes the backlog as well. The ACTIMIZE side of the business was very strong and created the good resulting in good bookings in Q4 that also increased the backlog. Overall, I don't think there was a big change in the structure of backlog. The only thing that was changed is the size of it.

Okay. And then in terms of margins, you spoke about goals going forward, long-term goals like 65% gross margins as well as on the operating side. How shall we look at that as the year ramps in the course of not just in a high level in terms of moving forward we look at it as the implied operating margins for 2010 and should we figure that as how we're going to eventually get there. Is that a good way to think about that? Could you just maybe speak to that?

I think we have a certain history in our business where usually the first quarter in terms of revenue we see is probably on the low side and revenues and profitability. And we see gradual improvements through out the year with usually a strong finish for the year in Q4. That has been the history over the last several years, and currently I don't see any reason to think it's going to be materially different this year.

Finally, what's a good way to think about a nonGAAP tax for 2010? Thanks.

About 18%.

Great. Thanks a lot. Good quarter.

Your next question is Jonathan Ho of William Blair.

Good morning. Great quarter. In terms of the security business, can you talk about the demand environment there and what your thoughts are in terms of the potential growth for the security segment in 2010?

We had our customer event in APAC about two weeks ago. We put weakness on firsthand. The impression of customers about our [security segment postings] by the way, about our potential offerings. And the results and what I've seen is very encouraging with the acquisitional flow through and we've now integrated the security solutions, enabled our customers not only to capture data and to record data, but also to connect the dots and to act and to automate the actions and then to investigate. That is really a very big hype from the customers and potential customers.

Now we should remember that these customers are in the public sector. So decision cycle can be longer than in the private sector. But nevertheless, there is a very good traction and feeling in terms of our product and our offering, and I witnessed it personally in APAC, but I also seen it across the board. So we are optimistic, and we believe that the business will grow. I think that the goals within our security side would be in line with the goals in the other segments of the business and we expect to grow across the board next year.

Great. Just talking about the broader business overall, can you talk about maybe the pipeline of opportunities and how healthy that is right now and whether you've seen any type of a near-term pickup in demand so far in 2010?

Our pipeline is what we are expecting it to be to this time of the year. Overall it's healthy and we gave our estimations about growing the business and we plan to grow and we believe there are growth potential and we are going to execute on them.

Excellent. Just a final question on [Fortin] and ACTIMIZE. You talked about some of the customer base conversion that's taking place there. Can you give us a sense of how far along you are and some of the synergies you're seeing as a result of the two businesses working together?

Fist regarding the two businesses working together this has already happened. The products are fully integrated. The teams are fully integrated and we already made some sales to the [Fortin] install base and the integration was completed.

And regarding the second part of the question, in terms of integration, we have a very nice penetration to the top financial institutes of the world with ACTIMIZE and Fortin combined. We believe if you look at their solutions like Ford, there are always more you can do and as we said, we are moving from silos to enterprise baseboard. There are a lot of activities and a lot of applications that we are coming up and a lot of innovation to make additional solutions to our customers. In addition on ACTIMIZE, but also enterprise front, we expect new regulations. The new regulations will also impact positively our marketable solution on the ACTIMIZE front basically being served and implemented on the very same platform. Also here, we believe there are opportunities in the future.

Thank you.

The next question is from Jonathan Kreizman of Oscar Gruss.

Hi this is actually (Inaudible) on Jonathan's behalf. What I want to know is you mentioned a few of your growth verticals. Do you see any business or opportunity from your video analytics and the retail vertical?

In the video space, we are not focused on the retail vertical. We are focused more on the safe city, on the public safety, on the critical facilities, on first responders and transportation. We are not really focused on retail and in terms of analytics, we are seeing our analytics capabilities being utilized like our customers in nearly all applications, nearly all verticals that we are serving. This is part of our differentiating features is the analytics.

Great, thanks. Have I one more question. I know you have a very strong pipeline for security. Do you think that may give a different breakdown in 2010 between security and enterprise?

No. No.

Thank you very much.

The next question have from Ari Bensinger of Standard and Poor's.

Thank you. I'll add my congratulations for the good quarter. Just one quick question. How does your gross margin profile differ between enterprise and security segment?

We don't discuss the gross margin on the separate businesses.

It seems to be since the security business is running off a smaller base and there's a lot of interest in terms of the macro environment, I think a lot of people are expecting that to grow a little bit faster. It seems from your comments that enterprise is also seeing the same momentum. Is that accurate?

I think we've seen good momentum on both enterprise and security in the second half of the year.

Okay. Thank you.

Thank you. There are no further questions at this time. Before I ask Mr Bregman to go with his closing statements, I would like to remind participants a replay of this call is scheduled to begin in two hours. In the US please call 1-888-326-9310. In the UK please call 0-800-028-6837 and internal please call 039-925-5925 And internationally call 9-723-925-5925. Mr Bregman, would you like to make a concluding statement?

Thank you for joining us today. I wish us all a great 2010. Thank you.

This concludes the NICE Systems fourth quarter 2009 and year end results conference call. Thank you for participation. You may go ahead and disconnect.