Nice Ltd (NICE) 2010 Q3 法說會逐字稿

Welcome to the NICE Systems conference call discussing third-quarter 2010 results, and thank you all for holding. All participants are present in listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. As a reminder, this conference is being recorded October 27, 2010.

I would now like to turn this call over to Anat Earon-Heilborn], Investor Relations at NICE. Please go ahead.

Thank you, operator, and good day, everyone. I joined NICE a few months ago to work with Daphna Golden, Corporate Vice President of Investor Relations and Corporate Development, who had just started her maternity leave. 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 of Business Development.

Before we start, I would like to point out that some of the statements made on this call will constitute forward-looking statements in accordance with the Safe Harbor provisions of the Private Securities 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 and performance of the Company to differ materially is contained under the subheading "Forward-looking Statements" in the Company's 2009 Annual Report on Form 20-F as filed with the Securities and Exchange Commission on March 31, 2010.

Such factors and forward-looking statements are based on the current expectations of the management of NICE Systems Ltd. only and are subject to a number of risks and uncertainties that could cause the actual results and performance of the Company to differ materially from those described herein including, but not limited to, the impact of the global economic environment on the Company's customer base, particularly financial services firms and the resulting uncertainties; changes in technology and market requirements; declining demand for the Company's products; inability to timely develop and introduce new technologies, products and applications; difficulties regulating, 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 arrangements. The Company undertakes no obligations 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 third-quarter 2010 development and the Company's updated guidance for the fourth 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 and amortization of intangible assets and accounting for stock-based compensation. The differences between the non-GAAP 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, please.

Good day, everyone, and thank you for joining us today to discuss our third quarter of 2010 results. The third quarter of 2010 was a strong quarter for NICE. We continued to execute on our strategy, gain market share, enhance our product portfolio, and deliver very good results. We achieved record revenues that exceeded our expectation, reaching $176 million and increasing 21% year over year. Non-GAAP EPS for the quarter reached $0.45, up $0.07 from Q3 last year.

Cash flow from operations in the third quarter was once again strong, totaling $31 million. Year-to-date cash generation for operations crossed the $100 million mark. Our operating income reached an all-time high of $32 million and we have expanded our operating margin from 17% in Q3 last year to over 18% in Q3 this year.

We ended the quarter with a very healthy backlog of over two quarters of revenues. We have a strong pipeline and traction in the market and we expect Q4 to be a strong bookings quarter.

On a regional basis, growth in the Americas and EMEA, by far our largest regions continued to be solid. We are also seeing good signs of recovery in APAC.

In September, we revamped our brand with a new tagline -- "intent insight impact". It reflects our strategy to provide enterprise wide intent-based solutions to our customers, who use our analytics offering to obtain insight on their business and thus form it into impact. We believe that our ability to provide real-time impact solutions to our customers across all businesses is a clear differentiator of NICE. It enables our customers to significantly improve their business performance and customer experience and to ensure safety and compliance.

The healthy demand we are seeing for our products across the markets we operate in is driven by the increasing number and complexity of interactions and transactions, persistent concern over physical security and fraud, and the growing number of regulations.

Moving on to the enterprise sector-

Q3 was a strong quarter for our enterprise business. We continue to leverage our existing customer base for expansions through cross-selling, up-selling, and implementation of major upgrade projects. We are continuously adding new logos and, thereby, increasing our market share across regions and verticals.

Our market share advances were acknowledged by top industry analysts. Frost and Sullivan, for instance, in their recent 2010 reports indicated NICE's continued number one position in the 2009 agent performance optimization market in both North America and EMEA. In North America, NICE had over 30% of the quality monitoring and analytics markets and over 40% in EMEA.

Demand for our advanced analytics applications continues to be an important growth driver for NICE.

During the quarter, we continued to execute on our strategy - At the beginning of the quarter, we closed the eglue acquisition, which strengthened our offering in three areas - Desktop process monitoring, real-time guidance and back office. The desktop process monitoring capabilities are already integrated within our product. They enhance our screen capturing capabilities as well as other important features such as enhanced CPI capabilities. Our real-time guidance offering and our ability to apply our analytics in real-time creates a significant differentiator for our offering and is gaining good traction in the market.

Just recently, we won a multimillion dollar deal, not yet disclosed, with a large Latin America telecom provider who will be implementing our new NICE Real-time Process Optimization solution. This telecom provider is already using NICE comprehensive contact center solutions and is now adding another component. In this complex project, the NICE solutions will be deployed at the customer data center and used at dozens of different sites in order to improve the performance at 15,000 agent seats. This deal is an example of the synergies and cross-selling opportunities brought by the eglue acquisition and the benefits NICE offers to its customers.

The back office is another area in which we strengthened our product portfolio. With a new back office offering, we are expanding from traditional contact center to enterprise wide workforce optimization solutions. This is a much larger addressable market and as such presents significant opportunity. These enhanced solutions provide us with major up-sell opportunities as well as an opportunity to penetrate new accounts.

In Q3, our financial crime and compliance solutions continued to demonstrate accelerated growth, exceeding our expectations year-to-date.

I have just returned from the annual User Conference of NICE Actimize that took place last week in New York. We had over 300 participants in this event, which was the largest ever. Among the participants were users of NICE Actimize solution as well as industry experts, including senior regulators and thought leaders.

I am happy to report several insights from the event. The turnout at the event and the content of the discussions demonstrated that NICE Actimize is the largest and broadest solution provider in each of its three lines of business -- fraud prevention, anti-money-laundering, and security trading compliance.

In addition, our view that there is a large growth potential in this market was reinforced. We see demand for our products and scope for innovation of new ones.

The trend of the world's top financial institutions migrating towards enterprise wide implementations of NICE Actimize solutions is spreading. We see it now also at the regional, mid-market institutions and it is becoming more common also in Europe.

At the conference, our customers shared their experience of the benefits achieved from standardizing on our enterprise wide solutiond. These include increased fraud prevention rates, savings in operational costs and improved customer experience.

In addition, we continue to see growth driven by financial institutions' implementations of new infrastructure as they prepare for the next wave of regulations. Being the de facto industry leader in securities trading surveillance and compliance technology provides a solid base for NICE Actimize to significantly expand its addressable market.

We have identified that such an opportunity exists in the energy trading market due to the compliance requirements set forth by various regulators. We therefore developed a solution tailored specifically for the needs of this segment.

Last week, we were pleased to announce our first win in this space with a top five global energy firm. This firm will use our solution to monitor its worldwide trading activities across all of energy markets in which it participates.

While new to our NICE Actimize business, this firm is an existing customer of the enterprise trading floor compliance solutions. This win is, therefore, also an excellent example for the synergies between the two lines of business. Furthermore, we intend to leverage our relationship with other energy companies for more wins with the new energy trading solutions.

We expect our market position and broad offering of financial crime and risk management solutions to continue and support our growth in this large and ever-evolving market.

Turning to our security sector. Our security business continues to enjoy a strong backlog and our pipeline entails opportunities for large deals and growth. Because a significant part of this business is driven by large deals, its bookings pattern can be uneven. Yet the pipeline and backlog are strong and we continue to successfully implement our earlier won large projects.

Here too, we are moving towards organization-wide solutions. The core of these is our Situation Management Solution which enables real-time impact trough real-time decisioning and process automation. We continue to develop new initiatives for the Situation Management Solution as well as to strengthen our position in the market.

We are advancing our open standard Situation Management initiative. These were recently recognized by PSIA, a global alliance of physical security providers focused on promoting interoperability. The alliance recently chose NICE's open situation management solution as the -- as an example of its specifications implementation.

In line with our strategy to further expand our business, we announced a few weeks ago a solution tailored for electric utilities. It leverages our situation management solution for addressing the unique compliance and operational needs of such companies. In North America, these companies are regulated by the North American Electric Reliability Council, known as NAERC, which lays -- which lays out strict requirements for protecting critical infrastructure.

We already won the first business here, and there is a pipeline of potential deals we expect to materialize in 2011 and beyond.

To conclude, we are pleased with our performance in Q3. We continued to execute on our strategy and help our customers create an impact with our offerings. This includes analytics, cross channel capturing and management solutions to improve performance, reduce risk and enhance regulatory compliance.

We ended the quarter with record revenue for the Company. We continued to acquire new customers, we entered new verticals and enhanced their offering with new solutions.

Our growth continues to be driven by a number of factors that are supported by our internal strengths -- our comprehensive offerings in the enterprise and security market, our focus on addressing our customer needs and our execution capabilities. We have improved our profitability and continue to benefit from the leverage in our business model.

We anticipate a strong Q4 in both revenues and bookings. We expect the end of the year with a much higher backlog than in the beginning of 2010, reflecting the strong momentum throughout our businesses.

We are currently going through the planning process for 2011 and believe we will deliver growth as well as margin expansion next year. I thank our team for the execution during the quarter and 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 performance for the third quarter of 2010 and our outlook for the full year and fourth quarter of 2010.

Revenues for the third quarter reached $176 million increasing 21% from $146 million in Q3 2009 and representing a new all-time high for the Company. Once again, we ended the quarter with strong backlog equal to more than two quarters of revenue. Our book to bill ratio was close to 1. Our book to bill for the nine-month period was greater than 1 and we expect Q4 to be a very strong bookings quarter. Therefore book to bill ratio for the year is expected to be greater than 1.

Our revenues by businesses were as follows. Enterprise revenues reached $135 million in the third quarter, increasing 25% from last year and accounting for 77% of revenue. Year-to-date enterprise revenues increased 20% for the same period in 2009. Security revenue reached $41 million increasing 9% from last year and accounting for 23% of total revenues for the quarter. Year-to-date security revenues increased 17% from 2009.

Looking by geography, the Americas region continues to be strong. It accounted for $114 million or 64% of our total revenues. Our business in Europe, Middle East and Africa continued to improve with revenues of $45 million in the third quarter and accounting for 26% of our total revenue. APAC accounted for $17 million in the third quarter accounting for 10% of total revenue.

Revenues from maintenance accounted for more than 1/3 of total revenue. Q3 gross margin reached a record high, increasing to 65.8%, up from 62.9% in Q3 2009. This improvement was impacted mainly by the growth in product revenue and favorable product mix. Our mid-term gross margin target remains at 65% on a yearly basis.

Operating income in the third quarter reached an all-time high of $32 million, up 28% from $25 million last year. Operating margin increased to 18.1% from 17% last year.

As we have highlighted in the past, our second half of the year profitability is typically higher than that of the first half and we are committed to our overall operating margin target of 20% for the mid-term.

Net income in the third quarter reached $29 million, up 19% from $24 million last year. Earnings per fully diluted share for the third quarter reached $0.45, up $0.07 from $0.38 in the third quarter of 2009.

During the third quarter, cash generated from operations reached $31 million. In the first nine months of 2010, we generated record cash flow operation as a total amount that crossed the $100 million mark. Our cash and equivalents totaled to $611 million at the end of September with no debt. During the quarter, we paid approximately $26 million for acquisitions.

Turning to guidance, I am happy to be raising our annual guidance again, taking into account the positive business momentum and our strong backlog. We are forecasting a strong Q4 for bookings, revenues, and margins. We expect revenues in 2010 to be in the range of $685 million to $690 million and earnings per fully diluted share to be in the range of $1.71 to $1.75.

We expect revenues in the fourth quarter to be in the range of $177 million to $182 million. As for earnings per fully diluted share, we expect a range of $0.47 to $0.55 -- $0.51 for the fourth quarter.

That concludes my comments. I would now turn the call over to questions. Operator, please.

(Operator Instructions). Shaul Eyal from Oppenheimer.

Good afternoon, Dafna and Zeevi and Anat, welcome onboard. I have, Zeevi, one question. You hinted, you mentioned in a sentence about fiscal '11 that you are still expecting to see growth. Can you provide us maybe with some more color? This growth, is it double-digit, high single-digit or is it just too early at this stage, given that you are just done with your third quarter?

As we said previously, our target is to be at the mid-teens growth year over year. And we are currently in the planning for next year. We are sure that this is going to be a year of growth. In terms of the precise growth rate, we will provide the data when we provide guidance, probably on the next call.

Okay. Thank you very much.

Daniel Ives of FBR Capital Markets.

So book to bill, was it less than 1 in the quarter?

As we said it was close to 1. It was a few million dollars short in becoming 1.

So can you explain what happened there? I mean obviously it is a good quarter, but just explain more on the book to -- because usually book to bill is greater than 1. You obviously didn't mention -- so just kind of give some more deep dive into that number?

First, we are not measuring our business by booking quarter by quarter. We can expect lumpiness and this is resulting from our -- and most of the lumpiness is coming from our security sector. Now when we are looking at the book to bill, we are not overly concerned with this fact because if you're looking at the first three quarters, book to bill is still higher than 1, and we are looking now at the pipeline and we are already at the beginning of Q4. So we are expecting Q4 to be a very strong booking quarter.

So really it is like enterprise is strong, the security business -- I mean obviously it was down sequentially, so that is kind of where (multiple speakers).

I will not characterize it this way. Because -- again we are not measuring quarter by quarter. In looking at our security business, it grew 17% year over year for the first three quarters. And we believe that this growth is within our model and it's a nice growth.

Okay. Thanks.

Shyam Patil of Raymond James & Associates.

Good morning. Congratulations on the quarter. In terms of the segment breakout, can you talk about what drove the strength sequentially in enterprise? Was that primarily Actimize? And then what is the right way to think about the security business growth rate going forward?

Well, I'll start with the second question. The security growth rate, we said that it will be mid-teens. This is our model going forward and we said that there is an upside with this -- within these numbers.

Regarding the enterprise sector, the growth was both on the Actimize side and it was performing and exceeding our expectations. But it also was a very strong quarter to our traditional contact center business.

Got it. And it looks like this year, you are going to show about 200 basis points or so in margin expansion. I know you are still planning for next year and you've given the 20% intermediate-term target. But is this level of expansion the right way to think about the annual expansion going forward? Or should it accelerate or decelerate?

The way we've talked about our operating margin is that we are looking at two years' timeframe for meeting to improve operating margins. When we do our internal modeling, we usually look at expansion of the -- in the top line to generate about a 25% or more contribution to the bottom line. This is how we do the math here. So over time, we will reach -- we intend to reach the 20% margin and I assume it would take about two years to get there.

Okay. And then just my last question, a lot of questions around the cash use and potentially a share buyback. We know whether -- whether one in the traditional sense or you know one to offset dilution from dilutive acquisition, could you maybe just address that, talk about how you think about that and potential for one?

The prime usage that we believe we should use our cash is for acquisitions. And we are actively looking at acquisitions and we have prospects and we have -- we are actively looking at this space. And actually, we have a very good record of acquiring companies and integrating them within our business, and we are going to continue to do so.

Having said that, we are constantly looking at our balance sheet and looking at our cash and the capital structure. And when we feel we will find it, we will think that there, we should do other things, we will do other things. These are all things that are constantly under review.

Thank you and great quarter.

Mark Strouse of J.P. Morgan.

I'm Mark Strouse on behalf of Paul Coster. Can you guys just talk about plans for headcount and to what extent, if any, that that has been a negating factor, restricting even better growth?

I am not sure that I understood the question.

I mean, I guess, has headcount held you back from addressing markets that you would otherwise have pursued or sales opportunities, anything like that?

We increased our headcount this quarter, and we are going to continue and invest in the Company and increase headcount when appropriate. Obviously we are very careful in doing it and we -- part of the increase in the headcount is and the product area and a large part is sales and marketing and, specifically, for geographical expansions in the geographies that we believe that there is a potential to strengthen and increase the business.

Got it. Okay. Thanks. And then can you talk about -- do you think there's any kind of a network effect I guess in the Actimize business? Meaning that, is it easier to conduct industry wide investigations using one platform such as Actimize and --?

This is specifically what we are -- this is specifically what is our strategy. We are moving more to enterprise wide solutions and when the information is coming from cross channel they provide a more accurate information and more accurate fraud prevention rate.

Now, among -- there is also an opportunity to expand this and to do it among different institutions. There are some regulatory issues but we believe that this is a direction that might happen in the future.

Perfect, okay. Thank you very much.

Brian Ruttenbur of Morgan Keegan.

Thank you very much. Good quarter. Questions on the fourth quarter, specifically gross margins, operating margins. Can you give us some ranges that you are looking in for your gross? You can either give me gross on a pro forma or a GAAP basis and then talk a little bit about selling and marketing G&A and R&D, where that is going to be in a range in the fourth quarter.

In general, we continue to expand our business. We expect improvement in top line. I expect gross margin to be at the 65% range and I expect certain increase in operating expenses.

But I also expect operating margin to be better than 18.1%, which will be operating margin this quarter. Not dramatically higher, but still higher than this quarter in a way that would bring overall operating profitability this year to be higher than last year.

And the taxes should be lower, higher from this period? From third quarter?

It's about the same. About the same rate.

Okay. Let me move on over to another question, if I could. I've got two more. The first one being Avaya. What has been the impact, if any? Can you talk a little bit about that?

And number two, can we talk about trends by region, security and the call center, where you are seeing weakness or strength? Specifically on the security side, since there seemed to be a little bit of weakness or appeared to be in the quarter, at least on bookings.

Okay, so, first regarding Avaya. Avaya, we had a cooperative relationship with Avaya. As we moved more to the applications space, the ability of using Avaya as a distribution partner has been reduced and we created and developed a more direct action, direct relationship with the customer.

As such, if you are looking over the years, the amount of business that we have done to Avaya has been reduced significantly and been reduced to less than 10% over the past quarter. We are still partnering with Avaya in certain opportunities, and this partnership is continuing.

Regarding the regional view, I think that the -- overall, the patterns are similar across the different product lines, we have a good solid business in the Americas and EMEA. We are seeing signs of improvement in APAC and I guess that this is across all of businesses.

Okay. Is there any --? Can you give us any kind of percentages for those improvements by sector? Like you're seeing (multiple speakers).

We are not breaking these numbers to within sectors and we don't have this information handy right now.

Okay. Great. Thank you very much.

Daniel Meron of RBC Capital Markets.

Hello. Congratulations on the ongoing execution. My first question is more of a strategic nature. When you look at NICE across the different markets that you operate in, what kind of advantages you've got from having all of the solutions combined under one company, and who do you see --? I mean, is there anybody out there that you guys are beating on a regular basis or can compete with you with the full suite of solutions that you've got across the board?

So, we are running a very specific portfolio, but there are cross-sale and synergies within the businesses. First, the nature of what we are doing is common. We are dealing with the same concepts and some common technology among the different products. We are using -- we are looking at things that are starting -- and this is by the way reflected by our new tagline. We are thinking, we are starting with things that are -- we are looking at human intent and we are using cross channel and analytics and cross channels to capture the data on the cross channels, we are using analytics to get the insights to this intent. And then we are having some management solutions and some processes in order to make an impact. This is across all different businesses.

When we are looking at specific opportunities, we are seeing more and more cases in which we can -- we have synergies between the different products. We gave an example in this quarter, this is an energy trading floor compliance where we are providing both recording and both the trading compliance by Actimize based on transaction analysis. We have -- even this quarter, we have not mentioned on the script, we sold surveillance equipment to a bank and this was leveraging our enterprise relationship.

So we do see more and more opportunities where we are getting synergies. And we -- part of the -- our work plan and what we work on is to create and have tighter integration within the -- within our operation and to make more and more synergies going forward.

I think that was the second half of your question that I forgot.

Yes, that's fine. Just, I was trying to get a little bit more color on the competitive landscape in relation to that. You know, as you move into more integrated solution offering, who do you see out there that can compete with you head-to-head or is it merely mostly point solutions and whether there are any changes in the competitive dynamics when it comes to Actimize, the security business or the enterprise call centers business?

So if you look at our abilities on the Actimize side and the enterprise side, that we can provide analytics on both transactions and interactions, I don't think that we have anyone that can compete with us in terms of the ability to access these two very important sources of data. And so there is no -- if you are looking at our combined offering, it really -- we don't know of any competitor that can match our offering.

Okay. Very good. Thank you. Good luck.

Jonathan Ho of William Blair.

Good morning. Great results, guys. My first question would be, why do you guys expect the fourth quarter to show stronger bookings? Is there a particular segment or product line that you think will be stronger in the fourth quarter?

There are two reasons. One, we have visibility to our pipeline and our internal forecast system, so we can see what is cooking. And secondly, traditionally, the fourth quarter is a very strong quarter for NICE.

But it is more than the traditional seasonality. It is also we can look at the -- at our pipeline and look at the opportunities and look at the forecast that we have, and this is going to be a strong quarter for NICE. Booking quarter for NICE.

I mean, as you look at that pipeline, would you say that the strength in that pipeline is coming from more the enterprise side then or specifically Actimize?

That strength from the pipeline for the fourth quarter is across the board.

Okay, great. And the second question would be, you guys talked briefly about some of the NERC compliance drivers there on the security side. Can you give us sort of your thoughts on the size of that opportunity? And is there any specific timing for when the utilities have to get into compliance?

First you have seen, we already sold the solution to one of the energy providers and we are currently have several additional ones in the pipeline. Our -- this market obviously is starting with a more larger and more established players and we believe that the smaller ones will follow. When we look at the overall size of the opportunity, we believe that, overall, it would be tens of millions of dollars.

Okay. And last question would be in terms of stimulus and infrastructure spending, specifically on the security side, are you seeing any impact from the US stimulus, given how close it is to the end of that spending cycle?

We have seen some in the past, but the nice thing about our Situator is that in many cases it has ROI model within it, in terms of reducing the cost of operations. And in many segments that we are serving, the acquisition can be justified by ROI and by increased security and not by -- we are not depending on funding.

Great. Thank you.

David Kaplan of Barclays Capital.

Quick question on the guidance you gave. If I take a look at your range of guidance for revenues, taking the top end of $182 million, and then applying to that what Dafna mentioned was 18.1% in the range of that operating profit, you end up with operating per share, operating income per share of around $0.52. So I'm kind of -- what I'm really trying to get that is what are you looking at below the line, vis a vis cash or financing income or taxes that would, in the end, make these numbers work a little better?

What I said earlier was a certain general guidance about how we move forward. We can definitely take it off-line and you know repeat everything that was said. Regarding the below the line, my assumption is that interest income would be at the range of about $2 million. We have some favorable contributions this quarter coming from exchange rates. But we will go back to the earlier of $2 million per quarter of interest income. And regarding taxation, we are -- our model is that tax expenses, would range between 17% to 18%.

Okay, and then -- sorry. I know you mentioned it earlier, you talked about gross margin earlier on the call. Can you just again clarify what exactly you were talking about for gross margin in the short term?

The target for gross margin is to be at the area of close to 65%.

Ari Bensinger of Standard & Poor's.

Thank you. If you could just dive a little bit further into gross margin. What pushed the strong sequential improvement in product gross margin in particular and do you think whatever pushed those improvements, is it sustainable? And also, can you give any color on the uptick in R&D? It grew much faster than sales.

Yes. So regarding the gross margin on product, the main impact is from the mixture of products. We had more products which were software based and that basically drove gross margin on the product up. So the main impact is the mix.

Regarding the R&D we had for our expenses include the business of eglue and therefore we've added about 50 people as a result of the acquisition. And that is probably the major reason for the increase in R&D expenses.

And just taking the security market maybe a different way. Can you quantify the total addressable market that you target and maybe talk about that addressable market? What you expect that to grow at over the near term?

The addressable market that we have in the security sector is huge. So it is really -- it is in the billions of dollars and it's -- we're talking about the addressable market is in the --. Overall, we -- unfortunately, we believe that security and safety are going to continue to be issues in the coming future and we all hope that this will change -- not on the business side, but on our lives.

But unfortunately this is an area that is a growing spending in what we are doing, and our ability to connect the dots in real-time is something that is very appealing. So we believe that this specific market is also going to grow very fast.

Okay. Thank you.

There are no further questions at this time. Before I ask Mr. Bregman to go ahead with his closing statements, I would like to remind participants that a replay of this call is scheduled to begin in two hours. In the US, please call 1-888-269-0005. In the UK, please call 0800-917-4256. In Israel, please call 03-925-5930 and internationally please call 9723-925-5930.

Mr. Bregman, would you like to make the concluding statements?

Thanks. I would like to thank you all for joining us today and wish all of you a very good day.

Thank you. This concludes the NICE Systems third-quarter 2010 results conference call. Thank you for your participation. You may go ahead and disconnect.