Nice Ltd (NICE) 2016 Q1 法說會逐字稿

Welcome to the NICE Systems conference call discussing first quarter 2016 results. 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. As a reminder, this conference is being recorded, May 5, 2016. I would now like to turn this call over to Mr. Marty Cohen, VP, Investor Relations at NICE. Please go ahead, sir.

Thank you, operator. With me on the call today are Barak Eilam, Chief Executive Officer, and Sarit Sagiv, Chief Financial Officer.

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 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 in the section entitled Risk Factors in Item 3 of the Company's 2015 Annual Report on Form 20-F as filed with the Securities and Exchange Commission.

During today's call, we will present a more detailed discussion of fourth quarter 2015 results and the Company's guidance for the first quarter and full-year 2016. 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 non-GAAP adjusted results and the equivalent GAAP figures are detailed in today's press release.

We would also like to remind you that we are hosting our investor day on May 23rd and 24th in conjunction with our annual user conference in Orlando, called Interactions. A special program for analysts and investors will include meetings with NICE executives, presentations from customers, product and technology sessions, and access to the solutions showcase. If you haven't registered and would like to do so please email us at ir@nice.com. I will now turn over the call to Barak.

Thank you, Marty, and welcome, everyone. I'm glad to be on the call with you today.

We are pleased to begin the year on a high note with a strong Q1, as we reported revenue of $226 million. We also continued to execute well operationally, as reflected in the 15% growth in operating income, which led to a Q1 operating margin of 25.6%. These represented solid growth over the 23.3% operating margin we reported in Q1 last year.

The strong results on both top line and for operating income produced another good quarter on the bottom line. We reported earnings per share of $0.81, which represented an increase of 17% compared to the first quarter of 2015.

As I described last quarter, we are focused on our long-term strategy moving forward in our transformation to become a true enterprise software company with a large and growing portfolio of solutions; a portfolio that is tied together for our analytics platform and a portfolio that is also expanding through the cloudification of our solutions to further extend our total addressable market.

Our continued strong quarterly performance is attributed to the progress we are making on all fronts. We are on a rapid path to align our businesses across all dimensions including technologies, customers, and markets.

We are pleased with the execution of our strategic and go-to-market plan, which has empowered us to continue to capitalize on many growth opportunities and expand our market share.

As for our growing portfolio of solutions, this can be attributed to our continued emphasis on innovation, which I believe is one of the things that sets us apart in this industry and is also underpinning our expanding market leadership.

For instance, just this past quarter, we announced the launch of Total Voice of the Customer, which leverages together our Voice of the Customer and Interaction Analytics solutions.

We also launched Actimize AML Essentials, which is an Anti-Money Laundering cloud offering designed specifically for the unique need of mid-sized financial institutions. This will help us further extend our reach into additional market segments.

One of our recent innovations, Holistic Surveillance, continues to do well. As you probably know, this unique solution combines the technologies of our Customer Interaction and Financial Crime and Compliance businesses. In Q1, a major global financial institution purchased our Holistic Surveillance solution in a seven-digit deal. We won this deal against our competitors due to our market channel capabilities along with our alignment to the customer's business objectives of its increased need for surveillance in regulated markets.

As with the Holistic Surveillance deal just mentioned, the expanding regulatory environment continues to provide great opportunities. For example, the Market Abuse Regulations, or MAR for short, continues to drive deals on global and EMEA-based financial institutions with the regulations becoming enforceable in July 2016. In one such seven-digit deal, a large global financial institution purchased our MAR solution for fixed income. We also signed a deal related to MAR with a $15 billion global hedge fund as they want to make sure they have adequate tools in place to detect and prevent market manipulation, insider trading, and other prohibited activity.

As our portfolio of solutions continues to expand, this has also driven multi-solution deals, or what we refer to as portfolio deals, and an increase in deals above $1 million, a trend that's continued into Q1. Our ability to sell more and more portfolio deals has also led to a number of competitive replacements. In one such example of portfolio deal, which also involved a competitive replacement, a large healthcare company extended their footprint with NICE in a seven-digit transaction. This company acknowledged that they chose NICE for having the most comprehensive portfolio of solutions in the market to support the significant growth they are seeing. In another portfolio deal, we replaced the incumbent in a seven-digit deal for remote banking and commercial banking fraud.

The third leg of our transformation; a portfolio that is tied together through our analytics platforms was just recently reinforced with the closing of the Nexidia acquisition at the end of March. Nexidia provides us with unique capabilities that no other company has in our industry. We introduced it to the market as Analytics with No Limits because with Nexidia's GRID and speech processing technologies, there are no longer limits placed on analytics when it comes to accuracy, scalability, speed, cost, use cases, and ease of deployment.

We have already seen great reception from customers and prospects who are embracing the endless possibilities of analytics with no limits.

This technology provides us another competitive advantage in the rapidly growing market for analytics and we see evidence of it in our pipeline.

In that regard, we had another strong quarter for analytics, analytics grew double digit in Q1 and represented the majority of our bookings.

For example, a large telecom company, which is already an existing customer, purchased our real-time analytics in a seven-digit portfolio deal. This company is embarking on a new and innovative customer experience program focused on an omni-channel and customer-first strategy. We also signed a seven-digit deal for one of our customer journey solutions with a large health insurance company. Healthcare in the U.S. is rapidly changing as more customers now have more choices. As a result, this company needed to quickly improve their customer experience. However, they had limited visibility into their customer interactions. With NICE, they now have the visibility to see where customers are having problems through the visualization of customer journeys along with dashboards to know how their operation is performing. This solution will be deployed in the cloud.

And that brings me to the fourth pillar of our transformation, the cloudification of our solutions. Along with growth in cloud business in Q1, our cloud strategy was further enhanced with the announcement of our new AML Essentials cloud solution, which I have already mentioned.

In closing, we are pleased that we continue to perform well and that we expect another year of growth and profitability as our strategic and operating plans are progressing. Our markets are strong. Innovation is accelerating. And our go-to-market approach is working well.

Before I turn the call over to Sarit, as most of you saw today, we announced that she will be leaving us in the coming months. On behalf of myself and the entire Company, I want to thank Sarit for her dedication and support during her time with NICE. As CFO and a valued member of our management team, she has made great contributions to the success of our business. I wish her the best for the future.

I will now turn the call over to Sarit, who will review our financial results.

Thank you, Barak, and good day, everyone. I'm pleased to provide you with an analysis of our financial results and business performance for the first quarter of 2016, as well as our outlook for the second quarter and full year of 2016.

Please note that the financial results represent continued operations and exclude the divested intelligence and physical security businesses for Q1 2016 and the comparative numbers for 2015. These two businesses are presented as discontinued operations. However, the cash flow statement includes the results of both divestitures.

And now I will review the results. Revenues for the first quarter were $226 million, which represents an increase of 4.3% from $217 million in the same period of last year.

Customer Interactions revenue for Q1 2016 was $172 million, a 3% increase compared to Q1 2015. And Financial Crime and Compliance revenues increased 8% to $54 million for Q1 2016.

On a regional breakdown, revenues in the Americas region were $155 million for the quarter, similar to last year. Revenues in EMEA increased 12% to $45 million for Q1 2016. And revenues for the Asia Pacific region grew 19% to $26 million for the first quarter.

Looking at revenues by business line, product revenues accounted for 29% of total revenues in the first quarter of 2016. Maintenance revenues accounted for 44% of total revenues in the quarter. And professional services, including cloud, accounted for the remaining 27% of total revenues in the first quarter 2016.

Gross margin in Q1 reached 70.6% compared to 69.8% in Q1 last year. The gross margin improvement is mainly a result of a favourable product mix and continued efficient utilization of the services organization.

Operating profit in the first quarter increased 15% to $58 million and operating margin improved to 25.6% compared to 23.3% last year. The improvement in the operating margin is the result of the higher gross margin coupled with disciplined expense management.

In the first quarter, we had financial income of $3.8 million. This included an additional $2 million or $0.03 per share above our expectations, mainly from a foreign currency exchange rate impact on monetary assets.

The effective tax rate for the quarter was 19.5%, which was in-line with our expectation. We expect the tax rate to remain at this level in 2016. Earnings per share increased 17% to $0.81 in Q1 2016 compared to $0.69 in the same period last year.

First quarter cash flow from operations was a record of $113 million, which reflects the healthy business and good execution.

Total cash and financial investments was $765 million at the end of March 2016. This amount is net of payments for acquisitions closed in the first quarter.

As part of our share repurchase plan, we bought back a total of $23 million during the first quarter.

In-line with our dividend plan, our board of directors approved the dividend of $0.16 per share for Q1 2016.

Before I turn to guidance, I would like to mention that, similar to prior years, we expect 2016 results to be second-half-weighted.

For the second quarter 2016 we expect total revenues to be in the range $229 million to $239 million and fully diluted earnings per share to be in the range of $0.72 to $0.78.

For the full year 2016, we expect revenues to be in the range of $995 million to $1,015 million. For earnings per share, we increased our guidance for the full year 2016. We now expect full year fully diluted earnings per share to be in the range of $3.41 to $3.55.

That concludes my comments. I will now turn the call over to the operator for questions. Operator?

Thank you. Ladies and gentlemen, your question and answer session will now begin. (Operator Instructions). Shaul Eyal, Oppenheimer.

Thank you, operator. Good afternoon, guys. Congrats. Good results. Good performance. Sarit, good luck with future endeavors. I want to start, Barak or Sarit, with the product. Just slightly below our expectation. Is it just a mix shift, seasonality? How should we be thinking about it down the road?

Thank you, Shaul. If you remember in Q1 2015 we had a very nice product total with a 27% increase in the product that quarter. So, it's basically a tough comparison this quarter compared to the previous one.

Got it. Fair enough. Barak, on Nexidia, so how would you characterize the contribution and performance since you closed that acquisition? Did it come in-line/a little better with your initial expectations? And I understand it's early days, but how would you characterize performance so far?

Hi, Shaul. Thank you. Actually, we are very, very happy with what we see so far. Obviously, it's still early. We just closed the acquisition at the end of March so we are about, give or take, a bit more than a month into the Nexidia part of NICE.

I can speak about the reception from the markets, both from customers but also prospects are very strong. The concept of analytics with no limits, the possibilities to enabled customers are pretty much mind-blowing to many of our customers. So, the level of engagement, the level of dialogue as a result of that, as I've mentioned also, the pipeline is very strong. Our integration plan both on the product side and also on the operational side are going very well. The Nexidia team themselves have been welcomed in a great way and we're working very, very -- the teams are working very, very close together. So, so far, we're very positive about the progress.

Got it. Okay, thank you so much. Good luck.

Thank you.

Thank you. Dan Bergstrom, RBC Capital Markets.

Yes. Thanks for taking my questions. I've noticed recently you seem to be taking the new message to customers. And, by that, I mean there's been a lot of road shows with Nexidia and analytics, several pop-up events, a number of webinars. Just curious to the customer response to these events. And then, is that part of the ongoing messaging strategy? Or is it more centered around communicating what Nexidia is bringing to the product offering?

I would say it's a few things. First of all, we would like to be out there with customers. We think that we have a great value proposition across our portfolio, both as a full portfolio, but also each product by itself on all the market segments where we operate. And we invest a lot in reaching out to customers and to prospects.

Specifically, on the messaging that, in the context of the acquisition of Nexidia and analytics with no limits, this is exactly what I talked about, about the logic behind such an acquisition. They have just a phenomenal technology, great team, but as they come under the umbrella of NICE, we have the go-to-market, brand, and marketing capacity that can take this technology that used to be owned a relatively small startup in a much broader way. So, this was the different (inaudible) messaging that you see in that regard are part of the integration plan with Nexidia.

Some of these events are on different things. As I've mentioned on my opening remarks, our innovation in the last couple of years is accelerating. You can see that every quarter with at least a couple of quarters if not more, I mentioned a couple of them earlier on the call. And as we release them, each one of them comes with a certain (inaudible). So you saw just a couple of days ago, I think it was yesterday or the day before, we announced Total Surveillance in the context of financial crime and compliance with some great offerings over there. And we are fine-tuning our marketing events to a different seasonal, so to the different reaction we see from our customers.

Thanks. And then, as far as accelerating innovation, you talked on the call about Actimize and anti-money laundering solutions on the cloud. I think it's on Amazon Web Services. It seems like this is maybe a move to bring those solutions to community and regional financial institutions or part of the move down to tier-two financial institutions you talked about in analyst day last year. Just curious about the response to that. And then what type of demand are you seeing for, maybe, tier-two customers and financial services or potential tier-two customers for services through the cloud and AWS?

So, I'll split my answer into a few parts. So, first of all, it's no secret that our financial crime and compliance solutions tacked under Actimize are considered to be the market standard and we are the market leader in the high end of the market both for AML, fraud, trading surveillance, and enterprise risk case management. And this has been our comfort zone for many years.

And, as we go, and I shared that with you guys last year during the analyst day we had, as we go down market, it takes somewhat of a different go-to-market, but also a more effective way of delivery to the second and third tier of the market. So, the recent announcement of the AML Essentials is just one component out of many that are expected in order to exactly tackle this market segment and expand our total addressable market. So, we are taking the high-end product, if you would like, and it is becoming much easier for us to go to that market segment and, through the cloud, easing the delivery, easing the consumption, and the time of deployment for these customers.

So, you are right. In terms of numbers of customers, it expands them dramatically. We offer these solutions in a variety of flavors. So, it can definitely go with a public cloud and we are compatible with AWS. But for those customers that have other needs and would like to go with a different hosting option, we have our own co-lo data centers. So, basically, all the above; we offer customers on premise, private cloud, co-location, and a complete public cloud.

Thank you very much.

Thank you.

Thank you. Paul Coster, JPMorgan.

Yes, thanks. A few quick questions. First up, Barak, perhaps you can give us some sense of what you think the end-market penetration is for anti-money laundering solutions.

Sure, absolutely. So, every financial institution out there today and here by definition when it comes to AML goes way beyond just the classic banks and financial institutions. So, we need to look at it in a much broader sense. Everyone that is actually dealing with payments or moving money is, today, under the either policies, directives, or full regulations of AML. So, its' expanded, first of all, beyond just financial services; NSBs, alternative money, other payment form, and so on and so forth. Just to begin with.

All of them have certain AML processes, anywhere from just internal policies, manual processes, and all the way to best-in-class solutions like Actimize. So, it's hard to quantify exactly that level of penetration.

But the interesting thing is not necessarily the penetration of the basic AML solution, but rather the evolution of what's going on in the market. Several years back, it was relatively easy to deploy a pretty simple AML solution. The rules were pretty simple. Every transaction above a certain amount needed to be flagged and so on and so forth.

But it became way more complex. So, it's no longer just about -- I'll give an example. It's no longer just about finding very large amounts moving from one side to another and understand whether it is legit or not. There are many ways today to launder money and everyday there are new ones. So, all of a sudden, instead of looking for the single very large transaction, a money laundering scheme can be thousands if not tens of thousands of $1-or-less transactions going to different dozens of accounts.

So, every day that passes, every month, every year, the sophistication level is growing. And one of the challenges of our customers is, while enforcing AML in a more effective way, how do you do that without increasing the false alarms. Because you don't want to stop, obviously, transactions of legit customers and legit transactions.

So, I would measure the penetration basically in a way that everyone, almost everyone has a very, very basic solution, manual or not, but the requirement today is to add a lot of analytics into AML. And, over there, the penetration is still very low.

The sequential decline of FCC segment was a bit more pronounced than prior years. Is it just simply a function of the budget cycle or is there something else going on?

Again, the revenue growth was 8% as we do see a good -- we had a very quarter for booking and we see a very good pipeline. So, it's just a matter of timing.

Right. Got it. And, sorry, the EPS guidance for the year was raised, but only by the magnitude of the beat in the first quarter. Does that mean that, moving forward, we shouldn't really expect this gross margin uplift to continue? What are your assumptions in raising the guidance in that manner?

So, I think you're asking two separate questions. With regards to the guidance, we increased the EPS for the year. Again, $0.03 of the beat this quarter was due to the additional $2 million in finance income, which was above our expectations. And this was connected to foreign currency exchange rate impact to monetary assets.

With regards to the gross margin, we do see a continuous improvement and we attribute it to several things. Among them is our transformation into a true enterprise software, together with the fact that we are improving our efficiencies. We pointed out the service gross margin, which is showing a gradual, but continuing improvement, which obviously contribute also to the bottom line.

Okay, thank you. Very good.

Thank you.

Thank you. Greg McDowell, JMP Securities.

Hi. This is Rishi Jaluria dialing in for Greg McDowell. Thank you so much for taking my questions. I dropped off a little bit in the middle of the call so apologies if I'm having to repeat anything. But, first, I just wanted to get an idea for how your offshore consolidation of R&D and services centers have been trending. Do you think you're still on track to maybe realize the future cost savings that you initially anticipated?

Thank you for the question. And the answer is absolutely yes. We have introduced a variety, many different aspects of initiatives throughout the Company with respect to the way that we operate. This was one of them, one, a very large one. And we are actually very happy with the progress there. And I believe that, as we continue moving forward, it is becoming a strategic asset for the Company, which impacts two things. First of all, our financial in a positive way, but, not less important, our ability to have more qualified manpower to fuel our growth.

Okay, great. And with NICE Interactions happening later this month and the Company analyst day, I guess can you give us a quick idea of what to expect out of the day and out of the conference?

Absolutely. So, we are actually looking forward to the event and are busy preparing to the event. I think it was two to three years ago when we decided to combine our user conference event, which is, in our industry, became the largest, almost the largest event in our industry. And you can expect to see there hundreds, more than a thousand of our customers from a variety of verticals joining. So, that's one thing; the ability to actually, instead of hearing it from myself and from other executives in the Company, to hear it directly from customers.

And during the event itself, first, you'll be able to hear the different presentations from myself and from the other team members of the management team. You'll see presentation of our customers of how they are using our different solutions. You'll also be able to enjoy a different demonstration. We have a great pavilion of demo where we have all our products being presented over there.

And, obviously, almost the entire management team is going to be there so, beside meeting myself and Sarit and Marty, you'll be able to spend time with others and hear directly from them. And then, some more talking between everyone and enjoying the day together. It is in Orlando and it is in the week of the 23rd.

Okay, wonderful. Thanks a lot and congrats on the quarter.

Thank you.

Thank you. Tal Grant, UBS.

Thanks. Hello and congratulations on the beat. And sorry to hear you're leaving, Sarit. All the best for your future. Just a couple of ones from me. So, on Nexidia, I was wondering; so, first of all, originally the deal was set for $135 million. It looks like $150 million outgoings in cash. Is that M&A fees or was there another tuck-in acquisition or something?

And also, what is the contribution or expected contribution from Nexidia this year? What have you got in your revenue guidance for Nexidia and in earnings as well?

And then, finally, if you could just -- actually two more, sorry. So one is about the services. The services and products growth rates were completely opposite. Just wondering what the driver for the services growth was. You're still not splitting out cloud, but I assume that's still not above 10%.

And then, finally, just on the financial income bit. So, could you just give us an idea of the split in currencies within that $415 million of marketable securities? Thanks.

Sure. Well, thank you, Tal. So, I'll just answer them one by one.

In the cash flow you do see $150 million, which comprised mostly of Nexidia consideration that we paid in Q1. But we had also another small acquisition and this is why you see a higher amount. It doesn't include anything other than that.

With regards to Nexidia contribution and your question regarding guidance, as we communicated also in the previous quarter, our guidance includes Nexidia. We explained, and this is still the case, that we look at the two businesses together. We do see them integrated quite nicely so far and quickly going forward. And, therefore, the guidance includes Nexidia. We did not disclose the specific numbers from Nexidia. Obviously, the impact of Nexidia for Q1 is immaterial. It was in the last few days of the quarter. So, it's more relevant to future quarters than to Q1.

You had another question regarding financial income. We did have $3.8 million of financial income. The financial income includes the interest and the gain from the portfolio. This stays more or less the same as previous quarters. We had a little bit better return because we had more cash. But the significant impact for, or the main reason for the increase of the $2 million in the Q1 was actually the devaluation, the impact of the foreign exchange rate on the monetary assets. This has to do with the fact that we report in dollars, but we have, for example, accounts receivables in euro or other currencies and this contributed the gain for Q1.

And I will now let Barak answer the question regarding services.

Yes. So the last one was you were referring to the what you saw in the quarter in growth services versus a decline in the product. So, a few things over here. First, Sarit referred to that before, about the fact that Q1 of last year we had a leapfrog in products with a growth of 27% in Q1 of last year versus 2014. So, really tough, tough comparable. But I wouldn't read too much into it. I think that moving forward, this should be more stabilized.

And with respect to the services, it's the growth in all the different area we have there, which is both our support, professional services, and the cloud. And all of them have been growing nicely in Q1. Operator?

Thank you. Jeff Kessler.

Thank you. I'm wondering if you could give us a little more detail on the revenue growth breakdown by geography, also by line of business. We know you obviously gave us the numbers. The question is; is now what were the characteristics of those growth by both geography and by line of business? Meaning, obviously, your enterprise business and your AML business.

So, you heard from Sarit, obviously, the regional breakdown.

Yes.

And you have the information, obviously, on the line of businesses. We don't break the line of businesses by region, but I'll give you general comments on what we see from the different geographies. And, again, that's one quarter and we should look on trends on the longer.

We had, as you've seen, a very nice growth in both EMEA and in Asia Pacific. When we look forward to the Americas, it's a combination of North America and Latin America. And I will say that we had this is probably the second or third quarter in a row we see from obviously then of the economic situation over there. We see Latin America a bit struggling, the market itself, obviously. We go to market and according to that. But we don't see a major shift in the different trends in the economics in the different territories to what we have seen in the past.

Okay. And with regard to why was EMEA and Asia so strong?

We continue to see good businesses in both those territories. We have the good execution and our markets over there are healthy. I think it goes to my opening statement. It goes to the portfolio, which is accepted very well by our customers. We see more and more opportunities coming in all markets, but also in EMEA and Asia Pacific. We believe, also, we are impacting the market share as a result of that. And, altogether, a combination of utilization, good portfolio, and solid go-to-market.

Okay. I'm also interested in your brief comments on, I guess, what you called Holistic Surveillance. How are you going to present and how are you going to market, if you want to call it, a fully-blown surveillance solution, incorporating all of your capabilities, to clients? This is going to go beyond, obviously security. It will go beyond anti-money laundering, compliance, and fraud. And it will go beyond customer service. So, I'm just wondering how are you going to package that and to which customer, to what types of customers is this Holistic Surveillance package going to be sold to?

So, let me explain what we mean by Holistic Surveillance. And, as you heard on this call, but we also gave some color to it in previous calls, this is not just future thoughts, but rather things that are happening to us right now. We have very large deals going on with many of our customers.

So, the addressable market is obviously the large financial services, not just the large, but financial services, specifically banks who are challenged by the fact that they have a variety of monitoring a surveillance tools to meet the regulations of the different regulatory bodies. But one of the biggest challenges is, today, misuse, inside trading, or any type of problematic activity becomes more complex and the only way to really find out and in real time those type of activities is by combining together all the different sources of information.

We have been fortunate enough as a company throughout the years, with the past position from more than nine years ago of Actimize, eight nine years ago, and the progression of our analytical capabilities on our Customer Interaction business to be in the sweet spot of actually bringing the two technologies together.

So, beyond the fact that we have the customer base, a very strong customer base in financial services, the fact that we have married, a couple of years ago, together the technologies from both sides allows us to come today to these customers and bring together information from all the variety of communication channels, whether that will be the voice, the chat, the email, social media. I'm thinking of the messages like WhatsApp and others. Add to that or marry to that market data coming from our financial crime and compliance business, transactional data, and bring it all into one case management tool, an analytics platform that enable us to alert in real time things that are happening between the different communication channels and the transaction.

This is the only way to actually find those suspicious activities in real time and avoid the reputational risk, a very significant reputational risk that you see that the banks are carrying. And every week when we open the news, we all read the same newspapers, we see more and more fines, very big fines and other things that are not monetary like reputational risk coming together when you're not doing this type of monitoring. So, these are -- a couple of years ago we talked about the future, thought about it to (inaudible) and every quarter during the last few quarters we report more and more customers onboarding that platform.

So, one quick follow up to that is that; does this take you up the chain of command in the type of conversation you are having with your customers? In other words, you're not just talking to compliance officers anymore, but you're going up to the C-level. Is that fair to say?

Absolutely. I can tell you from a personal experience, meeting a lot of customers on a weekly basis, that when it comes to Holistic Surveillance, because it's married together, different responsibilities between the bank, which are beyond compliance. It goes to the compliance team. It goes to the legal team. It goes to the CIO. It goes to the CTO. And in some other aspects, sometimes all the way to the CEO. It elevate us and allow us to get more often into the C-suite.

Okay. Excellent. Okay, thank you very much.

Thank you.

Thank you. Tal Grant, UBS.

Hi. Yes, sorry. Just missed one. I wanted to double check something, Sarit, the answer to Paul's question earlier about the deceleration in financial crime and compliance. You said the pipeline is good and it was just timing. So, does that mean there was some deals which didn't quite get signed in Q1, which have now signed in Q2?

I think Sarit mentioned that, actually, booking was very strong in this line of business in Q1. It's just a matter of timing of deployment, revenue recognition. But, all in all, we continue to have very strong business dynamics in this business for all the reasons that we have mentioned before. And every day we wake up in the morning and then find out about new regulation and new opportunities. So, we are confident with the pipe and moving forward.

Okay, got it. Thank you.

Thank you.

Thank you.

Operator, any more questions? Operator?

Thank you. I would now like to turn the call back to Barak Eilam for closing comments.

Thank you all very much for joining us. I'm looking forward to see you all at our user conference event, which will have also the analyst day with us in Orlando. And have a great day. Thank you.

Thank you. Ladies and gentlemen, that concludes your conference call for today. You may now disconnect. Thank you for joining. Have a very good day.