甲骨文 (ORCL) 2013 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Responsys' first-quarter 2013 earnings call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session with instructions following at that time.

(Operator instructions)

As a reminder, this conference is being recorded. Now I will turn the conference over to Carla Cooper, Senior Director, Planning and Analysis. Please begin.

Thank you, and thank you for joining us today to discuss Responsys' results for the first quarter ended March 31, 2013. Participating in today's call will be Dan Springer, Chairman and Chief Executive Officer and Chris Paul, Chief Financial Officer. I will cover the Safe Harbor statement, then turn the call over to Dan.

The primary purpose of today's call is to discuss our first-quarter performance. Some of our discussion will contain forward-looking statements, which may include projected financial results or operating metrics, business strategies, anticipated future products or services, anticipated market demand or opportunities, and other forward-looking topics. These statements are subject to risks, uncertainties, and assumptions. Accordingly, actual results could differ materially. For a listing of the risks that could cause this, please see our most recent form 10-K filed with the SEC, as well the factors identified in today's press release.

During the course of this call, we will also be discussing certain non-GAAP financial results. We direct your attention to our reconciliations between GAAP and non-GAAP measures, which can be found in the Company's earnings release, which is posted on the investor-relations portion of our website. Dan?

Thank you, Carla, and good afternoon to everyone joining the call. During the first quarter, we successfully executed against our strategy, and our strong results demonstrate continued and meaningful progress towards our goals. We are off to a great start on our goal of making 2013 even stronger than 2012. Today, I will begin with a quick review of our Q1 highlights and then discuss our Q2 guidance, as well as our increased guidance for the full year 2013.

Revenue in the quarter was $48.5 million, an increase of 27% versus the first quarter of 2012. We often say that our success is driven by the success of our customers, and it is particularly true with these great results. The strong usage of the Responsys Interact Platform by our customers and the high demand of our professional services from new and existing clients were the key revenue drivers this quarter. We also achieved strong profitability driven by this upside in revenue, and we generated non-GAAP earnings per share of $0.07. The revenue in Q1 was $3.5 million above the high end of our guidance, and the earnings per share was $0.02 per share above the high end of our guidance, so we are quite pleased with the results. We are establishing Q2 revenue guidance of $45.5 million to $46.5 million. And based upon the strong start to the year, we are raising our 2013 full-year guidance from $188 million to $192 million, up to $190 million to $193 million. Chris will provide greater details on our financial results and the highlight to key drivers for our Q2 and full-year guidance later in the call.

Responsys is achieving this financial success because, quite simply, we understand marketers and are able to anticipate their needs. You've all heard the Gartner study that predicts CMOs will spend more on technology and services than the CIO by 2017. And we are already seeing this happen with the CMOs we work with today. We believe the big need of CMOs and global marketing organizations will be how to communicate with their increasingly digital customers on an individual basis across millions of interactions and across all key digital channels. We at Responsys are key partners with CMOs to make this happen.

Responsys Interact Suite, our cross-channel interaction-management platform is integrated so each customer can receive coordinated and optimized messages in any digital channel they spend time in, be it e-mail, social, mobile, display, or the web. Our unique approach to customer-interaction management is why the top analyst firms continually rank our technology ahead of the pack. It is also why the world's leading marketing organizations are increasingly seeking out responses, and we are so confident in our growth investments. Because our innovative cross-channel platform is so important to our long-term success, I am thrilled to have recently renounced that Scott Olrich, my partner in building this business for the last nine years, has taken on the role of leading our overall platform effort as our President of Marketing and Platform. Scott's vision and leadership over the past nine years have been instrumental in helping to drive Responsys' growth. I'm even more excited for his next role as President of Marketing and Platform, where he'll help us to scale our growth and achieve our vision of making Responsys the most important marketing cloud software and services company for years to come.

In two weeks' time, we will have the opportunity to showcase the tremendous success our customers are having with the Interact Platform, while we engage with our customers and our prospects at the Responsys Interact 2013 Conference in San Francisco this May 21 to 23. With well over 1,000 attendees, this conference is one of the largest gatherings of digital marketers in the world and an important touch point with our customers and our partners. This year, we will have some of the best marketers in the business joining us from world-class brands, such as Nordstrom, Metropolitan Life, Southwest Airlines, Comcast, Coach, Orbitz, Intuit, and REI, to name just a few.

A big driver of our strong revenue growth is that Responsys continues to serve the best marketers in the business. In the first quarter, we signed up world-class brands that are embracing a consumer-led approach to their marketing. These clients span a variety of industries, including jewelry retailer, Zales, which chose Responsys so it could use a customer-led approach to drive deeper and more loyal relationships with its customer base. And MacAfee, the software company which will utilize our Responsys Interact Suite across the e-mail and display channels in Europe, as well as well-known companies like Gerber Life Insurance and Kirkland's Furniture. Because of our continued growth in our general business segment, we also added great brands you may not know well, Noni B, leading Australian retailer; and Musicnotes, the world's largest online retailer of sheet music.

Because we see such a large opportunity for Responsys, we will continue to grow our sales efforts and our global expansion. To that end, we have hired Jason Zintak, formerly Senior Vice President of Worldwide Sales at SaaS pioneer, GT Nexus. Hiring this experienced sales executive bolsters our effort to aggressively scale our investment in sales and marketing to ensure years of strong growth ahead.

At Responsys, our sales organization is motivated by our deep commitment to superior product innovation, and we continue to push the envelope on product development to support our industry leadership. In the first quarter, Responsys released a 6.17 version of Interact that includes key enhancements. Let me share just a few of them with you. First, we have delivered a completely redesigned campaign builder to help marketers create highly tailored messages faster than ever before, with fewer clicks and greater efficiency. Efficiency in creating highly tailored messages is important to our customers, because doing personalization without automation is difficult and time-consuming. Second, we built in more intelligence to help guide marketers on best practices for creating and sending messages across the digital channels. We have found that guiding our customers in this way enables them to deliver the highly customized messages that contribute directly to ROI and the success of their campaign. These are absolutely critical factors, and Responsys continues to push the envelope on helping marketers achieve the highest ROI in the industry from their programs, which in turn drives our premium pricing.

And finally, just last week we announced the release of Interact Preference, a new offering within the Responsys Interact Suite that provides marketers with a unified cross-channel view of customer preferences and permissions. For the first time ever, marketers can easily collect and manage preferences across both digital and physical touch points, all within one technology platform. As Scott Olrich noted on our fourth-quarter conference call, it is Responsys' strategy to expand its functionality so that the Interact Suite is the critical customer interaction management platform for world-class B2C marketers. Interact Preference is another building block towards that goal. This is one more element of functionality that makes Responsys the go-to partner for CMOs in this digital age of marketing.

As we continue to deliver success for our customers with a differentiated customer-led approach to marketing, we believe we will continue to innovate and execute on our vision of becoming the leading marketing cloud software and services leader. Now, let me turn the call over to Chris Paul for financial details of our first-quarter results and guidance for the second quarter and all of 2013. Chris?

Thank you, Dan. As Dan mentioned, we had a strong start to the year. First-quarter revenue was $48.5 million, up 27% from $38.1 million in the first quarter of 2012. Subscription revenue was $33.6 million, up 23%, as compared to $27.2 million in the first quarter of 2012. Overage revenue was 27% of total subscription revenue, compared to 25% in the first quarter of 2012. We are encouraged by how our customers are driving the marketing activities and our revenue, which in Q1 included approximately $2 million in overage revenue from customers with annual volume commitments. In line with this momentum, the subscription dollar retention rate was over 100%, consistent with previous quarters.

Professional services revenue was $14.9 million, up 38%, as compared $10.8 million in the first quarter of 2012. Our customer count was 415, up two from last quarter, and up 20% from the first quarter of 2012 count of 346. As we have told you in the past, there can be a certain fluctuation quarter to quarter in this metric, and we look at this metric in the context of a longer trend. To that point, the first quarter, there were about one dozen customers that were either consolidated into a single parent account, or dipped below the $3,000 threshold we use to count the customers.

As I walk you through profitability, please note that the following commentary refers to non-GAAP measures that exclude stock compensation and amortization of intangibles. Subscription gross margin was 74% compared to 73% a year ago, benefiting from the strong revenue in the quarter. Professional services gross margin was 19% versus 10% a year ago, driven by high utilization in the quarter. In the first quarter, operating expenses of 43% of total revenue were in line with our plan and compared to 40% a year ago. We are investing more in sales and marketing to drive revenue growth, spending 4 percentage points more in this area than a year ago. R&D expense was down 1 percentage point due to higher capitalization of software-development costs. We continue to increase spending in our research and development efforts to support our product innovation. Our R&D investments support our focus on adding enhancements and introducing new products that make it easier for our customers to deliver customer-centric campaigns and drive greater ROI from their marketing investments.

Non-GAAP net income for the first quarter of 2013 was $3.7 million, or $0.07 per diluted share, as compared to $3.5 million, or $0.07 per share, for the first quarter of 2012. Free cash flow, which we define as cash flow from operations less the purchase of property and equipment, was approximately $800,000 in the quarter. Cash and equivalents were approximately $106 million at the end of the quarter.

Turning to guidance, we are establishing second-quarter guidance of $45.5 million to $46.5 million. This reflects the strong momentum we have seen this year. When comparing Q2 guidance to the results for Q1, note that the first quarter included approximately $2 million in overage revenue from contracts with annual volume commitments. Our non-GAAP earnings-per-share guidance for Q2 is $0.02 per share. This reflects the expenses associated with our annual [user] conference in the US and UK, both of which fall into the second quarter of 2013. For the year, we are increasing our revenue guidance from a range of $188 million to $192 million up to $190 million to $193 million. Our non-GAAP earnings-per-share guidance for 2013 is approximately $0.18, reflecting our continued investments and opportunities to drive revenue growth. We have said before that we will look hard for opportunities to vest and drive growth, and we are finding them, both in sales and marketing and in product innovation.

I would also like to highlight the seasonality that we typically see in Q3 and Q4 revenue. In the past few years, we have seen that our third-quarter performance has been fairly consistent with our performance in the second quarter. Based upon what we've seen so far, we believe that we could expect to see a similar trend this year. Looking at the broader seasonality of our business, historically our fourth-quarter revenue has shown a meaningful increase above Q3, reflecting the holiday activities of our customers.

A note on cash flow and CapEx in our second quarter, we expect our second-quarter cash flow from operations to be higher than our first quarter, as we will be collecting a large portion of the overage revenue that was generated in the first quarter. We also expect our CapEx to be higher than in the first quarter, at around $6 million. In the second quarter, we will finish renovations for expanded office space in San Francisco and Chicago, and also expect to purchase IT equipment to deploy ahead of the 2013 holiday season. We expect our non-GAAP tax rate to be approximately 35% for the year. Our forecasted share count is 53.6 million shares for the second quarter and 54 million shares for the full year.

We are excited about our strong start to the year and for the opportunities we see throughout the marketing landscape. We are making the key investments that we believe will allow us to deliver innovation to our customers and continue to drive higher revenue growth. We hope that you will join us at Interact in May, and Carla will now give you details on that event. Carla?

Thank you, Chris. Interact will take place at the San Francisco Marriott, May 21 to 23. We are hosting an investor briefing for institutional investors and analysts on May 21 at 3.30. This briefing will be webcast. If you are an institutional investor or analyst and have not already received an invitation for the briefing, please e-mail me at ir@responsys.com and I will send one to you.

We are now ready for questions. Operator, could we please have the first question?

(Operator Instructions)

Carter Malloy, Stephens.

Congratulations on the quarter. On the first quarter, up 9% sequentially, I think that's better than any historical, repeated -- I'm sorry any reported historical 1Q. Help break down the drivers of that again. It looks like there's a few customers added. Was that -- were those high-value customers, or was this really just a function of volume and maybe even some price across your core base?

Your assumption is correct; that is our highest-ever sequential Q1 over Q4, at least in the nine years I've been here. And I think there's a couple reasons behind it. It's not something very specific about a couple key customers that drove dramatic change. I think it's more the longer-term tail winds that we're seeing. I think Responsys increasingly feels we're in the right spot. Digital marketing, particularly those that are serving direct channels that have high ROI and those that are doing customer marketing versus acquisition marketing, are in a really strong place. I think we are seeing that positioning be very attractive right now.

And the second thing is around execution that may be very specific to the near-term question, Carter, around this quarter, is we've been making great investments in sales and marketing, both to new customers we are adding, as well as to our existing customers. And we're seeing them pay off. And that's why you're going to see us continue to make those investments, because we think we have a very strong growth opportunity ahead.

That actually leads into my other question, which is on the sales and marketing line, certainly you are spending more on an absolute basis than historically. But still holding it still pretty consistent as [a verse in a] top line. Why not spend more incrementally there going forward or use more of that leverage? Or is it something where we should expect to see it stay underneath 30%?

So first off, for the specific quarter, we expected to have the percent of sales and marketing be higher than it was. But the revenue came in so much stronger that it actually effectively suppressed that percent. So we do have that intent to continue to increase that, as we talked about for the last several quarters, mentioned the hiring of Jason Zintak to come in and try to drive that more aggressively. And a think you will see us, Carter, continue -- we see the opportunities being significant. And you will see us continue to invest more aggressively on sales and marketing, because it really is a large opportunity ahead.

Okay, but as a percent of sales, so we should expect to see that go up some going forward?

Yes.

Okay. Thank you so much, and again, congratulations.

Jennifer Lowe, Morgan Stanley.

Going back to maybe even a higher level than just the specific factors to Responsys in the quarter, this is a Q1 where most companies in the tech space have struggled a bit. Obviously, your results stand out against that backdrop. What are you seeing from a macro perspective and from your customers and the type of discussions they are having at this point around -- ?

Good question. I think any macro component that you hear other people speak about this quarter has not been something we have really observed. And it could just be some that some of the strong things specific, either to our execution or to our specific marketplace, are drowning them out. But to be straightforward from our side, we are not really seeing the impact on our customers, either existing customers or prospects, that are thinking of coming to Responsys as being impacted by the macro. We are an outlier from that observation standpoint.

And maybe just a little bit of a follow-up on that, you are about a year in to the increased investments around the sales side. And that's helping your out-performance relative to some your peers, potentially. Two questions on that. One is how is your hiring tracking relative to that plans that you had? Are you finding the right people, or is it tough to find the right people out there? And then two, to the extent that you did start that hiring ramp last year and the out-performance in the quarter, is that those people becoming productive? Or is that still upward leverage from here, given that they are still relatively new assets?

Yes. Good questions, both. So on the first piece, you know how disciplined we are, Jen, about saying we won't bring on people that are below the Responsys quality bar. And we continue to have that discipline. But we have been quite fortunate that we've been able to attract great talent, and so we are pretty much on plan for our hiring. I think we are looking now, similar to Carter's question, can we accelerate it even more? Can we figure out a way to put even more feet on the street and more aggressively grow that spending in sales and marketing? And we are looking to do that.

From a productivity standpoint, one of the things that has been really successful for us, and we've mentioned this on a previous call, that we have brought people in through this general business segment. That we've been able to nurture and develop and promote into the enterprise. And so we have built this really attractive funnel for talent that we brought into the Responsys sales and marketing organization. So we feel pretty bullish that we can continue to ramp it, and we also feel pretty comfortable that we can, in fact, bring people to productivity sooner. And so we're finding that those folks that they enter into the enterprise side after a short stint in the GB, are actually productive faster than people we used to hire directly into the enterprise sales organization. So we are seeing some faster ramp to productivity, but I think we still have more opportunity ahead with that influx of people that we are bringing into the sales and marketing organization over time.

Brendan Barnicle, Pacific Crest Securities.

Dan, last year one of the big themes was around pricing, and I did not hear you mention it on this call. So can we assume that pricing's going to remain pretty stable during the quarter and no real changes on the competitive front?

Yes. We are not seeing any changes from the communications we've had in the last few quarters. We are feeling more and more comfortable that that is the same outlook going forward.

Great. And then following up a bit on Jen's question, we saw several SaaS companies that had weaker results in the first quarter, because they could not get implementations done on time, they couldn't staff up those implementations. You guys obviously had some nice upside on the pro services side. How confident are you in being able to scale that side of the business as well as the sales and marketing side?

That's a piece of our business that actually has a little bit of a similar tale to sales and marketing. We are very disciplined about the quality, but we've got enough scale in our organization now that we are starting to have a real nice pyramid. And so what we're finding, Brendan, is we are bringing in folks that are easier to find, some of the more junior folks, with less-specific expertise and able to train them and apprentice those people. And that is now filling out the overall pyramid. So we've had great success in building up our tech services team. And I think we are going to continue to be able to build it in from the bottom up, as opposed to being at the mercy of competing with the other SaaS companies, looking for the very experienced and senior tech-services personnel.

And lastly, you mentioned where you were already seeing in some CMOs where they were spending more than the CIOs, as referenced by Gartner in some of their reports. What are those some of those industries where you're really seeing the CMO accelerate the influence?

It's funny, because if you think about your last conference and the survey you did, which I think was very consistent in supporting that hypothesis that Gartner had, we see that it's the same places you saw in your research. That the retail is a place where absolutely the CMOs are amongst the most forward-looking. And travel is the other segment where we are seeing the opportunity to have a bigger presence at the table from the CMO, vis-à-vis the --traditionally the CIO. You're seeing -- going to see it there as well.

Michael Nemeroff, Credit Suisse.

Dan, back after the third quarter, it did not sound too positive on the business and had some pricing pressures. What's changed over the last two quarters, especially this quarter, that is giving you guys a fair bit of optimism for the rest of the year?

Well I think it's the progress we have had against executing the sales and marketing spending, Michael. I think we were early in that investment, and we did not have the visibility yet to that success. And perhaps we are conservative by our nature about seeing how that one is going to play out. And two is, we had not been 100% right on understanding the pricing. And so we were very sensitive to making sure we really had our ducks and fully understood the pricing implications. And we are now through the vast majority of that repricing effort. So we see with much greater clarity the future, and that's why our optimism is so high for this continued success.

And then, Michael, (inaudible) mention to (inaudible) when you're doing revenue forecast. One is pricing and another one is how much are the customers using the platforms. And we are seeing, to a large extent, some offsets that adoption continue at a high rate. [Not] going to see the higher turns, the volume growth we see is a very positive trend, and encouraged by that.

That's very helpful. And also, how should we think about the breakdown of the subscription versus professional services revenue for implied and embedded in the 2013 guidance?

We said before that we expect to see that roughly in the mix that we have seen in 2012. Remember we're already higher than we have historically seen, right now at around 30%. And we are comfortable with a range in that realm. The key [drive process] has always been our professional services is driving the overall business, driving the higher margin business. And we have been very successful at that. Right now it will stay in that 30% range. There's no driver with us saying we've got to get that lower or higher. These (inaudible) natural equilibrium it reaches, and we think we're in that area right now.

And just one last one, if I may. There's a lot of discussion, a lot of talk among investors and some of your peers about marketing on the B2B side. Is that a market in which you guys aspire to enter, either internally developed or through acquisition at any point over the next year?

We do serve B2B companies today, and some of our strongest marketers are B2B companies, and we are excited to serve them, Symantec being a simple, great example. We believe that there's a bigger opportunity on the B2C side. The budgets that marketers have are larger, and we feel that there is more and more transformation opportunity for the consumer marketing. So we just think it's a bigger opportunity. We are not uncomfortable continuing to serve business customers, and we may make more innovation on our platform to meet that need. But we think our focus will be B2C.

(Operator Instructions)

Justin Furby, William Blair.

Congratulations on the quarter. I was curious to dig in a little bit on the guidance for the full year. You guys have done a really nice job in the last few quarters of beating expectations. And if you look at the full-year guidance, it looks like you raised it at the mid-point by an amount less than you actually outperformed in Q1. So is that just a function of conservatism in your guidance or is there anything that is different in the back half of the year relative to what you saw one quarter ago?

Yes. So Justin, we increased our view on our Q4 call coming into the year for 2013 revenue, and some people thought we might have been a little bit aggressive or bullish there. We are increasing it again now. And to your point, we feel great about the strong start to the year, and there is a lot of enthusiasm here. We want to be prudent. It's early in the year, and given the visibility we have, we thought that was the appropriate level to increase. Whether it's conservative or not, our goal is to continue to beat and hopefully be raising that guidance continually through the rest of the year.

Okay. And then if you think about your new business activity, I think last quarter you mentioned you were targeting to achieve something in the range of 50 net new customer adds. It sounds like there was some consolidation within your base this quarter. But is that still on track to hit that? And if so, how are you thinking about the split within the enterprise and general business between when you think about that 50 target?

So very much on track for the year. And as we mentioned, there will be fluctuations quarter to quarter. We mentioned, what, 12 or so that were either consolidated or didn't meet the threshold. If you look at the customer acquisition, very happy where that is going. Got a good, solid momentum now for a number of quarters. The breakout, probably in the latter part of the year, there will certainly be more momentum on the GB side. Right now, seeing very good traction on that. We're not breaking out that count at this point. So the threshold there does move around, but overall in the total 50 count, absolutely see us being on track with that.

Okay. Great. And then lastly, if you think about longer term, Dan or Chris, what are you guys thinking in terms of the revenue growth that you can generate from this business longer term? Is it 15%, 20%? Any range that you're thinking about as you look out the next three to five years?

We are not putting together a long-term revenue growth guidance. But one thing that we've been pretty clear about is that we wanted to get back into the solid 20%s. And we feel that with the momentum we have in this quarter and what we're seeing in the marketplace, that is a very achievable long-term target for us.

Christopher Crum, Ayelstone.

A couple questions. One, what was organic revenue growth in the quarter? And second, your accounts receivables, your DSOs ticked up. I know you guys had 27% overage versus 25% last year, but it just seems a little higher than I was expecting.

So the growth, it's all organic. We didn't benefit from any acquisitions in the quarter. As far as the overage, Q1, we do get the benefit from the post-holiday-season volumes, to some extent, but also some of the annual overage that we mentioned on the call. But I think it's just the adoption, again, of marketers on a platform. They've seen the revenue and are driving solid volumes. And with that, it goes directly to the bottom line -- top line in this case, in overage.

Michael Nemeroff, Credit Suisse.

Chris, I guess this is for you on the services margin, pretty strong result this quarter. What can we -- and I think the guidance after last quarter was to expect the services margin pretty much flat with '12. Given the out performance this quarter, is that a similar range of where you're thinking it's going to be for the year?

Yes, for the year I think that's what we're shooting for. We're seeing obviously good growth in services. The challenge always is as you ramp up to meet higher revenue demand, you will have some impact on margins. But for the year, still expecting those margins to be roughly flat with '11 and '12.

AJ Strasser, Coopercreek Partners.

Congratulations on a really great quarter.

Thank you.

My questions largely have been answered. Maybe you could talk to it a slightly different way. You guys just posted 27% growth rate in Q1 organically. And [in the past] you've definitely thought yourself as a mid-20%s growth player. And I think the market got all caught up when you came down to that 17% range. I wanted to hear your comfort level as you look out over the near- to longer-term view of your story here. And assess whether or not you think you are back in that mid-20%s type growth rate, given the fact that pricing seems to have stabilized. Thank you.

Yes, I think if you look at the longer term, we feel very bullish that we have had very good success and that we have achieved the ability to feel much more bullish about that long-term growth rate that you are describing. I think that there may be some steps to getting there. And in any given quarter, we want to be very careful about making sure we are providing the right level of guidance about what we can very confidently deliver. So there may be some difference between those short-term forecasts versus that long-term view we have that is so bullish on the opportunity. And that's probably how I would reconcile those two points, but leave you with that sense that we are very excited about the success coming out of Q4 and Q1. We want to continue to build on that momentum and drive higher growth opportunity.

Brendan Barnicle, Pacific Crest Securities.

Dan, I wanted to circle back and get your thoughts on all the M&A activity we've seen in the group. I don't think we've had a call since the [alqua] transaction happened, get your views there. And then sales force has certainly made a lot more -- has talked a lot more about the marketing cloud and potentially moving into some of the space that Alqua was in. And made them potentially even the direct marketing space. I was wondering what you were thinking of the activity we are seeing.

I think it is no secret that there's a lot more noise and discussion about what's going to happen with the marketing cloud. And it goes back, Brendan, to what you and I have talked about many times. This is an important space, and it's becoming a more important space in software every day. So Responsys, with our leadership position, and I think quite frankly, our attractive valuation, we of course get a lot of interest and calls. What we're trying to do is keep our focus on building a great Company. We are trying to put our focus on making sure we drive a lot of customer success. And if something happens at some point as a public Company, where that kind of activity becomes more relevant and pressing on us, we will make those appropriate decisions and drive shareholder value as appropriate.

But at this point, our focus is exclusively on continuing to grow the business and make the investments in delivering great success for our customers. And we feel pretty good about that traction. I do believe over the next year, if you step back and look at the industry overall, there probably will be more consolidation in the space. Because more and more of the software companies that need to get into SaaS and need to be into marketing are going to see there aren't a large number of quality assets. So Responsys is aware of that, and we will do all the appropriate things to drive shareholder value in that context.

Thank you. There are no further questions at this time. I would like to turn the call over to management for any closing remarks.

Great. Thank you, everybody, for joining and we will speak to you at our investor briefing, which as I said, will be webcast, or our next quarter report for the second quarter. Thank you very much.

Ladies and gentlemen, thank you for all your participation in today's conference. This concludes the program. You may now disconnect. Have a wonderful day.