Operator: Good afternoon, ladies and gentlemen, I am Casey. Welcome to Tibco's First Quarter 2011 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. You can also listen to this call via the Internet at www.tibco.com.
Today's call is being recorded and will be available for playback from Tibco Software's website at www.tibco.com. In addition, replay will be available through InterCall for one month following today's call by dialing 1-800-642-1687 from the U.S. or 706-645-9291 internationally. The confirmation code is 48596709.
The following conference call includes forward-looking statements, which represent Tibco Software's outlook and guidance only as of today and which are subject to risks and uncertainties. These forward-looking statements include, but are not limited to, forecasts of revenues, operating margins, operating expenses, outstanding shares, and earnings per share for future periods. Our actual results could differ materially from those projected in such forward-looking statements. Additional information regarding the factors that could cause actual results to differ materially are discussed in the Risk Factors section of Tibco's most recent reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission. Tibco assumes no obligation to update the forward-looking statements included in this call whether as a result of new developments or otherwise.
The conference call also includes certain financial information that has not been prepared in accordance with Generally Accepted Accounting Principles as we believe that such information is useful for understanding our financial conditions and results of operations. For a presentation of the most directly comparable financial measures calculated in accordance with the GAAP and a reconciliation of the differences between the non-GAAP and GAAP financial information, please see our website at www.tibco.com.
The presenters on the call are Vivek Ranadiv�, TIBCO's Chairman and CEO; Murray Rode, Chief Operating Officer; and Sydney Carey, Chief Financial Officer.
I'd now like to turn the call over to Vivek.
Vivek Ranadiv� - Chairman and CEO: Thanks, Casey, and thank you all for joining us today. I'll begin the call with summary remarks and our first quarter performance. I will next provide an update on the broader market environment we’re seeing and pursuing. Then I will turn it over to Murray and Sydney to discuss further details.
We started 2011 in our strongest position ever as our Q1 results will attest. Total revenue grew by 20% over the first quarter of 2010 for a Q1 record of $185.3 million. License revenue grew by 29%; its fastest pace in a decade for a Q1 to 70.1 million. Non-GAAP operating margins came in at 21.9%, a 230 basis-point expansion over the same period a year ago and non-GAAP EPS at $0.16 grew by 33% over the first quarter of last year. Once again we exceeded our guidance ranges for revenue and profitability.
Last year I spoke of the tipping point in our business and a new era in enterprise computing as companies shift from transactional or database-centric architectures to event-driven architectures built around a Service Bus. This new era has arrived and the 21st century has begun. Whereas content was king in the 20th century, context will be king in the 21st century.
Context is the ability to bridge past occurrences with current behavior and understand what is happening at a moment in time and every one of our prospects and customers today are looking for context. As they seek to acquire new customers, deepen their relationships with existing ones and grow and manage their business.
For example, we have retailers who want to offer the right promotion to a customer before they leave the shopping aisle. We have utilities that wish to detect a power outage before it actually occurs, and we have banks that want to prevent fraud before it happens. To acquire this important context however businesses must fully leverage the Internet, exploit mobility, operate in real time, and harness the resulting explosion in data volumes.
TIBCO's middleware platform is uniquely qualified to scale to the needs of business today. Provide context from streams of events and provide the connections such that the right information can get to the right person or place at the right time. Customers old and new are increasingly appreciating the power of our platform and building a whole range of 21st century context-aware applications.
This first quarter we had another central U.S. oil and gas company adopt our platform as the digital spinal cord to accelerate their smart grid initiative, which will drive customer interaction and communication for over 800,000 customers system-wide.
A new gaming customers came to TIBCO with bidirectional data flow and to capture and correlate real time consumer behavior with static information captured over a customers' life in a channel deal, where our software will be embedded as part of a larger solution.
A bank whose mission was to define 21st century customer service and initially choose to work with IBM called us back two months later to explain that the project was getting too complicated, too complex, and too costly. We signed a seven figure deal one month later.
A state government in Australia signed a deal including TIBCO Spotfire and our Formvine products to help emergency first responders be prepared for natural disasters in a deal cycle that took eight weeks to close and the list goes on.
We are moving from a client server world centered around the data base to an event driven world built on a Service Bus. No longer is this just a nice to have, it's a must have. TIBCO is the only company that provides an end-to-end platform for handling events and with the additional tibbr we have now extended the platform into social networking. Tibbr is becoming the universal inbox for the event driven enterprise and now has over 100,000 seats sold.
Whereas content was king in the 20th century, TIBCO will prove that context will be king in the 21st century.
I'll now turn it over to Murray.
Murray Rode - COO: Thanks, Vivek. I'll focus my remarks on key Q1 operational metrics before turning over to Sydney. Once again, we saw broad mix of demand this quarter with 108 deals, over $100,000 in license revenue as compared to 97 such deals a year ago. Also this quarter we had 14 deals over $1 million in license versus 10 a year ago. Our average deal size for license transactions over $100,000 was $584,000 in line with historical averages and our top 10 customers comprised 22% of our total revenue as compared to 19% a year ago.
Looking at the geographic mix, total revenue broke down as follows; Americas had another strong quarter at 57% of the total; Europe, Middle East, Africa came in at 33%; and Asia Pacific and Japan at 10%. The growth in Americas was particularly robust, up 34% over last year, Asia was up about 15% over last year, and Europe came in slightly above last year. From a vertical market perspective, total revenue broke down as follows; financial services 26%, telecommunications 10%, energy 9%, transportation and logistics 9%, government 8%, and life sciences 6%. In addition, we had three verticals; retail, manufacturing, and insurance registered just shy of a 5% contribution. The strongest year-over-year growth came from transportation and logistics, retail and energy.
Turning to products, the breakdown of license revenue among our major product families was SOA 55%, business optimization 34%, and BPM 11%. Our business optimization portfolio grew by more than 100% over last year with particularly strong growth from business events. BPM was up by more than 70%. This traction in business optimization and BPM highlights what we’ve been describing as a broader shift to event-driven architectures.
In addition, tibbr, as Vivek mentioned, now has over 100,000 seats sold and we’re continuing to see a lot of traction in both existing and new accounts and in both standalone and bundled sales of other TIBCO products. We also released FTL, our new ultra-low latency messaging product, which extends our leadership in this area moving from microseconds of latency to nanoseconds. Overall, our performance reinforced the broad applicability of our middleware platform and our unique real-time event-driven approach. We saw this in two fundamental ways; our total license revenue growth and the vertical and product diversity of that growth.
With that I will turn it over to Sydney.
Sydney Carey - EVP and CFO: Thank you, Murray. First, I'll provide additional details on our financial performance in Q1 and then I will provide comments on our financial outlook for Q2. I'll review our financials on both the GAAP and non-GAAP basis. A full reconciliation was included with our press release along with an explanation of our non-GAAP measures.
Some key performance data on our first quarter results are as follows; total revenue was $185.3 million, up 20% year-over-year. We had about a 0.5 percentage point of currency headwind on the total revenue growth. License revenue was $70.1 million, up 29% year-over-year or 30% on a constant currency basis. Services revenue was $115.3 million, up 14% from last year or 15% on a constant currency basis.
Our non-GAAP gross margin for Q1 was 74.5%. Our non-GAAP operating income was $40.5 million, up $10 million or 33% from the same period a year ago. This resulted in an operating margin of 21.9% versus 19.6% a year ago. Q1 cash flow from operations totaled $36.5 million and non-GAAP EPS was $0.16 versus $0.12 a year ago. On a constant currency basis, earnings for Q1 were negatively affected by approximately 4% as compared to the prior year period.
Turning to our balance sheet, we ended the quarter with approximately $262 million in cash and short-term investments. Deferred revenue, including both long and short-term components, totaled $207 million, up $20 million from Q1 of last year. DSO came in at 74 days this Q1 compared to 65 days in Q1 of last year. Also during the quarter, we repurchased approximately 1.2 million shares at an average price of $20.06.
Looking forward to Q2, we continue to see our pipeline strengthen with strong demand across all geographies driven by continued customer interest in our middleware platform. Our Q2 guidance is as follows.
We expect total revenue to be in the range of $195 million to $200 million. We expect license revenue to range between $72 million and $76 million. The non-GAAP operating margin is expected to be 23% to 23.5%. Non-GAAP EPS for the quarter should range between $0.17 and $0.18 with an assumed tax rate of 31%. GAAP EPS should range from $0.08 to $0.09 with an assumed tax rate of 30%. We expect cash flow from operations to range from $48 million to $55 million.
With that, we'll be happy to take your questions.
Operator: Brad Zelnick, Macquarie.
Brad Zelnick - Macquarie Securities: Just to hone in on cash flow, you came in I think a little bit shy of where we were, and I just wanted to get a sense of where that was relative to your expectation, and any guidance you can give us on next quarter?
Sydney Carey - EVP and CFO: Sure, we did guide cash flow slightly higher than where we came in at. It was primarily due to our DSO increasing to about 74 days and as we look forward we expect our cash flow for Q2 to range between $48 million and $55 million.
Brad Zelnick - Macquarie Securities: Vivek, you talk a lot of tibbr, it sounds really exciting. Any anecdotal evidence inside of TIBCO, I imagine all of your internal constituents are using the product, any idea as to how much less you're using email for collaboration?
Vivek Ranadiv� - Chairman and CEO: Yeah, in fact, we're using email a lot less and I was just on my way chatting with somebody here, and just chat on tibbr is becoming pretty much a de facto way of communication now. So the email traffic has gone down considerably. We have 100,000 users now signed up, and it's just – it's taken out like a rocket, so we're ecstatic about the way it's doing.
Operator: Yun Kim, Gleacher & Company
Yun Kim - Gleacher & Company: Vivek, I know, you talked about the emergence of the retail vertical over the past several quarters, can you just tell us where we are in terms of the pipeline development for the Company, and when can we expect to see some sizeable uplift coming from that vertical? I think it's been around 5% of revenue for a while?
Vivek Ranadiv� - Chairman and CEO: I should defer to Murray and Sydney on that, but we're seeing a lot of retail business. Murray, do you want to respond to that?
Murray Rode - COO: Yeah. No, I think we've seen it through the latter part of last year and into this year pretty significantly expand. I don’t think retail for most of last year was not close to being a 5% contributor. So that's a pretty recent phenomenon. So I think what we think is retail has the potential to become one of the core markets for us actually.
Vivek Ranadiv� - Chairman and CEO: Even going where we are right now, we're seeing great strength in the pipeline with regard to retail.
Yun Kim - Gleacher & Company: Do you expect that to happen towards end of this year or it's just more like a 2012 event?
Vivek Ranadiv� - Chairman and CEO: It will happen throughout 2011 and 2012 and beyond.
Yun Kim - Gleacher & Company: It's been a while since you guys have done a sizable acquisition. What is your current appetite for a large one and if you can just simply update us on your current acquisition strategy?
Vivek Ranadiv� - Chairman and CEO: We’re staying vigilant. We're looking at everything out there, but right now we believe that our stock is still as good a buy as anything, and so we're putting our money where our mouth is with regard to that. We just see great strength in the business. If you look across the board, the kind of license growth we've had, so it’s a high bar that we've set and a big acquisition for unlikely small technology tuck-ins more likely.
Yun Kim - Gleacher & Company: Sydney, anything out of the ordinary besides just simply higher number of large deals closing towards end of the quarter that drove the DSOs higher? Where do you see the DSOs trending or do you sign more and more higher number of large deals going forward?
Sydney Carey - EVP and CFO: Well, our DSOs at 74 days has been in a historical range that we’ve seen in the past. So I do expect for them to come down some in Q2, but I don’t think that 74 days are alarmingly high. We did have a few kind of collections just slip into the first week of Q2, so again I think it was just a trend that impacted the cash flow for Q1.
Vivek Ranadiv� - Chairman and CEO: It was a shorter quarter right…
Sydney Carey - EVP and CFO: Yeah, it was also a shorter quarter for us.
Vivek Ranadiv� - Chairman and CEO: So, it's fewer days.
Operator: Nabil Elsheshai, Pacific Crest Securities.
Nabil Elsheshai - Pacific Crest Securities: First, I was wondering if you could give a little color on the growth rates within the maintenance and services line, if anything going on with the growth on maintenance versus the consulting, obviously not as fast as we’ve seen on the license side, so just want to understand that a little more?
Sydney Carey - EVP and CFO: Our Q1, just to remind everyone, had four fewer days than our Q4. So our maintenance actually came in as expected with fewer days impacting the total, but not impacting the growth on a per day metric. Our professional services did come in a little bit lighter and that was more due to the timing of the execution of some – excuse me some service contracts.
Vivek Ranadiv� - Chairman and CEO: So we feel as though our licenses grew at about 30% and our services grew – our maintenance growth was strong, our services grew less, so we are a little bit behind on hiring on services and some of this is my fault. I have just been cautious in terms of hiring. We have huge demand for services and we have to build up the capacity. So we’re in the unusual situation where the license growth was a lot faster than the professional services growth, and we’re very focused on recruiting to start filling that demand.
Nabil Elsheshai - Pacific Crest Securities: Then obviously as you mentioned great numbers out of the BPM and optimization line. I was wondering if you could talk about kind of level of penetration of those within your installed base and maybe a little more color on what types of those deals. Are they going into an existing customer, are there new customer, and is it pulling along a lot of the traditional integration product?
Vivek Ranadiv� - Chairman and CEO: Yeah, Nabil, it's all of the above. The penetration is very small still, so we still have the vast majority of our market ahead of us. Customer up-sell/cross-sell often becomes a catalyst, and it does indeed pull in everything else with it. So, all of what you said is true.
Nabil Elsheshai - Pacific Crest Securities: Then last question just on sales hiring. Are you on track there to what you talked about it in Q4, just a little – any update you can give?
Sydney Carey - EVP and CFO: Yeah. We ended Q1 with 207 quota-carrying hires, and we'll continue to make investments both in hiring quota-carrying and also field enablement.
Operator: Derek Bingham, Goldman Sachs.
Derek Bingham - The Goldman Sachs Group, Inc.: My first question is just kind of macro related. I mean, there's obviously been some disruptions in the world over last month or two, and I was just wondering kind of what impact you've seen both to the extent, they had any impact in Q1 or probably more importantly in the early parts of Q2, and how much that's factored into how you've guided?
Vivek Ranadiv� - Chairman and CEO: We are really not seeing any impact, Derek. We are seeing a very strong pipeline as we had our strongest Q1 ever and we are continuing to see very, very strong demand. So we're not seeing anything, but obviously we are being cautious whether it's the Japan situation or the government shutdown and so on. So we've shown some conservatism in that. But we're seeing great strength across the board.
Derek Bingham - The Goldman Sachs Group, Inc.: I'm wondering if you could add any comments on competitively you've been growing at a pretty impressive clip of late, and also it would seem that you're taking some share there and just kind of what your latest thoughts are on when you do take share who it tends to be from most often?
Vivek Ranadiv� - Chairman and CEO: Yeah. The market is really narrow, so it's just us and IBM and Oracle, and we're seeing most – most of the – I think, we see IBM more than anyone else, more than Oracle, a lot more than Oracle, and it's probably taking market share from both, more from IBM than an Oracle, because IBM is – you see IBM more, you see Oracle less. We had a situation with a bank recently that I mentioned, and they – IBM was the incumbent. We won the technical evaluation. The CEO of IBM called the CEO of the bank and they went with IBM. Two months later they called us and said that it's been a disaster to work with IBM, and would we please come back in. So we signed a seven figure deal weeks after that. So I think, it's really a three horse race right now, us, IBM, Oracle, and IBM is the incumbent, IBM is the largest player, so most of the market share we take is from IBM.
Derek Bingham - The Goldman Sachs Group, Inc.: I just had one last housekeeping one, Sydney, could you remind us how much of or kind of what proportion of late of your cash is onshore versus offshore?
Sydney Carey - EVP and CFO: Yeah, we've got about approximately $100 million offshore of our cash.
Operator: John Difucci, JPMorgan.
John Difucci - JPMorgan: You put up really strong growth metrics. Does that contain – and especially license line, and you talked a lot about what was driving that as far as products, but you mentioned I think that one of the deals you closed was through the channel. I was just curious if you're starting to see more traction through SIs and if maybe you can talk a bit about that?
Vivek Ranadiv� - Chairman and CEO: We're starting to see a lot more traction through SIs, both people like EDS were actually taking our product and offering it as part of the solution as well as the guys like Infosys and TCS who refer deals and then we work jointly with them. These guys have trained as I've said before, they've trained 10 times as many people as they had a year ago, so that automatically creates a lot more pull-through for us. So we're continuing to invest in that channel. There's a lot more opportunity for us in that channel. We're still in the early stages, but there is a lot of leverage we're getting from that.
John Difucci - JPMorgan: If I could two for Sydney. Sydney, on cash flow, it looks like there was a $6 million negative swing in the contribution for prepaid expenses. I guess if you could just touch briefly on that?
Sydney Carey - EVP and CFO: Yeah, that was just normal timing of events. So there's nothing unusual there really going on.
John Difucci - JPMorgan: It was a year-over-year swing. I am sorry, I should have said that upfront, is it?
Sydney Carey - EVP and CFO: Yeah, again, it was just timing. There's nothing unusual going on there.
John Difucci - JPMorgan: You mentioned that maintenance you had four days less in this quarter, but just when we’re looking at it in the model, could we assume that maintenance grew sequentially?
Sydney Carey - EVP and CFO: Yes.
Operator: Kash Rangan, Merrill Lynch.
Kash Rangan - Merrill Lynch: Looks like you are showing excellent rating growth against even tougher comp, so really well done there Vivek and team?
Vivek Ranadiv� - Chairman and CEO: Coming from you that’s a good compliment. So, thank you.
Kash Rangan - Merrill Lynch: Vivek, as it looks to – since your growth is starting to pick up, how are you planning to grow the sales headcount? I would suppose that for the license growth of 20% plus, 29% you should be looking to increase sales capacity right around that percentage. I think also you had made a comment about services headcount. How should we be thinking about the growth versus any near-term margin sacrifice that you might have to endure in order to keep sustaining this kind of very impressive growth rate?
Vivek Ranadiv� - Chairman and CEO: Kash, those are great questions, and we are on track to meet our target for the year in terms of sales headcount. Sydney, how many people have we added and what are we at now?
Sydney Carey - EVP and CFO: We’re at 207 up from 196 as of Q4 and we’re trying to track to about 220 by midyear.
Vivek Ranadiv� - Chairman and CEO: So, we’re on track to meet that 220, so we’re hiring aggressively and we are behind in terms of services hiring, and so we're being cautious in terms of the EPS guidance that we’ve given, because we do need to invest much more heavily in both sales, sales training and in services. The demand for services is huge right now, and we’re just leaving a lot of opportunity on the table and as you pointed out we had almost a 30% growth in licenses and the services significant lagged that.
Kash Rangan - Merrill Lynch: So you have dialed in the appropriate level of investment into your earnings guidance, so on the flipside, we should expect to see this growth rate. You're not guiding to license growth rate beyond Q2, but I guess you are still targeting high teens to 20% plus license growth I would imagine considering that you've put up these kinds of numbers against tough comparisons?
Vivek Ranadiv� - Chairman and CEO: Yeah. We see a huge opportunity in cash, and as you've pointed out, we've had accelerating growth and we need to have the capacity to meet that growth and we will keep investing in it.
Operator: Derrick Wood, Susquehanna.
Derrick Wood - SIG Susquehanna: So, clearly you had very, very strong growth on the BPM and optimization product side. You back out the SOA product revenue and it looks like it was down year-over-year. Now I know this is a fairly lumpy business. So, can you just talk about what kind of demand trends you are seeing out of that business, and then maybe to what extent success in your other products can drive subsequent demand for the SOA platform?
Murray Rode - COO: Yeah. So, SOA was actually not down year-over-year. It was just slightly up, but clearly the growth was – the really outstanding growth was from business optimization and BPM, and I think what we've seen a little bit, if you look back over a number of quarters is in any given quarter, you can have one part of our three major product families lead the growth and drag along other products. I think what we are – we have seen business optimization be a very strong lead in past quarters. I think, this quarter, we really started to see the traction and the pickup in the BPM business. So, I think, we saw that as a particularly positive sign looking across the portfolio, and I think FTL now too gives us additional new growth potential in the core middleware of the SOA business.
Vivek Ranadiv� - Chairman and CEO: Yeah, in fact just on that, Derrick, we just announced FTL, the Faster Than Light ultra low latency messaging product, and we are very, very excited about this. We've pushed the barrier beyond microseconds into nanoseconds, and for those of you who have known us for some time, we have over a 1,000 Rendezvous EMS customers, and it's the same API. So this a automatic upsell into that customer base with a product that's truly leapfrog in terms of what we've done with it.
Derrick Wood - SIG Susquehanna: I mean I guess heading on the BPM business then, you had a major new product that came out last year, and I imagine it's starting to percolate through the sales cycle. So could you give us a sense for how that product cycle is tracking? What kind of pipelines were out there, and then maybe what you're seeing competitively?
Vivek Ranadiv� - Chairman and CEO: Yeah, we're having very, very strong success with BPM. It is a sensational product and the pipeline is the strongest it's ever been in this area, and the growth numbers I think speak for themselves, Murray, right so.
Murray Rode - COO: Yeah, I think that's really the story of the growth this quarter. I think to the new product is, the ActiveMatrix BPM product is doing well as a rapidly growing pipeline. We also see strength with our existing iProcess product as well. So across the board BPM is showing good traction.
Derrick Wood - SIG Susquehanna: Just could you lastly just give us a sense for what kind of revenue exposure you have in Japan?
Vivek Ranadiv� - Chairman and CEO: Yeah, we do very little in Japan and so we don't really have that much exposure over there.
Murray Rode - COO: Yeah, it's well below 5%. It's just a few percent really exposure in Japan and this upcoming quarter I think it's even – just the way the pipeline lays out, it's even less than that really.
Operator: Mark Murphy, Piper Jaffray.
Mark Murphy - Piper Jaffray: Sydney, in terms of maintenance renewal rates in a quarter did the actual renewal rates improve directionally during the quarter?
Sydney Carey - EVP and CFO: Our maintenance renewals have remained pretty constant at that 92% to 95%, and we didn’t see any change in that in Q1. Again, we had a shorter quarter. We ended the quarter on the 27 and so depending on when the quarter end can impact the timing of renewals, but we didn’t see any change related to the renewal rate.
Mark Murphy - Piper Jaffray: Just following up on a couple of earlier questions. Why exactly did some of the collections slip into early Q2 or kind of what was it that caused the collections activity to be less predictable than it has been in the recent past?
Sydney Carey - EVP and CFO: Again, it was just the timing of pulling in the collections. There really wasn’t anything material to why that happened. So again, that 74-day DSO has been in a range that we've been in historically. Last year DSOs were very good, but they were not in a range that we haven’t been in.
Vivek Ranadiv� - Chairman and CEO: Our license revenues was dramatically up. There was a lot of pressure on the team to just keep closing the deals that we had coming in and it was – there were three days less in the quarter, so it's a variety of factors, but I think it's within what we've always done.
Mark Murphy - Piper Jaffray: Vivek, also I am wondering maybe how you feel just about the texture of the deal pipeline moving forward and specifically is it mixing – is the mix shifting more towards larger deals than it did say last year and then also just in terms of the financial services piece of the pipeline, does it feel generally like would it be logical that at this point in the cycle that financial services portion of the pipeline is maybe going to flatten out a little and kind of the uplift in the growth that you are seeing will be in the other verticals?
Vivek Ranadiv� - Chairman and CEO: I think what we’re seeing as strength across the board, and yes there is new verticals like retail and government that are showing a great deal of strength, but we also have a lot of opportunity in the financial vertical. They continue to spend money, then this FTL announcement that’s a huge catalyst for growth in that vertical as well. The deal sizes are potentially getting bigger. We prefer the smaller deals, but customers are now coming back to us and saying look we just want the whole platform and will you license it to us and they are throwing out big numbers to us and so the deal sizes are starting to look bigger. We are trying to keep it small and spread it out but it would be accurate to say that if you look at the pipeline, number one the pipeline is the strongest we’ve ever seen it and number two there are deals in it that are larger in size.
Operator: Tim Klasell, Stifel Nicolaus.
Tim Klasell - Stifel Nicolaus: Just a couple questions. On tibbr, what other products does that help pull along and sort of a part for that is, that product has been out for a little while but it seems like about a year and half or so, this was in beta. What's causing the acceleration there, because I certainly sense some acceleration with that product set.
Vivek Ranadiv� - Chairman and CEO: I think, we actually GA'ed it only like two months ago, so we had it in a beta internally for a while with some partners, but we didn't really GA the product till I think it was about two months ago. So, in two months, we've signed on 100,000 users and it's just an amazing product. It's become a inbox, universal inbox. We believe that we'll have it on 10 million users within the next five years, and we are on a path to achieve that kind of growth. And what's interesting about it is we have customers like CIBER that were never customers and they are using it, and then we have customers that are existing customers like MGM casinos and they are adding it on, and both types of customers are then going back and buying other parts of the TIBCO stack in order to make sense out of the events and do things with it. So, it works both ways, and so we can sell it into our existing customer base. We can sell it to new customers, who will then buy new products from us, and then we can sell it into our existing customer base and they too will then buy other products as a result of that. It's a corporate event tracker. It becomes a universal inbox, and we have customers where they've pulled out things like Chatter and Yammer because those things were too restrictive. It's offered on-premise, it's offered in the cloud. It allows you to follow people. It allows you to follow subjects. It's very easy to use. You can go live. We've had customers literally deploy it in a matter of a couple of hours. We've had customers who said they wanted to start with 50 copies and they come back to us a day later and say we want to make it 10,000 copies. So this is – it's taken off like a rocket, we have such huge demand for this product. It's another area where we are behind on hiring. The key to our growth is having what we call a community manager. That's the person who manages the community in each client, and we need to hire many of more of those. So we're very, very excited about where this is going.
Tim Klasell - Stifel Nicolaus: So do you think 10 million users in five years, if I look at your standard price sheet is this going to become a reportable line or will you break this out as a separate product set, and where is it being reported right now?
Vivek Ranadiv� - Chairman and CEO: I think over time what we want to look at doing and we haven't really gotten to the bottom of this is that we think we'll start having more and more cloud subscription revenue, and we might start looking at that with our maintenance. So we think it's a huge opportunity both in terms of revenue, but also in terms of what other products you can sell to back into it.
Tim Klasell - Stifel Nicolaus: Then just a quick question on the retail vertical, should we expect a little bit of seasonality there? I've seen in other companies where retail prefers to buy in the first half of the year as in the second half of the year they get tied up with the holiday season and not want to make substantial changes to their infrastructure, is that something we should expect or do you think it will…?
Vivek Ranadiv� - Chairman and CEO: No. I don't think so. It's still a small part of our total business and the things that we're doing there, they're not based on, they're fundamental, so what people are doing is fundamentally changing their architecture. They don't want to – what's the point of making you an offer six months after you go home, and you're getting a coupon in the mail. They don't even want to wait till you leave this aisle, let alone until you leave the store and these companies the opportunity is huge and they're moving from that database to an event-driven architecture. So we are not seeing that cyclicality, but it's a small part of our business right now.
Operator: Steve Koenig, Longbow Research.
Steve Koenig - Longbow Research: If I could do one question and one follow-up that'd be great. The initial question is perhaps Vivek you could comment on both multi-element deals and also cross-selling, what products to what base, any particular trends you're seeing this quarter or last few quarters that are noteworthy that you'd like to comment on?
Vivek Ranadiv� - Chairman and CEO: One of the most underexploited elements of our portfolio is that we've now got Spotfire integrated with our BPM and business events products, and that represents a huge, huge upsell, cross-sell opportunity for us. So we expect a lot more momentum in that business and so you'll go from having dozens of sales people to having over 200 sales people in that. So that's one huge opportunity, but really across the board we're seeing that we can go into a customer that's bought SOA and then go sell them BPM, go sell them business events, or conversely a customer that buys BE then backs into buying PPM and the rest of the stack. This is a huge opportunity for our company and so far we've been focused on the land grab in getting as many customers as possible and now our focus will start shifting to getting much better at doing that kind of up-sell, cross-sell, and Spotfire is a good example of how we hope to do that. So I think that – what was the other – was there anything else I should add to that?
Murray Rode - COO: No.
Steve Koenig - Longbow Research: Great and then related to that the follow-up would be, what kind of – are you seeing any initial traction with Silver, or is it still early days, is there meaningful revenue yet, and if I could just toss in, I’d also love your comments on, I mean, your Q1 is usually the time in which software companies see sales turnovers, was it the same as usual or higher this year?
Murray Rode - COO: Silver, I think, the broader Silver platform is still early days as you say. I think, we continue to feel very positive about the overall cloud story that we have today and the combination of products and how that – what that represents for an offering as we go into the future. So now we have core infrastructure under the Silver better. We also have Spotfire in as a cloud product under Silver, and then things like tibbr and the Loyalty Lab solution, so there is a really good mix of products going forward there. In terms of the sales turnover, it was pretty typical, a little bit lower than past years I believe.
Operator: At this time, I will turn it back over to Vivek for closing remarks.
Vivek Ranadiv� - Chairman and CEO: We’ll conclude this call. Thanks everyone for joining us and have a good day.
Operator: Thank you for joining us. We will now conclude TIBCO’s Q1 2011 earnings conference call.