Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from [Wayne Devin] – Burnham Asset Management.
[Wayne Devin] – Burnham Asset Management
Your growth in deferred revenue when will this show up in reported revenues?
Pat Beans
It will be shown up over 12 months so it will between now and next May or June.
[Wayne Devin] – Burnham Asset Management
Annualized revenue is about 80% of contract revenue when will that spread close, can you go into that a little bit?
Pat Beans
Hopefully is we are selling more contracts, the contract value will increase faster than the annualized revenue. We will have a small spike of revenue in the third quarter from some of the traditional market guides that will help close that gap.
Mike Hays
Our goal would always be to have total contract value increasing as we move to a higher mix of subscription based revenue. Theoretically the gap may never close.
[Wayne Devin] – Burnham Asset Management
Obviously you’re optimistic about the Picker growth could you talk about why basically some early signs of what you’re seeing.
Mike Hays
I don’t think that we’re focused correctly on the sales side. We weren’t penetrating existing client really to the degree that we could and now are. The market opportunity is clearly there I just think we had the sales force aligned in not quite the most optimum way. Now we book that into two groups as I mentioned one focused exclusively with clients and tapping into increasing our penetration of that portfolio across service across all of our current NRC Picker clients. Another group is on the new business.
[Wayne Devin] – Burnham Asset Management
Have you seen any early signs yet?
Mike Hays
This change literally took place in the last 30 days so the alignment is done, every client is assigned to an inside sales person and those people are literally on the road Monday through Friday visiting. I think it’s a little too early to tell but the opportunity we know is good we quantified it now we just have to go collect it.
Operator
We have no further questions at this time.
Mike Hays
Thank you all for joining us on the call today and as always Pat and I look forward to providing you more color on progress during our next conference call. Thank you very much.
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