Question-and-Answer Session
Operator
(Operator instructions) And your first question comes from the line of Brian Kinstlinger from Sidoti & Co. Go ahead, sir, your line is open.
Brian Kinstlinger – Sidoti & Co.
Great, thank you. I'm curious in the second quarter, either Umang or Drew, maybe you can discuss the mobile segment. The sequential growth was dramatic, and did something happen earlier than expected to see that much growth in the quarter? Just to sort of take us through it and take us through the deferred revenues as well, Drew, if you could, the changes there and how we should read into that?
Umang Gupta
Let me answer first and then, Drew, you can answer with the deferred revenue question. But let me just start by saying, I think you mentioned third – you meant third quarter, because we are talking about what are in the third quarter right now.
Brian Kinstlinger – Sidoti & Co.
Absolutely. Sorry – yes.
Umang Gupta
So, yes, no question that the third quarter revenue growth of mobile was in fact greater than anyone of us anticipated, including our own guidance. And there were two reasons for it. One, you may recall that for the last couple of quarters there has been a logjam in the amount of revenues that could come on to our P&L because of a major telecom situation where a big deal was simply being held up for amortization purposes, even though it had been recognized under certain GAAP, but once that deal – the logjam cleared, which happened on March 31, literally at the end of last quarter, we were able to see the benefits of that happening this quarter and expect to continue to see the benefits over the coming quarters as the deal is amortized. So in effect, what you had was a situation where for the last couple of quarters, revenues were perhaps less than they should have been or at least based on run rates, simply because the deal was being held up for amortization purposes, and now we are actually coming the opposite way. But the other reason is also that we ended up with more acceptances, project acceptances earlier in the quarter. So, if a project was originally planned to be accepted in June and it was accepted in May or April, you end up with a pretty nice benefit in terms of amortization for an extra month or two. And it's just part of the way the accounting works. But the combination of that big deal, logjam breaking, and also the earlier acceptances of a number of deals allowed us to actually do much better than we expected this last quarter.
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