Question-and-Answer Session
Operator
Our first question is from Jerry Herman – Stifel Nicolaus.
Jerry Herman – Stifel Nicolaus
First question about orders. It would appear, based on your commentary and what you said about AR, that order rates actually accelerated in the quarter, which would suggest a pretty strong June. I’m wondering if there’s any fiscal year-end influences on the June month typically?
Also, you didn’t reference your 15% to 20% order increase expectation that you thought might be feasible earlier in the year. I’m wondering if you could maybe comment on that as well.
Steven Schmidt
Jerry, there’s no question that every year we see some influence from the budget cycle or the end of the school year seasonality. Schools do tend to plan for the following year, use up unused budget monies. May and June have always tended to be somewhat strong months, but it was far more robust for us this year than in the past, and we expected that.
We knew that with the subscription model that we’re undergoing, subscriptions are more likely to be renewed or adopted around that school year budget cycle. And it’s exactly what we saw during this quarter, with June definitely being the strongest month of the quarter, and more so than we’ve seen in the past.
Of course, we’re certainly hoping that that momentum carries us well into the third quarter, which we’re expecting to be very strong. As far as the overall yearly forecast for orders, I think we said last quarter, given the slow start that we had in Q1, that the 15% to 20% for the year was likely to be too aggressive. I think that’s continuing to play out as we expected.
I don’t think we’re in a position yet to be able to forecast the year with any certainty, as the third quarter is really going to be extremely important for us. The momentum continues as we saw in the second quarter well into the third quarter, and we expect to have a very good year, but not ready to quantify that precisely in terms of the order growth.
Jerry Herman – Stifel Nicolaus
Did you say the momentum has continued into the third quarter or if it continues into the third quarter? I am sorry.
Steven Schmidt
I think, I said if. But it certainly has shown every indication it’s continued to be strong right into the third quarter.
- To read the full transcript on Seeking Alpha, click here »
