Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from Tom Ernst – Deutsche Bank.
Analyst for Tom Ernst - Deutsche Bank
This is Greg [Don] I’m on behalf of Tom. You mentioned you’re not expecting an immediate improvement in the financial services vertical when you’re factoring your guidance.
But you are looking for $65 million in bookings in the back half of the year. Could you talk about, one, how do you usually see bookings from a seasonal perspective given you’re going into the back half and then two, just assumptions on close rates and how to characterize them?
Steven Springsteel
What we look at when we look at our bookings at the second half of the year is really we’re going to start to see the payback or the payoff from the investments that we started to make in the emerging markets as well as the verticals such as insurance, healthcare and telco that we made at the beginning of the year. So that’s why we feel confident about the bookings associated with the second half.
We do believe the financial services we’ll still continue to do business there as evidenced by the order that we’ve already, the one order that we’ve gotten from Citi so far this quarter. We’re just not factoring in a wholesale turnaround in financial services by any means.
Analyst for Tom Ernst - Deutsche Bank
You mentioned the maintenance component at roughly $40 million a year on an annual run rate basis and looking at the stock and the cash balance, the stock is trading just over two times maintenance right now, which is relatively low compared to traditional software peers. Can you talk about the renewal rates on those maintenance contracts and what you’re seeing and the kind of visibility you have to that revenue stream?
Steven Springsteel
The renewal rates we see are pretty high. What we do, our applications are very sticky, they’re typically very mission critical type applications. Where we will not see a company renewal will be if the company was potentially acquired and they get their system migrated to whatever the acquirer’s system is.
And we have seen in the last five years, we’ve seen one or two instance where a customer has opted not to renew maintenance because they decided to stay on an older version because it was running fine and they had no intention of attempting to upgrade. But those renewal rates are actually pretty high, they’re in the 90 percentile range.
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