Question-and-Answer Session
Operator
(Operator instructions) We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Martin Murphy.
Martin Murphy
John, it looks like the quarter was affectively completely in line with my expectations for revenue and also for earnings if we make the adjustment just for the interest income and expense. Was there something in there did you have an FX translation loss? Or, some other type of item that was dragging down that one line item?
John E. Farr
We don’t have a lot of that FX exposure. Are you talking about interest income?
Martin Murphy
Yes I am.
John E. Farr
Interest income is down a little bit from prior quarters mainly because we have purposely shifted some of our investments to more tax advantaged securities and so I would expect that interest income will be less, certainly was less in Q2 than in Q1 for that reason and now with the FED funds rate down three quarters of a point I think we can expect it to go down a little bit more in future quarters.
Martin Murphy
Okay. Thank you John that’s very helpful. My second question was going to be on the operating margins. If we look forward into Q3 and Q4, you’ve been investing so far this year to a point of slight degradation of the operating margins. How do we think that’s going to look in the second half of the year versus the first half?
John E. Farr
Instead of trying to answer that from a margin perspective let me answer it more from an expense or an investment perspective. I would say that right now I would expect that our expense stack would be similar in Q3 and Q4 as it has been in Q2 and Q1. We, like all companies, in the states have a little bit of expense stack pressure in the March quarter just simply because the payroll taxes start up all over again for all employees who haven’t reached the limit so that puts a little bit of burden. But we are – the main message here Mark is that we have room in our P&L to make investments for the future and we’ve been doing so and investing, net investing in initiatives that described today in the call both on DataSynch and DataWrap and DataRush and more to come. We’ve proven our ability to manage our investments certainly over the last 28 quarters and we expect that we would continue build that into the future.
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