Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Mark Marostica - Piper Jaffray.
Mark Vitovitch – Piper Jaffray
It is actually Mark Vitovitch for Mark Marostica. I just had two questions. As it relates to deferred revenue, can you remind us again how you account for that line item and also explain the sequential drop that we saw in Q3 and then, secondly can you elaborate on the visibility both in your R&D and discretionary segments of your business and specifically if you have seen any cancellations or delays; specifically in the R&D side? Thanks.
Ofer Segev
So, on the deferred revenue, the drop is mostly due -- probably I don’t have the exact number in front of me, but mostly due to the SAP sales because this is where we have the prepaid maintenance revenue, and this was taking off when they purchased the unit. Regarding visibility on the SPL business, the R&D we did not see any significant or I would say any change in the third quarter. We didn’t have any cancellations, we booked new deal and actually we believe that this turndown of the economy is probably a good opportunity for us as this offering is an incentive offering.
Mark Vitovitch – Piper Jaffray
Okay. Just on the deferred revenue side, can you just quantify the SAP impact?
Ofer Segev
Well, I will have to get back to you. It’s probably close to $3 million, but I don’t have the exact number in front of me.
Mark Vitovitch – Piper Jaffray
Okay and excluding that then can you be a little more specific as to what accounted for the sequential drop?
Ofer Segev
That is probably just the timing of prepaid or advances from customers that we get and we start to utilize on projects. Apart from the software maintenance, most what you see there is really advances from customers.
Mark Vitovitch – Piper Jaffray
Okay and just one final question; you mentioned $6 million - you collected quarter-to-date from prior from Q3 deals, can you just quantify what concentration that $6 million is of, what you have outstanding in terms of collections for Q3?
Ofer Segev
Well, again we saw from many public companies that want to look better on the balance sheet at the end of the quarter, just paying a few days after the quarter. So again, the $6 million is on top of what we really collect. Just the average difference above the normal collection, the first 10 days after any quarter, which actually I think it shows that we don’t really have any collection problems. It is just that some people are trying to play the number to get on the balance sheet.
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