Question-and-Answer Session
Operator
(Operator Instructions). We will take our first question from Ashwin Shirvaikar from Citigroup. Please go ahead.
Ashwin Shirvaikar - Citigroup
Thank you. My first question is, having signed so many clients and contracts in the last two, three quarters, why can you not provide even sort of a loose full-year outlook? How much of the decision to not throw out a full-year outlook is related to currency versus market conditions?
Dov Baharav
Thank you, Ashwin, for the question. And yes, we see encouraging signs in the market. To say, we don't see cancellation of the current activity. We signed many deals in the recent few months and even in the recent few weeks. However, the business we are finding might provide us confidence regarding Q1 and Q2, but not Q3 and Q4.
And given the fact that the world is facing such unbelievable financial turmoil and we see signs of a global recession, I would say that there is uncertainty what will happen in the marketplace. And at this point to provide the full-year guidance would be, I would say, too much, and we do not feel comfortable with giving it.
What we try to share with you is, first of all, that the Q1 results was affected mainly by the foreign exchange. Other than that, it would be in line with Q4. And moving forward, as we said, the jury is still out. I'll think that will shape up. We are managing the business and controlling and managing our expenses under the assumption that we should generate the profitability at the same level as Q4, given the new dollar revenue that we have in Q1.
Ashwin Shirvaikar - Citigroup
Okay. And then a follow-up question on the balance sheet hedging that you mentioned. I know you had a program, fairly extensive hedging program, both for earnings and for balance sheet, if I'm not mistaken. So, what changes are you making?
Tamar Rapaport-Dagim
First of all, historically, we're more focused on the hedging of the net exposure of cash flow coming in under different currencies. With different changes historically of 1% to 3% per quarter, the reevaluation of the balance sheet was not a material amount on a quarter-to-quarter basis.
However, with the drastic changes in currencies that we've seen since September, we have decided to extensively increase our balance sheet hedge in order to greatly mitigate for such effects going forward. Unfortunately, even with the best hedging program, we cannot provide a fully safe insurance against the impact that the currencies will have. But I believe that we are much better covered today than we were before this crisis happened.
- To read the full transcript on Seeking Alpha, click here »
