Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from the line of Abhey Lamba.
Abhey Lamba – UBS Securities
Can you just elaborate on your pipeline comment, how does the pipeline going into Q2 now look versus your typical Q2? And the coverage ratio, what gives you confidence of increasing coverage ratio in this quarter?
Ron Hovsepian
Yes. When I look at the overall pipeline for the exact same period of time compared to the last year in this quarter, we are slightly ahead of our actual pipeline in a comparative basis. So I actually feel good about the amount in the pipeline and the amount that we have in there, we're running a little earlier on the committed, and we are in a better position this year at this time in terms of committed. Now that being said, I'm not misled by the fact that the last two weeks of our Q1 deteriorated is where we really saw the pipe fall apart and the coverage fall apart. So I do feel better about the quality of the coverage that we have, I feel better about where we are in the committed compared to last year at this particular time, but I'm not naive to the fact that we could have deterioration like we did the last 2 to 3 weeks, because that is really where our quarters derailed. Everything else look pretty much historically similar to those last few weeks and then we really felt it at the last two weeks in January.
Abhey Lamba – UBS Securities
Great. Thanks. And lastly any comments on how sustainable the margins are Q1? Really it is a very impressive performance on the margin. Were there any one-time issues or one-time benefits in the quarter that could reverse as you go through the year or you feel pretty good about the quarter margins?
Dana Russell
Yes. There's a couple of one-time items in there, some expenses that were small. I think we feel good about the expense structure in comparison to the revenues. We’ve certainly positioned ourselves for some turmoil in the market. But you can see from the prepared comments there that we do expect the expense structure to increase, second, third and fourth quarter. There is a number of reasons for that. First of all, we would have expectations that the invoicing will increase and most of our invoicing or a good portion of our invoicing occurs in the second half of the year, it is weighted towards the second half of the year, and that will drive royalty costs for some of the things that we purchase, technology, some of our technology purchases. There will also be some discretionary spending increases as well as the normal things like payroll taxes and travel which are typically low because of the way our first quarter ends. Our travel is at the lowest in the first quarter due to the holiday season and then we have also got the impact of payroll taxes. So for those reasons we are going to see some increase in expense. But I think we remain committed to what we said, double-digit operating margins for the year, and we will continue to carry out like you have seen here in the first quarter.
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