Question-and-Answer Session
Operator
Thank you. (Operator Instructions). And our first question comes from the line of Simona Jankowski with Goldman Sachs.
Simona Jankowski - Analyst
I just wanted to find out if you're seeing any evidence of revenue synergy so far, and I realize it might be early, but it just struck me that you added 40 new customers, which is about how much you normally add, and so it didn't seem like you had yet tapped into a new customer base through Covergence.
Andy Ory
We absolutely are. You know, we closed the transaction on April 30th, and the mean time sell of our product, the lifecycle of the sale is usually longer than 60 days. So we might not see the revenue impact or the acquisition of new customers that we talk about. But in terms of activity, excitement and what we believe will lead to increased revenue in Q3 and beyond, the synergies are very, very real. Not only are we addressing a new market, but we are driving demand for our access service providers, who see us as increasingly strategic as part of them offering their services. So it's really stimulating both markets.
Simona Jankowski - Analyst
Then I know I've asked you this question in the last couple of earnings calls as well, but your deferred revenues are now up over 60%, year-over-year, and I realize there are some elements in there from Covergence, and some large one-time deals, but, you know, compared to your full year guidance of up only 20%, can you just explain the disconnect? Are you just building up more of a backlog, and if that's the case, how is your relationship with your customers changing so that to allow you that kind of control over the timing of shipments and project completion?
Andy Ory
Maybe Peter and I should take a whack at this together. My feeling is, I mean, first of all, we always want to try and improve our visibility, so that we can run the business properly and articulate fairly what is going on in the business. And so part of the goal that I talked about in the closing paragraph I had, one of the goals was to continue to improve visibility. At the same time, our business is moving from a book, ship and bill to a backlog-driven business.
And as it moves that way, the deferred revenue largely is just annualized service revenue being recognized ratably over the period that it's being delivered. And the product element is sort of like a catch all or a buffer for stuff that ends up, you know, where you might have shipped it and received some revenue, but we haven't really been able to satisfy our revenue recognition and that will happen shortly. I wouldn't look at our deferred revenue for the kind of business we run, as necessarily a harbinger of anything other than just business as usual.
- To read the full transcript on Seeking Alpha, click here »
