Dun & Bradstreet Holdings, Inc.
Q1 2011 Earnings Call Transcript

Published: 29 Apr 2011

[Operator:]

Good morning, and welcome to D&B's 2011 First Quarter Teleconference. This conference is being recorded at the request of D&B. If you have any objections, you may disconnect at this time. [Operator Instructions] I would now like to turn the call over to Ms. Kathy Guinnessey, Leader, Treasury and Investor Relations. Ms. Guinnessey, you may begin.

[Kathy Guinnessey:]

Thank you. Good morning, everyone, and thank you for joining us today. With me on the call this morning are Sara Matthew, our Chairman and Chief Executive Officer; Manny Conti, our Chief Administrative Officer; and Tasos Konidaris, our Chief Financial Officer. In a moment, you will hear commentary on our first quarter 2011 performance, as well as our outlook for the remainder of the year, and then we'll open the call for your questions. To help our analyst and investors understand how we view the business, our remarks this morning will include forward-looking statements. Our Form 10-K and Form 10-Q filings, as well as the earnings release we issued yesterday, highlight a number of important risk factors that could cause our actual results to differ from these forward-looking statements. These documents are available on the Investor Relations section of our website and we encourage you to review the material. We undertake no obligation to update any forward-looking statements. During our call today, we will be discussing a number of non-GAAP financial measures as that's how we manage our business. For example, when we discuss revenue growth, we'll be referring to the non-GAAP measure, core revenue growth before the effect of foreign exchange, unless otherwise noted. When we discuss operating income, operating margin and EPS, these will all be on a non-GAAP basis before non-core gains and charges. A reconciliation between these and other non-GAAP financial measures and the most directly comparable GAAP measure can be found on the schedules to our earnings release. They can also be found on the supplemental reconciliation schedule that we post on the Investor Relations section of our website. Later today, you will also find a transcript of this call on our Investor Relations site. With that, I'll now turn the call over to Sara Mathew. Sara?

[Sara Mathew:]

Thanks, Kathy, and good morning, everyone. Thank you for joining us. Here's what you can expect on the call today. I will open with a brief overview of our first quarter performance and an update on our Strategic Technology Investment. I will then turn the call over to Manny Conti who will provide you more details on the quarter and our plans to close 2011 on a strong note. I will conclude with a review of our guidance and then open the call for any questions you may have. Now before I discuss the quarter, I'd like to provide some color around the recent events in Japan. First, I'd like to thank the leadership team in Japan for their tireless efforts to secure the health and safety of our team members and their families. I'd also like to express sincere appreciation to our partner, TSR, who has been in the forefront of the relief efforts in the region. I'm happy to report that all our team members are safe and our offices did not suffer any damage from the earthquake and tsunami. Manny will discuss the impact on our operations in more detail in just a minute. With that, let me discuss our Q1 results. Overall, our first quarter was in line with our expectations and we are on track to meet our guidance for 2011. More specifically in Q1, core revenue grew 5%, operating income grew 1%, EPS was flat to last year, and we generated $190 million -- $119 million of free cash flow. Regarding revenue, our Q1 results showed a 2-point deceleration after the strong close in the fourth quarter of last year and mostly due to the North American business. You should know this was anticipated when we set guidance for 2011 and we expect North American revenue to improve in the second half as we gain traction from the new products in the marketplace. For the full year, North America will deliver low single-digit revenue growth, unchanged from the expectations provided earlier this year. Moving to our Strategic Technology Investment, we made excellent progress in the first quarter. As a reminder, there are 3 components to this initiative

[Manny Conti:]

Thank you, Sara, and good morning, everyone. Before I start, let me remind you that starting with the first quarter, we are making a change to our external reporting to increase transparency. As such, we are now reporting international results in two separate segments

[Sara Mathew:]

Thank you, Manny. So to conclude, we are on track to meet our full year guidance. We expect our performance to improve as the year unfolds, as our pipeline is strong and we gain traction from the new products. Once again, we expect the second half of the year to be better than the first half of 2011 and we are reconfirming guidance for the full year. Specifically, core revenue growth of 5% to 8%, with double-digit growth in international and low single-digit growth in North America; operating income growth of 2% to 6%; EPS growth of 6% to 10%; and free cash flow between $240 million and $270 million. And with that, Manny, Tasos, Kathy and I will be happy to take your questions. Operator, could you open the lines please?

[Operator:]

[Operator Instructions] Our first question comes from Michael Meltz from JPMorgan.

[Michael Meltz:]

Thank you. Two questions for you. I appreciate the detailed guidance. I understand that you're guiding to -- you talked about the full year, you talked about improvement in the second half. Do you expect organic revenues better in Q2 than you did in Q1, Sara?

[Sara Mathew:]

I would say yes, we should see a gradual improvement. And as you know, Michael, most of the organic trends in the company come from North America. So we do expect an improvement. And we expect this to sustain all the way into the second half.

[Michael Meltz:]

Okay, and then the migration that you were talking about with the 80-20 and then the marketing migration, are those at larger customers? Can you give a little bit more context around the types of users for those products and how exactly you're doing it?

[Sara Mathew:]

Sure. So they are large customers. So dnb.com, as an example, has several very large customers and you know we've migrated that to the new mydnb.com. If you haven't had a chance to look at the 2 products side by side, the next time you're in the offices, I want to make sure we do give you a chance to look at it. And that's the portion that has gone really well. Hoover's is another example. So it is a combination of very large customers and there are also what I would say midsize and small customers. And it is those 20% of our platforms that we actually want to shut down completely, and I would say that was a part of the program we had to worry about the most. And we are ahead of schedule and the first half has actually gone really well. And we're beginning to see usage improvements. In other words, people using more of the new products and feedback is extremely positive. And the last piece we don't believe should be a big issue, we should be pretty much done with that by the middle of '12.

[Michael Meltz:]

Okay, and then the last question. The comment, Manny, that you made about Japan, I assume that the margins -- I don't think I understand the comment fully. Where are the margins in Japan? Are you talking about an EBIT drag of up to $5 million? I mean that would imply -- I don't know. How much of a revenue drag would that imply is the question. And what is it even predicated on I guess is more of the question.

[Manny Conti:]

Yes, sure, sure. So some context, as we said, our first quarter results were not impacted due to the fact that the close of Japan -- the close of international is February 28. So we started obviously to track what occurred and how customers were using our products right after the earthquake. And we did see a couple of days after the earthquake some impact. We've begun to see a recovery in how customers are using this but still slightly below what we've seen prior to the earthquake. So we're projecting in the moment at or below $5 million impact due to the fact that customers would use less. And this is mainly due to the fact that we were looking at two pieces

[Sara Mathew:]

And, Michael, if I may just help with a little bit added perspective. Japan is about 4% of our business. So you want to think of it in the $70 million to $80 million range. And most of that operating income of at or below $5 million is mostly top line related. So it flows right all the way down to the bottom line in terms of impact. We had actually hoped to turn Japan around. So we were aggressively working execution and this has really not helped. It doesn't change our guidance for the year. If we see any impact, we'll see it mostly in the second and third quarter in international. But it will not change our guidance. We believe that's well within the reach of what we normally see in any given year.

[Michael Meltz:]

And Sara, I guess your point, it's because it's a fixed cost business, $5 million drag is essentially revenues just go away and EBIT drops to the bottom line. We don't gross up the international margins and assume that this is like a $20 million or $25 million revenue drag.

[Manny Conti:]

No.

[Sara Mathew:]

No, we don't. And remember, this is a joint venture, Michael.

[Operator:]

Our next question or comment comes from Shlomo Rosenbaum from Stifel.

[Shlomo Rosenbaum:]

Thank you for taking my questions. Just some basic questions. First of all, how much did the Australian acquisition contribute to deferred revenue growth? Is it similar to the 1% like last quarter?

[Anastasios Konidaris:]

Yes, even less than that in this specific quarter. So it was a very small piece, less than 1%.

[Shlomo Rosenbaum:]

Okay. And can you just maybe do a little bit of a round-robin in just what's going on in the sales and marketing in the various geographies? You talked a little bit about projects that were -- project spend is a little bit different.

[Sara Mathew:]

Let me take the North America business and then I can ask Manny to add anything on international but I think your question is probably primarily focused on North America. So in the fourth quarter of 2010, we were somewhat surprised by what appeared to be high-propensity dispense by customers. This came fast, furious and towards the very end of the quarter. So we believe that customers, as they were closing out the year, had a lot of visibility into as the amount of money they had and they were actually aggressively pushing projects. And when we saw this happen, including projects we thought would close in the first quarter, eventually close in the fourth quarter because they wanted it faster. So when we were setting guidance, we recognized that some of this would probably come back in the first quarter and it looks like it's pretty much playing out in the first quarter the way we expected. Project spend, just to give you a sense for what it is, is it could be something as simple as getting list of labels to ready yourselves for marketing. In the case of risk, it's project spend that could be around doing portfolio analysis to set credit limits early in the year. This is outside what we would call our ongoing subscription and other efforts. So project spend is the one thing that creates volatility, to some extent quarter-to-quarter. It's not a very large part of our business but it does have the propensity to create 1 to 2-point of swing between quarters and that's what we saw between the fourth and the first quarter. We start in both sales and marketing and in risk management projects as well. And you should see it in your segment reporting.

[Shlomo Rosenbaum:]

And just one other thing, DNBi Pro is just launched and I know you guys have been working on that to address that area of the market. Can you discuss that some of the resources are dedicated to the product and you talked about initial sales are good. Are there any way to quantify that? You have the revenue metrics or any way to describe how that come out?

[Sara Mathew:]

Sure. So I want to remind you that all these new products are going to be ratably recognized so you won't see the benefit really in revenue until you get to the latter part of the year. But let me talk about DNBi Pro. So remember the positioning. This was to close the competitive gap we had at the low end where the DNBi product functionality was too much for a small business owner or midsized business owner. And we also had competition coming in there with products, which was -- they didn't have a full data, were significantly less expensive. So DNBi Pro is primarily focused on new customer acquisition and win backs in this space. It is a stripped-down functionality and in the first quarter, as a reminder, we launched it in March, and so in one month, we had 140-ish sales. By the end of April, it's already 200. So we really like the traction we are seeing. In terms of pricing, we are getting pricing better than we thought. I am reluctant to disclose pricing for competitive reasons even though I know exactly what it is. And if you think about close rates, with the speed with which our sales people can close a product, because it's a small dollar item, it's much faster than we thought. So the value proposition is playing really well and we're providing a product that works for this space. We will know a lot more in the next quarter or 2 and we'll continue to give you updates every quarter. But it's a good start and it allows us to penetrate that area where our penetration is well below 5% and it's a place that we have a right to be and customers in that space would like to partake the D&B product but just don't have a price point where they can make it work.

[Shlomo Rosenbaum:]

Can I just put in one more?

[Sara Mathew:]

Sure.

[Shlomo Rosenbaum:]

Okay. Can you talk about, a little bit about the change in the sales force composition? You've been focusing on changing the culture of a lot board to kind of a hunter culture. Are there any updates on that front?

[Sara Mathew:]

The sales force culture? Well, here's what we are doing. So we have reorganized our sales force really into three channels, what I would describe as large, what we call midsized and small. And this is really tweaking the model I described in the past to you where we had strategic customers, which were 40 and spent $5 million at plus; commercial, which was anywhere from $100,000 spend to call it $1 million plus, which is where the bulk of our customers who are with 4,000. We're taking that commercial channel and taking the Tier 1, the very top end of it, and moving it up to what we're calling our large customer segment. So strategic is going to become even larger. It's going to go from call it 40 customers to maybe 400 or in that range. And commercial, which was 4,000 will come down into a couple thousand and then you'll have of course the vast majority of our customers at the small end. We are going to have a range of products and you're only seeing the beginning with DNBi Pro. Manny touched on a test call, the metered DNBi. With the improvements in C&I loan volume, we believe this is possibly, an opportunity to get the last few transactional holdout, as well other segment of customers who liked to essentially transact with us versus having subscription plans. And remember, DNBi Pro, this is just the beginning. You will see more products continue to attack the space so we can get our risk management business back to what we will call low single-digit growth in 2012 so that they can stay on track relative to our 2012 expectations.

[Operator:]

Our next question or comment comes from Carter Malloy from Stephens.

[Carter Malloy:]

Just returning back to your comment on C&I loan volumes. I mean, I guess they're still flatfish year-over-year but they did accelerate out of 4Q and so I'm just curious on the divergence between C&I loan volumes and U.S. RMS being flat. And then maybe the answer to that, that may answer my real question is the DNBi. And if so, can you guys give us deferred revenue gross in the U.S. broken out?

[Sara Mathew:]

Well, I'll ask Tasos to give you deferred revenue growth and then I'll come back and take to tackle C&I.

[Anastasios Konidaris:]

The core revenue growth in North America in Q1 was up 3% when we adjust for the divestment of SaaS. As you know, it took place last year. So up 3%.

[Carter Malloy:]

Is it most of that U.S. deferred growth within DNBi or is it safe to assume?

[Anastasios Konidaris:]

DNBi is the vast majority of where the deferred revenue growth is coming from but also we know we have our other non-DNBi subscription products and to a lesser degree the S&MS Optimizer.

[Carter Malloy:]

Okay, thank you so much.

[Sara Mathew:]

Perfect. So getting back to C&I loan volumes, on a year-over-year basis, so if you look at C&I loan volumes, they bottomed out comments in the May, June of last year timeframe. And if you look at the trends, they stayed flat and it's only turned positive in the last few weeks. But if you look at where, we are with still 25-or-so percent below, whatever called, still with the 2008 peak, we're coming out of it and that's a good sign. You should know there is a lag between our RMS revenue growth, as well as the C&I loan volume and that's mostly because our Risk Management business is ratably recognized so it takes a while before you see the results in -- show up in revenue. And just remember, when the C&I loan volume was down 25%, our Risk Management business was not down 25%. It was down in the mid-single-digit range and that's part of what the ratability does. So in general, I would say, we'd performed better than the C&I loan volume trends. I would say, you answer the question appropriately when you said it is largely driven by DNBi. But as we come out of this environment, we do recognize we have to push for new customers. We have to start to tackle the segments of growth that we could ignore because of the so much growth coming out of the business we had and that's really what all the new innovation is targeted at.

[Carter Malloy:]

Okay, great. And then in your European business, you guys touched a little bit but can you go a little deeper as to what drivers are there? It's good to see that business doing well. And you said a lot of cross-border but are there any specific geographies that you're seeing really recover there or is that just sort of general strength around that execution?

[Manny Conti:]

Yes. I would characterize it as you did and the fact that cross-border demand is the core driver of growth in our European markets. And we do experience strong growth as relate to value-added products in those markets. I did mention that we experienced very good growth in all of our markets outside of the U.K. The U.K. didn't do as well as we've liked but in general, Europe, main growth drivers around cross-border demand and value-added products.

[Operator:]

Our next question or comment comes from Dan Leben from Robert W. Baird.

[Daniel Leben:]

First, I just want to start in the North American risk business around DNBi. We continue to get the mid-single-digit pricing lift every year. I was trying to get to understanding of if you're getting that type of pricing and we're only seeing a couple of percent of growth in DNBi, what's the disconnect? Are there some customers slipping, going back to transactional or where is the disconnect on why that's not growing?

[Sara Mathew:]

If you think about it, it's primarily penetration. We're tapped out on penetration. And our retention is in the 90s. So we have very, very good retention but we recognize that the contribution of DNBi, relative to say 2007 and 2008, is continuing to move down and it will continue to move down which is why we want to push for penetration into new customers with DNBi Pro, the metered DNBi as the C&I loan volume improves. And so we're still going at this, I would say, with the existing DNBi base, growing in the mid-single-digit range, we don't retain all of them but it's in the 90s, which is very good, and then all of the new products. So you are correct in terms of what is really happening in terms of DNBi. And are some moving away? Yes. Some moved back to metered and giving them the metered version actually helped in terms of continuing to push the Risk Management franchise forward.

[Daniel Leben:]

Okay. And then I guess, the second follow-up question on this is, as we look back over the last several years, you've always had kind of a big first quarter step up in the run rate of DNBi presumably from customers who decide in new year we're are going to switch. Instead of paying transactional this year, we're going to go subscription. We didn't see that. We actually saw a modest sequential step down in DNBi. What's the driver behind that? Was it just full penetration?

[Sara Mathew:]

All right. If you look at penetration, Dan, you'll start to see that our penetration is really kind of around 60%. So if you look at our business, you would see 60%. We believe we can go up further as we penetrate with new products. We can move that up a little bit more. But beyond that, you've got projects and projects tend to be somewhat seasonal depending on customer visibility and the spend. And then you've got the transactional holdouts, which as I said we are tackling. And that's the reason why as Manny said in his prepared remarks, we see either the Risk Management business kind of stays flat for the next couple of quarters before you start to see growth with the new products towards the end of the year and into 2012.

[Daniel Leben:]

Okay. And you mentioned that you have the transactional fees out there, those things in fall and then now, you talk a lot about how that was much stronger in the fourth quarter than you anticipated. How do you get comfortable that the organic growth is going to ramp up in the back half when you've got some of that work from 2010 in the comparison?

[Sara Mathew:]

I think we'll have much better products. We're coming out into the final phase of what I would describe Max CD. And we're bringing products out early. So you see in DNBi Pro, we are having the metered version. And like I said in the second quarter, maybe there will be more that we will be able to talk about. So you should know, we see this. We're on it. It is carefully thought through as we developed our guidance for 2011. And you'll really start to see the North America RMS business start to move in 2012 as we start to get the benefit of all of these. Now, this is on the risk side. On the sales and marketing side, we actually have a one-year headstart over risk management because remember, we started testing the D&B360 product much earlier. We've pretty much been -- we're in test mode with D&B360 all of 2010. The traction we're getting in the marketplace is very strong. The interest is very high. The pipeline is strong and growing and our sales people are really excited. You heard about the sales force partnership. You heard about the Microsoft Dynamics partnership. And our intent is to continue to add more people in the CRM space with this product. And since D&B is going to be native within that application, it allows us to get our data to places where previously, we would not be able to do it because it would have to be our people selling to somebody else and to somebody else's platform. That's probably the significant shift.

[Daniel Leben:]

And then last one from me, just stepping back on a high level strategically. We look at the organic growth being flat this quarter. Mid-cycle part of the economic cycle, looked back to where you're at last cycle and there was mid-single-digit growth. Has there been a step-down in the secular growth here? How do you think about the long-term opportunities for secular growth?

[Sara Mathew:]

I feel very good about the long-term opportunities because one, the C&I loan volumes improving and that's always good because it also helps customers feel better, because at general environment improving helps our business. We don't have a cyclical business in that. It didn't go down this far, it doesn't come up as high, but essentially, we move with that trend. So I would have to feel very good about the long-term cyclical trends and once we get Max CD completed, data selection will be done by the end of the year, you're going to see us dramatically accelerate the pace at which new businesses are actually covered, updated and our business will essentially go through on demand as needed in whatever application is required. Today, I am not able to do that because it would cost a tremendous amount of money to connect my data with its legacy business to what customers want. So that's the reason why we're optimistic about the future and we recognize and we did when we gave you guidance for 2011 and then we told you back in 2010, that '10 will be a tough year, '11 will be better than '10 and if '12 is when we will really start to see us get back to the sustainable growth. That's still the path that I see right now.

[Operator:]

Our next question or comment comes from Peter Appert from Piper Jaffray.

[Peter Appert:]

Sara, on the 200 users of Pro that you mentioned, are all of these new customers and how do you think about the potential risk of DNBi customers migrating down potentially to the Pro offering?

[Sara Mathew:]

Yes, in terms -- the small business space, we are so underpenetrated. So several of them are win backs. We know that for sure. We know about 25% to 30% are win backs so they were all D&B customers who came back. And we are tracking that closely because win back is an important metric for us. In terms of migrating down, we're not concerned, because we've actually shared DNBi Pro with our DNBi customers and it would not meet their needs. And the best way, Peter, for you to see this is we almost have to show you these products as to show you DNBi and you have a far more sophisticated, as I would describe, credit professional with DNBi. They like detailed trade insight. They like modules. They do portfolio analysis. DNBi Pro is more to the small and the low end of the middle mid-size customer end where you don't have credit department. You don't have credit professionals. You have what I would describe as a generalist and they want to be able to be confident when they make their decisions. So we have lights in green, red and yellow to help people make decisions. So with green, you can pretty much just make your decision. If it's yellow, you may want to decide how you want to make the decision and in that case, sometimes they want collateral, sometimes they want more. If DNBi customer is dealing with a much larger portfolio, you will not be able to do it this way one customer at a time. So you want to think of DNBi Pro is our approach to segmenting the risk market so that we can go after each element of it and partake in all parts of it, where previously we had seeded some sections of it. Does that help?

[Peter Appert:]

Yes, that's very helpful. And then, I guess somewhat related to that, Sara, just can you give us a snapshot of what you're seeing? If there's anything new or interesting going on in terms of the competitive dynamic more broadly within the risk business?

[Sara Mathew:]

Sure, the competitive. The competition has been making a lot of noise. So you should know what we did in the first quarter, we got an independent third party to actually randomly pull reports so they would not be biased by D&B and they looked at Experian and Cortera and just at a plain comparison of data, well, we have about 30% more coverage than Experian and about 80% more coverage than Cortera. In terms of trade insight, we have 8 times the trade insight and this is from a random sample of reports that we pulled. And we actually started to see some serious issues with some of these competitive reports relative to us. Now, for my perspective, this was just to confirm where we are today. This does not talk about where we will be once our data supply chain is completed. When that happens, we will just widen the gap that we have and this was almost designed to help arm our salespeople so that they can actually handle what has been a pretty significant competitive pressure down at the low end where we have less pipe share and where competition is more active with a much lower price. And that's also connects back to them, the earlier in DNBi Pro.

[Peter Appert:]

That's great, thank you. And then just the last thing, I'm wondering if in the context of the migration to the upgraded offering next year in terms of realtime data et cetera, do you see that as a pricing opportunity potentially or is it more about penetration and new customer adds?

[Sara Mathew:]

Well, it's a segmentation opportunity for each segment of customers who don't want visibility into that spend, most DNBi customers want visibility into that spend that's why they lock in the spend upfront and they don't have to worry about it. And also, to take advantage of the improvement in the C&I loan volume. With today, a customer who wanted to transact with us will have to go with our legacy products, which is an annual program that is neither realtime nor does it have all the functionality of DNBi and all we're trying to do is say, "Look, you can still get the benefit of DNBi." If you want to use a lot, I would not use the metered version because you will be paying us significant price premium. So the way we are segmenting this is for those people who really want to come back to the franchise, they want to come back in a small way and overtime, they might actually decide to move up into the DNBi platform. But if they don't, we can actually handle usage on a metered basis and that was essentially again, this is about going after all the segments out there, not leaving any gaps open because we don't have an offering that works for that customer base. We are 100% focused on moving the needle on RMS. We know that, we know we have to do it and they we are on it.

[Operator:]

[Operator Instructions] Our next question or comment comes from Manav Patnaik from Barclays Capital.

[Manav Patnaik:]

First, a few quick questions on C&I loans. So firstly, you talked about the lag between the growth we see in the C&I alignment and how it reflects in your revenues. I was wondering if you could maybe give us a little color on what you have seen in terms of what that time lag typically is. And also if you could just maybe help clarify the metered DNBi product that you talked about and if that is something new and as you said, to leverage sort of the current improving C&I environment. Is that something that you did not do before or is this just sort of an upgraded version of that?

[Sara Mathew:]

Sure. The timeline is on average about 6 months and I'm giving you an average number and the reason is remember, we have contracts that are usually 12 months and they are recognized over that period evenly so if you just do the math, it should be about 6 months. In terms of metered DNBi, if it is new. It is new, because there was only one you could use DNBi and that was with a subscription, it had to be annual, it had to be upfront and it give you enormous visibility into your budgets for the year and we allowed you to have much more usage. So it wasn't quite unlimited but call it unlimited within certain bands. In a metered environment, what happens is as you use it, we would record revenue. In an environment where C&I loan volume is improving, a metered version actually starts to make sense. You certainly would not have wanted it when the C&I loan volume is going down because then you get the metering that goes down with the C&I loan volume. So we think now is the right time to actually introduce it and what we're doing is we're testing it. What happens is if you overuse, you end stand up, you will pay more and over a period of time, we may be able to upgrade you into a subscription program but if you don't, we'll leave you unmetered and you get all the functionality of DNBi but you don't get with our other metered products and that's the reason why we think the time is right now to introduce that version of DNBi.

[Manav Patnaik:]

Got it. And I guess talking about subscription, obviously 70%, 71% this quarter in North America. Can you give us some color on what that breaks down internationally and what your general views on the visibility there?

[Sara Mathew:]

Let me ask Manny to talk about break out international.

[Manny Conti:]

Yes. Manav, can you just repeat the question to make sure I got it right?

[Manav Patnaik:]

Yes. Just the subscription, as a percentage of revenue from subscription and sort of the visibility on that front?

[Manny Conti:]

So yes, in our international markets, if you were to look at, in general, unifying that much of the revenue is subscription specifically in the RMS space. This is more true in Europe than it is in Asia Pacific. And then what you'll find in Asia Pacific, we have a little bit more waiting on S&MS products, which has less of a deferred or subscription-based element to it.

[Manav Patnaik:]

Got it. And I guess one last question for Tasos, I guess. If you can just -- what's the total company organic deferred revenue growth, if you can?

[Anastasios Konidaris:]

Yes, absolutely. So the total company organic revenue, deferred revenue growth in Q1 was 5%. So it's pretty much in line with our total deferred revenue growth.

[Manav Patnaik:]

Got it. All right. Thanks a lot guys.

[Operator:]

And I'm currently showing no further questions.

[Sara Mathew:]

All right. Well, I'd like to say thank you for participating on the call. We look forward to talking to you again and then that -- see you in about 90 days. Take care.

[Operator:]

That concludes today's conference call. Thank you for your participation. You may disconnect at this time.