RealPage Inc
Q3 2016 Earnings Call Transcript

Published: 4 Nov 2016

[Operator:]

Good afternoon and welcome to the RealPage Third Quarter 2016 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference call over to Rhett Butler, Vice President of Investor Relations. Please go ahead.

[Rhett Butler:]

Thank you, Gary. Good afternoon, and welcome to the RealPage financial results conference call for the third quarter ended September 30th, 2016. With me on the call today is Steve Winn, our Chairman and Chief Executive Officer; and Bryan Hill, our Chief Financial Officer and Treasurer. In our remarks today, we will include statements that are considered forward-looking within the meaning of the federal securities laws. In addition, management may make additional forward-looking statements in response to your questions. Forward-looking statements are based on management’s current knowledge and expectations as of today, November 3rd, 2016 and are subject to certain risks and uncertainties that may cause actual results to differ materially from the forward-looking statements. A detailed discussion of such risks and uncertainties is contained in our quarterly report on Form 10-Q previously filed with the SEC and our earnings release and materials distributed today. RealPage undertakes no obligation to update any forward-looking statements except as required by law. Finally, please note that on today’s call, we may use or discuss non-GAAP financial measures as defined by Regulation G. The GAAP financial measure mostly directly comparable to each non-GAAP financial measure used or discussed and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP measure are included in today’s earnings press release. In addition, please reference the explanation of non-GAAP financial measures, section of today’s earnings press release for more information. With that, I’ll hand the call over to Steve.

[Steve Winn:]

Thanks, Rhett. Good afternoon, everyone, and thank you for joining us today for our third quarter earnings call. Total revenue was $148 million for the third quarter, growing 22% over the same period last year, driven primarily by strong subscription revenue growth of 24%. Profit performance continued to accelerate, increasing 230 basis points over last year. With each quarter, property owners and managers utilize more of our data analytic capabilities to gain information superiority. Our massive database of lease transaction data that underlies our solutions gets larger and more accurate every quarter and we believe is encouraging clients to expand a number of solutions that the license from RealPage. Our data enables clients to transform the operational and transactional elements of their business in order to outperform against their peers. During the third quarter, we saw continued evidence of clients deploying multiple solutions as part of our broader suite sale. We believe the industry is awakening to the necessity of accelerated technology adoption and I would like to share a few examples with you. As we look at these examples, it’s important to note that they represent all three major multi-family client segments. Enterprise that’s owners with 20,000 units or more, corporate that’s owners with 5000 units to 20,000 units under management, and SMB owners with less than 5,000 units under management. For our top enterprise segment, we recently won a significance suite deal with an NMAHC top 50 client managing over 34,000 units. When I use the term suite, I’m referring to a bundle of multiple product centers that are sold in a single package. After extremely thorough due diligence process, the client chose to begin deploying over 20 product centers as part of a single suite. Starting RPU for the deal was over $50 and we expect that this will grow substantially over time, as some of our more expensive solutions are deployed after the initial rollout. RealPage accounting business intelligence and performance analytics were instrumental differentiators that drove this sale. The client is eager to acquire more fee management contracts by leveraging the power of our data through our performance analytic benchmarking to highlight the outperformance that they’re able to drive for their property owners. For our corporate segment, we recently won a large deal that included over 15 product centers as a single suite. This suite sale brought the clients’ RPU to nearly $80. The client who manages over 8,000 units said the business intelligence and enterprise accounting solutions were the key differentiators in helping them decide to adopt RealPage in a more meaningful way. Lastly, we have a lot of activity in our SMB segment this quarter. Two new loop logo clients aggregating over 7,000 units and one existing client with nearly 5,000 units all plan to deploy a significant number of product centers as part of a suite. Each client is deploying initially at least 14 product centers with one client agreeing to deploy almost 20 product centers. The two new logo clients have a starting RPU of over $50 and the existing client has an RPU of over $90, which is up nearly 300%. In all of these suite deals, each client referred to the power of our data through the BI Platform that we offer as one of the key differentiating factors in the sale. One client described it by saying and I quote that it’s critical to have the BI functionality that allows us to not only view easy to consume dashboards of portfolio performance with drill down functionality to the asset level but also to benchmark our performance with peers in our markets and nationally. No other provider was able to match the suite and the data that RealPage could provide. So we feel this is great news from a client perspective then underscores where we have invested and the data advantage inherent in our platform as well as our ability to bundle multiple product centers into suites. Now I’d like to share with you some details about the rental housing macro environment, our individual product performance and salesforce productivity during the quarter. Our MPF research division reported that occupancy for the third quarter was 96.5%, up from 96.2% in the third quarter last year. We are just shy of an all-time occupancy peak of 96.8% which was set in the tech boom period in 2000. As Greg Willett our Chief Economist has said many properties, especially communities at the mid-tier price point are completely full. While, an upturn in high end deliveries is yielding more product availability in select spots mostly projects are moving quickly through the initial lease-up process. Third quarter rent growth on average across the country was 4%, down from 5.6% growth in the third quarter of last year. Rent growth remained strong compared to historical rent growth with Class B inventory being the primary driver behind the continued strength. Ongoing building remains in line with the very high levels posted over the past two years. Properties totaling over 560,000 units are under construction in the nation’s 100 largest metros. Product completions in calendar 2016 are still set to top 300,000 units. The big picture remains healthy, but it is important to recognize that a broad downward shift in momentum is beginning to play out in certain markets particularly on the West and East Coast. The distribution of good, average and bad performance in markets and categories of rental housing inventory is getting broader. Our interpretation of the data is that this usually indicates the return to a more normal marketplace where there is some sort of penalty incurred from an operational and or investment mistakes as well as product mistakes made regarding four plan mix, location and amenities. We believe this trend could board well for RealPage because operators generally precede a higher need for our products and services when markets weaken. Moving to specific product performance for RealPage, our property management product family grew 11% year-over-year and represents 28% of our total on demand revenue. Within this product family, OneSite continues to be a steady grower in addition to our accounting solution. Importantly, our accounting offering seems to be one of the strong factors for increased suite deals which I spoke about earlier. Our recent acquisitions of Esupply and the smart source solution of NWP continued to help drive incremental revenue traction compared to last year. Our resident services product family grew 50% year-over-year and represents 41% of our total on-demand revenue. Our acquisition of and the NWP, renter’s insurance and payments continue to drive the significant revenue traction here. Since watching our payments platform in 2005, we processed over $85 billion worth of rent payments. Our resident portal also achieves strong revenue growth driven primarily from the industry’s focus on resident satisfaction. Our asset optimization product family grew 15% year-over-year and represents 10% of our total on-demand revenues. Our YieldStar statistical pricing engine and our Business Intelligence Solutions drove revenue strength in this category. As I said earlier, our BI platform is another differentiating factor that seems to be improving larger suite deals. Our leasing and marketing product family declined 2% year-over-year and represents 21% of total on-demand revenue. The contact center was the primary reason for this deterioration. However, we believe the third quarter may prove to be a turning point for the stabilization of this business, which has seem increased competition in macro headwinds over the last couple of years. Specifically, contact center new sales bookings grew significantly compared to last year and represent the highest level since the fourth quarter of 2014. As more and more new inventory is added to the U.S. apartments stock, we believe clients will be more inclined to view the contact center as an indispensable tool to improve lead capture rates. In addition, during October, we entered into a strategic relationship with a Place for Mom, where we expect to collaborate on improving lead transparency, utilizing the nation’s leading referral service and RealPage’s senior living customer relationship management platform. In conjunction with the strategic relationship, we agreed to sell certain assets associated with our senior living referral service to a Place for Mom. Bryan will provide more details on this shortly. However, we effectively sold our senior living ILS assets and transferred certain client agreements because we simply did not see how this relatively small business could achieve our target operating our target margin objectives long term. I’d like to note that we are still very committed to the senior vertical market with solutions that address property management, care management and marketing management pain points for our clients. We’re particularly pleased with the traction we are gaining with our contact center in the senior market. To underscore our commitment to senior, shortly after the quarter ended, we closed a 5,000 unit senior suite deal with the client choosing to adopt seven of our solutions. Starting RPU for this deal was over $65. Our suite was replacing the competitor who could not offer the breath of solutions available from RealPage. Lastly, I’d like to provide an update on the salesforce. Since rejoining the team in August, as our Chief Revenue Officer actually Glover has hit the ground running and we are now experiencing the highest overall booking level since the fourth quarter of 2014. We attribute this to a more tenured salesforce, the strongest products suites we’ve ever offered and increased demand for many of our solutions. From product family perspective, resident services was the primary driver of bookings growth followed by solid growth from leasing and marketing product family as well. We also began the process of optimizing salesforce headcount focusing on high performers while working now under performers. As a result of this and some bookings momentum, productivity levels are improving. I’m pleased with the very positive signs from our salesforce under Ashley’s leadership. In summary, third quarter financial performance was strong with profit levels outperforming our expectations, booking is strength and salesforce productivity are modestly improving. The multifamily market is softening in certain geographic areas which should help us especially in our leasing and marketing solutions and particularly the contact center. We are also experiencing positive signs with the execution of our data centric strategy which we believe is influencing broader client adoption. We’re very optimistic about RealPage’s future, while still early I’m pleased with the early traction we’ve gained in achieving our 2020 objective of $1 billion of revenue and 30% adjusted EBITDA margin. We remain committed to a strategy of balanced emphasis on revenue group growth through organic adoption of our product solutions as well as accretive acquisitions that are mainstream to our product strategy combined with an intense determination to drive profit and margin improvement. With that, I’ll turn the call over to Bryan.

[Bryan Hill:]

Thanks, Steve, and good afternoon, everyone. Our strong Q3 results reflect the power and scale of the RealPage platform, the success of our acquisition strategy, our unique ability to leverage real time transaction data and our large cells footprint which has enabled us to drive client adoption down market. In Q3, we delivered 22% total revenue growth and better than expected profitability. We expanded adjusted EBITDA margin 230 basis points compared to the prior year representing 36% adjusted EBITDA growth and 33% non-GAAP EPS growth. Q3 marks the sixth consecutive quarter of significant margin expansion. This profit performance provides us the confidence to raise our full year profit outlook which I’ll speak to you momentarily. Before reviewing the financial results, I wanted to briefly note our continued strong free cash flow return on invested capital. Year-to-date, this metric was just over 25% underscoring our focus on allocating capital investments that drive the most compelling risk adjusted returns for our shareholders. Our acquisition in cost management strategies are both very much a part of our success. For example, as of the third quarter, NWP run rate EBITDA results in a purchase price multiple slightly under 6 times compared to the 12 times at deal close. This occurred a quarter earlier than we otherwise expected. I am very proud of this accomplishment as our management team has worked diligently to identify redundancies and scale efficiencies. Now providing more details into our operational performance. On-demand revenue for the third quarter grew 21% compared to last year. Our subscription revenue stream grew 24% compared to the prior year and represented 90% of on-demand revenue. Revenue growth was driven by our acquisition of NWP and solid adoption across our property management, resident services and asset optimization product families. ACV or annual client value grew to $566 million or 21% compared to the prior year. Our top 100 ACV clients possess an average RPU of $73. We ended the quarter with 11.3 million units representing an increase of 8% compared to the same quarter last year. RPU was over $50, an increase of 12% compared to last year. Our top 50 RPU clients possess an average RPU of $177. Our average RPU for top clients is penetrated 3.5 times higher than our total company average. The top 50 RPU clients include a diversified mix of enterprise, corporate and SMB submarket clients. Moving to profitability for the quarter. Profit performance continues to exceed our expectations. Efficiency gains across the business are driving adjusted EBITDA margin expansion and significant EPS growth. Gross margin was 63% for the third quarter, down 70 basis points compared to last year. Gross margin was diluted nearly 220 basis points of our acquisition of NWP. NWP processes a higher mix of sub-meter installation revenue that carries a lower gross margin as well as a predominantly domestic work for supporting both resident billing and invoice processing solutions. We expect to improve NWP’s gross margin as we leverage RealPage’s international capabilities. Excluding NWP, gross margin expansion of 150 basis points was driven by scaling efficiency gains across our fixed cost areas primarily within IT, product implementation, product management, and client support. Total operating expense grew 15% compared to last year, and as a percentage of revenue it declined 280 basis points to 42.6% matching the lowest level in company history. With respect to the individual components of total operating expense product development expense grew 14% compared to last year and as a percentage of revenue it declined 80 basis points to a 11%. The primary driver of expense growth was incremental headcount related to NWP our next generation innovation as well as investment in our data analytics solutions for the operating and transactional aspects of multi-family. Sales and marketing expense grew 7% compared to last year. And as a percentage of revenue it declined 270 basis points to 19%. The primary driver of expense growth was incremental cost from NWP combined with higher marketing program costs. Sales team headcount was 375 at the end of the third quarter a 14 sales team members or 4% compared to last year. We expect to incur modest year-over-year growth in our sales team as we exit 2016, however as Steve mentioned we are seeing initial trends of improved productivity. General and administrative expense grew 29% compared to last year. And as a percentage of revenue it increased 70 points to 12%. The primary driver of higher G&A relates to the incremental costs resulting from our NWP acquisition. We expect to eliminate a large portion of these costs as we further integrate the acquisition. In addition, we incurred higher professional fees and related costs from various projects we expect to be non-recurring. Finally, we experienced higher personal cost to support our growth in global footprint. Despite increasing as a percentage of revenue 2016, we expect G&N to contribute to margin expansion in 2017 and beyond as we track toward our 2020 objective adjusted EBITDA margin. Non-GAAP net income for the third quarter was $15.4 million or $0.20 per diluted share. Adjusted EBITDA for the third quarter was $33 million or 22% of revenue representing 230 basis points of margin expansion compared to last year. As I previously mentioned Q3 marks the sixth consecutive quarter of year-over-year margin expansion and we are highly focused to continue to expand margins. Moving to cash and liquidity, cash and cash equivalents were more than $69 million at September 30, 2016 compared to $31 million at December 31, 2015. Cash flow from operations was nearly $31 million this excludes approximately $14 million at tenant improvement reimbursement related to our new headquarters and exhibited strong growth of 56% percent compared to the same quarter last year. Capital expenditures for the quarter were $22.5 million. The primary uses of capital were built out of our new corporate facility and related furniture and equipment. Total CapEx does not reflect the $14 million we received as tenant improvement reimbursement related to our corporate headquarters, which were GAAP financial reporting purposes was included as a benefit to operating cash flow. For the fourth quarter, we expect CapEx to be slightly higher than the third quarter as we complete our headquarters project. As we move beyond our corporate relocation or longer term objective is to manage capital expenditures and no more than 5% of revenue. Now moving to guidance. For the full year we expect to deliver higher profitability than anticipated in our prior outlook from our call on August 3, 2016. We expect to exit the year with full year adjusted EBITDA between a $124.5 million and $126 million. This represents an increase of $1.8 million from the midpoint of our prior outlook. Consistent with our adjusted EBITDA guidance we are increasing our non-GAAP EPS to a range of $0.73 to $0.75. This represents an increase of approximately $0.02 compared to the midpoint of our prior outlook. As per total revenues, we are tightening our guidance to a range of $566 million to $569 million. At the midpoint this represents a growth rate of 22% for the year which is ahead of the 15% average growth rate required to achieve our 2020 revenue objective of $1 billion. Our revenue guidance reflects the sale of assets related to our senior living iOS and referral services to A Place for Mom, which were previously expected to contribute revenue of nearly $1 million during the fourth quarter of 2016. In addition some of these assets resulted in a small pretax impairment charge of $750,000 during the third quarter. In summary, we are very pleased with our Q3 operating results. In addition, as we exit 2016 we are confident in our progress towards achieving our 2020 objective of $1 billion revenue and a 30% adjusted EBITDA margin. And now we’ll open the call up of questions.

[Operator:]

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Brandon Dobell with William Blair. Please go ahead.

[Brandon Dobell:]

Thanks, afternoon guys. Maybe focusing on the revenue growth for a second, maybe some color around contribution from acquisitions, so I guess you both revenue as well as the RPU and unit metrics just a sense of what organic versus acquired was, and if there’s any color on what the fourth quarter should look like from those perspectives too? Thanks.

[Stephen Winn:]

From a RPU perspective were we saw some low in RPU is primarily from an end of the acquisition and it adds about $3 to $4 of RPU is that acquisition only brought with approximately 220,000 unique units, so the remaining units that they have were already clients of RealPage.

[Brandon Dobell:]

Got it.

[Stephen Winn:]

Yes, within the quarter NWP was on track with our expectations would revenues slightly above $15 million. We need to track we were expecting it to it at the point of acquisition.

[Brandon Dobell:]

Got it, okay. And then the other small acquisitions out there, I’m assuming that those were million dollars or less kind of contributions to third quarter and probably fourth quarter as well or is there some seasonality that would make those numbers bigger?

[Stephen Winn:]

There’s kind of seasonality and they contribute much less dollars, pretty small acquisition.

[Brandon Dobell:]

Okay, got it. Okay. From a cost structure perspective you’ve talked about the end of used synergy and your piece energies where should we see continued I guess those call at outsized operating leverage. Should we expect that one a gross margin line or something else going on where you’re seeing the synergies track well or maybe it’s on SG&A just to trying to get a sense of how the different expense line should track relative to the past couple quarters?

[Stephen Winn:]

Right, so for this quarter gross margin was 62.6% on an adjusted EBITDA basis, and we feel and that’s within NWP being diluted by 220 basis points. So we feel that there’s room to expand our adjusted gross margin overtime between 64% and 66%. But that is highly dependent on revenue mix, but we feel like there is that room for leverage within the gross margin line and that leaves the balance within OpEx which we’ll see more margin expansion and sales and marketing, but there’s also much more room left within product development and G&A. So as we as we track to our 202 objective you’ll see some fairly even margin expansion across OpEx, there’s still lots of room for us to expand margins. And a lot of that will come from different [ph] areas one area is continued offshoring, today we’re 42% international mix and I think we can take that slightly higher. But more importantly we’re focused on for the integrating all of our acquisitions and relocating positions into our new headquarters in Richardson and redesigning in many instances the manner which we’re doing work in removing redundancies.

[Brandon Dobell:]

Okay. And then finally should think about salesforce headcount, I may have missed it in your remarks where did you guys finish the quarter and how should we think about how the year ends up in any broad strokes on salesforce headcount looking out 2017, 2018 to be helpful as well?

[Stephen Winn:]

Yes, sure. We finish the quarter with 375 sales team members that represented 4% growth over the prior year, and it’s actually flat with the year-end of 2015. I would expect on a full year basis will be somewhere in a 4% to 6% increase over the prior year. As you look at we feel like in large part did the salesforce footprint is well established within multifamily. What you’ll see is some select areas of investment if the lower end of multi-families, so more the SMB market and you’ll also see some investments within our vacation rental space, in our single family space and then potentially some investments more at the institutional level as we round out more our institutional products that’s the way you should think about it going forward.

[Brandon Dobell:]

Okay, perfect. Thanks, I’ll turn it back.

[Operator:]

The next question comes from John Campbell with Stephens Inc. Please go ahead.

[John Campbell:]

Hi guys good afternoon.

[Stephen Winn:]

Hey John.

[John Campbell:]

I had to hop in the car just a little late apologies, if I missed this, but was the senior living referral service was that all transaction based revenue?

[Stephen Winn:]

It was.

[John Campbell:]

And in the annual run rate call it $4 million; $5 million is that right?

[Stephen Winn:]

Yes little bit less and I mean we were expecting slightly under $1 for Q4, so that would be a good run rate we think about.

[John Campbell:]

Okay. And was that growing or just naturally growing or declining?

[Stephen Winn:]

It was actually declining. So absent that business, it would have added 100 basis points to growth within our leasing and marketing product offered of the last couple of years.

[John Campbell:]

Okay. That’s good to hear. And on the international growth, have you guys sized up that international kind of total addressable market or maybe just the overseas markets that you’re in now?

[Stephen Winn:]

We are focused on the U.K. at this point and it’s an immaterial number, but it’s a very important foothold into Europe. We are launching or have launched in the U.K. property management solution or resident services solution and yield start for the U.K. The U.K. is slowly moving to more market rate type of communities and that’s where we perform best. It’s not a huge growth opportunity though it’s just an important decision that we need to enter Europe and that’s what we’ve done in the U.K. And I fully expect that you’ll see us in other countries over the next few quarters.

[John Campbell:]

Okay. And then to go to market strategy there, I mean are you - is that a partnering are you acquiring kind of new sales teams that are already international?

[Stephen Winn:]

That’s part of what we’re in the middle of doing right now. So I can’t speak to it, because we haven’t actually acted, but clearly we need a stronger in place footprint in the U.K. We do have a Barcelona office that handles all of our contact center work and we’re very pleased with that office and I think Barcelona will support from a contact center perspective all of our needs in Europe. But some of the other product families we really need to have feet on the street, so I would expect to have an office in the somewhere in Europe probably in the U.K. in the near term

[John Campbell:]

Okay, thanks for taking the questions guys.

[Operator:]

The next question comes from Mark Schappel with Benchmark. Please go ahead.

[Mark Schappel:]

Hi good evening, thanks for taking my question. Steve, could you just address the reasons for the selling of the senior living referral services once again?

[Stephen Winn:]

We have made the internal commitment to not be in businesses that we don’t think can drive gross margins of 50% and after working for a number of years on trying to expand that margin on our parents, we finally concluded, we just couldn’t drive it where we wanted. So without the gross margin it’s going to actually detract from our objective of achieving higher EBITDA margin. So given that business wasn’t growing and it wasn’t contributing to our objective for EBITDA and propping just as important to establish a integration with the largest referral service in the country, which is a place from our own there are substantial business where we can accept leads injected into our CRM from A Place for Mom and feedback to them. The information they need to know whether they converted it a lead to a lease isn’t an important ongoing strategic relationship that would have been difficult for us to enter into if we were actually competing with A Place for Mom. So all factors considered it just made sense to does that.

[Mark Schappel:]

Okay that’s helpful. Thank you. So a follow-up question in your leasing and marketing segment, I believe you are making some enhancement to your contact center services basically to help offset some of the macro headwinds you were countering there. And I was wondering if you just go through one more time what some of those enhancements you’re making there?

[Stephen Winn:]

Well our goal is to create a unified communication platform, where a resident can literally seamlessly move from a phone call, to a chat, to an e-mail, to an SMS text message and we really don’t care whether it’s a workstation or a mobile phone. It’s that flexibility in the method of communicating with prospects and residence so it’s very important and while we do support these methods, today they tend to be separate solutions and we need to bring them together. We also bought a company called Indatus last year that offered a really powerful answer automation solution for maintenance request. And we believe that same technology platform can be used to take inbound prospect calls. Reason this is important is many owners while they would prefer that a live agent answer the call. They also want to be able to establish a budget each month t doesn’t change and since they can’t really control the number of calls to come in, what we want to be able to offer them is the flexibility of when you exceed the calls that you live agent calls that you paid for then you will automatically flip over into an answer automation solution, which may not convert quite as well, but the converts a lot better than you would if you didn’t answer the call at all. So these are the sorts of things we’re doing with the contact center and we’re very pleased with the progress we’ve made. We’re also very excited about the opportunity for contact centers in the senior housing market this is an industry that has lags candidly the conventional apartment adoption of technology. And I think senior living [ph] housing now is realizing the same thing that conventional apartments did it is critically important and you answer the phone and you try to schedule visits and that’s what we do many of the care advisors that were part of our parents, which is the name of ILS that we sold to A Place for Mom or being absorbed into the senior contact center, because of the demand we’re seeing there.

[Mark Schappel:]

Okay, thank you. That’s all from me.

[Operator:]

[Operator Instructions] The next question comes from Kyle Chen with Credit Suisse. Please go ahead.

[Kyle Chen:]

Hi good evening, thanks for taking the question. On the unit acquisition front the 110,000 units that were added this quarter. Can use segment where those units came from enterprise corporate SMB and also have you seen any pick up in terms of unit acquisition productivity from the salesforce within the enterprise and corporate segments, and then also what are you seeing from early investments within the SMB salesforce investments.

[William Bryan Hill:]

Yes Kyle, we haven’t segmented out our units by the sub markets within multifamily, but the unit growth that we’re experiencing is predominantly multi-family. There’s a few units and we’re gaining some market share within single family, but by and large it’s multi-family which represents over 90% of our total units.

[Kyle Chen:]

Got it, thanks. On the multiple product momentum it’s good to see that your product growth has helped you win some larger deals. I guess do you anticipate having to make any additional salesforce configuration adjustments to accelerate the momentum in these type of deals or and could this potentially make your results in the future a little lumpier?

[William Bryan Hill:]

No our salesforce has trained to sell all products and factor compensated based on the total annual client value did they sell each year, and they’re not compensated on renewals. So they’re incentivized to so all of our solutions and they’re trained to sell all of our solutions. Now what we do have is industry our solution experts that will come into sell that may specialize in an individual solution or product as needed, but from a salesforce perspective we’re - we already have the footprint and we already have the training of the salesforce to sell the broader sub. We do have our salesforce organized in a manner where it goes after the different sub markets within multifamily, which Steve spoke to on the call as well as especially salesforce that is designed to go after the vacation rental space in a separate one for single family as well as the senior market. So that’s where our specialties today reside, but no need as it relates to this week’s sales are there more deeper penetrated solutions.

[Stephen Winn:]

I might add the industry is clearly becoming much more aware of the cost of integrating multiple solutions from multiple single service providers or single solution providers. This idea of a single or at least a smaller number of technology providers is gaining in the lot of traction so we think the bundling of our own products is very complimentary to this movement that we’re seeing in the industries. So you’re going to see a lot more sweet sales that’s what we lead with at this point.

[Kyle Chen:]

Okay, that’s great to hear. Thanks for taking the question.

[Operator:]

This concludes our question-and-answer session, and the conference has also concluded. Thank you for attending today’s presentation. You may now disconnect.