Welcome to the Bazaarvoice fiscal first quarter 2015 financial results conference call. (Operator Instructions). I would now like to turn the conference over to Ms. Linda Wells, Director of Investor Relations. Thank you Ms. Wells. You may now begin.

Good afternoon, and welcome to today's conference call to discuss Bazaarvoice's financial results for the first fiscal quarter of 2015 ended July 31, 2014. I'm joined today by Gene Austin, our Chief Executive Officer and President; and Jim Offerdahl, our Chief Financial Officer. Following the remarks from Gene and Jim, we'll have a question and answer session. Please note that we’re simultaneously webcasting this call on our Investor Relations website at investors.bazaarvoice.com. The earnings release with our results for the first fiscal quarter of 2015 was issued after the market closed today Please remember that certain statements made during this call, including those concerning our business outlook and guidance, growth plans and opportunities, potential acquisitions, outlook on legal matters, sales execution and our ability to capitalize on our opportunities are all forward-looking statements. Forward-looking statements are subject to a number of risks, uncertainties and assumptions that are described in our SEC filings, including the Risk Factors section of our Form 10-K for the fiscal year ended April 30, 2014 filed with SEC on June 26, 2014 and our Form S-1 filed with SEC on June 12, 2012, as well as other documents that we may file with SEC in the future. Should any of the risks or uncertainties materialize, or should any of our assumptions prove to be incorrect, actual results could differ materially and adversely from those anticipated or implied in these forward-looking statements. In addition, forward-looking statements are based on currently available information and we undertake no duty to update this information. Additional cautionary language regarding these forward-looking statements is further described in today's press releases. On June 4, 2014 Bazaarvoice entered into a definitive agreement to divest PowerReviews LLC, the successor to PowerReviews, to Wave Table Labs LLC. The terms of this transaction were approved by the DoJ on June 26, 2014 and the transaction closed on July 2, 2014. Wave Table subsequently changed its name to PowerReviews. As a result of the divesture in accordance with accounting guidelines we reported the results of operations and financial position for PowerReviews as discontinued operations, within the statements of operations and balance sheets for all periods presented as of April 30, 2014. Accordingly, PowerReviews revenues, related expenses and loss on disposal net of tax are components of loss from discontinued operations in the statement of operations for the three months ended July 31, 2014 and 2013. The statement of cash flows is reported on a combined basis without separately presenting cash flows from discontinued operations for all periods presented. Some of the numbers that we will discuss today during this call will be presented on a non-GAAP basis. Today’s press release, together with the accompanying tables, contains the calculations of these non-GAAP financial measures and a full reconciliation between each non-GAAP measure and its corresponding GAAP measure including the reconciliation of non-GAAP to GAAP operating results from continuing and discontinuing operations. With that, I’d like to now turn the call over to Gene.

Thank you Linda and thank you all for attending today’s call. I'm pleased to report strong financial results for the first quarter of fiscal 2015 year. We exceeded our guidance across the board delivering total revenue growth of 14% year-over-year while also making excellent progress on EBITDA sequentially. In addition to our strong financial performance we delivered record client launches, good new account acquisitions, excellent adoption of our new offerings and completed the divesture of the PowerReviews assets back in July. We have commented in past calls that we believe our revenue growth rates were at or near the bottom and with the overall performance of the business in the first quarter we’re confident that the fourth quarter of last year did indeed mark the bottom of our growth rates. Also we the strength of Q1 we’re raising our estimates for our overall revenue this year to $188.5 million to $191.5 million. Before I talk about some of the specifics for the first quarter let me cover our financial performance. Total revenue was 46 million, an increase of 14% versus Q1 of last year and exceeding our guidance of $43.5 million to $44.5 million. Recalled that in our last call we discussed a large client expected to not renew as a result of a client specific business issue. In Q1, we received an early termination fee to release the client of any further obligation. Excluding the onetime impact from the termination fee, our revenue growth rate would have been 12%. Adjusted EBITDA for the quarter was a loss of $5.3 million better than guidance of a loss of $6 million to $7 million and a nice improvement from our prior quarter. Non-GAAP EPS was a loss of $0.09 which was $0.03 better than the midpoint of our guidance. In short,…

Thank you Gene. And thank you to everyone who joined the call today. As a reminder we’re on a fiscal year calendar ending April 30. So today we’re reporting results from continuing operations for our first quarter of fiscal 2015 ending July 31, 2014. For the first quarter we achieved total revenue of $46 million up 7% sequentially and up 14% year-over-year. As Gene mentioned our revenue growth rate picked up in Q1 and we now believe our 11% growth rate in Q4 was the bottom. We achieved SaaS revenue of $44.3 million up 6% sequentially and up 14% year-over-year. Net media revenue was $1.7 million. Adjusted EBITDA for the first quarter was a loss of $5.3 million, a significant improvement sequentially from Q4 and consistent with the same period a year ago. Our non-GAAP net loss per share was $0.09. Strong Q4 bookings led to excellent Q1 launches as we launched 123 clients, another record and more than double from 59 in Q1 of last year. Net new clients were also strong in Q1 as we added 64 of 73% from 37 in Q1 of last year. Our client retention rate was 94.8% in Q1. This is lower than typical as client losses included approximately 20 clients with immaterial revenue that were either a clean-up of last quarter’s connections and PowerReviews counts when we changed definitions or were prior feedback to clients. Without such losses our client retention rate would have been relatively consistent with our average over the last four quarters. We ended the quarter with 1197 active clients, an increase of 275 or approximately 30% from year ago. Annualized SaaS revenue per average active client in the first quarter was a $152,000 down $4000 from the prior quarter as we had a large number of launches in…

(Operator Instructions). Our first questions is from Brendan Barnicle of Pacific Crest Securities. Please go ahead.

Gene, you mentioned, and I caught some of it, something new with the DoJ. Can you just refresh me again what that is and what the timing is on how all that gets worked out?

Yes Brendan on August 20th, we were informed by the DoJ that they were investigating whether we had satisfied the applicable deadlines for our transferring or discontinuing use of or deleting copies specifically to two software components that were part of the PowerReviews asset. So if I back up for just a second in the middle of the Spring I think we commented that we believe that divesture was a likely occurrence since that time we had allocated dedicated resources on the side of Bazaarvoice to work towards that eventual outcome, it involved millions of lines of software code, employee contracts, relocating employees to new places, specifically we had to move our BV team. So very, very obviously involved process to complete a divesture of a company that we had in the business for two years. That came to conclusion on July 2nd, and on August 20 we received this notice that they are investigating an issue around as I said two software components. It’s very early and in respect to the DoJs process I really don’t have anything else to comment there but hopefully that gives you some context. We’re obviously working in good faith with the DoJ and expect to cooperate fully on this investigation.

So have your lawyers given you any sense on how long or the scope of this? This sounds like it has opened a whole another can of worms and I just want to be able to put it back into maybe the right perspective.

I can't really give you the perspective on the case or this investigation. It’s very early and it is -- I don’t really have a feel for what I think the timeline is. Again I think its focused on these two pieces of software and in perspective you know the divesture completed on the second of July. So I think it’s -- we will have to wait and see the length of time involved here.

And then can you remind us again the difference between client churn, and Jim, you mentioned some of the reasons why that was a little bit lower versus dollar churn?

We had client churn this time little bit higher than typical because we had some clean-up on some prior accounts and some FeedMagnet accounts that left and without those our client churn would have been pretty typical of what it has been or same as the average it has been the last four quarters. From a dollar churn’s standpoint we did have one large one that we talked about last quarter and without that our dollar churn rate would have been actually quite good.

And lastly, you had some questions or mentioned in your comments something about pricing and ASP's. Is that just related to lower ASPs on some of the newer products that have a smaller footprint or has there been any change in overall pricing or the pricing environment?

Yes, no change in pricing or overall change or pricing environment I should say. Our average revenue per active client and active client is clients we get revenue from went from 156,000 to a 152,000 sequentially and as primarily because we had a large number of launches and we typically do bring new clients in at a lower average ASP than what our average is across all our clients because overtime our clients generally on average tend to grow.

Thank you. The next question is from Kevin Liu of B. Riley. Please go ahead.

First off, could we start with what FeedMagnet contributed in revenues to the quarter? And then maybe also what percentage of the new client adds within the quarter were from some of the newer solutions?

We don’t talk about how much Curations was part of our revenue. I would say it’s pretty small because we have got $46 million worth of revenue and that’s a brand new product that we just started selling this quarter, so it’s a percent of revenues obviously first of all.

But the sales far exceeded our expectation.

Yes, the booking side.

So the booking side was quite strong and obviously the revenue from FeedMagnet it was -- its a small company so the revenue contribution was pretty much what the company was when we acquired it but the sales booking is obviously far exceeded our expectation so we’re quite excited about Curations, we actually think Curations has the opportunity to be a significant piece of the business because it opens up new opportunities and new markets as well as allowing us to expand our ability to capture more share inside of our current customers.

Got it. And I think you mentioned in your script that gross bookings were similar to Q1 levels a year ago. Should we take that to infer that the number of launches that you would anticipate for Q2 might be on par with what you experienced last year then?

Well let me comment about bookings and then Jim you can comment about launches. So the way to look at bookings is that Q4 was one of the strongest quarters in the company’s history and in fact I think the only quarters that exceeded Q4 was those that had million dollar or more deals at the same time during that quarter. So Q4 was out any $80 million [ph] plus deals was our largest quarter in the company’s history. As we entered Q1, the core business Conversations was less mature of a pipeline than ideal given the strength of Q4, we actually took some Q1 business into Q4 but we countered that with strong performance of Curations, Sampling and professional services. But I would characterize Q1 which is always our seasonally lowest quarter as a very typical Q1 for the business.

And just to pile on from a launch perspective then something similar to prior year would be a pretty good assumption from the launch perspective.

And just lastly, looking at your full year guidance, obviously you've taken up the revenue line. Does the lack of flow through to the bottom line, is that more reflective of some of the costs you're seeing on the gross margins side or are you planning some heightened investments given the reacceleration in growth here?

We’re continuing to make investments in R&D, in sales and basically we’re -- the overachievement in the revenue in Q1, we’re plowing back into the business. Especially around new products and Curations given the good start that we have had.

Thank you. The next question is from Greg Dunham of Goldman Sachs. Please go ahead.

I wanted to follow-up on Brendan's question about the new DoJ investigation. I know you can't comment too much about it, but do you know what catalyzed this to take place here on August 20th? What forced them to or what caused them to reinvestigate so to speak?

Greg, all I can say is we received a letter we have not handed over -- they have not asked for anything from us. I don’t know what catalyzed it. I will be honest with you. We debated whether it was appropriate to disclose this letter to investors because it is so early. It involves two components of software and we don’t know the intentions of the DoJ in this situation. So I debated whether it was the right thing to do to bring it forth in our Q and in our earnings call but I landed on the side of -- we have tried to run a very a transparent business here as much as possible to our investors on this particular issue. So I want to give everyone an alert. We obviously have to take any kind of letter we get from the DoJ as an important thing to consider and watch. This is not an anti-trust situation, this is not the same situation as what happened with the overall asset itself. But yes at the same time the order is an important document and we believe we acted in good faith on it and we’re going to support whatever investigation process that the DoJ wants to go through but they have not given us a process, they have merely alerted that they are investigating whether we handled these two software components appropriately.

Then one more for me. You mentioned that Conversations bookings in Q1 had a little bit of a sluggish quarter, following a very strong Q4 which is natural in Q1. I guess you also said that the pipeline looking forward was robust and healthy. How do you characterize the pipeline for Conversations itself?

The Conversation business in Q2 I expect it to rebound nicely. It’s a classic lull that you have from time to time after a strong Q4 and what I see coming on the pipe for the conversations pipeline is very encouraging and looks very good. So when you take that and you combine that with what we’re seeing from the new products, you know I feel very good about where we’re positioned with our product line and the market demand for such products.

Thank you. The next question is from Jennifer Lowe of Morgan Stanley. Please go ahead.

I wanted to follow-up a little bit on the full year guidance for revenue vis-a-vis Q1's upside and then the Q2 guidance. And just kind of running through the numbers at the midpoint, it sounds like the full year guidance only implies around 12% growth in the back half of the year which is consistent with the commentary around Q4 being the bottom. But is only a slight improvement given the growth we saw this quarter and potentially could see next quarter. So I wanted to dig into that a little bit and get a feel for how much of it is you all wanting to be conservative as you come out of the turn versus anything you see in the business, any headwinds that we should be thinking about for the second half that might create slightly tougher growth comparables?

I think I will start as Gene said we expect a strong improvement in the net bookings growth rate. This year we have got a good pipeline going into Q2, and note that we had the one large client with the termination fee in Q1 which without that our growth rate in Q1 would have been 12% and not 14%. And so when you take a look at that first is around a 13% year-over-year range when you combine the Q1 and Q2 and second half is in the 12ish range, 12 plus range so it’s relatively similar when you look at it that way. The other thing is in Q1 we had as Gene noted our bookings of our new product Curations was quite strong and a lot of those deals were combined with Conversations and when they are combined it takes longer to implement and therefore longer to revenue which is impacting the second half a bit. And lastly to your point hopefully the second half is a bit on the conservative side as well.

Maybe just one more. In the prepared remarks, Gene, I think you mentioned that -- or maybe it was Jim, it's hard to keep track. But there was a mention that you were feeling encouraged by the pipeline or the amount of traction you're seeing with the Connections product and viewed that as a pipeline for conversions to other products over time. Can we dig into that a little bit more? Is there any anecdotes or color you can provide on how the Connections audience has potentially helped build pipeline for some of the other solutions?

The most important development in the connections business is that 18 months ago those customers were largely sourced by our own efforts and now 90% of the Connections customers are now being sourced and partnered with us by our retail clients and it just shows that retailers are increasingly wanting to speed up the process of getting brands integrated into their user generated content strategies using Connections. The Connections conversion to revenue has been mid-single digits and I think that has the opportunity to go higher, in fact we plan to expend resources to drive that higher and so I think that’s a hopeful sign for additional bookings momentum as we look forward but I think the most important thing is the speed of which we’re adding Connections customers which gives them basically the ability to just answer questions and respond to reviews and doing that with the aid of our retail partners.

Thank you. The next question is from Stephen Ju of Credit Suisse. Please go ahead.

So given all the new products as well as geographic expansion, any context you can share in terms of range of ARPU between your e-commerce clients versus your brand clients as it stands now? I'm just trying to get a feel for where clients are coming in when they first start a relationship with you and where that can go longer term. Thanks.

Could you repeat that? You faded out quite a bit in your second half of your question.

Yes. So I'm just trying to get a feel for where clients are coming in when they first start a relationship with you and where that can go over the longer term in terms ARPU? And I remember when you guys were first going public there was a range of ARPU that existed between your e-commerce clients as well as your brand clients. I'm just wondering where that stands now.

Yes, over time our older clients typically do tend to trend up from an ARPU perspective and from a brand versus retail or e-commerce in your vernacular, brand average revenue per client is about 1.5x that is what retail is and our brand revenue itself is growing faster than our retail revenue which you would imagine.

Thank you. Our next question is from Nandan Amladi of Deutsche Bank. Please go ahead.

Back to the comment you made, Jim and Gene, both in your script about achieving your 15% to 25% revenue growth target. The guidance at the midpoint certainly implies that you'll approach the lower edge of that band. So does this become a fiscal ’16 event where we have revenue growth within that range and then perhaps gradually pick up?

Nandan, we’re seeing a -- I'm very encouraged by the overall performance of the business and we obviously have spent many quarters building credibility with our investors on operating the business at the right level and hitting our plan and numbers for you all. So when you look at guidance it’s too early to tell if we can hit the 15% to 25% this year, it’s not at all out of the question but we’re guiding appropriately for where we think the business is at this point. But I do believe our growth rates have real momentum and I think the company is executing far better than we were 12 months ago from both a client retention and a sales performance standpoint and our launch team is doing a great job. So the key elements of driving revenue growth in the business are operating at a much better level. We certainly have more room to go but I like what I'm seeing. The 15% to 25% is a goal that we think is achievable, I don’t want to really give a timeline but I do think it’s not out of the question that that happens this year.

And a quick follow-up on the turn on of new customers. You had more go-lives this quarter than you've had in quite a while. And presumably, you're getting more efficient at this. But you're also signing, I think Jim made this comment earlier to another question, about customers turning on multiple modules often takes a little bit longer. So how should we think about the puts and takes here as you do sign larger deals particularly on Curations for the remainder of the year?

Yes, Nandan, that remains to be seen as to what mix we sell when we do upsells of Curations to existing clients, that implementation is relatively quick, same or better than a typical Conversations client. When it’s combined with Conversations that’s when it gets longer and that’s what remains to be seen is what that mix is going to be between an upsell and a sale to a new customer of both Conversations and Curations combined. When that happens both need to be implemented to get to revenue. So that mix remains to be seen.

Thank you. We have no further questions in queue at this time. I will turn the floor back over to Mr. Austin for any closing remarks.

Thank you all very much for attending Q1. Again I think it was a great start to our year and we look forward to talking to you all in future calls. Thanks again.

Thank you. Ladies and gentlemen this does conclude today’s teleconference. You may disconnect your lines at this time and thank you for your participation.