Ladies and gentlemen, thank you for standing by and welcome to NetScout's First Quarter of Fiscal Year 2013 Operating Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a Q&A session. Instructions will be given to you at that time. As a reminder, this conference call is being recorded. With us today is NetScout's President and CEO, Mr. Anil Singhal. He's accompanied by NetScout's Chief Operator -- Operating Officer, Mr. Michael Szabados; NetScout’s Chief Financial Officer, Ms. Jean Bua; and Mr. David Sommers, NetScout's Executive Vice Chairman. At this time, I will turn up the call over to Ms. Cathy Taylor, NetScout's Director of Investor Relations, to provide the opening remarks. Ms. Taylor, please proceed.

Thank you, and good afternoon, everyone. Welcome to NetScout's fiscal 2013 first quarter conference call for the period ended June 30. Before we begin, let me remind you that during the course of this conference call, we will be providing you with the discussion of the factors that we currently anticipate may influence our results going forward. These statements include forward-looking statements made pursuant to the Safe Harbor provisions of Section 21(e) of the Securities Exchange Act of 1934 and other Federal securities laws. These forward-looking statements may involve judgment, and individual judgments may vary. Forward-looking statements include expressed or implied statements regarding future economic and market conditions, guidance for fiscal 2013, acquisition integration success, and new product releases. It should be clearly understood that the projections on which we based our guidance and other forward-looking statements and our perception of the factors influencing those projections are highly likely to change over time. Although those projections and the factors influencing them will likely change, we will not necessarily inform you when they do. Our company policy is to provide guidance only at certain points in the year, such as during the quarterly earnings call. We do not plan to update that guidance otherwise. Actual results may differ materially from what we say today and no one should assume later in the quarter that the comments we make today are still valid. For the further discussion of the risks and uncertainties that could cause our actual results to differ, see the specific risks and uncertainties discussed in NetScout's annual report on Form 10-K for the year ended in March 31, 2012 on file with the Securities and Exchange Commission. Our quarterly financial results today are included with our earnings press release. We report our results on a GAAP basis as well…

Thank you, Cathy. We are pleased to start our new fiscal year with a solid quarter. First quarter GAAP revenue was $76.4 million and non-GAAP revenue was $76.5 million, slightly exceeding the high end of our revenue guidance range we issued at the end of last quarter. We also hit the high end of our earnings per share guidance with GAAP earnings per share of $0.12 and non-GAAP earnings per share of $0.19. Our first quarter revenue was up 21% year-over-year. GAAP earnings per share were up 100% over last year and non-GAAP earnings per share were up 46% over last year. Total bookings were up 27% year-over-year. Total bookings are comprised of new business bookings and maintenance renewal bookings. New business bookings which are an indicator of future growth for our company increased 37% over last year. Service renewal bookings were up slightly over last year by 4%. On trailing four quarter basis, which is a more stable measure of our business performance, new business and renewal and total bookings all grew 23%. We saw strength across all over our verticals. New business bookings from service providers were strong, and within enterprise we saw a particular strength coming from the financial services sector. The government sector returned to typical spending patterns as compared to Q1 last year when orders were delayed due to federal budget holds. We are pleased that strong results in our seasonably slow first quarter enabled us to maintain a significant backlog. Looking beyond our quarterly results today, in a separate press release we announced the acquisition of certain technology and assets from Accanto Systems. Accanto Systems S.r.l. is a privately held and located in Modena, Italy. They are a subsidiary of a company with the same name that is headquartered in Helsinki, Finland. Accanto System…

Thank you, Anil. As Anil mentioned, we are pleased with this quarter's result. New business bookings remain on a steady pace of growth. Two of our Enterprise segments, Financial Services and Government, returned to their normal purchasing patterns. Within Financial Services we saw a large deal from a returning major player in the industry where our strength in assuring unified communications and financial trading drove the purchase in a competitive setting. Our Service Provider segment remained strong. We had 5 multi-million dollar wireless orders coming from a mix or tier-1 carriers around the world. The majority of these 5 large carriers are building out LTE networks. As Anil mentioned, with our new acquisition we expect 4G or next-generation voice and coming voice over LTE to be a big driver for future growth in this segment. We also continue to see a large number of tier-1 and tier-2 carriers who are purchasing our product for that 3G networks which comprise the majority of our product deployment globally. Service renewals are inline with our expectations for the first fiscal quarter and continue to demonstrate our solid customer loyalty. In the first quarter, we further sharpened our focus on execution in our 2 markets with clear messaging, selling and positioning training and the strengthening of our sales enablement and support through dedicated service provider and enterprise solution teams. With these teams, we are able to improve responsiveness to large customers' existing needs and achieve a deep understanding of emerging requirements at these accounts. We are making some progress in integrating our acquisitions to expand our service delivery management portfolio supporting new workflows for a number of IT operations teams beyond network operation users. In the quarter, we announced nGenius Forensic Intelligence, a new product based on technology acquired with the Fox Replay acquisition…

Thank you, Michael, and good morning everyone. As Cathy said earlier, we have a slide presentation to accompany this section of the call. You may feel free to follow along with the slides as I speak. However, I will discuss our results without you needing to follow the slides. We'll be starting with the third slide, which shows our first quarter income statement. As Anil outlined, our business produced solid results for the first quarter of fiscal year 2013. Our non-GAAP revenue grew 21%, while our non-GAAP earnings per share grew 46%. Our first quarter non-GAAP total revenue was $76.5 million, which is an increase of 21% from the same quarter in fiscal year '12. With a non-GAAP total revenue, non-GAAP product revenue was $40.3 million, which is an increase of 36% over the same quarter in fiscal year '12. Service revenue was $36.2 million on a non-GAAP basis, which is a 7% increase from the same quarter in the prior year. The GAAP total revenue for the same period was $76.4 million, which is an increase of 21% from the same quarter in fiscal year '12. Within GAAP total revenue, GAAP product revenue was $40.3 million, which is an increase of 36% over the same quarter prior year. Service revenue was $36.1 million on a GAAP basis, which is a 7% increase from the same quarter in the prior year. On a non-GAAP basis, our earnings per share for the first quarter were $0.19. This is $0.06 higher than the first quarter of fiscal year '12 and represents a 46% increase. On a GAAP basis, our earnings per share were $0.12. This is $0.06 higher than the first quarter of fiscal year '12 and represents a 100% increase. Turning to Slide 4, business maintained strong gross profit margins and…

[Operator Instructions] Your first question comes from Mark Kelleher from Dougherty & Company.

You are seeing some particular strength from some interesting verticals and geographies. Could you talk about what you are seeing in Europe? I wasn't quite expecting such strength there. And just as an additional question, did you see any 10% customers in the quarter?

10%? Yes, we did not have any 10% customers, but I think if you look at Europe or any other places just looking at one quarter in isolation I think is not the best way to look at it. But I think part of the things is some of the acquisitions we have done and some of the other things we have done in the product area is what is helping us. And so, if you just look at the overall percentage, it looks good and but yes, there are challenges in European market much more than in the U.S. market. So, this is not necessarily an indicator of the environment is improving in Europe.

Are the verticals consistent among geographies so that the telco is strong in the U.S., it's similarly strong in Europe? Or are different verticals different in -- showing different strength in different geographies?

Can you explain?

In service provider, we generally see strength across the globe. And as we talked in the past, we have been making lot of inroads with a lot of the international service provider carriers. So that on a global -- that market on the global basis seems to be growing well. However, as we've discussed in the past also the financial markets -- the financial services markets that we have in EMEA that also sometimes expand into the Asia-Pac have been depressed due to the economic condition. And we -- while we see some strength in the domestic, we still continue to be cautious about the financial services sector throughout the rest of the world.

The next question comes from Chad Bennett from Craig-Hallum Capital.

Yes, just a couple of questions for me. Drilling down a little bit more in the prior question, specific to service providers, can you give us a sense, and I don't know if you have the data in front of you, looking back 12 months and possibly looking forward 12 months from an expectation standpoint, how much of the service provider revenue was 3G- or 4G-related, if you can tell?

I think -- yes, I think it's since we had the same product with software changes only, which can be used for 3G and 4G and sometimes people move the probes around, functions also, it's very hard for us to estimate and we don't necessarily keep track of that, but I can tell you that we need both the products. There is a drag on one versus another. So if you didn't have a 4G offering, then we will not have a 3G. We're seeing a lot of 4G projects, but that's also driving lot of 3G business.

Yes. Okay, fair enough. And then, there's has been stories out there or rumors out there about potential kind of a pause at least domestically in some 4G spending by the tier-1s here and maybe even a little bit in Europe also. Are you seeing any of that relative of what you were thinking 3 months ago in terms of any of your service providers or potential service providers kind of pushing out plans on 4G rollouts?

Yes. No, we are not seeing that. In fact, you might have seen in the news, recent news from AT&T and Sprint especially, that they are aggressively moving forward with AT&T. I saw press releases from them just in last couple of weeks. So I don't think -- I don't see a slowdown there or at least we're not seeing even in international or Asia.

Okay, and then one more for me. Financial services, really strong again this quarter, and I think it was very strong in the March quarter also. Maybe it's a function of pretty easy comps, but it seems like you're still little cautious there. Is -- are you adding new customers in financial services or existing customers just returning to normal patterns and we're just -- it's more of a function of that than it is you're seeing spending come back in that sector? Is there anyway to kind of give more detail into what you're seeing there?

I think -- I don't know whether total budgets have increased, and first of all -- but the reason we're cautious is, as Jean mentioned, is because of outside of U.S., because -- I mean, we do 20%, 25% -- 20% business outside of the U.S. overall. So that is one of the reasons for cautiousness as well as things happening even in U.S. But a lot of the customers are same, but they are expanding on our products for additional reasons. As you know, we acquired some voice technology; we have developed some features in our product for the financial market and web services. So I think finally people are starting to use our products in other parts of their network which they were not necessarily doing before, because either lack of functionality or maybe they are looking at other solutions before.

Okay, fair enough. I lied, one last question for me. Can you just mention if anything has changed in the competitive landscape?

I think it's -- if at all, it is slightly better for us now and especially we did the -- with the latest acquisition we have everything in the service provider. On enterprise, we've always been a leader and yes, there are a lot of small competitors, but there is no fundamental change in that.

Your next question comes from Aaron Schwartz at Jefferies.

I had a follow up question on financial services domestically. I know you do have some large customers within that segment, but can you talk about sort of the run rate business domestically? I mean, just sort of the volume base sales outside of the large deals, is that sort of -- or could you just give us a view on sort of how you see that business?

You want to know the breakdown of financial in U.S. versus rest of the world?

In domestic markets, I believe -- or I believe in financial services, in general, you typically have some larger customers there that sort of carry the sector sometimes, but beneath that, just kind of the run rate financial services there. Has the volume based business there continued to track to your expectations?

Aaron, this is Jean. As we mentioned, we are cautious about financials in general. What we have been seeing in the last few quarters, including this quarter, is that some of our larger customers within the financial services group that are domestic-based are continuing to spend on their data centers or refreshing hardware for infrastructure coverage and those things. Those are what has been driving the financial sectors for the last few quarters. Internationally still, it is still is very slow and struggling.

Okay. And given those remarks, as we think about the seasonality and linearity of your model through the year here, I know you gave some commentary on expenses here due to the acquisition, but would you expect this September quarter to be maybe a little more seasonally slow? Is there any sort of a high-level comments you'd have for us as we build our model for the rest of the year?

So, Q2 for us is generally a strong quarter for the government sector. And in talking with the sales force, we still have the lot of very good projects and a very good project pipeline. However, the governments have still been cautious about spending and budgeting and we are getting a lot of budget scrutiny. So, we are still reaffirming our guidance and so we are comfortable within that range, but we still are cautious about the actual release of dollars when it comes to the government vertical.

Okay. And last question from me, if I could. On the acquisition, you did comment on sort of the gaining some assets maybe on the legacy side or on the voice centric side. Has this been sort of a gaining factor for you to expand within some tier-1 telcos? And now that you have these assets, I mean, that sort of go away? I just wondering if you could sort of comment on how that sort of fits in with the expansion or introduction of new telcos?

I think -- yes, legacy, the comment we were making was that we will have -- we are now covering the entire spectrum ranging from not just data network, but to legacy voice as well as IP voice. So, I think over time, I think this will be very helpful for us to be established as a single vendor which is very unusual in service provider. And this will -- but in the short-term it's going to be just incremental business. It's not necessary for our survival or to do the numbers we talked about, but it's going to allow us maybe year down the road to be establish as the only vendor or in some other tier-1 accounts and that way we could capture a lot more budgets because overall the -- and at the same time, there will be significant cost savings for the customers.

If I might just add one statement that -- this is Michael. There are 2 significant dimensions to this acquisition. One is that in the strategic sense, it's going to position us in a very strong way for 4G voice and that is where the real tier-1 impact is going to be. And I think that the tier-2 business and international business will benefit immediately because these smaller operators are looking for a vendor with a full line of product. So, these are the 2 different dimensions.

Next question comes from Matt Robison from Wunderlich Securities.

So, can you -- it looked -- I know that in the telco space, you had relatively tough comparison. Can you maybe comment if you -- on your pipeline if -- and if you're still looking for bookings growth from that segment that's comparable to the kind of growth we saw last year?

Yes, yes, that's the assumption based on the guidance, and the guidance is based on that assumption. That will be continuously improved.

Okay, and are we -- do we think -- are we pretty well set for the kind of customers we're going to see this year? Or have you -- are we going to be -- what kind of customers might we would be adding in terms of types of networks?

I think we're already there in all the tier-1s and which is a big portion of the business and -- but we're not fully penetrated in many of them. So that will be the biggest opportunity. But with this new acquisition and few other things which Michael talked about, there is -- there'll be some expansion in tier-2, and which has not been our area of focus until last year. Last year, if you may remember, we did some good tier-2 business in U.S. But outside of U.S. we have not done that. So this will allow us to focus on tier-2. So that -- so we'll have still more business from existing customer in tier-1, but we will have some new tier-2 customers.

When you say tier-1, are we talking internationally, you mean it includes Vodafone, American Mobile?

Both. Yes, we're talking about like, for example, in U.S., T-Mobile, Sprint, and Verizon, and AT&T, and outside of U.S. we're talking about T-Mobile, Vodafone. Then we're talking about SKT in Japan, China Unicom. So I mean that's what we mean, really big companies worldwide, which I think we do have some presence and contact in almost everywhere but not enough -- not necessarily enough.

Your next question comes from Alex Kurtz from Sterne, Agee.

Yes. This is just for the group. Over the last couple of years through different macro economic cycles, mostly bad for everyone, but there has been some misfires from you guys on quarters and guidance, and obviously congratulations on this quarter and sort of the outlook. Could you just sort of net it out why this time around things are a little bit different? Was there a change in managing the sales force or managing the pipeline that you guys did where it gave you a little bit sort of better visibility than maybe in prior cycles?

I don't see that as any -- I mean, fundamental change. Last time, I think, last year also, I think we had some bad experience in Q1. Even though we did revise the guidance, we had significant booking growth in last year and which I think nobody expected after the first half performance. So I would just -- while we are confident of what this year we should [ph] just look at one quarter performance. Because of this deal, things can go on one quarter to another quarter. So while we are happy that we are on the growth trajectory already, which maps to our guidance for the rest of the year, I think we will have to look at more longer period to see the impact of it. But I think we do have more things to sell and we have added, for example, we are fully functional LTE product now. As I mentioned, we have come up with our new strategy, USDM. We have a new ASI technology and all these things are bringing to have an impact. So, our pipeline is not just bigger but there is higher quality.

Maybe more products, sort of broader -- broader reaching to the customers, Anil, is that maybe one answer?

Yes. I think we -- people see we that we are on to something and we have been making lot of investments which has not been seen in the product, and also, I mean, you know that we acquired this company in the packet flow switch area also which is a good incremental revenue stream for us. So yes, so in that sense there are some new products, but the biggest change is the fuller functionality in existing products like we have doing only 3G now we are doing 4G also, and we have done some other things in the encrypted links. So we just have more things to offer to our sales force. I don’t think it is because of -- I think the sales force increase in size is just we have much more focus and we sort of reinvented the company in the last 18 months.

And Jean, if you could just recount, there has been a lot of acquisitions over the last 12 months. If you really look at the fiscal '13 revenue guide, is there a way to sum up how many points of top-line growth if you would aggregate all these acquisitions you would -- what kind of number you would net out with?

So the guidance -- for those acquisitions, as we talked about before, they are product technology acquisitions and then they're subsumed on to our platforms and sold over the existing sales force. So to that end, we don't -- we consider it all organic growth, and we don’t necessarily track, nor is it easily tractable, to know which acquisition did which amount of revenue. But at this point, the performance of the 3 acquisitions that we made last year have been satisfactory to us.

Okay. So no -- even in an aggregate sense, not a material revenue uptake from all these acquisitions, correct?

I will update. The biggest thing, sorry. The biggest thing what Jean is saying is we are on to this pro-consolidation strategy. That means everything on that link, whether it's data, voice, web services, whatever, whether a service provider, or enterprise, or 3G or 4G, even architecture, so you can address all the stuff in a single box. And so, if I, for example, getting the security technology from Fox Replay and voice technology from voice for the enterprise and video quality measurement technology from Psytechnics last year, we've put those agents inside our InfiniStream box. We didn't increase the price, but that helped sell more InfiniStream. But it's very hard to keep track of why somebody brought that InfiniStream. So -- and the reason we say organic growth is because the revenues for these companies were very small before we acquired them, so that's why for those 2 reasons we look at all of this as organic growth.

Your next question comes from Scott Zeller from Needham & Company.

Could you clarify the comments from earlier around financials, the financials vertical? I -- it seems that there are pockets of strengths, there are large deals, yet you're cautious on the international question around financials. But it appears that domestically, where most of your revenue is coming from, so the financial footprint, is doing quite well. So, could you clarify the net outlook for the financials piece please?

Well, first of all, everything is more tilted towards U.S., not just financials, service provider, federal, I mean, that's even more tilted towards U.S. than in some sense financial. And -- but I think overall, lot of the projects, which are there in financials, are multinational companies. So if some -- Barclay makes a decision in one place it impacts the other. And so, in that sense, I think we will get some good reasonable business even on the international side on financial, but some things are driven from, let's say, U.K. or outside. That's what we're cautious about.

Okay. And the next question is around 3G and 4G. I believe, Anil, you had mentioned earlier in your comments that the 4G capabilities and with this acquisition you're certainly -- it's helping you win deals. But is there a way to actually attribute revenue or bookings to 4G and the traction that you're getting and how material 4G is to revenues at this point?

I think its material from a impact point of view. But I think, it's, like I said, it's very, very hard for us to measure that. Sometimes that these things are shared also between that the blue sides and handovers and all those. So, its -- we don't even try to track that and lot of time we get a single purchase order from a tier-1, which include both 3G and 4G. And unlike other vendors, we have the same part number for both, and it's just a software image which is different. So that makes it while it's convenient for the customer and because they can use it for whatever they want, if they have the right software version from us, it's very hard for us to track what's going on.

David has something.

Scott, David Sommers. I think maybe a crystallization of the SP, 3G, 4G discussion that we've had here a couple of times would be useful. We make our business in service providers because we're a technology leader and -- on the data side and now we're adding voice to that, and that really means that that our customers are viewing us as a vendor of the future for their 4G networks. If we weren't able to do that, then we would not have the success that we have today. And what we've tried to say here is that that spills over so that once we qualified with them as a 4G vendor, they buy us for their 3G networks, and that's where most of the spending is happening. So it's impossible, as Anil and Michael have said, to really sort it, parse it between 3G and 4G, but it all depends upon their assessment of us as a competitive vendor for their future 4G and LTE environments.

Yes. They're looking for a -- earlier they were looking for 3G, 4G, common solution from a single vendor for the data network and obviously, a natural expansion to that is to be able to do that across voice and video also.

A follow-up question. David, that's helpful. But a follow-up question, we've heard, I believe, from the field that 4G networks are not overtaxed. Can you explain again the impetus or the -- around spending in 4G, if there is one? And then, why people would be compelled to spend on 4G in advance of the network being overtaxed?

Well, I think we -- I mean the visibility is needed just to know whether it's overtaxed or not. We still have to know what is going on and the investment in NetScout Solution is still a fraction of that. So when LTEs had their 40, 47 zones or rollouts on those, or Verizon says or Sprint says that they have these more market added, they're making investment, they're making money in that area and they expect the traffic to increase there. And that's why when we go and sell our product, we have to justify the scalability for future. So, they're not just buying for today, they're buying partly for future. And just to know that it's not over-taxed or they should be able to combine 2 markets or not, even for that they need the visibility which only a product like ours can provide.

A lot of the issues associated with the 4G deployment have nothing to do with the volume of traffic; it has to do with the complexity of connecting 4G with 3G segments of the network. And just the old deployments, the dynamics, right, so you are -- so you cannot just ascribe demand to the degree to which the network is taxed.

[Operator Instructions]. Your next question comes from Kevin Liu from B. Riley & Company.

I guess, going back over the prior quarter and then maybe into the early weeks of this one, I'm just wondering if there have been changes in terms of kind of length of sales cycles or approvals or anything of that nature that you're seeing with deals?

No, we're not seeing any -- any measurable change.

Good. And then on the service provider side, you guys had a nice number of multi-million dollar deals. Could you just characterize for us kind of the timeframe for which those projects are expected to roll out, whether you see any sort of significant concentration in terms of your pipeline for the remainder of the year with any of these service providers, or whether it would be more broad-based across the tier-1 and tier-2 customers you're serving?

Well, tier-1 is still going to be a big portion, I don't know what exactly the portion, maybe 70%, 80%. And so, you will see, when you look at quarter by quarter basis, you may get the impression something is working better in one quarter versus another one for service provider because it depends is it end of the quarter or just first week of the next quarter. And so, but overall I mean our guidance assumes that we'll have lot of traction and a lot of -- and the pipeline size and quality is very good.

Your next question comes from Rohit Chopra from Wedbush Securities.

This is Sanjit Singh for Rohit Chopra. Wanted to dig into the service contract renewals. 4% year-over-year growth, when I compare that to last year a little bit weaker. Just wanted to see what was going on with the service contract renewal business. Is there anything there that was unusually weak?

The -- well, Q1 is seasonally our lowest quarter for our renewals in general. On a year-over-year basis the -- on a quarter-over-quarter basis, the renewals have actually grown 4%. So it is up $600,000. There is nothing that really necessarily trending in that. It is down from Q4. Q4 was a very large renewal quarter. We also probably had what we would some pull-forward, some large deals that with the customers decided…

Multi-year.

Multi-year deals where the customers decided to purchase prior to their contract expiring and to purchase in multi-year. We did see that effect a little bit in Q4, but in Q1, we are comfortable with the renewals growth and what the renewals were for that quarter. So we don’t see any kind of trend and any kind of a long term basis at this point.

Great. And then on the DSO that came down a lot. Is that sustainable as the strong DSO performance? And then my follow up to that is, just in general, when do you think voice over LTE will be generally available for most of the LTE providers currently today?

On the DSO question, the DSO came down dramatically from Q4, because Q4 is a very large quarter for us seasonally for booking and we collected at least $30 million worth of accounts receivable. So again, the 45 days for the DSO this quarter, it is also down from Q1 of last year. We would have to continually have strong quarters for that -- strong performance for that DSO to trend that way and also to probably maintain backlog.

And on the 4G voice, I mean the RFPs are already coming in looking at this and we will -- and that's why we think we need to be in a position to bid for those and this acquisition will allow us to do that. We hope that -- we are planning to have an integrated product with the rest of the product line based on this technology towards the end of this fiscal year. So we will be ready in 6 months or so to deal with these things, but we have enough information and to bid for these RFPs right now.

Would you say commercial voice over LTE offerings will be available in the second half of 2013 or early 2014? What is your sense on when are these services will be launched?

Yes, I don’t have, at this point, good information. I know that every meeting we go to people talk about it and it could be hype, but even with hype, I think we have -- the customer have to feel good about that whenever it happens even one year down the road that they can stay with the current vendor and user interface and everything. So it is very important to have credibility that we'll be the person -- we'll be the company ready with this kind of solution for voice as they roll it out some time next year.

[Operator Instructions]. Your next question comes from Jonathan Ruykhaver from Stephens Incorporated.

Yes. I just have a couple of quick questions. Growth, growth in Europe, surprisedly strong. What do you expect from a sequential standpoint in the current quarter from Europe?

We don't give guidance by -- I don't know anything about that, maybe Jean has something to add. But we don't give guidance for the sequential -- for any quarter based on geographic or markets.

I think the composition generally has been pretty consistent over the last few quarters. I think just from a trending basis, we would expect that composition to remain in the range that it has been. I'm just looking at bookings and everything to see if there is anything interesting in there, but there is nothing that comes to light at this point. It's just, again, we continue to grow in service provider and the larger service providers throughout EMEA and we're just very cautious on the financial environment.

Right, okay. I know that you don't give quarterly guidance. But if you look at the -- you have a comparison from last year from a sequential standpoint, 2Q from Q1, obviously that was a bit of an anomaly because of the weakness in June. But if you look back at earlier periods, it looks like sequential growth from 1Q to 2Q generally trended in the low to mid single digit range. And just given the macro concerns, don't you think it's prudent that we take a haircut to those historical seasonal trends? And again, I know you don't give quarterly guidance, but just from a kind of -- what kind of perspective should we have from your standpoint regarding September quarter?

No I don't -- I think we're comfortable with our guidance. I think as we had said that the revenue -- the revenue patterns that we see in Q2 over Q1, they generally do grow. It is a strong quarter for our government business and we have very good projects in pipeline, we're just cautious about actually the release of the money from the different people. On EPS, as we mentioned though, we will be integrating Accanto. And so we will see a slight depression in Q2 and Q3 for that integration, but then we do expect it to rebound in Q4 as we start to sell the product. So we think that will be neutral. But I don't -- I think we're comfortable right now. We don’t really anticipate that you should take any haircuts for revenue in the out quarters.

I have no further questions in queue. I will turn the call back over to the presenters for closing remarks.

Thank you everyone, and we'll see you in 3 months. We'll talk to you in 3 months again.

This concludes today's conference call. You may now disconnect.