Good day ladies and gentlemen, and welcome to your Pegasystems Inc. Q2 2010 earnings conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. (Operator instructions) As a reminder, today’s conference call is being recorded. I would now like to introduce your host for today’s conference call, Mr. Craig Dynes. You may begin, sir.

Good morning and welcome to the Pegasystems 2010 Q2 earnings conference call. With me here in Cambridge is Alan Trefler, Pegasystems’ Chairman and CEO. Before introducing Alan, I will start with our Safe Harbor statement and then provide my financial commentary. Certain statements contained in this presentation may be construed as forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. The words anticipates, projects, expects, plans, intends, believes, estimates, targets, forecasting, could, and other similar expressions identify forward-looking statements which speak only as of the date the statement was made. Because such statements deal with future events, they are subject to various risks and uncertainties. Actual results for fiscal year 2010 and beyond could differ materially from the company’s current expectations. Factors that could cause the company’s results to differ materially from those expressed in forward-looking statements include among others variation and demand and the difficulty in predicting the completion of product acceptance and other factors affecting the timing of our license revenue recognition, the mix of perpetual and term licenses, and the level of term license renewals, our ability to develop or acquire new products and evolve existing ones, the negative global economic trends and the ongoing consolidation in the financial services and healthcare markets, our ability to attract and retain key personnel, reliance on key third-party relationships, the potential loss of vendor-specific objective evidence for our professional services, management of the company’s growth, our ability to successfully integrate our acquisition of Chordiant Software, and other risks and uncertainties. Further information concerning factors that could cause actual results to differ materially from those projected is contained in the company’s filings with the Securities and Exchange Commission, including its report on Form 10-K for the year ended December 31, 2009 and other recent filings with the…

Thank you Craig and good morning all. Overall, the second quarter was very successful for Pegasystems. Despite a difficult economy, we had our 12th consecutive quarter of revenue growth. Very different from other firms who have claimed 2010 successes on easy compares after having retrenched in 2008 and 2009. We achieved licensed wins across a broad spectrum of our targeted verticals, we crushed our prior attendance record for PegaWORLD, our user conference, and we had over 25 systems go live in leading organizations around the world, because the largest acquisition in the company’s history and continue to deepen relationships with key partners, contributing to a record level of pipeline and sales activity with the world’s leading organizations. But before I talk more about some of that good stuff, let me acknowledge that there challenges, and we have chosen to make significant investments at a time when conservativism is the norm when economies are in distress. We have said many times before that we don’t manage the business on a quarterly business, but instead focus on the huge market opportunity in front of us and on the long-term business value growth of the firm. Despite a stressful economy and despite the fact that software is our lumpy business at best, the returns we see from our clients in the adoption of our technology is so significant that we are convinced that the right action was and is to continue to invest for long-term profitable growth. Let me give some color on our thinking about the business. First, the use of the BPM technology is a very big market opportunity, and we have a very excited highly differentiated product line. We have a leading technology that’s clearly pretty revolutionary in providing a level of agility to our clients that has kept them…

(Operator instructions) Our first question comes from Nathan Schneiderman with Roth Capital. Nathan Schneiderman – Roth Capital: Hi Alan and Craig, thanks very much for taking my questions. First one for you, as far as the Chordiant contribution goes, do you still comfortable that Chordiant is going to contribute $45 million to your pro forma revenue this year?

Yes, part of the increase in Chordiant revenue are directly attributed to Chordiant is on a GAAP basis in the Q. So, the non-GAAP basis is significantly higher. We gave guidance about $348 million in the GAAP basis and $360 million. So, we are confident that they will contribute. And you know, that’s just this year. Once we get going and we start really capitalizing on synergies, we expect better things for next year. Nathan Schneiderman – Roth Capital: Given that you are still thinking $45 million would be the Chordiant contribution, that would imply $33 million of Chordiant contribution in the second half, how back-end loaded do you envision that for Q4?

I don’t think the Chordiant contribution is terribly back-end loaded. Frankly, I think that as Craig said in his presentation, we worked very, very hard to try to make it, so the Chordiant contribution and the Pega contribution have both sort of come into the same stream. I assume you are getting the $45 million number from the fact that we originally were at $315 million and we now are at $360 million, if that’s correct. So, I don’t know that we are going to be in a position to tell you exactly how much of that at the end of the year was Chordiant or not, but obviously as I said, we feel comfortable, the $360 million continues to the right target for us. Nathan Schneiderman – Roth Capital: I have a couple of questions related to the guidance, Craig. I wanted to clarify, is your guidance for the $1.02 based on fully diluted share count, or is it basic share count?

Fully diluted. Nathan Schneiderman – Roth Capital: And does it include the negative impact of this $0.13 penalty for FX that you experienced during the first half?

Yes, it does. Originally, we didn’t want to forecast that. I mean, who can’t forecast that right. But it is what it is, we have taken that hit for Q1 and Q2 and we think that we have some measures in place to greatly reduce the fluctuations in that for the rest of the year. Nathan Schneiderman – Roth Capital: Okay. And a final question for you. On the $360 million of guidance for the year, what approximately do you see as license, your license, software licenses as a percent of total revenue, just pretty approximately there?

I don’t believe we gave that indication right now. Nathan Schneiderman – Roth Capital: Okay. Thank you very much.

Our next question comes from Laura Lederman with William Blair. Laura Lederman – William Blair: Yes, hi. Several things can cause a slowdown in the market. Obviously, you mentioned not adding sales capacity. You mentioned the difficult comparisons with last year, but other things that could impact a company's results obviously would be competition or market penetration. So, can you talk a little bit about those and why you think the slowdown in new customer billings doesn't relate to those two factors? Thank you.

Sure, Laura. So, a couple of things. In terms of market penetration, even in our traditional markets like financial services, we are far from having – penetrate to that market to the level where there is not a lot of opportunity and in fact we are adding staff in those existing markets to both better cover and cover additional accounts. So, I would say that even in our oldest market financial services, I don’t think we are more than 20% penetrated of where we could be as we take a look at just a very, very large organizations that are out there. Well, as a competition, I actually think the competitive environment is better than it was a year ago from our perspective. We have had a number of our competitors so to get sucked up by other companies, and customers have a pretty cynical view of what ends up happening particularly since inevitably the management turns over, you know, sort of aggressive entrepreneurial culture tends to become a little more staid and a little more corporate. So, it was a very competitive environment, it continues to be competitive environment, but I haven’t seen any meaningful change in the competitive dynamic. Laura Lederman – William Blair: Any major losses to the competitors this quarter that surprised you or –?

I think our win rates have continued to be around the same. We do have tough competitors. The biggest challenge I would say we have with our competitors is inevitably they will go in and having perhaps lost of the business, we will offer to let clients try it for free. One of the really cool things that happened this quarter is a customer that had made a decision with one of a very, very large competitors, actually back to us this quarter, having discovered that it was a reasonable spree. So, I am not seeing anything that’s particularly difficult, but it’s been a tough and a challenging market all along. I am actually quite pleased however that some of these smaller companies were acquired, I think that’s actually long term helpful for us. Laura Lederman – William Blair: If you look at how you did in the quarter, it sounds like it was below what you thought. What was different? Did deals slip? The pipeline wasn't as mature as you thought, in other words, why was it less in terms of a bookings quarter than you would have expected? Because you knew what your sales headcount was, etcetera.

Laura Lederman – William Blair: Final question for me and then I will pass it on. If you look at the pipeline, can you give us a sense of how much bigger it is year-over-year, how mature versus immature the pipeline is, coverage to revenue, in other words, something to give us comfort in the $360 million in revenues?

Yes, it’s up very significantly I would say year-over-year. Craig is looking for the numbers, but off the top of my head, I would say that the pipeline is up 40%, 50% over, Craig just checked, it’s in about the 50% range of increase. Obviously, when the pipeline increases that much, more of it early-stage than late stage, but we think that the pipeline is generally of extremely high quality. Laura Lederman – William Blair: Actually – I am sorry, go ahead.

Laura Lederman – William Blair: Thank you.

Our next question comes from Raghavan Sarathy with Dougherty. Raghavan Sarathy – Dougherty & Company: Good morning. Thanks for taking my questions. Start out with a clarification question, Craig. So, your full-year guidance of $1.02 includes about $0.10 or so FX loss. So, you did $0.27 in non-GAAP EPS in the first half. So, you are implying that your full-year guidance implies $0.75 non-GAAP for the second half. Did I understand that correctly?

As I said in February and as I said today that this was always going to be a backend loaded quarter when it came to profitability. Raghavan Sarathy – Dougherty & Company: So, the backend loaded year, not the quarter. So the number we are looking at, $0.75 for the second half, as implied by your guidance, that's all I wanted to make sure.

Yes. Raghavan Sarathy – Dougherty & Company: Okay, all right. So in terms of, I think, Alan, you kind of talked about the new customer wins are up year-over-year. The ASPs are down. Can you give us some color on why customers are buying in small chunks this year versus last year, when it seems like macro economy is improving and there seems to be more spending on IT?

I think remember, we sell more to the business people than we sell to IT. So, most of our projects are justified in the business. I am hearing a bit of an echo on the line, I am not sure if the –

It seems like you are echoing off of the current questioner’s line.

If you could mute yourself, that would be good. So, I would say that the ASPs were the – what I would describe as kind of lack of whales, would do to sort of individual circumstances of the customers. There were customers that could have made much larger purchases, but wanted to sort of take it a bit slower, which I don’t think there is anything particularly wrong, in fact I would generally prefer working with our clients that way. So, there was nothing macro. The reality is we have three whales in the first half of last year and it was different this year. Raghavan Sarathy – Dougherty & Company: All right. And then in terms of healthcare vertical, Craig, you kind of touched upon that. Do you see the reform actually holding up things and do you expect that to change in the second half of the year?

So, I think that what we are seeing is some temporary sort of uncertainty in that market. I think people are now getting over that. They are starting to think about purchase decisions and the pipeline is actually very strong for healthcare for the rest of the year. And by the way, we have always found historically that healthcare has been much of a backend loaded business. And again, we are looking at a tough compare where last year, it was last year we closed significant healthcare deals in Q2 and healthcare deals in Q3. So, last year was an anomaly. Raghavan Sarathy – Dougherty & Company: All right. Then one final question and I will pass on. So, this question was asked before, so let me ask it a little differently. So, if I look at the license revenue growth for the first half, it was about 11%. I know you have not provided guidance on license revenue growth in the past. That said, when you look at again the revenue growth in the first half, you are looking at low teens from mid-40s that we saw recently. And also you have (inaudible) effect on EPS in the second half. So, things are a lot different now than in the past. We haven't seen this kind of backend loaded year. So, given this backdrop, can you give us some color on how to think about license revenue growth in the second half?

I think the right way to think about the license revenue throughout is to realize that we only had a little additional capacity of experienced sales reps in the first year and first half of the year. So, if you take a look at the first half of this year compared to previous years, our growth in the sales force, which is directly tied to license revenue was modest, very, very modest. I think Craig cited only 15% more than it was a year ago in terms of experienced reps. Now, we have brought on a lot of reps who have much shorter tenure, but will be hitting the sort of nine months that we look at in Q4 and going into 2011. So, we have a very material increase in the sales force, that it’s not a slam dunk, but it’s our job to get those guys productive and you can see it in the headcount numbers that we talked about and that we report in the Q, that we have actually jumped up the sales force and the support for that sales force. So, that’s why and I don’t think it’s actually very complicated, that’s why I would expect that it will be backend loaded.

And as I said, it’s very typical for us to license revenue till down from Q1 and Q2, in fact it’s done that virtually every year since 2004.

Sir, would you like us to move on to our next question?

Yes, pleasure.

Our next question comes from Steve Koenig with Longbow Research. Steve Koenig – Longbow Research: Good morning. Thanks for taking my questions, guys. Let me start with some housekeeping questions and then move on. Craig, in going through your Q last night, what – we found commentary that we were looking at the contribution from Chordiant, and we found commentary that – this is on a GAAP basis, that Chordiant maintenance added $3.9 million, and ProServ from Chordiant added $3.9 million. So, that gives me $7.8 million contribution from – on a GAAP basis. And that is even – so assuming no license, is that number higher than the $7.2 million contribution you mentioned on a GAAP basis? So, I am wondering, can you help us with that calculation?

As I said, there was a very little contribution from Chordiant on license revenue. It was primarily in maintenance and in professional services. Steve Koenig – Longbow Research: Okay. So, the Chordiant maintenance and professional services contribution was at $7.8 million, was it $7.8 million or was it $7.2 million?

It should be $7.8 million, I believe. I will look at the Q, I don’t have it in front of me, but it’s $7.8 million I believe. Steve Koenig – Longbow Research: Okay, thanks. And then can you remind us, the licenses that Chordiant has typically generated, are those mostly perpetual, term or subscription, or are you accounting for them differently than Chordiant did?

Historically, I would say the licenses were very, very significantly standard traditional perpetual licenses, and actually if you look back on their history, they were also really quite lumpy in terms of when they would hit. We are planning to offer them in a variety of mechanisms more consistent with how Pega licenses.

And we will not be changing the accounting. The accounting is what the accounting is according to the terms of the license agreement. Steve Koenig – Longbow Research: Okay, and the deferred revenue write-down haircut that you took on licenses, that would relate to the perpetuals then?

That refers to the maintenance. Part of the craziness of purchase accounting is that if somebody was to renew $1 million of maintenance agreement on April 19th, we would probably only be able to report something like $600,000 of that maintenance revenue as opposed to a very similar maintenance renewal on April 25th after the acquisition where we will get the full million. So, that’s why we add that back to give people the true run rate. Steve Koenig – Longbow Research: Okay. But the thing that confuses me is in your reconciliation in your print, you also have a haircut on the license lines as well, in the ProServ line. So where do those come from?

There is a small amount of license revenue, a small amount of ProServ revenue that fits and deferred and we do take a small haircut on that, but for the most part, most of it is in maintenance. Steve Koenig – Longbow Research: Okay. Great. And then move on to maybe last housecleaning questions here. So, when I look at what kind of – how you need to generate the EPS in the second half that you are targeting, assuming no big FX gain or losses and assuming no big change to the other income line, I come up with you need an operating margin around a 20% level. Am I thinking about that the wrong way or is there something very wrong with my calculation, or if not, what is going to get us to that kind of operating margin?

As we said, the bookings for this year are going to be very much backend loaded as our customers buy out of annual budgets and those bookings especially at the license piece are virtually 100% margin and fall right to the bottom line. So, we will be adding additional staff, but we will be additional staff at a reduced rate in Q3 and Q4, and there are some Chordiant staff that are onboard and they are in the OpEx line, their transitional roles will end and their costs will follow during Q3 and Q4. Steve Koenig – Longbow Research: Okay. And Craig, did you say earlier those are more G&A-weighted than in the other OpEx lines?

It’s about 20 of them in the G&A line. You could imagine that once the acquisition closes, they have to help us take off their stub year, and then they have to help us pick up ending balances into our accounting systems and do a lot of work. So, yes, there are a lot of G&A people that are going to fall off by the end of Q3. Steve Koenig – Longbow Research: Okay. And then just two last questions, on the 89 addition to the sales organization, can you guys talk about what kinds of roles were those hired into? I assume heavily weighted towards quota carriers.

Yes, absolutely. We hired quota-carrying sales reps, they also need what we call sales engineers or sales consultants that needs to be able to work with them, and so you are kind of buying these guys almost in pairs, as it were. Steve Koenig – Longbow Research: Okay. Got you, great. And then last question, Alan, as you are going out and talking to the Chordiant customers, especially you mentioned over the last month or two, and you talk to them about the roadmap, the kind of a two-part question there is can you give us a flavor for some of the highlights on the integrated product roadmap that you are talking about with them? And secondly, how are they responding to that?

I think the response is really overall quite favorable. We have come up with ways that we can preserve the clients’ investments I think quite well. That was one of the things that they were worried about. I think we are also going to increase the investment in, for example, well just pragmatic things that the customer ends up getting in both the decisioning and in some parts of the foundation products, which are the predominant products that customers were. We are worried about, and frankly, the customers had seen – Chordiant’s revenue had declined pretty precipitously over the last two years as they went through the top 2008 and 2009 period. They went down from sort of mid-120s to in the 70 something sort of range. And so, I think most clients anticipate that Chordiant was going to be acquired as did a lot the staff frankly, too. Having Pega acquire them was viewed as like wonderful compared to alternatives like Oracle or other sorts of firms. And I think we have lived up to that expectation with both the customers and the staff as we work hard to really bring them together. So, I would say that overall it’s been quite positive. Steve Koenig – Longbow Research: Terrific. Thanks so much for your answers.

Operator, are there more people in queue or are we just –?

Brian Murphy – Sidoti & Company: Hi, thanks for taking my question. I just have another question on the guidance. I am just trying to par some of your comments with the guidance. I am hearing sort of lack of whales in the pipeline, lower ASPs, deals in the pipeline are in the earlier stages and license bookings in the first half of the year were down year-over-year, but yet to get to that sort of 20% operating margin range that the guidance implies for the back half of the year, that would seem to imply a pretty significant acceleration in license revenue growth. So, the question is what gives you the confidence or sort of increased visibility given the lower level of deferred license revenue backlog that you can sort of hit that guidance?

Well, one thing just to be clear. There is not a lack of whales at all in the pipeline, in fact we have some lovely whales swimming along in the pipeline right now. The reality is that some of the deals in the first half just weren’t the whales that sometimes occur. I don’t think we are unduly counting on the whales to make our guidance number, however to be blunt, we like the whales when they happen, but sometimes you end up paying for the whale and what you are able to do long term with the client. So, we try to take a pretty balanced approach. We look long and hard at the numbers and the reality is we have a lot of work to do in the second half, but we have onboarded a very significant number of really terrific sales people. Some of them have actually closed business in six months, which is not what we expect and was actually unusual in the level of quality of staff and the effectiveness of the onboarding makes me feel really good that these hires were the right thing to do. So, some of that I know is perhaps more subjective. Objectively, the pipeline is well up. But it’s not really at all surprising that it would be somewhat earlier stage given that the sales reps who generated it are all earlier stage as well. So, I am not seeing anything in that, that causes me concern, but yes, we do have a lot of work to do. Brian Murphy – Sidoti & Company: Okay. And Alan, you know, you mentioned that you are getting more deals from new clients. Can you just remind us sort of historically what percentage of license bookings come from new clients, maybe where it is today, and where you expect that to be in any year from now?

Historically, for the last couple of years, we have seen about 70% of the revenue be follow-on revenue from existing customers. So, quite a bit, and that’s why we think it’s a good thing when we hit more new clients, particularly when these are clients who have a capacity to buy a lot more. Brian Murphy – Sidoti & Company: Okay. And where is that today, or where has it been in the first half?

I think it was similar. We got a lot more new clients, but as I said, they weren’t whales. We got about twice as many deals in the first half of 2010 as in the first half of 2009. It wasn’t a minor increase, it was actually just an enormous amount of activity. Brian Murphy – Sidoti & Company: And what kind of sort of uptick are you seeing from your emerging verticals and life sciences manufacturing and telco I guess?

I think that in the life sciences area, we are very, very excited. That’s a market that also continues to consolidate. Oracle just gives up phase forward, and a lot of clients hate that. They don’t think they are looking for new and more agile ways to do things and don’t necessarily trust that Oracle is always doing what’s in their interest. The telco vertical is going to be spectacular for us. We can see that Chordiant actually brought a lot of telco customers and expertise. We signed some of our first significant business in the retail vertical in the past quarter, and one thing, even though it’s not a new vertical, one thing I would say is that I had complained as you may recall in the past that we just hadn’t gotten government rights. We have actually really increased the team associated with the government, and I am pleased to say that they are scoring and that their pipeline is looking excellent as well. So, I think I am prepared to actually declare that problems having been fixed and then we have to go and move forward cashing on it, but there is a lot of opportunity there, too. Brian Murphy – Sidoti & Company: Great. And maybe one more quick housekeeping question, just your geographic breakdown. The other bucket, there was a big jump in revenue in that other bucket, could you just remind us what’s in there and what accounts for that’s like in the June quarter?

You know, I was actually a little surprised about that as well when I went down to Craig, and I actually hadn’t thought it had been that much in other, but it turns out that when we say US, we literally mean US instead of North America, which I think is actually, I actually think of North America as being sold together.

But the SEC doesn’t.

The SEC doesn’t. So, a big chunk of that was we had a very, very good quarter in Canada. Brian Murphy – Sidoti & Company: I see. Thanks very much.

Our next question comes from Derrick Wood with Wedbush Securities. Derrick Wood – Wedbush Securities: Good morning, thank you. So, how much did Chordiant contribute to the backlog, could you give us a stat and the Chordiant telco win, was that recognized in the quarter, or is that going to be recognized over future quarters?

Yes, I think some of the telco win was recognized in the quarter. It wasn’t a whale or anything. So, it’s just more of a new entrée. And I don’t know that we actually give backlog contributions for Chordiant versus Pega, but the Chordiant as you would expect was not enormous when we acquired the company, and it’s not actually the major part of what contributed to our end of Q2 pipeline, because frankly, we are still, we have just rolled out the training for Chordiant to the broader sales force as we have gone into Q3. So, the broadening of the people who can sell Chordiant technology is really just, and it just happened. So, it was not meaningfully contributing to that pipeline increase that I talked about. Derrick Wood – Wedbush Securities: So, would you say that Chordiant, maybe with the training going on with Chordiant, maybe the pipeline has come down a little bit since that was acquired?

No, I think it was about flat. It might be a little bit higher, because we just have more people there, but as I said, the training didn’t really happen until Q3, if you can think about it, we really did an awful lot of the training in July. Derrick Wood – Wedbush Securities: Thank you very much.

On the pipeline number, the pipeline increase I cited was as of the end of Q2. Derrick Wood – Wedbush Securities: Okay. What are you doing with the foundation talks, just maybe proactively sold to new customers or are you (inaudible) focus on maintaining the installed base there?

In certain markets, we are continuing to sell foundation to new clients, though most clients are selecting and have opted for the Pega version of customer relationship management which is quite a bit different, but we have actually been pretty pleased with what we think is going to be about the stickiness and the ongoing interest in foundation and part of our roadmap was to make two meaningful improvements to the foundation product that I think were very well received by the clients. Derrick Wood – Wedbush Securities: Okay. Craig, I think the Q2 is –

Derrick, you broke off, could you repeat that? Derrick Wood – Wedbush Securities: Yes, can you hear me now?

Yes. Derrick Wood – Wedbush Securities: Craig, so I was saying, I think you said Q2 was the toughest quarter of the year and I was hoping if you could give a little bit more color on, and I would imagine and revenue recognition as well as bookings, but why is Q2 a tough quarter for you? Lot of other software companies have did the rebounds from Q1, why do you see Q2 as being a really tough quarter?

We see for a variety of reasons. First of all, when we look at new license signs or bookings, there is a substantial difference between bookings in Q1 and Q2, and Q3 and Q4. That’s no mystery in this business. Most of the bookings come in, as I said, it’s very unusual for us to have even as much as 30% of the bookings in by the end of Q2. So, Q1, we get a lot of fall over from deals that we closed in Q4. A lot of times we don’t have complete arrangement, we have revenue recognition issues, and those comp fall into Q1. So, by the time you hit Q2, you have got slower bookings in Q1, slower bookings in Q2. So, it’s always been a little bit of a struggle, and as I say, historically, Q2 license revenues have always been lesser than Q1 for, I think I look to the day as back as 2004. Derrick Wood – Wedbush Securities: Okay. Well, is there any color you can give, since you guys don’t give annual guidance, it’s been real tough for some of us to model quarterly, how it’s been tracking so far in Q3?

I think once again, I think you could pick up that our tone is actually pretty positive, we have affirmed the $360 million number, and we have work to do, but we are feeling good about what’s going on in the business in terms of the Chordiant acquisition as well, which I think is going to be very exciting. The thing I will tell you is that given when we hire the sales folks, we expect that the preponderance of them will be at the nine-month plus level in the fourth quarter. We started hard in the beginning of the year, pushing, hiring, we are pleased with the way that hiring has gone. I will also say one more thing, we don’t actually manage the sales force particularly to quarters either. The sales people have annual quotas and one of the things I really like is that given this target account model, they are really interested in making sure that they do the right deal for the client, the right deal this year and the right deal next year, so that – I actually sort of an interesting thing to see a sales guy step back and say, you know, maybe we are better off selling something a little smaller now, because I will get something in Q4, I will get something next year, we actually have that behavior which I think shows a real maturity on their part, and past year has paid off. So, those are the things that I would say should give positive color to the fact that we think we can get the job done on the second half.

I think just to add one point to it, and that is that I said that in Q2, we were up in Asia, we were up in Europe, we were up in every vertical with the exception of healthcare and I think a lot of healthcare was caused by uncertainty due to the federal government changing some of the rules, but I think that’s temporary. We have a great healthcare team, and I look at their pipeline, and I look at where in the pipeline their deals are, and I think they are going to have a very strong Q3, Q4, and as I see, that’s the only area where we were down.

Those in line have actually left the queue, and there are no further questions at this time.

All right. Well, thank you very much, and we will look forward to next quarter’s call and in between meeting with investors on individual business.

Thank you.

Ladies and gentlemen, that concludes today’s presentation.