RADCOM Ltd. (RDCM) Q1 2015 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the RADCOM Ltd. First Quarter 2015 Results Conference Call. All participants are at present in listen-only mode. Following management’s formal presentation, instructions will be given for the question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, April 28, 2015. I would now like to hand over the call to Ms. Noga Fisher. Ms. Fisher please begin?

Thank you, Johnny and hello everyone. With me today are RADCOM's CEO, David Ripstein; and CFO, Uri Birenberg. By now, we assume you have seen the earnings press release, which was issued earlier today is available on all the major financial news feeds. Please note the management has prepared a presentation for your reference that will be use during this call. If you’re not yet downloaded it, you may do so, there’s a link on the Investor section of RADCOM’s website at www.radcom.com/investor-relations. If you have any trouble please call us at our U.S. number 408-805-3009, that’s 408-805-3009 or send Tally an email at tallyk@radcom.com. And she will send it to you directly. Before we begin, I would like to review the Safe Harbor provision. Forward-looking statements in the conference call involve a number of risks and uncertainties, including but not limited to product demand, pricing, market acceptance, changing economic conditions, product technology development, the effect of the Company’s accounting policies and other risk factors detailed in the Company’s SEC filings. The Company does not undertake to update forward-looking statements. In this conference call management will be referring to certain non-GAAP financial measures, which are provided to enhance the user’s overall understanding of the Company’s financial performance. By excluding certain non-cash charges, non-GAAP results provide information that is useful in assessing RADCOM’s core operating performance and in evaluating and comparing our results of operations on a consistent basis from period to period. The presentation of this additional information is not meant to be considered a substitute for the corresponding financial measures prepared in accordance with Generally Accepted Accounting Principles. Investors are encouraged to review the reconciliations of GAAP to non-GAAP financial measures, which are included in the quarter’s earnings release. Now I’d like to repeat the information about the presentation. If you have not downloaded it yet, you may do so through a link on the Investors section of RADCOM website. If you have any trouble, please call us at our U.S. number 408-805-3009 or send Tally an email at tallyk@radcom.com. Now I would like to turn the call over to David. Go ahead, please.

Thank you, Noga and thank you all for joining us today. I’m very pleased to report another strong quarter for RADCOM. As you can see on the third slide of the presentation we have reported $6.4 million in revenues, and 82% gross margin, $1.3 million in non-GAAP operating profit, an earnings of $0.10 per share. This proves again that success of our MaveriQ product and our transition to a software-based business model. This is the continuation of our trend for the last two years, and especially the last four quarters since we introduced the MaveriQ. In Slide number 4, we show Q1 2015 as compared with Q1 2014 and Q1 2015, demonstrating the continuation of the positive trend. As you can see in Slide 5, our margins have also moved to a record level. Already in the first half of 2014 we were very close to our long-term target of 75%. And this quarter, we pushed it to gross margin of 82%, a new record. The light grey line in the chart shows you when the MaveriQ was introduced and you can see that it is a totally different story before and after. And Slide number 6, you can see how the rise in sales and gross margin, together with the stability of our operating expenses has increased our operating income. On a non-GAAP basis, our operating income for the quarter was $1.3 million. One of the best quarters we have ever had. So we can see the dramatic improvement that the MaveriQ has made on our sales, margins and profits. I like to take just a minute to explain again why MaveriQ has succeeded. We designed the MaveriQ to address the need that operators have for better quality of service solutions, especially for their LTE networks. These networks are so complicated that it is almost impossible to solve the quality issues we found the right tool. And operators need to solve quality problems, because they lead directly to the loss of the customers and revenues. The MaveriQ solved these issues better than any other product on the market. This is because it is stronger, more flexible and smarter than anything else of them. The fact that it works in software rather than in hardware is a big selling point. It means that the product is ready for virtualized environment, ready for our customers when they begin the transition to energy [ph]. In this, I believe that we are two years ahead of the market. For us, the fact that it is a software-based product means that it is cheaper and faster to install. This will enable us to reduce the time rate between booking and revenue recognition from as long as years to just months. Market developments are working in our favor. The NFC rollout continues to pick up speed in our traditional markets, especially in APAC and Latin America. We are participating in tenders which both existing and potential new customers and we feel very positioned for strong win rate. Some of these opportunities are in the Unites States, which are NFC capabilities have opened up for us. Our bookings for the quarter were in line with our typical pattern, we generally benefit from budget flashes in the fourth quarter, followed by the quite fifth quarter. Nevertheless, we made important progress in a number of large tenders and hope to be able to announce news good soon. In parallel we continue to make progress in deploying the orders in our backlog, including the two over a $4 million deal that we announced in the last several months and some legacy work as well. Although it has been the same for the past several quarters, with a clan [ph] base of over 60 operators, many of whom are deploying LTE, you can see the upbeat potential for the MaveriQ and understand why we are so confident. So that is for the first quarter. We are very pleased with our progress and going in line with our plans. Our products are good, our markets are growing, our team is motivated and our operation, are under control. We believe that we are positioned to achieve go throughout 2015 and we continue working to create shareholder value. With that I will stop and turn the call over to Uri to discuss the financial results. Uri, please.

Thank you, David. Since we have the financial results on Slide 7, I will just go over the highlights. To help you understand the results I will be referring mainly to non-GAAP numbers which exclude share-based compensation. It is important to mention that the value of the options that were granted to emplace in Q1 has become more significant as our share price has gone up over the last few months, making a larger impact on our operating expenses from a GAAP point of view. This makes it even more important to look at our non-GAAP results in order to get the full picture of our operation. Revenues for the quarter over $6.4 million up 16%, compared with the first quarter last year. The majority came from the sales of the MaveriQ. As a result, gross margin for the quarter was 82.2%, a new record for us. We compared to that 67.7% in the first quarter of last year. So as you can see, the shift to a softer model is bringing a permanent improvement to our gross margin. At the same time we expect the gross margin to continue to shift from quarter-to-quarter based on the exact mix of sales. We are sticking to our long-term target of above 75%. On a non-GAAP basis our gross R&D is down slightly from last year. Net R&D, however, is up by $250,000, reflecting a delay in the timing of the receipt of our grant from the chief scientist office. We expect to have a catch up in the second quarter, when we receive the grant. Sales and marketing expenses were up slightly in the quarter, reflecting new personnel that we have recently recruited and we expect to continue investing in our sales and marketing teams in the near future. As David said, we are participating in more opportunities than ever before and doing this well requires an increase in our sales personnel. General and administrative expenses for the quarter actually decreased slightly on a non-GAAP basis and we are at a good level for our needs. Taking together operating expenses went up by about 8% during the quarter, compared to Q1 2014. Using operating profit of $1.3 million on a non-GAAP basis, which is a 20.1% operating margin. This compares to just $42,000 in operating profit on Q1 2014, which is less than 1%. So we have made outstanding progress in a short time. In the future, the operating margin will obviously fluctuate along with the gross margin according to the mix of sales. The next item is financial expenses, which have been fluctuating significantly from quarter-to-quarter along with evaluation of the Brazilian real and the U.S. dollar. If you look at the presentation, you can see how the exchange rate has developed. It was BR2.66 on the December 31, and then went all the way up to BR3.2 on March 31, a devaluation of about 20% in just one quarter. Today, the real is about BR2.92, meaning that it has going up just in April by about 8.75%, compared to dollar. That translates into financial income of about $180,000. So if there is no change we will have meaningful financial income in Q2. During the first quarter, our financial expenses totaled $452,000, while in the first quarter of 2014 with financial income of $206,000. As a summary, you can expect our financial expenses to continue to fluctuate from quarter-to-quarter. Net income for the quarter, on a non-GAAP basis totaled $821,000 or $0.10 per basic share, more than three times [indiscernible] in the first quarter of 2014. So our results continue to improve in line with our plans and expectations driven by the MaveriQ. We believe the best is still ahead. Turning to the balance sheet, all parameters are in line with our expectations. As of the end of the quarter our cash-and-cash equivalent totaled $4 million, compared with $2.3 million one year ago. DSO for the quarter were 117 days. Our receivables were relatively high reflecting primarily the delay in a payment in one large project, otherwise receivables [ph] would have been at their normal level. In [indiscernible] we already received part of the payment and we expect to get the reminder by the end of Q2. Inventory bounced from $3.9 million last year to $2 million reflecting the transition to software-based product. So we are in a completely different place in terms of stability and flexibility. Back to you David.

Thank you, Uri. So that is for the fifth quarter. The market is full of [ph] opportunities, our products are excellent, our team is motivated and we are confident as we look for the future. As to guidance, the lumpiness of our business together with the remaining legacy projects in our backlog, it is difficult to make projection on a quarterly basis. What I can say is that we are on track for delivering additional growth throughout 2015 and that our target gross margin remains above 75%. We will revise this policy when our transition to software is complete giving us better short-term visibility. In the mean time, we continue on tracks with our plans for growing the company and creating shareholder value. As always, thanks for your ongoing support and participating on this call. With that we would be happy to take your questions. Operator?

Thank you. [Operator Instructions] The first question is from Amit Dayal of HC Wainwright. Please go ahead.

Thank you. Hey, David, Uri, congrats on the quarter. Just a few questions from my side, in terms of the revenue growth, is primarily coming from existing customers or new customers. If you could provide some color on number of customers added in the quarter.

Hi, Amit, good morning. For the revenue this quarter is mainly from existing customer, and as we said in the call bringing new staff to dissolve helps penetrate new opportunities. So the focus is to see new customers in second half of the year.

And are these people going to be focused in Asia or Latin America?

Basically we are hiring in all territories, as we see huge potential for our technology. So we are hiring in Asia Pacific, in EMEA, U.S., and Latin America.

Okay, perfect. So gross margins very strong, congratulations on that. How should we be looking to kind of model gross margins for the remainder of the year? Should we be closer to the 75% levels for the rest of the year, is there an opportunity to maintain the level we’ve seen in the first quarter?

Yes, Amit, we are very happy with 82%, but we should expect fluctuation in this parameter, and I think it’s better to look on a trend. So this is why we’re still saying that we are aiming for 75% maybe above it. So I suggest to be conservative for now.

Got it. But is this an indication that some of the legacy products either out of the inventory or are being recognized now and we have an opportunity to kind of be more consistent with these levels or closer to these levels in terms of gross margins.

Yes, we have less and less legacy in our inventory. So the moment that we will feel that we finished the transition for software or for the full MaveriQ solution, then maybe we will be able to plan better the gross margin or to focus the right number. So you’re right and every quarter is a little bit better, but again you should expect fluctuation and it’s very hard to plan on that.

Got it. The big I guess, thing that stands on this quarter is the forex related losses. This is not an operating issue I guess, but if you could provide some color on what the strategy is to kind address this or you pretty much just then you stay neutral on it and let the markets work itself out. And whether most of that exposure is to the Real or are you seeing pressure from other currencies as well?

Yes, the main issue we have this quarter was and also in Q4 was with Brazilian Real. We see no alternative, but to stay a natural for that and as we indicated in his wording we basically in the first four weeks of [indiscernible], we’ll always be again somewhere meaningful financial income. So again you can expect fluctuation on that. What we are doing is we are trying to secure with contrast the life fluctuation, especially with the contracts with our customers in Brazil. So looking forward, I believe we would see less fluctuation in Brazil and against the Real, the Brazilian Real.

And are you implementing similar contracts for other geographies as well?

Well we – as you know it’s not only contrast design in our full control, but we are trying to learn from that and to improve the way we are doing business with the customer in a lot of other places, the currency of the contracts or the purchase order is in dollars. So there is less influence or no influence at all. But again in Brazil, we had a specific issue and I think that now we will address it for the future purchase order.

Got it. Just in terms of new product offerings, can you talk about anything that you’re doing within the MaveriQ family of offering that are going to be sort of an opportunity for up sell or line extensions of your offerings already for the remainder of 2015 that could continue helping sales group?

Yes, there are two areas that we are adding capabilities to our solution. One is adding more functionality in different area. Till lately, we were very focused on troubleshooting and quality. And now we are more and more adding capabilities around some marketing reports for our customers, some reports related to security and stuff like that. So I cannot for now report yet meaningful income from this direction, but we believe that it will bring additional value to our customer and they will pay for it. And this is a good development that we had, it’s part of the investment in R&D. Another dimension which can be meaningful, it’s around the NFV. Basically, we were NFV-Ready let’s say in the last year, but especially in 2015, in the last four months, we invest meaningful amounts of R&D efforts around full functionality, full virtualized solution. Again the market is not yet there our customers are not yet in virtualization, especially our customers in the emerging markets. But there are operators, especially in U.S. and Europe, Q1 operators that start investment in NFV in virtualized environment. And by that we want to show them that we have a great solution and a full support in virtualization. So this is another investment that we are doing and hopefully it will bear fruits in the future.

These are the things that probably could play out in a more meaningful way in 2016 I guess.

2016 maybe something in 2015 again it depend on the plans of those operators, it’s really hard to focus the business, but we have certainty that this is the need that the operators, Tier 1 operators have especially in EMEA and U.S.

Okay, got it. Thank you David, thank you Uri.

Thanks.

The next question is from George Marima. Please go ahead.

Thank you good morning David. I had some questions around the your sales effort, how many sales people do you have today?

Must be [indiscernible] but I don’t know the exact number, how you defined a sales guy, it’s a free sale, port sale and [indiscernible]

For a quarter, the guys that carry a quarter.

Yes, I prefer to skip the answer on that since also competitor can hear this call as well.

David, well let me ask it a little bit differently more generally, you talked about, you expect to hire new people. I know you were looking to hire or did hire about a quarter or two ago another couple of two or three people for sales. But what I’m trying to figure out is or I kind of – the magnitude of your growth and your sales efforts that you are growing your sales efforts by 5% or 10% or 50% or…

Okay.

Yes. Okay. I think I can answer this, maybe two questions. The planning to be in the end of Q2 with double sales people than we had in the beginning of the year, sales peoples that carry a quarter.

Okay.

So those people, part of them, already started to work, and they are more focused on new territories.

And what’s driving the decision behind this? Why have you being so aggressive in it?

We gain a lot of confidence with the MaveriQ, with the new technology that we released to the market exactly a year ago. We see that the costumer know to appreciate this technology we see that it cover all the needs that the customer rising in tenders. So we feel that we need to see more opportunities. We know that the market is big, the market is more than a $1 billion, and we need to increase our addressable market. So in order to increase our addressable market we need more reliance on the field and I think this is a risk we should take to do this investment and take more opportunities, of course the influence for those opportunities or for these efforts we will see that in 2016 maybe a little bit earlier, but this is more longer – long time investment.

And if you look at your pipeline for 2015, how much of this is felling up to exciting customers versus new customers?

Yes, we are now, since we started this effort in the sales organization and we generally beat the strategy and open our eyes to new customers and new market. I can say now that the pipeline that we have new opportunities with new customers. In percentage I can say, 60% existing, 40% new customers. Again new customers, you need to gain their confidence, it’s a long process sometimes they involve proof-of-concept, but again having a new customer it’s also something that we need to bring and we are working on that.

And can you maybe characterize sort of the sales process and with Tier 1 North America and European players, what that looks like.

I think in general, the sales process – in general the sales process [indiscernible] is the territory is that there is in – if it’s a new customer than there is an RFP [ph], I mean they write-down or they are amazed and we are answering, they are asking they are having at least let’s say of eight may be ten competitors, then they reduced the number, they choose two may be three, during their proof-of-concept, they decide who is the best product in term of technology and then they start negotiating the price. This is the average sale process, it’s a long sales process if it’s a new customer. If it is existing customer and he’s using the solution, then the process is shorter, they can ask for more capacity because the network is growing, they can ask for more application. So it’s more software packages, they can ask for some more or different technology, if they are moving to LTE or Voice over LTE, et cetera. So in general those are the two ways to do business. There is one exception and this is more related to Tier 1 U.S. and EMEA that adopt the NFV since NFV [indiscernible] virtualization is new for everybody, I think, those customers are more checking the technology and learning what you can propose them before starting the business circle. So it’s hard for me to say if there will be RFP [ph] for that or they will just choose the technology, it’s a new dimension and we’re learning it.

How has the feedback been from these Tier 1s on new product, what kind of feedback are you getting?

The feedback is great, again this is why we are getting this feedback from existing customer, we are getting this feedback from new customer, we are getting this feedback from the NFV test that we are doing on customer side. So this is why again we choose to invest more for us [ph].

Can you kindly explore little bit more in the past, in the history, RADCOM’s legacy products you have not really had much market share any in the U.S. and Europe producing not a lot, we look at Tier 1 players, what has changed with this new product is it that the NFV factors that make you one of your player there or what’s different now than it hasn’t been in the years past?

Yes, first of all currently still our main market is Asia-Pac, in Latin America. And we took this decision to go to the emerging markets, because we understand, I think, it was back then in 2008 to 2009 or something like that, that we understand that first of all they are going to invest more on the – that their growth pattern is better than in EMEA and U.S. This is one reason, the other reason was practical reason that the U.S. market was saturated to its competitors. According to our analysis, the NFV virtualization open the door for everybody now and it’s opened the door for new solution. So Q1 all the network elements that we have today are basically non relevant and is building again the network around the virtualization and for in his perspective, he need to choose the best technology in each of the parameters [ph]. We are service assurance company, customer experienced management company and this is our field and if you want now need to decide what is the best technology that you can take today, no matter what he had in the last five years, ten years doesn’t matter. This is our analysis, this is why we are investing now, more in the U.S. and EMEA than we used to invest in the past.

You had mentioned earlier that your technology is in some ways like three years ahead. When you’re competing against these big Tier 1 North America does that apply in those cases where you feel like your technology is well ahead of your competitors in it? A – David Ripstein: We feel that our technology first of all ready already today for the virtualizing format, which is not much [indiscernible] as you know in the Tier 1, this is one thing and the other thing is yes, we feel that internal technology, we are ahead of our competitors.

Okay, thank you, David.

Okay.

The next question is from Nicole Gilliat of Ion. Please go ahead.

Hi, I have few questions today. Where there any notable deals signed in the quarter on MaveriQ?

Actually the majority of our sales [ph] are MaveriQ.

Okay. Can you quantify the size of the deals signed in the quarter?

Yes, around 90%.

No, but this size of largest deals.

We have – you mean the – from the revenue, right?

Yes.

We have one large customer that bring up a lot of revenue this quarter.

Was that a Tier 1 customer?

It is a Tier 1 customer, yes.

Where there any large deals that came close in the quarter but are going to be pushed out to Q2?

What do you mean close to the quarter and pushed out, I mean, we are not manipulating the numbers.

No, where there any – where you in the sales process in Q1 that were delayed and you should see those coming in the second quarter?

Yes, we have a lot of potential. I mean there are always deals and yes, there were deals for Q1 to Q2 and Q3 and also for Q4 there some deals. It is a common practice in the industry, but again we feel very comfortable with pattern we have.

Okay.

Even if there are some deals, I mean, in the end of the day, the customer need a solution and he will choose somebody.

And can you comment on what the competitive landscape is like at the moment given the Netscout, Tektronix agreement?

So basically we are going to see one big company which is going to be Netscout adopting Tektronix. So it’s hard [ph] for me to measure, I mean, I have my numbers but I’m to ensure that they are accurate, so I don’t want to present them, about the size of their market. And beside this big company Netscout, there will be some other companies in our size and there are other companies in our size playing around.

Okay. And have you noticed there any comments from customers or shift in the landscape in the last several weeks or months, what basically in 2015?

What kind of comments related to Netscout, Tektronix or…

Yes, have you seen any shift in customer preference?

Well, we naturally – Tektronix customers are little bit nervous, because of this change. And naturally we are trying to deliver that this opportunity.

Okay, last question for me is a quick balance sheet question. What was the main use of cash in the first quarter?

So operating expenses like every quarter.

Okay, thank you very much.

Thank you.

Okay, thank you.

[Operator Instructions] The next question is from Noah Steinberg of G2 Investment Partners. Please go ahead.

Hi, this is this is Josh Goldberg for Noah. Just a two quick questions, firstly, I just so everyone has it clear, if your financial income was equal to what it was last year, I calculate that there has been an additional $650,000 of income. And against your share count that cancelation to that $0.07 of earnings or about $0.16 for the quarter, I just want to make sure I got there right. I mean obviously a lot of people are affected by the foreign currency, but in terms of your core business you would spend [ph] $0.16 this year versus basically $0.03 last year.

Hi Josh, yes, I think you got it right, exactly right. Unfortunately the financial losses damaged the EPS of the company.

And if the Brazilian real continues to perform for the rest of this quarter, you might actually have to opposite effect your earnings per share in June.

Yes exactly we have two parameters that we hope to catch up in Q2, one is the financial losses that I hope it will turn to be a financial income and as we already described there’s already there’s something like 180 positive financial income and the other thing is the operating expenses [ph] that we were not able to report at this quarter, but we believe we will be able to report it in Q2, and that’s will be another catch up.

You think you’ll catch up on that, meaning that if you spend about – if you get about $1.5 million a year, you should still get about R$1.5 million this year not in Q1, but for the rest of the year?

Yes, I don’t know if it’s R$1.3 million or R$1.7 million or R$1.5 million it’s very hard to focus how much it will be, but we are going to get a letter from them in about a week or two, and we will know the exact number and then we will report it in Q2, like half of the number well report in Q2.

Okay, so it sounds like you have a few balance in Q2 on the – beyond their control.

Exactly.

Okay, you mentioned little bit on the call that your cash collections will improve in the second quarter. Obviously your cash went down this quarter. Do you have any sense on cash by the end of June being above $7 million again?

Again another parameter that we are catching up this big amount of payment that we not able to collect due to tactical reason in the end of Q1 and we already start to collect this quarter and we have some additional big amounts coming from Latin America. So all of the total with some other project, the targets for Q2 in term of collection is really very big and we believe we will make it. So we will see a huge increase in the cash in this quarter. It’s hard for me to say what is the exact number or do you seeing the $7 million is reasonable?

Yes.

Yes, okay. So the CFO says that $7 million is reasonable.

Okay. I guess the last question if you are increasing your sales force by about 50% and obviously the majority of your bookings is clear was MaveriQ and MaveriQ is showing some really good signs for the rest of the year. And you reiterated that that business is lumpy do you expect a strong year in terms of growth? Where are we missing this opportunity in terms of – it seems like this is not even just a one year thing, this could be a two year, three year, four year or a deal where you continue to get more and more customers and your revenue opportunity to grow. And obviously your earnings will grow even faster. So I'm just trying to without making predictions obviously with NFV and another things happening it would seem to me that you’re sitting in front of a very big spending cycle of your customers.

Yes, I agree with you, that’s exactly we are in a good position because we don’t see any need to increase the investment in R&D, G&A other than the sales and marketing. And since we believe that the customer must continue to invest and as I mentioned, we see the trends that they ask for solutions, see more LT, more voice of our LT opportunity. We believe that NFV will open a new dimension in sales in territories that we were avoiding in the last six years, seven years. So this is – won’t make us – again make this sprit here as a very optimistic spirit.

Okay great, thanks, so much.

The next question is from Robin Gilmore [ph]. Please go ahead.

Congratulations guys, I think Josh asked most of my questions. And just continue the good work. Thanks.

Okay, thank you.

There are no further questions at this time. Mr. Ripstein would you like to make your concluding statement?

Yes thank you Noga, thank you Uri.

Thank you.

Mr. Ripstein there is a follow-up question from Josh.

Okay, okay sure.

I will open him up. Okay.

I guess if you just could help us obviously stock is down about 11% this morning, I think, mostly on the foreign exchange concerns, you mentioned on your primer remarks you are participating in tenders with new and existing customers. North America and Europe making progress with some of these very big Tier 1 customers, can you just give some more color, then going into much detail about what’s going on at the company, how much bigger are these tenders and these tenders are possible opportunities than what you had before, two years ago with your existing pro-products?

Yes, there is certainly a trend that we are more and more gaining Tier 1 customers. And when you’re playing or dealing with a Tier 1 customer, it means basically that the potential is really huge. We now have a few for interesting deals in Q4, as an example of what is the value of Q1 and this was from the emerging market. As I mentioned we are now also starting to invest in U.S. as well. And again the potential is huge, I cannot guarantee anything. We need to still work hard and to win against competition, but when we are looking on our pipeline compared to the past, still we see we have a Tier 2 to Tier 3 opportunities, but we see huge potential coming from those Tier 1 customers that we have and Tier 1 new opportunities that we are building.

Do you think you have enough staff now to get you to some of those customers or do you feel like you’re not prepared yet, whether its potential size of a company or in terms of what you have to be able to win some of these big tenders?

We proved already that we can support Tier 1 in the size of 16 million to 17 million customers. So this is basically the high end of the Tier 1s, so we have the technology that can support this size of customers and we have also the people that know how to deliver those customers. So I don’t see any issue with that. I think the potentially is huge, as you mentioned the lumpiness of the Brazilian may influence us this quarter or the OCF that sounds, but this is again lumpiness of the quarters. For the long-term we’re very positive in our potential.

Okay, thank you so much.

Okay, there is another question from George Marima. Please go ahead.

Good afternoon sir. The last caller kind of embarked [ph] of the questions about capacity and RADCOM’s capacity, being that your new products are more software-based, rather than hardware-based more, what sort of capacity do you have as a company nowadays?

Can you define capacity?

In terms of deployments, revenue and how much does it take to deploy, and to maintain and to service. How much can you handled?

Basically the – we always had software solutions that the issue was in the past that it was a combination of software and hardware make our life more complicated in the past. Then we had the MaveriQ and using a proprietary hardware make it much more easy to deploy, much more easy to maintain. So our life in term of customer support much better than it is used to be in the past. I think the customer satisfaction is in the top today and I may not use [ph] in the company to sense that, it’s very hard to measure, but I can sense it. It’s really the happy customers. And I think we are in a good capacity of the company, with the right tools and the right process to support another round of improvement in the results and more customers.

Can you give any more order of magnitude or what that, I mean, could you handle $50 million of revenue this year or $100 million or how expandable is this?

Yes. First of all I can – [indiscernible] just to explain you how we measure that is the time that it take us in the past to implement a solution, than compared to what we have now. In the past, it’s taken us more than a year. And it has sometimes a year, sometimes a year and a half from the moment we got purchase order till we finish. And installation and all the testing that the customer did. Today it take us three months to six months even less sometimes and we are generating a happy customer that start using the system and then we can start dealing with more options. So this is another – this is an example how you can measure the efficiency that was improved my bringing the MaveriQ technology in. As for the capacity, I’m not thinking yet on the $100 million per year. Last year we did $24 million, so we are aiming for a growth but not to $100 million this year. But we feel very comfortable with the results we have, we can control [indiscernible] full amount of growth.

Thank you, Dave.

Yes, it’s okay.

There are no further questions at this time. Mr. Ripstein would you like to make your concluding statement?

Yes, thank you, Noga, thank you Uri. And to you all for participating in this conference call.