Hello and welcome to today's Tyler Technologies Fourth Quarter and Year-End 2015 Conference Call. Your host for today's call is John Marr, President and CEO of Tyler Technologies. 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. And as a reminder, this conference is being recorded today, February 18, 2016. I would like to turn the conference call over to Mr. Marr. Please go ahead. John S. Marr - President, Chief Executive Officer & Director: Thank you, Gilda, and welcome to our fourth quarter 2015 earnings call. With me on the call today is Brian Miller, our Chief Financial Officer. First, I'd like for Brian to give the Safe Harbor statement. Next, I'll have some preliminary comments. Then Brian will review the details of our fourth quarter operating results and 2016 guidance. Then, I'll have some final comments and we'll take your questions. Brian?

Thanks, John. During the course of this conference call, management may make statements that provide information other than historical information, and may include projections concerning the company's future prospects, revenues, expenses, and profits. Such statements are considered forward-looking statements under the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties, which could cause actual results to differ materially from these projections. We would refer you to our Form 10-K and other SEC filings for more information on those risks. Please note that all growth comparisons we make on the call today will relate to the corresponding period of last year, unless we specify otherwise. John? John S. Marr - President, Chief Executive Officer & Director: Thanks, Brian. The fourth quarter was certainly eventful with our acquisition of New World Systems Corporation, completed on November 16. New World is a leading provider of public safety and financial solutions for local governments, and brings an important element to our portfolio of solutions. Founded in 1981 and based in Troy, Michigan, New World has over 2,000 public sector customers and more than 470 employees. New World Systems is highly complementary to Tyler, and the combination supports our strategy of being an industry leader in all major enterprise applications essential to local government. The purchase price was $360 million in cash, which was funded from cash on hand and proceeds from a new revolving credit facility, and 2.1 million shares of Tyler's common stock, making this the largest acquisition in Tyler's history by a wide margin. The integration of New World's operations and products with Tyler is well under way and, as you can imagine, is a major effort and will continue through this year. Our combined employee and client groups are enthusiastic…

Thanks, John. Yesterday, Tyler Technologies reported its results for the fourth quarter ended December 31, 2015. I'm going to provide some additional data on the quarter's performance and review our guidance for 2016, and then John will have some additional comments on the quarter and our outlook for 2016. In our earnings release, we have included non-GAAP measures that we believe facilitate understanding of our results and comparisons with peers in the software industry. These measures include write-downs of acquisition-related deferred revenue and acquired leases, share-based compensation expense, the employer portion of payroll taxes on employee stock transactions, acquisition-related costs, and amortization of acquired intangibles. A reconciliation of GAAP to non-GAAP measures is provided in our earnings release. Revenues for the fourth quarter were $158.9 million, up 24.7% with 15.3% organic growth. Software license and royalty revenues increased 15.2%. This was our 12th consecutive quarter of double-digit growth in licenses. Organic license growth was approximately 1.1%. In Q4, we received $319,000 of royalties on public sector sales of Microsoft Dynamics AX by other Microsoft VARs, down 63.8% from $881,000 a year ago. For the full year, we received $3.4 million, an increase of 12.4% compared to $3 million in 2014. Subscription revenues increased 29.3% with 26.6% organic growth. We added 33 new subscription-based arrangements and converted nine existing on-premises clients, representing approximately $32.4 million in total contract value. This represents our highest quarter ever for SaaS bookings. In Q4 of last year, we added 24 new subscription-based arrangements and had 12 on-premises conversions, representing approximately $31 million in total contract value. SaaS clients represented approximately 22% of our new software clients in the quarter, compared to 17% in the prior-year quarter. SaaS contract value represented 49% of total new software contract value signed this quarter, compared to 39% in Q4…

Thank you, sir. Our first question comes from Patrick Falzon with Evercore ISI. Please go ahead.

Hi. It's actually Kirk Materne with Evercore. Thanks for the additional commentary on the New World acquisition, John. I guess, maybe the first question I have is just on the change in the revenue expectations. I think you mentioned about a half of it was just a rev rec timing. The other half, I think, you mentioned earlier in your prepared remarks, there are some positive as people sort of get their arms – or customers get their arms around sort of what this means for them. I guess, two questions around that. One, do you feel comfortable that after a pause in sort of the first half of the year, things will start to accelerate? And then, I guess, two, does the New World acquisition have any impact on sort of the organic Tyler sort of sales motion? Meaning, I understand sort of the pause from a New World customer perspective but from a core Tyler Technology customer, are they taking a step back and evaluating what New World means for them as well? John S. Marr - President, Chief Executive Officer & Director: No. But probably, I will start with your – their reduction. It's probably almost a third. So, a third maybe rev rec, maybe a little more than a third. And we had some of that built in, but it turns out to be more than we thought. A thirdish is probably slowing down some sales processes and people getting more comfortable with this. And then, a third, I would say, this is new to us, but they would be telling us that their pipe is a little lighter than the last few years. So, again, it's no one significant issue. But a few different things putting some pressure on their revenues. We did as we indicated and as you asked. We feel better about the long-term potential of certainly the Public Safety side of New World now than we did at the time we did the acquisition. We're very impressed with the team. They're very easily blending into Tyler, very similar cultures in ways of operating. They're enthusiastic to be part of Tyler. We feel with these investments that we're teeing up now that we can improve this product competitively, and we think the combined story of New World and Tyler will be more compelling than New World was on its own. So, we're very enthusiastic about that long term, but as we indicated, it can be a little bit slower out of the blocks for those three different reasons. In terms of Tyler, no, there's no impact on Tyler's decisions because we did a large acquisition or there's any confusion in the product strategy. I don't know of any indication for any instance where one of our own organic fields was affected by the acquisition.

Okay. And just a really quick one on sort of the increase in R&D sort of investment, I think makes a ton of sense. John S. Marr - President, Chief Executive Officer & Director: Yeah.

I guess after we get through sort of the step function up this year, does the opportunity for EBITDA growth of, sort of, I guess 20% where it's been over the last few years. John S. Marr - President, Chief Executive Officer & Director: Right.

Does that come back into play, or is this something where you just need – you may be investing a little bit – not as much as you should be? I guess, I'm trying to get a sense on what sort of EBITDA growth trend should be after we sort of normalize this uptick in spending this year. Thanks. John S. Marr - President, Chief Executive Officer & Director: Yeah. Yeah. Fair enough. And I have to be a little careful, right, answering that question because we clearly want to remain in a position to have the flexibility to make good investments that we feel are compelling. And I could tell you, don't worry, next year they'll rebound, and we'd find a great opportunity that we will invest in and we'll do that. I know you'd want us to do that. So you have to be a little careful about how you answer that question. So, I guess, I'd say it this way. We definitely expect that as our company grows, that the benefit of the scale that we realize will drive margins higher. I don't have any question about that in the long term, but I actually will be pleased to find other opportunities where we feel if we make an R&D investment, it'll give us a great return in the future and we'll literally look for those and make those investments. But in the long term, yes, we expect those investments to drive revenues higher, and the typical model and scale benefits will kick in, and then margins will expand. As we said, we expense all of this, but we look at this as an important investment in building a new data center, which is capitalized, or doing a major acquisition. But it obviously runs through the P&L. I would estimate – and we look at it this way that of the $47 million R&D spend, about half of that, maybe a little more, is what I would call discretionary, competitive investment. So, if you were trying to run the company right now to maximize its current earnings, taking care of all of the deliverables you need for your contracts and customer work, and even doing the core maintenance for the product that you need to do, I think there's a $25 million spend on top of that. That is a great investment to Tyler but is discretionary and really used to be the catalyst for growth down the road. And you guys can kind of look at that and model it as you'd like.

Thanks, John. Appreciate it. John S. Marr - President, Chief Executive Officer & Director: Sure.

The next question comes from Alex Zukin with Stephens. Please go ahead.

Hey, guys. So two questions for me. The first around the software and services backlog. On an organic basis, it looks like it's basically flat with the prior year, and it hasn't been that way since 2012 I believe. So I'm just wondering if you could shed some light on that around the puts and takes there.

Well, I think, it is relatively flat this quarter. I think most – we have seen more of an increase on the subscription side. The last couple of quarters have been very strong on the subscription booking side. So I think some of that is offset by an increase in the subscription bookings and backlog. So that's probably the major impact there. There's probably also a little bit of an impact from how the New World acquisition fits into that. But I think the biggest change is through the subscription side, the growth there.

Got it. And then what about just if you look at it on a total backlog nature, it's up about – or on an organic basis, up about 8%. Was there any kind of puts and takes in terms of the quarterly volatility in that metric that put it at that level? Was that a level that you came in happy with? Maybe just that one.

I don't think there's anything particularly unusual in there. This quarter, as we talked about frequently, the timing of large deals affects that. This quarter, there weren't any sort of mega-deals. So it seemed to be a pretty normal quarter in terms of bookings. I think, as I said, a very strong quarter on the SaaS side; and kind of an average quarter, actually down a little bit from last year's quarter on the license side. But all in all, nothing remarkable about it. Just kind of a normal bookings quarter, activity and pipeline remained strong. And as John noted, I think we have seen some delays in new signings on the New World side, particularly in the first quarter after the acquisition, and that's not surprising. And I think if it were a normalized quarter for New World bookings, we would have seen more growth there.

Got it. That's helpful. And then, John, how would you characterize the core RFP pipeline for Tyler going into 2016 versus maybe going into the last two years? And then can you just also talk about – is there a little bit of a heightened level of conservatism in the guidance? John S. Marr - President, Chief Executive Officer & Director: Well, I think – okay. In terms of the RFP activity, as we've kind of said, there's nothing here unusual. All the leading indicators are pretty consistent over the last two years or three years since the recovery from the bumps in 2009, 2010, 2011, whatever. Nothing different there. Really nothing different in our core business. I think the activity toward the end of the year in some divisions, particularly Munis for example, the amount of business that kind of uncontracted, not in backlog, so backlog's a little flat, a lot of that's timing. And there were a lot of awards that weren't contracted in the quarter that will get contracted in the first quarter. So that core flow is very normal and something we're pretty satisfied with. I think our growth will come from continuing to improve our competitive position in that situation.

Got it. And just maybe the conservatism around the guidance. John S. Marr - President, Chief Executive Officer & Director: Well, maybe a little. I think over the years, most of the things that happen that are surprising affect you in a downward way during the year, right? They guide some expenses you didn't see or some revenue slips. And most of the good things that happen, it takes a little longer to recognize that revenue and get the upside. So I think, sure, over the year, management has learned that and has become a little bit more conservative. And I think we used to probably deliver more in the mid or low end of the range, and I think in recent years we've delivered in no certainty, but delivered on the high or outside the high end of the range. And so that's been an evolution of Tyler I think is accurate. In terms of New World, I just think there's an awful lot of moving parts. There's a lot of noise. And so we're taking a little more conservative position now, which I think is appropriate. And the net of it is what we've tried to do is give you guys an accurate impression of what we see, but it's probably got a little broader range given the moving parts that we're digesting this year.

Okay. Great. Thanks, guys. I'll cede the floor. John S. Marr - President, Chief Executive Officer & Director: Sure.

The next question comes from Jonathan Ho with William Blair & Company. Please go ahead. Jonathan F. Ho - William Blair & Co. LLC: Hey, guys. I just wanted to start out with just maybe going back to the $12 million in investment. I just want to understand sort of why the decision now to increase those investments. And did you guys see sort of a number of opportunities or key product gaps in the portfolio or opportunities to displace competitors? I'm just trying to understand sort of why the decision to make those investments this year. John S. Marr - President, Chief Executive Officer & Director: Sure. It really isn't just this year. I'd say that $12 million, as I indicated earlier, is incremental to heads we've been adding to, on a discretionary basis, invest in things we thought were important. And probably our run rate now, as I said, it's maybe around $25 million in annual spend that are resources that we can target what we think are important timely investments that will give us a good return. So it's the extension of a process that I think we've been working on for the last few years. I think, in the last few years, M&A activity and the cost of those assets are higher. Cost of our own stock in terms of deploying capital has been higher. And the company executes well on building and investing in existing products, getting them to market and proving their competitive position and being in a very good position to opportunistically take advantage of opportunities that come in front of us. And we think that's a very good investment for Tyler's shareholders. It's a company that knows how to execute. And when you're in that position, you should invest in your own…

The next question comes from Brian Kinstlinger with Maxim Group. Please go ahead.

Great. Thanks. Wondering if you guys can talk about the pipeline of large Odyssey and E-File contracts. Sounded like there's a number of RFPs in the U.S. and Australia. And maybe expected timelines of awards as you see it. John S. Marr - President, Chief Executive Officer & Director: Yes, a little bit. It's hard to know exactly, but there are a few deals, statewide kind of deals that we're engaged in that we feel good about in some large counties. Obviously, we've got the 26 or 27 counties (41:47) them in California, which we have virtually no E-File revenue a little bit right now, and that would be the biggest market. And some of those had E-File as part of their initial engagement, some of them contracted subsequently, a few are mandatory. But certainly in the next few years, as those sites go on line, that's a major growth opportunity. So there's still a lot of runway left for E-File.

And then in terms of bookings, clearly this was a difficult year for comps compared to last year, given California. What's your reasonable goal for bookings growth going forward, is it 10%, is it 15%? I know you've done even more than that in the pastsize. Maybe give us a sense of what's reasonable. John S. Marr - President, Chief Executive Officer & Director: Well, it's an important number, I appreciate. But it by itself is hard to say that, Brian, because like we mentioned, a 10-year deal with Raleigh is $8.5 million, and it might have been a $2 million deal if it was on-premise. So the mix of SaaS versus traditional, the length of the terms, it's 10 years or 4 years, so I'd be careful to focus on that exclusively. It really has to be looked at within a number of different things. So if you do normalize that for the Californias or if you had a spike in SaaS versus traditional, then I do think it would be at least 10% and probably should grow a little north of our overall revenue growth rate because the SaaS contracts add more backlog than they will revenue.

Great. Thanks, John. John S. Marr - President, Chief Executive Officer & Director: Sure.

The next question comes from Scott Berg with Needham & Company. Please go ahead. Scott Berg - Needham & Co. LLC: Hi, John and Brian. Thanks for taking my questions. We've got a couple of quick ones here. John, first off all, can you just clarify your comments at the beginning with regards to the delayed decisions? The way you made it sound like, there was some maybe Tyler-focused decisions that were also delayed, but your other comments would not suggest that. I just wanted you to clarify that really quick. John S. Marr - President, Chief Executive Officer & Director: No. You're right. Sorry if we gave that impression, but I don't know of any Tyler decisions that were materially affected. It certainly could have been a call or something, but nothing material on Tyler decisions affected by the New World acquisition. Scott Berg - Needham & Co. LLC: Okay. Great, thanks. Brian, I wanted to see if you could talk about the New World financials just a little bit relative to the 8-K that was disclosed, their gross margins look abnormally high relative to other software companies, I'm sure, most of us cover. Is there going to be any changes to how they recognize expenses or revenue? I know there are some obviously moving parts on the revenue side that we've already been made aware of, but more thinking on the expense side as we model out 2016.

Well, when you look at the historic New World financials that were filed with the 8-K, there are a number of differences throughout those from both Tyler's accounting, their – so, as you mentioned, revenue recognition, policies of their books in accordance with GAAP, there should be – would have been, in some cases, somewhat more accelerated than they are under Tyler policies. There's obviously the purchase accounting adjustments that affect the deferred revenue recognition. They were a Sub S corporation, so they didn't have corporate taxes included there. The way they classified R&D in their historic statements would have been different from ours where we have a significant amount of our development expense up in cost of sales, and then a portion of it on the R&D line. Theirs would have been more on the R&D line. So that would have elevated their gross margin versus ours. So there's quite a number of changes through there. But at a very high level, their gross margins and operating margins were higher than ours and should contribute to increasing our blended margins, and part of that is just the nature of the business. They were a relatively simple business, had not done any acquisitions or been acquired. So they really have two core products, the ERP product and the Public Safety product, both of which have been developed organically, more than 50% maintenance revenues, which generates very high margins when you've got that level of scale in maintenance revenues from a couple of relatively mature products. So clearly, it's hard to infer a lot from those pro forma statements, but that's kind of a high-level look at it. Scott Berg - Needham & Co. LLC: Great. Thanks. John, it hasn't come up really at all in any of the other questions,…

No, I don't think so. I think our long-term model is still consistent that as we grow revenues in that low to mid-teens, and as we've talked about kind of 12% to 14% has been where our long-term average has been, that over the long term we expect that that, obviously lots of puts and takes with the mix of revenues between SaaS and license, with the acquisition, with investments in products. But over the long term, we expect that that kind of growth will yield north of 100 basis points on average. And it doesn't happen in a straight line every year, but on average in gross margin improvement and better than that on the operating margin and EBITDA margin lines. And even with these investments this year, I think our EBITDA margin, because the New World business overall gives us a lift in that, we'll still see I think relatively stable EBITDA margins, and we'll see gross margin improvement, so. Scott Berg - Needham & Co. LLC: Great. That's all I have. Thanks for taking my questions. John S. Marr - President, Chief Executive Officer & Director: Sure.

The next question comes from Charlie Strauzer with CJS Securities. Please go ahead.

Good morning. This is actually Robert Majek in for Charlie. John S. Marr - President, Chief Executive Officer & Director: Good morning.

Given the pullback in your recent acquisition of New World, what is your appetite for share buybacks currently? John S. Marr - President, Chief Executive Officer & Director: Brian, did you announce that number?

Yeah. We did announce. We have 1.4 million shares left in our authorization. We have bought, given the broader pullback in the market in the last few weeks, we bought a modest amount of stocks. I don't think we announced the number till year-end, but we bought a modest amount. And then – but as we said, we've got about 1.4 million shares left in our authorization, and John can comment on our appetite for that going forward. John S. Marr - President, Chief Executive Officer & Director: Yeah. So we have been active in the last two weeks since the tech sold off a little bit, obviously recovered a little bit in the last few days, and now we're back down to a level below where we have been active. So, I guess from there, you could infer that we would intend to be active at this level. I don't think we would be trying to do something that's too significant at this level. It's still not a discounted stock, but it certainly got down to an area we will take a long term view. All of our long-term objectives we think are strongly in place, and we think buying at this level and looking out at a couple of years, as to what that means, makes a lot of sense for us. So, at the current level, we would not be overly aggressive but we will be active.

All of my other questions have been answered. Thank you.

The next question comes from Kevin Liu with B. Riley & Co. Please go ahead. Kevin Liu - B. Riley & Co. LLC: Hi. Good morning. Just in terms of the bookings metrics this quarter, it did seem like more of a shift towards SaaS business. I'm just wondering what you're seeing in the pipeline in terms of any potential shift away from on-premise to license? And then, also curious whether some of the larger opportunities you signed on started off as SaaS deals or whether clients ultimately shifted over the course of the quarter? John S. Marr - President, Chief Executive Officer & Director: It just hasn't changed that significantly in a number of years now. So, high 20s, low 30s in terms of percentage of new names tend to be where it settles out. In any individual quarter, it can bump around, but it really isn't changing. And now we hear so much about the cloud, we offer both. We don't try to have a bias in directing them one direction or another. We believe the name has great value to us in the long-term and we welcome them either way. But the numbers don't change too much. I think, sometimes you see a higher percentage of bookings look like SaaS. SaaS names are growing and sometimes that can be distorted as I indicated earlier, the Raleigh deal, for example. It's a 10-year deal. It's one name, but it's a 10-year deal so it distorts a little bit how many dollars are going into backlog as SaaS dollars versus traditional dollars. But really not a material shift in the number of years at this point. Kevin Liu - B. Riley & Co. LLC: Got it. And just in terms of e-filing growth, obviously another strong year in 2015. As you look forward now between the states you have contracted and that could potentially come on line versus the overall backlog of business there, what sort of growth do you expect for e-filing this year? John S. Marr - President, Chief Executive Officer & Director: This year is a little bit lighter because we literally are bringing a lot of clients, a lot of Odyssey clients online and implementing them, and the E-File revenues will follow after that. So I think there'll be a little of a pause this year. It will be a little lighter growth. But if you just look – we're not talking about names. We're not working. We're just talking about California names, some of the other large counties and states we're working with where we know it's their clear intention to introduce E-File and eventually go mandatory. I think you'll see that growth rate bounce back two, three and four years out. Kevin Liu - B. Riley & Co. LLC: Great. Thank you.

It grew about $9 million in 2015, and I expect it'll be – the growth will be more in the $5 million, $6 million range in 2016. And then as some of the California stuff comes online, we'd probably see that accelerate in 2017. Kevin Liu - B. Riley & Co. LLC: Got it. Thanks for taking my questions.

The next question comes from Tim Klasell with Northland Securities. Please go ahead.

Yeah. Two quick questions here. First on the product side, the E9-1-1 initiatives are getting a lot more press here recently, and wondering what sort of synergies are you seeing with initiatives, particularly as it relates to New World? Are those two product sets helping each other out? So maybe a little bit of color there would be appreciated. John S. Marr - President, Chief Executive Officer & Director: What two products?

New World with Public Safety and with your E9-1-1 initiatives around video and in terms of the new Next Generation 9-1-1. John S. Marr - President, Chief Executive Officer & Director: Yeah. Our focus will be – we have some Tyler products in that area, they'll be maintained, they'll be invested in. But clearly, in terms of investing in Next-Gen E9-1-1 Solutions to handle texting and a lot of the things that traditionally haven't been handled, multimedia coming through there, that will be – that is part of the significant increase in R&D in the New World side of our business.

Okay. That's helpful. And then finally, on your tax rate, obviously, that's up a little higher than what we have been modeling. Is that something permanent or is it something that maybe you can work down over the years relative to what the expectations you laid out for 2016? John S. Marr - President, Chief Executive Officer & Director: Generally, the tax rate is in a pretty tight range. It certainly moves around for a number of different reasons. The outside-the-box increase, which is a little higher, 55%. Obviously, I hope is way higher is associated almost exclusively with the exceptionally high activity of options we had in fourth quarter with a very high stock price, understandable. Our average hold for our employees is over seven years, so there's a lot of options out there and that's a good thing. And there was a lot of activity understandably, and that causes the elimination of deductions that we get and that's what drove the rate higher. And being in the fourth quarter, it's completely absorbed in that quarter. And so, it really is a one-off experience.

Okay. But even 2016 guidance is a little bit higher than we modeled and I'm sure New World had probably some impact there. Is that sort of the steady state run rate that we should be expecting? You guided 38%, 39.5%. Is that the sort of the range we should be thinking about for the next few years?

Yeah. I think that 38%, 39% is generally the range we widened – where we've historically been, and we put a little bit wider on the high end because of the uncertainty around the level of option exercises. But our rate is pretty close to statutory rates. We don't have significant international operations so everything is pretty much fully taxed at full domestic rates as well as state taxes. So that 38%, 39% range is probably pretty good. Obviously, we'll work on tax planning, look for places where we can get marginal improvements. But absent more overseas business and jurisdictions with lower tax rates, we likely are going to be close to that range.

Okay. That's helpful. Thank you very much.

The next question comes from John Rizzuto with SunTrust Robinson Humphrey. Please go ahead.

Hi. This is Anubhav Mehla, sitting in for John. Just two questions. So, the first one on – when you look out to 2016, given your guidance, and what do you see as far as the revenue mix between, let's say, license, services, and maintenance versus, let's say, subscription? I guess, that's the first question. And, I guess, implicit in that is like is there a change in the pace of license revenue growth as we move to the cloud? Thanks.

In a broad range, I think the addition of New World probably shifts a little bit more into the licenses side because New World didn't really or hasn't historically had much of a subscription offering. So, they're almost exclusively licenses. So, I think that the mix is a little bit more on licenses next year, a little bit lower on services. But really, it may be only a point of the mix, something like that. They also had a higher proportion of maintenance, so that probably raises it a point. But I think generally, our mix this year will be similar. 2015, it was about 10% licenses. That might be more like 11% in 2016. We're about a little less than 24% services. I think that might go down a point or two in the mix. Subscriptions were about 19%. That also might go down about a point, but stay pretty similar. Maintenance might go up a point or two. It's around 41.5% in 2015. It might go up, again, a point. And then, appraisal is a relatively slow-growing business, so it probably will modestly continue to be a little bit smaller piece of the mix. But no dramatic changes in the mix.

Okay. Okay. That's helpful. And, I guess, with R&D spending, it's rising, but overall, you pointed out, like, you still expect the gross margins, operating margins to rise. So just – could you just talk about where do you really see the leverage? There's some impact from New World, but New World – where do you really see that leverage in New World, and other than New World maybe in the core business? John S. Marr - President, Chief Executive Officer & Director: Well, Tyler – like New World is a good example. So their margins were higher, and they'll be affected a little bit as we go through this transition. But they'll settle out at a much higher level than what Tyler's blended margins are. They're a good example and they're very similar to a lot of our more mature business units. So, I think the reason they're hired, they're not making a lot of investments outside of their core products. They maintained and invested in those well, but they really didn't have a lot of new initiatives around them. When you look at Tyler, our core divisions that have reached a level of scale, Munis or Incode or Infinite Visions, or TMJ (1:01:32) getting to that point, their margins are very similar to New World's, which I think are the appropriate margins for a more mature business units that's reached a certain level of scale where employees are well served, customers are well served, investments are being made in maintaining and expanding products and improving their competitive position. At Tyler, we're consciously choosing to always be investing in new products and new initiatives that bring that core rate down. And so, over time, as those investments in relation to the more mature business units are smaller, the dollars won't be smaller. But as the percentages are smaller, we'll see our blended rates move toward where they are for those mature units that exist, which really is in the 55% to 60% gross margin level and in the 35% operating margin level. So we know that that's sustainable. We choose to be making these investments as we go, which brings the blended rate down, but we believe it's a good investment for the company.

Perfectly clear. Thank you.

And just to be clear, the guidance for 2016 implies really a modest increase in gross margin, modest increase in the EBITDA margin, a little bit bigger increase in EBITDA margin, but a decline in operating profit margin because of the elevated R&D that falls below gross margin but is in the operating margin.

The next question comes from Peter Lowry with JMP Securities. Please go ahead.

Thanks. Hey, Brian, one quick question. Given the noise around the high level of stock option exercise in New World Systems, is there anything you can say in terms of guidance in terms of how we should think about cash flows in 2016? Anything you would highlight?

Well, cash flows, I mentioned a couple of things that kind of brought down cash flow in 2015 a bit below our normal cash flow margin: the cost associated with the New World acquisition, the timing of some of the taxes where we pay taxes earlier in the year, and then this excess tax benefit from the option exercise really was created at the end of the year. And so that will benefit our next year taxes, and New World billings, the timing of their maintenance billings is favorable for us for 2016 cash flow. But, I think we should, as I said, see some EBITDA expansion and cash flow should sort of grow normally in line with that. So nothing terribly unusual. But, I think some of the things that maybe helped cash flow down a bit in 2015 will turn around and maybe press a little bit above the curve in 2016.

Okay. Great. Thank you.

At this time, there appear to be no more questions. Mr. Marr, I'll turn the call back over to you for closing remarks. John S. Marr - President, Chief Executive Officer & Director: Okay. Thank you. And we appreciate everybody joining us on the call today. If there are any further questions then feel free to reach out to Brian and myself. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.