Gregg Swearingen - Former Vice President of Investor Relations Michael F. Koehler - Chief Executive Officer, President, Director and Member of Executive Committee Stephen M. Scheppmann - Chief Financial Officer, Principal Accounting Officer and Executive Vice President.

Wamsi Mohan - BofA Merrill Lynch, Research Division Matt J.

Summerville - KeyBanc Capital Markets Inc., Research Division Raimo Lenschow - Barclays Capital, Research Division Jesse Hulsing - Pacific Crest Securities, Inc., Research Division Bhavan Suri - William Blair & Company L.L.C., Research Division Edward Maguire - CLSA Limited, Research Division Joseph Wittine - Longbow Research LLC Aaron Schwartz - Jefferies LLC, Research Division.

Welcome to the Q1 2014 Earnings Call. My name is Katrina, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I would now like to turn the call over to Gregg Swearingen. Mr. Swearingen, you may begin..

Good morning, and thanks for joining us for our 2014 First Quarter Earnings Call. Mike Koehler, Teradata's CEO, will begin today by summarizing Teradata's first quarter results. Steve Scheppmann, Teradata's CFO, will then provide more details regarding our financial performance.

Our discussion today includes forecasts and other information that are considered forward-looking statements. While these statements reflect our current outlook, they are subject to a number of risks and uncertainties that could cause actual results to vary materially. These risk factors are described in Teradata's 10-K and other filings with the SEC.

On today's call, we will also be discussing certain non-GAAP financial information, which excludes such items as stock-based compensation expense and other special items, as well as other non-GAAP items such as free cash flow and constant currency revenue comparisons.

A reconciliation of our non-GAAP results to our reported GAAP results and other information concerning these measures is included in our earnings release and on the Investor page of Teradata's website. A replay of this conference call will also be available later today on that website.

Teradata assumes no obligation to update or revise the information, including in this call, whether as a result of new information or future results. I'll now turn the call over to Mike..

integrated data warehousing, big data analytics and integrated marketing cloud. First, we believe the IDW will remain the strategic, mission-critical, analytical foundation that companies rely on to optimize value from their data. Our leadership position was again noted in Gartner's latest Data Warehousing Magic Quadrant in Q1.

We will continue to add IDW customers. We have plenty of room for new customer acquisition. We are a little over 20% penetrated in the Global 3000. Second, we're increasing our investments in big data analytics and consulting, and we're recently recognized by 2 analysts.

Forrester ranked Teradata as one of the market leaders in its big data Hadoop wave and noted that few vendors can match our high-performance Hadoop appliance. And Ovum, the U.K. technology analyst, said our Aster Discovery Platform stands out as one of the most innovative solutions on the market today.

And third, our integrated marketing cloud offers a big growth opportunity as companies focus on improving dialogues with customers to better understand, interact and serve them at scale. Gartner again highlighted our clear leadership in Marketing Resource Management in the first quarter.

In summary, we will continue to be a leader and a beneficiary of this evolution in the analytics market. We are confident we have the right technology, solutions and services today, and we are excited about our R&D roadmaps and the new technologies we will be delivering.

Shorter term, Teradata's revenue growth rate could remain limited, as our major customers evaluate and rationalize their analytics infrastructure.

However, once our major customers have settled on their analytic ecosystem, especially this top 50 in the Americas, and have reset their spending baselines with Teradata, we believe we will then have the opportunity to grow revenue double digits again. And now I'll turn the call over to Steve..

Thanks, Mike. Welcome, everyone. Teradata delivered a good Q1, increasing total revenue 8% in constant currency, achieving 10% product revenue growth and improving product gross margin 360 basis points, or 16% in terms of dollars. On a non-GAAP basis, operating income was up 20%, and EPS was up 26%.

During my discussion today, except where otherwise noted, I'll be addressing margins and expenses on a non-GAAP basis, which excludes stock-based compensation and other special items, including acquisition-related and other special items that may arise from time to time.

Gross margin was a solid 54.9% in the first quarter, up 160 basis points from 53.3% in the first quarter of 2013. The increase was led by a favorable revenue mix and higher product gross margin. Product gross margin in the first quarter increased 380 basis points to 68.1% compared to 64.3% in the first quarter of 2013.

The product gross margin increase was driven by favorable product mix, which offset the expected increase in FAS 86 amortization. FAS 86 amortization is still expected to increase approximately $14 million for the year. The increase in Q1 was approximately $6 million and we expect approximately the same increase in Q2.

Services gross margin in the quarter was 44.8%, slightly down from the 45.3% in Q1 2013. Turning to operating expenses. SG&A expense of $175 million was 7% higher than the first quarter of 2013, due to primarily higher selling expense and variable-based compensation expense.

Research and development expense in the quarter was $45 million, flat against the first quarter of 2013, which was due to the timing of capitalization under FAS 86. In total, actual spend for R&D was up in Q1.

However, I do want to point out that our R&D expense will increase in each of the next 3 quarters and will increase at a higher rate as we move through the course of the year. In total, we expect R&D expense to increase to the mid-high teens for the full year, as increasing our investment in R&D continues to be a key initiative for Teradata.

The amount may increase inorganically, depending upon the nature and extent of future technology-related acquisitions we may enter into during the year.

Total R&D spend for the first quarter, which includes R&D expense plus the additions to capitalize software development costs from the cash flow statement, less capitalization of internally developed software, was $64 million. This compared to the $61 million in Q1 2013.

As a reminder, these capitalized costs when amortized are classified in the income statement as product cost of revenue, which reduces product gross margin. As a result of these items, operating margin for the quarter was 19.9%, a 220-basis-point increase from the 17.7% yield in Q1 2013.

The higher operating margin was driven primarily by revenue growth and improved product gross margin. On a GAAP basis, our effective tax rate in Q1 2014 was 28%, 6.7 points higher than the 21.3% in Q1 2013. This was mainly due to the timing of the recognition of U.S. R&D tax credits. The research and development credit expired as of December 31, 2013.

As a result, there was no tax benefit associated with the U.S. R&D tax credit reflected in the effective tax rate for Q1 2014. Our non-GAAP effective tax rate for the first quarter was 30.4%, 1.3 points higher than the 29.1% in the same period in 2013. This was primarily driven by the expiration of the 2014 U.S. R&D credit.

As a reminder, for non-GAAP purposes, we called out the $4 million 2012 R&D tax credit benefit in Q1 2013, as we have previously reflected that tax benefit in Q4 of 2012 since the benefit related to the 2012 tax year. In terms of earnings per share, our Q1 GAAP EPS was $0.37 compared to $0.35 in Q1 2013.

Adjusting for stock-based compensation and other special items, which equated to $28 million, or $0.17, in the first quarter of 2014, our non-GAAP EPS was $0.54 compared to $0.43 in Q1 2013. Turning to cash flow. Net cash provided by operating activities was $343 million in Q1 2014. This was $100 million higher than the first quarter of 2013.

After $33 million of capital expenditures, versus $27 million in the first quarter of 2013, we generated $310 million of free cash flow, versus the $216 million of free cash flow generated in Q1 of 2013.

The increase in free cash flow was primarily due to the change in working capital components between the reported periods, primarily current payables and accrued expenses. As a reminder, the strength in Q1's free cash flow will likely mean that the year-over-year free cash flow comparison in the remaining quarters may be less favorable.

However, for the full year, we expect free cash flow versus net income to normalize to plus or minus $25 million to $35 million, as we have referred to in the past. Moving on to the balance sheet. We had $922 million of cash as of March 31, 2014, up from the $695 million as of December 31, 2013, of which approximately 20% was held in the U.S.

During the first quarter, we used approximately $86 million to fund share repurchases, acquiring approximately 2 million shares. Over the last 18 months, we have used over $700 million to fund share repurchases. As of March 31, we have approximately $250 million of share repurchase authorization available.

Additionally, our Board of Directors just authorized another $300 million, resulting in a current total open market share repurchase program authorization of approximately $550 million. With respect accounts receivable, accounts receivable increased $97 million in Q1 2014 versus Q1 2013.

Days sales outstanding was 81 days as of March 31, 2014, compared to 71 days as of March 31, 2013. The increase was due to timing and mix of payment terms in Q1 2014 when compared to Q1 2013. Total deferred revenue was $523 million as of March 31, 2014, which was up $34 million from March 31, 2013.

For the full year, as Mike indicated, we now expect that we'll be at the lower end of our previous guidance ranges for revenue and EPS. And with that, operator, we are ready to take questions..

[Operator Instructions] Our first question comes from Wamsi Mohan..

Mike, you're alluding clearly to a weaker second quarter. Historically, at this point in time, you've said you really don't have too much visibility into the back half of the year, so I'm sort of curious if you think, at this point in time, that the 2Q weakness will persist into the second half or not. And I have a quick follow-up..

Wamsi, yes, it is a little bit early in the year, and if you go back to what we've said over the years to really have a good handle, in particular on our product revenue in the second half of the year. We do have a lot of tailwinds, as I said in my prepared remarks, around our services business and other parts of the business.

But given what we're currently looking at in the second quarter, we thought it was appropriate that we take the guidance to the lower end of the range for the full year. So it is early in the year. Do we have upside from the guidance? Absolutely. But where we sit right now, we think it was the appropriate thing to do..

Okay, Mike.

And can you remind us the time between floor sweeps that you've seen historically? Is it still around 3 years and then should you not see the benefit of that at some point in '14 and '15?.

I would say, on average, it gets more out to 4 or 5 years on floors sweeps. You might run into isolated situations where a customer wants to double their capacity on something that's only 3 years old, and in the coexistence, they want it all to operate at the latest performance levels and you might see that.

But this lack of floor sweeps, at the same time, what's happening is it's helping our maintenance revenue growth, if you kind of look at the dynamics of what's happened over the past 3 or 4 years..

Our next question comes from Matt Summerville..

Just 2 questions, Mike. In your prepared remarks, you indicated that the ETL offload, if you will, into Hadoop has been less than what you speculated upon earlier.

Can you sort of quantify that and remind us what your expectation was?.

Sure. What we've said previously is when we look at the amount of ETL that would be a good candidate to move off of our integrated data warehouses, what we're saying is it represented 4% to 8% of the total workload on Teradata could be impacted by that.

So what we're saying is 20% to 40% of the work being done on our integrated data warehouses was ETL and 20% of that 20% to 40% of the ETL being done on our Teradata IDWs was a good candidate to move off.

So I just wanted to provide an update -- and I want to provide an update each quarter as things change or don't change, and basically, the update is not much has moved off over the past, whatever, 12 months or so..

And then, Steve, if you can just comment, given where the stock price is today, what you would expect the repurchase tempo to look like for the balance of the year?.

Well, Matt, we continue to be opportunistic with respect to our stock and always evaluate other alternatives against share repurchases. So I would think we would be -- that strategy is going to remain consistent. You saw us in the market about $380 million last year.

Again, everything is pretty consistent with our methodology, our logic going forward into '14..

Our next question comes from Raimo Lenschow..

A quick one.

On the top 50 customers, I mean, Mike, how do you think about it? So are we kind of in a way going through a process of people taking off what wasn't kind of -- shouldn't really ideally be in the EDW, moving that to kind of more efficient -- cost-efficient media as -- which basically means you have like a time where people don't have to do the capacity upgrades because they're kind of freeing up capacity, and then eventually, because we have data growth, that should come back to be kind of normalized growth rates? Is that the way you think about it? And is that kind of in a way what's going on at the top 50 customers?.

Raimo, it's actually partially what you're seeing there, the way you're thinking about it. I think more of the impact is kind of outside of the integrated data warehouse. So what we're seeing is increased investments there, if you will, in the broader analytical ecosystem. And we're competing for business there.

It's a bunch of different types of workloads. Some of the competitors are just good enough and it's point solutions and everything else, and we have our Teradata data warehouse appliances there, as well as other things we're doing with Hadoop and Aster and everything else. It's way beyond Hadoop, what's going on in the analytical ecosystems.

So the business we're winning, for the most part, today and really with the subset of the top 50 customers, is in the analytical ecosystem, and it comes with a much lower average selling price than when they're adding to the integrated data warehouses.

The other subset of the top 50, by the way, there's still integrated data warehouse expansions, purchases and everything else. But when you look at the whole thing in aggregate, our revenue declined last year and it's going to decline to a lesser degree here in the first half.

In terms of workloads coming off of the integrated data warehouse, there's not much. I cite an example of some things like for big computations, like around scoring and simulations, but we've also had that over the years with SaaS, where we're offloading to a dependent data mart and doing -- and workloads there. So there's a little bit of that.

There's not much ETL. There's dependent data marts that sometimes come into play for simpler workloads that come off the data warehouse and we -- off the IDW. And we do that with our appliances, as well as we're competing with some good-enough types of dependent data marts, databases, if you will.

But once again, that's not new, and when that's occurred in previous years to keep companies to keep costs down, a lot of times, these customers will circle back and then realize the cost of duplicated data, the movement of the data and everything else and it gets recentralized again.

So the net-net of it is, there is some demand for more work on the IDWs out there. It'll show up eventually. We're just not counting on it right now. And those fundamentals are still there as we look going forward. I don't know if that helps with your answer, Raimo, or if you'd like further clarification..

No. I think it's a good starting point. I guess it's a process that we all have to go through. The other quick question, like last year, Asia was kind of a little bit of an issue, more macro related. I saw it coming back in Q1 a little bit with 4% constant currency.

Can you talk a little bit about the trends there?.

Yes. In international, first of all, the one thing I want to point out is the EMEA side, and you saw the results, they were up 10% and 8% in constant currency. So that part of the business is performing okay. There's always room for improvement. On the Asia side, basically, what you saw in the numbers is Japan remains a headwind.

We're making improvements there and Japan did grow a little bit in constant currency in the first quarter. And Japan made improvements last year, but it's such a big part of the revenue in Asia-Pacific, if we don't have that growing meaningfully, it's hard for Asia-Pacific, in aggregate, to grow.

China was flattish in the first quarter, but I would call it just more of a timing thing. And then outside of Japan and China, South Pacific and Southeast Asia in constant currency grew double digits, and by that, I don't mean low-double digits, it was more in the high teens and 20. So that's kind of a picture of what's going on in Asia-Pacific..

Our next question comes from Jesse Hulsing..

I've been to industry conferences over the last couple of quarters and it seems like there's been some indication that customers are starting to coalesce around architectural approaches, and you guys have talked about that a little bit on this call. But your commentary also indicates that customers are still kind of feeling it out.

Are you seeing signs that decision-making is still frozen because customers are still in the process of planning out their next 2 or 3 years of -- or more of data management architecture? Or does a thawing start to occur?.

I think we have to segment your question a little bit. So in a subset of our 50 largest customers in the Americas, I mean, we have clear innovators that have been at this a long time, and their analytical ecosystems or their architectures are more thought out and are more in process, although I'd still say not -- it's still evolving.

Then you run into another subset in the top 50. I'd characterize it more as early adopters, and they're still experimenting and they're finding out some things on their own around what some of the alternative technologies can do and what it can't do and what type of workloads, different technologies could be good for outside of the IDW.

And then, as you get out into the broader market, they're still in the very early phases of looking at this. And I wouldn't say categorically everybody. You run into smaller companies that are doing things with the newer technologies.

But the other point here is, in addition to devoting a lot of resources and energy out into the analytical ecosystem, we still have a lot of them in top 50 that are building out their IDWs. So that's going on in parallel while this is going on, and I'm talking about the top 50 customers.

Obviously, outside the top 50 customers, our revenue growth and the performance of the business is pretty good..

And I guess, as a follow-up to that, when you look at how your innovators, as you categorize them, are spending and their spending plans, how has that evolved over the last 6 months or to a year?.

In some of those customers, our revenues have been flattish. In others, it's been down. At the end of the day, what we're looking for, because the top 50 accounted -- accounts for 1/3 of our revenue, is once we get to a stabilized spending point, then we can grow from there. And many customers have hit that in the top 50, but we're still a ways to go..

Our next question comes from Bhavan Suri..

I guess, Mike, if I was to look at the point solution market, and maybe split the question up a little bit, but if you look at the point solution markets in the broader ecosystem that are not Hadoop and you look at when you've faced this in the past, when Netezza was out there and people were doing data marts on open source like Postgres or MySQL, what seems to be the difference today? And what are your win rates today versus with the point solution data mart type appliance versus sort of when you just launched that appliance when you were dealing with guys like Netezza pre their acquisition?.

I would say our win rates with our appliances are remaining fairly consistent with what they've been over the years, Bhavan. The -- I think the opportunity that's there that we need to participate more in is there's more granularity in some of these point solutions in the ecosystem, meaning outside of the integrated data warehouse.

So there's workloads that don't require as much capability as we have in our appliances or there's workloads that need different types of analytics, hence, what we have with Aster.

You can see other solutions from other companies that are out there in this industry, making a company and a business out of one specific solution that's going into the analytical ecosystem.

So I would characterize it more that in today's world versus back a couple of years ago when there was Netezza or some of these other databases, there's more granularity of workloads out there in the analytical ecosystem to be addressed than what traditional database vendors did.

And we're working hard on it, we see the opportunity and we've got a lot in development. It's a heck of an opportunity..

So Mike, does that suggest that -- so as these workloads really get granular, right, so someone building a system just to do lead scoring for Marketo or sales scoring just for stuff on salesforce.com or something along those lines or revenue optimization in a very specific vertical for a specific set of companies, does it mean that you guys need to potentially think about heading towards the front-end applications? You've always had sort of -- I've got a telco data warehouse in the logical model, but you've never stepped in too much into the pure sort of application-based space.

Does it make sense for you guys to head in that direction, potentially leveraging Hadoop or Aster underneath for sort of a more flexible environment or even sort of the dumbed-down appliance-type database, but more vertical-specific applications that address a business case as opposed a broad-based IDW?.

Well, our focus is on the analytics portion of that, and we do that with Hadoop, as well as with Aster and with -- in addition to other things to provide the analytics that support many of these different analytical -- or many of these applications, if you will.

And we see a huge opportunity around the analytics for all the, if you will, specialized types of applications.

Now the one place where we've gotten out into application software is with our integrated marketing cloud solution because if we had to pick a subject area for analytics and new types of analytics over the next several years, marketing would be a subject area where there's lots -- a broader amount of analytics that can be had as opposed to some of these point solutions, specific applications that you just mentioned.

So our focus is on the analytics of everything, of all data from all the various sources and applications that are out there, except for in the area of marketing, where we're going deep on marketing applications and the analytics that go with it..

Yes.

I guess that's just even -- I guess, even if we just take a step back and ask a little more fundamental question, which is, so the concept of the IDW was to integrate data at a granular level to drive better decision-making and now you're seeing the top 50 sort of invest in these point solutions that are outside the IDW, the more data mart approach.

Do you think there's been a philosophical -- a shift in these top 50 that have sort of said, we've got what we've want in the IDW and then for specific use cases, they will be point solutions and we don't need to reintegrate that back at a granular level into an IDW, which, when said, obviously begs the question if there will be expansion in the IDW in those companies?.

The IDW, as far as business transaction data in the business object areas, will continue to go on in the world with the analytical ecosystem, such as Gartner says about data warehousing and what we're saying. The ability of it to grow is mostly centered on the growth in business transaction data.

That said, there is new data types or incremental data that's coming into the analytical ecosystem that will get processed and refined in Hadoop and elsewhere, but where subsets of that data will be going back into the integrated data warehouse, and it'll be small subsets of data.

But what drives the integrated data warehouse and our growth there is less about the amount of data, it's more about the queries, the users and more -- and processing and more value that we bring to the business users. So if you think about the amount of data going in the integrated data warehouses, it'll grow like it's always grown.

It won't grow at the -- like the analytical ecosystem and Hadoop that's digesting these huge data volumes, but it will grow data at a slower rate than the rest of the analytical ecosystem. But it will grow the types of queries, processes, processing end users and business value that can be gained in the IDW.

So even the customers with the well-built-out IDWs, which is the minority here when we're talking about the top 50, they will continue to come up with more uses, more information for their business users. And the more processing, the more queries, the more users, that drives the need to add capacity to our integrated data warehouses.

So we definitely see growth in the integrated data warehouse in all of our customers to a lesser degree, but growth in customers with well-established IDWs, which is the minority, where they've integrated the majority of the business transaction data..

Great, great. And one last one, you've obviously added over the last few quarters, even in Q3 last year, which was a tough quarter, you seem to be adding more net new customers.

Could you just provide a little color? Typically, those customers have had an average deal size of $1.5 million or so, and then they've typically ramped over 4 years to double and so on and so forth.

Did those trends remain in place or are you adding customers, as you might have mentioned, with lower ASPs? And so maybe that sort of doubling every 4 years or couple of years from their analytical environments is less of a pattern?.

Our new customer wins have been very, very good the last couple of years and it continues to trend extremely well. When we look at the mix of customers we're adding, some of them we can mention by name and we've mentioned them on the -- in the prepared remarks.

We are adding at a pretty good clip what I would call global Fortune 500, global Fortune 1000 customers and that's new customers. And that's helping our growth outside the top 50 in the Americas and also worldwide. In terms of average deal sizes, I think they've remained fairly consistent, but the larger....

The initial deals..

The initial deals. But the larger customers that we're adding bring a lot more growth and quicker..

[Operator Instructions] Our next question comes from Ed Maguire. You may begin..

Steve, you mentioned the ramp-up in R&D spending and I wanted to tie that into really the broader question of whether you guys believe that with these new technologies that you're competing against, you need to bulk up the products that you've got? Where is your R&D spending going to be focused? And are you seeing more competition, particularly on the marketing cloud side that's informing this investment?.

Well, Ed, on an overall basis, we expect R&D to be, for the year, mid- to high-teens over last year, and the first quarter was really offset by an increase in the capitalization of FAS 86. We're going to continue the R&D investments in the core, big data and the integrated marketing cloud.

So those investments, we'll continue to redirect and reprioritize our investments in R&D with respect to our 3 growth areas. So overall, I see that increasing throughout the year..

Ed, it's Mike.

Your question regarding our integrated marketing cloud?.

Yes. Just have you seen any -- there has been a lot of focus among competitors in building out marketing cloud, and I was just interested in any color in terms of what you may have seen on the competitive front there..

Oh, okay. The good news is, we got there early in this opportunity with integrated marketing management, Ed. And I think the fact that other companies are building out portfolios is actually stimulating demand and pointing out the value and the need of customers investing in this area. So overall, I would call it healthy.

By getting into it early, we've had an opportunity to get a little bit further along in terms of integrating the different tools and different solutions you have within the Integrated Marketing Management suite, and we have a very good position there..

Our next question comes from Joe Wittine..

A question on international. How much do you think it will grow this year? I mean, I ask because you framed up the top 50 and -- or excuse me, well, you have the top 50, in the Americas it will be down; it's 1/3 of the business. But nice secular growth story outside of the top 50.

So if you sum those up, you're looking at the Americas, it seems to be at the low end of guidance or a little bit higher even.

So what are the international expectations in '14?.

At this juncture, it's a little premature, Joe, to try to lock in on a kind of an estimate of where we'll be at. You saw the results in the first quarter and we believe they'll be better in the second quarter. So we'll see a trajectory that's probably moving constant currency into the mid- to high-single-digits type of thing.

For the second half of the year, we don't see anything that would take the trajectory lower or higher. There could be some upside as the year unfolds, as it relates to emerging markets. We have a lot of activity right now in the second quarter in emerging markets, and that might provide a little bit of a tailwind there..

And finally, Steve, can you quickly just clarify the guidance? Is R&D higher than what you thought 90 days ago rolled into the guidance? And taxes as well, if you can clarify, is that higher in your expectation?.

No, Joe, R&D is generally in line with the original guidance and the tax rate, with it increasing in the remainder of the year, and the tax rate is consistent with the guidance with the exception of the R&D tax credit, which, from a non-GAAP basis, we did not bring into Q1.

But for our full year, non-GAAP tax rate, we're assuming that, that does get approved for 2014. If that is the case, we'll recognize in the quarter in which it was approved..

Our next question comes from Aaron Schwartz..

Just a quick question. You mentioned a little bit in your prepared remarks about some of the point solution companies and your large customers evaluating solutions from those type of vendors.

As that evaluation continues to occur, I guess, the question for me is that, do you have all the product and technology you need to address demand from your top 50? And you sort of made a comment on the R&D spend that something could be inorganic here.

And so could you just sort of review what you're looking at from a product portfolio, both organically and what you may be thinking about that you may need to add to the portfolio?.

Aaron, we have the majority of the capability to provide analytics throughout the analytical ecosystem. There are different workloads and requirements and price points that we don't necessarily address them all today. We do have different point solutions that will be coming.

Keep in mind, the average selling prices in this space are not large, but likely there's some -- we look forward to some upside here. There are some very specific things that are beyond analytics that are applications, if you will, that come to play. So we won't cover them all.

But, by and large, the vast majority of all the analytics opportunities in customers today and over the next several years, we have those capabilities and we're going to add to them..

I would now like to turn the call over to Mike..

Thank you, operator. One more comment I'd like to make before we adjourn is I talked about our ability to grow double digits longer term, and I just wanted to add to that a little bit. The big headwind we have right now is in the top 50 in the Americas, our 50 largest customers, which is 33% or 32% -- it's 32% of our revenue.

And last year in -- or the year before, in 2012, it was 37% of our revenue.

In 2014, we're estimating it to be in the mid- to high-20s, and I wanted to just give you a little background on why I believe we will get to double-digit growth again and that is, at some point in time, the top 50 customers in the Americas will be contributing something like 20% of our total revenues.

We're investing like heck in the rest of the business to grow our revenues outside of the top 50. And if we get to a scenario where outside the top 50, we're growing 10% and we've got the top 50 at 20% of total revenues, we only need the top 50 to start growing single-digits 5% type of growth and we're at 10%.

So I just wanted to give you a little more information to modeling that we're investing and growing rapidly outside of the top 50, and we will continue to do that. And over time, the top 50, as a percent of our revenue, will become smaller. And once we hit the baselines in spending, we'll start growing from there. So I just wanted to add that color.

So listen, I want to thank all of you for your questions today. It's a very exciting environment we're in, with the evolution of the analytical ecosystem, and, like I said before, we think we are going to be a key contributor and beneficiary of this analytical ecosystem market opportunity. Thank you, and have a good day..

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect..