Thank you, Melanie. Good morning, everyone, and welcome to the Q1 conference call.

As you know, we go directly to questions. So Melanie's going to gather up some questions and then we're going to start answering them.

Mark, the cash generation at TSS was very strong this quarter. And so could you shed some light on that?

In the past, we've seen that you've often taken working capital out of a business shortly after you've acquired it. And so was that the case here, or were there any seasonal or one-time factors that drove that, which could reverse going forward?

We haven't had that much experience with TSS to know what the answer to that question is, Thanos. The sense is that they are highly seasonal and collect a lot of their maintenance in the first quarter and that they then are cash flow negative for the other quarters.

But the absolute magnitude of those cash flows, I don't have any idea at this stage. I hope longer-term, the working capital management becomes one of the things that we do better at TSS.

It's one of the areas inside our own businesses that I think we're quite good at compared to most software companies and would be a best practice. But there's lots of other things to address in the interim.

Okay. And so the margins as well were a bit lighter than we saw through last year.

And so could that also reflect some seasonality?

Are you talking about Q1 for Constellation or Q1 for TSS?

For TSS, specifically.

Yes. Really, last year's numbers were what we got from the accountants.

This year's numbers are what we have from our own management information systems. And so I tend to feel much more comfortable with what we're looking at this year than last.

We're not particularly pleased with the margins that we saw there, but they are what they are. You work with them.

And anyone can take a business of this nature and squeeze it for higher margins. The trick, of course, is to generate attractive margins while also building a business, and that's the challenge.

So there's no clear sense at this point whether or not that was seasonal or not?

No, no.

Okay. And I saw you completed a small restructuring there and so presumably, you've already identified some opportunities to take some costs and improve the efficiencies in that business?

So this was a restructuring that the management team at TSS had been planning and had put in place before we came along and had nothing to do with Constellation's ownership, per se, and it was just sort of part of their operating plan.

Okay. And one last one for me.

Are you still in the process of looking for stand-alone debt financing? Or might this proposed new source of financing that you described in your shareholders letter be an alternative to that?

We're looking at every potential source of financing. The -- I feel strongly, and the board are comfortable backing me up on this, that we should try to make sure that we have access to capital, should there be a setback in the economy, a recession, a crisis of any kind.

We found that the buying opportunities during the last one were terrific, and I'd like to make sure that we are not tapped out come the next one. So we'd like to have some more permanent financing for the acquisitions that we've already done and to have some capacity for ones that may come along.

Just, Mark, to follow on Thanos' question there, if we add back the severance just to the Q1 margins at TSS, it looks like that works out to be about 10% on the EBIT line. Is that a, as good as any indication right now for what we should use going forward?

I would hope not. I would hope that all of our businesses get better over time.

I think you've seen that in Constellation. And I think most of the things that we acquire over a period of a couple of years tend to be better.

And when we're looking at that -- the sort of where a business like TSS could get to, is there any structural reason -- maybe this talks to the whole European dynamic itself. Is there structural reason why those margins couldn't get to where Constellation's stand-alone has been?

So the European hypothesis, I'm hoping is incorrect. It's something that we're dealing with in a number of other acquisitions.

And certainly, the cost per person in a number of the European locations are higher, but it appears that the revenues per person are higher too. And so we're hoping there's nothing per se that stops the European business as being as attractive as North American businesses.

That said, there are some structural reasons why TSS would find it tougher to achieve the margins that we have achieved inside of Constellation. For instance, a number of their businesses are professional services-only businesses.

Those tend to be very difficult places to make consistent high margins. And it's going to be -- those particular ones will be a challenge.

Inside the software businesses, they have some truly wonderful software businesses that should be top quartile performance within the context of Constellation's portfolio. So there'll be some offset, but they also have some businesses that are built on top of third party software, and that becomes a toll or a tax on your business as well, and tends to drive down the margin somewhat.

On the discussion in the President's Letter of the nontraditional instrument, can you give us some idea of how advanced these discussions are at the Board level?

I'm told by our Security Council that I cannot.

Okay. Is there -- do you feel that there's, at this point, an imperative to get something like that in place given the -- how you feel about the economy maybe and your pipeline of deals relative to the capital that you now have available?

It's like all insurance, you get to start paying a premium as soon as you take out the insurance, and that's never fun. But at the same time, you're covered.

So there's no imperative, Scott, but I'd like to do it.

Mark, in regards to TSS, based on what you knew going into the acquisition and what you know now, like, is that sort of operating at that expectation going in, or has there been some surprises either negative or positive here?

No real surprises, Richard. Would I prefer that we had higher margins?

For sure. But there's been no eye-opening sort of revelations.

The management team are intelligent and hard-working, fun to work with and are listening hard to what we have to say. I'm learning a whole lot about operating in Europe, which has been terrific.

And I'm very optimistic about the whole situation.

Okay. And then in your letter to shareholders, you dedicated quite a bit of time, I noticed, on SaaS.

And I want to sort of get an impression of that business for Constellation today. Like what percentage of revenue would come from that revenue model?

Jamal is speculating 10% to 15%, and he's going to have a look while I talk. The problem with SaaS is that it's not a well-defined term.

There are certainly billing and economic models that are SaaS-like, but there are technology models that are SaaS-like as well. And sometimes the 2 come together.

So frequently, when I find people characterizing themselves as SaaS, it's usually that they mean they charge per month or per quarter or per annum rather than selling perpetual licenses, irrespective of how it's hosted or where it's hosted because SaaS is such an attractive moniker for the public market. So in terms of SaaS, that is both the economic, and the business model, and the technology model, I would say that it's going to be lower than that 10% to 15%.

I'm just looking at some numbers with...

And I guess while you're looking here, if you look at that contribution based on what it is today, like where would you see that going maybe in the next 2 or 3 years? And I guess on a related question, if you're looking to acquire those type of companies, how does the process work in terms of evaluating them?

Is it different in any way? Or I think the models are slightly different, so you guys have different metrics on that basis.

So just roughly, it's something on the order of -- 10% of our maintenance would be SaaS and 30% of our maintenance would be of a nontraditional recurring-type basis. So the 30% includes the 10%.

So back to your question, yes, we do use different valuation methodology -- that's wrong. Yes, we use different assumptions when we're looking at a SaaS company versus a license company.

The valuation methodology is the same in that we use IRR, and the major assumption differences probably revolve around infant mortality in the SaaS model, which tends to be quite high. And so you tend to get -- if you take that infant mortality into account, you tend to get overall higher attrition in the SaaS models.

Obviously, it's cheaper to get onto them, so it's probably cheaper to get onto a competitor's SaaS model. And hopefully, you also have lower sales and marketing cost than you would with a perpetual license model, where people are paying you upfront.

And there is a rumor that R&D costs can be lower in the SaaS model as well, although my perception is that most of the players who talk about doing SaaS in the vertical markets at least, frequently offer highly-customized SaaS solutions to their largest clients that often are hosted on those clients' sites, and so I don't see how that gets you any R&D leverage in the model.

Okay. And then one last question for me.

In terms of the M&A opportunities, what are you seeing globally right now in terms of markets that are probably more robust than others on a relative basis. Is North America weaker in terms of opportunities versus Europe and maybe other parts of the world, or how does that stand right now?

So we track every month the number of leads that we have coming into, I guess that you might call them prospects, coming into the funnel. These are not qualified prospects.

We don't have NDAs with them, things of that nature. And what we see is that Europe is growing faster than North America, but North America continues to grow very quickly as well.

And then as I just think through the acquisitions that we've been looking at the last couple of months, it's a situation where, for sure, Europe is represented, but it's not a majority.

I guess, Mark, first on TSS. Are there any long-term government key professional services-type contracts that limit things just at least over the next 18 months in terms of slowly bringing margins up, that we should think about or bear in mind when we look at the numbers again?

There's definitely long-term government contracts there.

But in terms of margin impact -- sorry -- which should've been what I said specifically -- that would sort of slow that progress?

Both. Generally, contracts specify prices and don't allow you to increase them a whole lot.

And so I would assume that would be the case in a number of instances.

Okay, fair enough. If we think about Europe, I think last quarter when we talked, you talked about maybe making some more of the structure leveraging TSS as an organization there in terms of building out the rest of the organization.

Is there maybe a little bit of a pause or a thought to consolidating some of that, or maybe I misunderstood, in terms of how you organize in the European theater, I guess?

So it's not like TSS has a mandate for all of Europe. They have hired a couple of M&A professionals, and we're hoping to spend some time with them in North America in the June timeframe, so we're looking forward to that.

But in Europe as a whole, we have a number of M&A professionals already working the territory, so to speak.

I didn't know if there was an opportunity with TSS being a little larger to maybe leverage some of the back office functions and sort of run some of that via TSS? Or is that not -- are you going to skip that plan, remain -- keep things decentralized?

Yes, philosophically, we believe in a few things. One, is small teams.

We believe that small tight teams end up winning in these markets and tend to be more responsive to them, tend to carve out niches and be successful. And the larger those teams get, the harder they are to manage, and they're not as much fun to work in.

So we like the idea of TSS being a group of those small teams with highly autonomous managers who are making the calls. If we rip away back office from them and our German operations and our U.K.

operations and try and centralize it somewhere, what we do is take away some of the autonomy of those general managers. Now if it's absolutely compelling and everyone thinks it's a good idea, then no doubt it's going to happen.

But my sense is that the benefits of having a small team that's very focused on their market and controls their own infrastructure is much greater than the extra point of G&A that you can wring out by having a single group that does your world accounts receivable.

Fair enough. The last one for me is just in the letter, you talked through doing a good job on balancing that R&D an estimate [ph] across the business and bringing up that organic growth, particularly in maintenance.

What do you think your largest opportunity is across the group, because you sort of say, "Yes, many of our businesses have got the balance right." That presumes that not all of them have it right.

Is there still a decent opportunity going back, just even into mining that base of businesses you have?

So certainly, selling back to the base new products designed with the base, is a huge opportunity. And if we stopped acquiring tomorrow and focused solely on our existing base and not doing any new name sales, we would be a very different company, but I think we would still be an admirable company and would do quite well from an organic growth perspective.

It's really a question of sort of how you deploy your resources. When you take the opportunity to either buy or build, you're making an intelligent trade-off.

And I think we do that well. When you are looking at building, you are working with relatively imperfect information.

You're looking at the future and you're looking out 5 to 10 years. And that's really, really hard.

It takes people who are really close to their clients and have very intimate relationships with them and high levels of trust to make that stuff happen, and so we can't expect every one of those investments to work out, nor can we expect every one of our managers to be capable of doing those. We can certainly aspire to get there.

That tends to be the place where you get some superlative results. If you think about the venture capital world, when you get a small group of people focused on producing a product with a real sense of mission, you can get extraordinary performance out of the small teams, and that was where I came from.

And having seen that, if you can capture that magic inside of a larger company like ours, inside of some of the operating groups, that's very special and very hard. I think some of our groups have managed it.

Can you give us any examples, or we'll hold off today?

There are a host of examples. We are running -- I was looking at the Volaris portfolio, and I think it was 40-odd initiatives that they're either embarked upon or in the process of embarking upon.

So what tends to happen is they are relatively small and they get subsumed in the whole, but if you track them separately and think about them rationally, you do a whole lot better job than if you just say, “I'm going to spend 17% of sales on R&D," which I think is the heuristic that most software companies pick.

Mark, if I look back on my math, it looks like you closed about 1 acquisition in the past 2 months. So I was just wondering, is that timing, or is there some other color that you could provide there?

So Jamal says we closed 6 in the quarter.

Right. But you had 5 like when you announced your Q4 results about 2 months ago.

So 5 -- subtract 5 from the 6.

I think that math works, yes.

Okay. So it's just timing?

Or is it something to do with a macro picture? Or how should we think about that going forward?

So you're saying that we will do 1 a month for the rest of the year? Is that the thesis that you have?

No, that's the question.

I have no idea. It's the future.

Okay. And then just on the tax rate on the income statement, please.

How should we think about that going forward? It seems like it was a bit high this quarter.

Is that 10% to 15% number still good, or should we sort of expect to take it up over the rest of the year?

I think increasingly around the world, we're seeing tax authorities looking for a greater share of the pie, and I wouldn't be surprised if our tax rates don't go up over time, particularly as acquisitions, as a percentage of our revenues, probably come down. And so it's, I'm afraid, inevitable that we will be contributors to government coffers.

Okay. And just lastly, one housekeeping question here.

So the $3 million severance charge, was that mostly on the professional services side? Or was that distributed across professional services and R&D and a few other buckets as well?

My sense is it was across multiple buckets, but I don't have it at my fingertips.

I'd just like to delve into your comment in the President's Letter about the margin of safety. What do you see as the operating risks that are inherent in your business that would require a reasonable level or a reasonable margin of safety?

I think one that I pointed out there was that if we stop acquiring and the market values our ability to acquire or deploy capital on acquisitions, then that would not make shareholders happy.

And when you think about margin of safety, do you think about it in different terms versus the subsidiaries that you look at when you look to make acquisitions of businesses, versus when you think about margin of safety at the corporate level?

Now, it's interesting. I don't particularly care for margin of safety.

I used it as a term because we were doing an analysis that uses a market WACC in the analysis. Personally, what I seek to do and what I've hopefully convinced others around Constellation to do is to use IRR as the method of choice.

And because we're looking to buy and hold forever, I feel way more comfortable with IRR as an approach. And so we set a relatively high IRR bar and then we use multiple scenarios that are probability weighted to come up with the IRR that we expect, taking into account all possible outcomes.

Now that sounds undoable, but we simplify it into sort of 4 scenarios and try and think through what a failure would look like, what a wild success would look like and what a couple of models in between would look like.

I mean, I think an extension of this, and I think what I'm trying to get at is, if you think about your business model as a conglomerate, one of the benefits is diversification. So the arbitrage, per se, between the public market and the companies that you buy, perhaps, is the cost of capital.

And when you look at the businesses, you may apply a higher cost of capital than the public market would -- the perception would be. Do you agree with that comparison?

I would say necessarily, we apply a higher cost of capital than the public would do, yes.

And then taking it a bit further to the financing side of things, when you think about the financing on -- at TSS on nonrecourse debt, and using the financing at the subsidiary level, is that -- from a shareholder point of view, would it be more attractive to finance TSS at the corporate level and leverage the diversification benefits of the public market -- that the public markets see versus applying it to the subsidiary level?

From a straight up cost of capital point of view, you're absolutely correct. In terms of the flexibility of Constellation at the corporate level, I -- we're willing to pay an insurance premium and have more flexibility at the Constellation level.

What we're doing at the TSS level is using quite a bit of debt. And one of the reasons that we managed to acquire the business was because local management wanted to buy in and become shareholders in the enterprise.

And one of the ways they hope to get very high rates of return on their capital is through financial leverage. That puts additional stress on that team.

They're a sophisticated team, though, and they've done it before. And so I'm happy to go along and sort of experiment and see how it works out.

Would I want to take one of our existing subsidiaries and leverage it up, paying probably a higher cost of capital that we would pay at the parent level? The answer is probably not.

I think it would probably hurt organic growth and make them more short term-oriented and more leery about investing in initiatives that are 5 and 10-year horizons when they're writing 5-year debt.

Okay. That's good to understand, the thinking behind all of that.

Just one more question, probably more geared towards Jamal. Just in regards to organic growth, could you break out the foreign exchange impact on organic growth this quarter?

Well, we did a quick analysis on it. It wasn't material enough to break it out in the MD&A.

There was some impact. If you look down at, say, the Harris operating group, maybe it impacted their organic growth by a percentage point.

But at a CSI consolidated level, it wasn't material enough to break out.

So less than a percentage point then?

Yes.

My question is one that your analysts never ask. The Street took a very poor view of your upcoming quarterly results.

To my mind, the Street, I'm staying stock price were wrong. Have you any idea of what -- why this thing has happened in your case?

Why the stock price came down over the last week or so?

Yes.

Yes. I have no idea.

I am bemused. I mean, if you want to speculate, I can try addressing specific questions, Ed.

My only -- my speculation is that the Street thought that this quarterly report would be poor, and we will find out in the next week if the Street was right or wrong. That's not a question.

Yes. Yes, no, I tend to agree with you.

My sense, we try not to manage to analysts' expectations or anything of that nature. We look at absolute levels of performance.

And I was pretty pleased with the quarter. It was lovely to see organic growth up at the levels it was at.

Would I have liked to have seen better margins -- slightly better margins at TSS? Absolutely.

But we bought it to hold it forever and one quarter isn't a concern.

Just a few quick questions for me. Just going back to the M&A pipeline.

Mark, is there any particular industry vertical you are kind of like -- that looks attractive at this stage? Or pretty much you're looking at a broad-based sort of M&A strategy here?

We tend to try to be kind of cyclical. And so if you can think of a vertical that is suffering right now, we're probably looking at it.

Okay, fair enough. And the other question is relating to TSS.

Looking at the R&D spending levels, are there opportunities to prune development there? Or are you pretty much going to maintain what they're doing in terms of their product development?

So they, of course, the managers there have asked the same question. And what I tell them is, "You have to decide what you want to do.

Here are the processes that we use to look at our business. We carve R&D into 2 pools.

There is a sort of a core and sustaining chunk of R&D that we expect to see, and here are some benchmarks for it. And then everything else needs to be justified as an initiative, an investment in the future.

And to invest in the future, you got to have some sense of what the revenues will be, what the profits will be, what expenses will be in those particular initiatives, and we'd like you to put business plans around those." And that's the stage that we're at right now.

And what I'm hoping is that we come out of that with a bunch of magnificent business plans that we can all feel comfortable will be successful and would lead to enormous organic growth and recurring revenues. So that would be the happiest possible outcome.

Obviously, the one that you talk about, which is that we spend less on R&D because we can't get good rates of return on it, would be another outcome. And it really comes down to the individual business unit managers because they're the people that will have to make these trade-offs.

I was looking at sales on a pro forma basis of acquired businesses in the quarter and it seems that -- it seems that acquisitions in the quarter might have come a touch higher than the midpoint of the valuation we were usually used to in the past. Can you give us an insight maybe into emerging valuation trends of the potential targets you're looking at?

Is it maybe more or less challenging to find that value?

So nothing springs to mind, Andrew, as I think about it. I don't think we paid up enormously during the course of the quarter for the acquisitions that we did.

Obviously, there are half a dozen of them and so it's hard to generalize. But Jamal's having a look at it while we speak and maybe after the next question, he'll come up with some revelation for you.

Okay. And I guess, if I may, a follow-up to that is more related to organic growth.

And specifically, in the public segment, can you give us a sense for the drivers here? And in particular, is macro recovery in Europe a large part of the solid 7% year-on-year?

Or would it be -- or would you attribute that to something different?

I wouldn't attribute it to macro recovery in Europe. My sense is that it's selling more stuff to existing clients, primarily in North America.

Yes, I guess my question is mainly geared toward a sort of the fiscal budgets in Europe and a replacement cycle or a renewal cycle of contracts from public customers. So from that perspective, do you see a macro recovery further driving the replacement cycle?

My sense, as I spent time in Europe, is that there is no bubbling optimism on the horizon amongst the government accounts. They seem to be sort of in austerity mode and don't seem to be coming out of it at high speed.

I see. And maybe a last one, just the details from your letter this morning.

You talked about purchasing a number of SaaS businesses in the past. Can you give us a sense for your SaaS offerings going forward?

I mean, will subsequent purchases be driven by customer requests who demand SaaS features or SaaS options for their existing offerings? Or is this mostly driven as a preemptive response to a potential competitive threat of SaaS players coming into the VMS market?

So the pitch with SaaS is, "Instead of paying x million upfront for your system, pay me x thousands per month. And over time, you may end up paying me more, but any time you don't like it, you can cut me off and off you go to another system."

So that's an inherently attractive pitch to clients. It may not actually be reality when you get down to it, but it's an inherently attractive pitch.

And so sometimes, you have to respond to that inherently attractive pitch. And invariably, if one of our major competitors is making it, we will have to make a similar offering.

It sounds like there's a dual driver there, customer demand and competitive pressures. Where would you place the weight more in the near-term?

To me, it feels mostly like something that is -- it's kind of like dropping price, right? And so if a competitor drops price, you invariably have to match and you go down as far as you can on a variable cost basis until you hit the point of misery, and then the 2 of you sort of bash away at that for a while until hopefully, some rationality merges.

And if there isn't a price leader who's got decent share, rationality never merges. Now that is the equilibrium state of nearly all license software businesses.

So having people go the next step of spreading those payments over time isn't surprising in most markets. Fortunately, over time, you tend to make up some of that upfront misery by having recurring payments that are on -- that as they persist, become more and more and more attractive because the upfront investment has been sunk.

And so whether it's licensed or SaaS, I think it's the situation that you're going to get whoever's got the deepest pockets going to variable pricing at the front end in every marketplace, and that most marketplaces are going to be like that occasionally. This is very occasionally.

It's 10%, maybe 20% of the time, you'll get a rational market where people recoup their costs upfront and then offer a slightly better deal over time to their clients. And we're in some of those markets, those are terrific and those are fun.

When you're in the highly competitive markets, you make your money up with add-on sales and add-on services to the existing base and lose money on new name accounts. And whether it's SaaS or licensed, that's sort of where you end up going.

That's clear.

Not sure it was clear, but I was trying to hit the issues as I see them across supply and demand. Did you, Jamal, get to the bottom of that sort of pro forma valuation on Q1 acquisitions thing?

Yes. I looked into what we paid versus a multiple of revenue, gross revenue is historic selling [indiscernible].

Just back on the TSS, Mark. You were talking earlier about some longer-term contracts or government contracts.

This company has sort of 37% of its revenue from services versus 20%, 21% for CSU. What's -- what percentage of those contracts are -- would you classify sort of as long term in nature?

And does the model shift over time in your mind to more of a 20%, 25% services business?

I have no idea on your first question. And on the second question, I find that professional services is a really tough business.

It's one where capacity utilization and pricing of the services are absolutely key and you've got to manage it every day. Whereas the software business, you can have a good month end and sign up a bunch of clients and catch up, having had a couple of solid months.

That doesn't happen in professional services. It's an intense business compared to the software business.

And it's one where, if you're undifferentiated, it's a truly miserable business, the software business -- sorry, the services business. What we think we have at TSS is some service businesses that are quite differentiated and have the ability and track record to be uniquely profitable.

And so we're learning from that. We haven't had many businesses like that and I've got my fingers crossed that we'll learn something new that we might be able to use elsewhere inside our organization.

As to the trend over time with the professional services business, it really comes down to the individual business units and what they want to do inside their markets and what their customers are looking for. We find in markets where we have a few large clients, there is going to be a lot more services and that they're willing to pay for those services.

In markets where we have many small clients, they generally -- and particularly, if they're spending their own money as opposed to government's money, they generally don't want services and we get a much more license-rich or recurring revenue-rich stream.

Second question, just on the overall maintenance. Attrition of customers in the last 3 years has kind of trended up slightly, loss of 3% to 4% to 5%.

Any -- should we read a trend in there? Or is this -- it's just sort of bouncing around?

What's your expectation there?

I think this is -- well, firstly, if you go back further, you'll see that it was running in the 4% range. And so the 3% in 2011 kind of explained it.

The increase in 2013, I took a crack at explaining it in the President's Letter, pointing out that we had acquired some businesses with inherently higher churn, and I think that's part of the SaaS model, but not always SaaS. There are some conventional license businesses too that have high churn.

And high churn can be a good or a bad thing, and really it comes down to what the switching costs are in that particular marketplace. If you've got a high-churn market where the churn is due to bankruptcies or mergers, and you have high switching costs, then you tend to be able to factor that into your model.

If the switching costs are low, however, it tends to be a much less attractive place to be. And as I broke out and drilled down to the next layer of data in our maintenance attrition analysis, what I found was our high-churn businesses, you can't tell whether they're more or less attractive yet.

And I've got my fingers crossed that we've bought the ones that have the relatively high switching costs and will be quite attractive.

Just one quick one for you, Jamal. Tax rate last year was 21% for the year in fiscal '13, 48% this quarter.

Can you give us any view at all into where you think the annual tax rate might come out for 2014?

I mean, I always look at current tax as a percentage of adjusted net income before tax because all of the other, like amortization expenses and future taxes, I mean, it's not cash tax. So my -- we always look at current taxes as a property of cash tax.

And that -- so that percentage, current tax as a percentage of any before tax, is actually pretty consistent. I think it was 10% in 2013, but 12% in '12.

12% in Q1 '14. So it's all within the same range of the guidance we always give, right?

So.

Just a couple of quick ones here. It was nice to see the organic growth on the maintenance side hit 10%.

I mean, what was driving that? Was it customers that were off maintenance and were happy with some of the development you've done in products and have come back on?

Or was it the new product initiatives where you're getting that incremental software license sale pulling in the maintenance growth?

So we don't have a huge number of clients that go off maintenance and come back on. We highly discourage that kind of behavior through a variety of policies.

So my guess is, it was indeed new clients being signed up.

Okay. And then just given your austerity comments, though, on the European side.

Do you see financial services or health care driving growth there in the next 12 to 24 months? Or are there other verticals that you see that sort of -- have you interested with regards to growth opportunities, in Europe in particular?

So even when governments are feeling the pinch, they're usually looking at managing labor costs and trying to drive efficiency. Systems tend to help that.

And I know this is a bit of a hackneyed response from software vendors, but we do believe that irrespective of what's happening with medical costs, which are definitely going up, our revenues in that sector will probably go up faster than the expenditures on other items in that sector. So I'd certainly say that medical is an area where we should do well over the next few years.

Thank you, Melanie. Thank you for joining us on the Q1 call.

We will be at the AGM later this morning and look forward to seeing some of you there. Thank you.

Bye-bye.