Lucas Skoczkowski - Chief Executive Officer David Charron - Chief Financial Officer

Michael Urlocker - GMP Securities Steven Li - Raymond James Eyal Ofir - Dundee Capital Market Paul Treiber - RBC Capital Markets Robert Young - Canaccord Genuity

Great, thank you. Good morning, everyone and thank you for joining us today.

With me is today, David Charron, our Chief Financial Officer. Before I begin, I would like to draw your attention to slide 2, of our presentation, where we have outlined company’s disclaimers and cautions regarding forward-looking statements.

Yesterday, at the market close, we reported our second quarter fiscal 2016 financial results. A press release and the company’s financial documents are available in the investor section of our website as well as on SEDAR.

In addition, if you haven’t done so already, I encourage you to download the presentation which provides further analysis of our quarterly results. David and I will be referring to this presentation during today's call.

The agenda for today’s call is as follows. I will begin with an overview of the quarter, David will then review our financial results in detail and then I will return with some concluding remarks before we open up the call to your questions.

As we discussed on our last call, when we announced our preliminary Q2 results, our financial performance in the first half of fiscal 2016 reflected delays, we achieved this purchasing decisions of our telecom customers especially in our key Asia-Pacific, Europe, Middle East and Africa markets. David will discuss the financial results in more detail.

But at a high level, our Q2 numbers were very much in line with the preliminary estimates we provided in the beginning of April. Revenue came in at $39.8 million.

Gross profit was $21.4 million or 54% of revenue. Adjusted EBITDA was a loss of $2.4 million.

While we remain disappointed with the quarterly results, we are encouraged by the continued growth in our order backlog which was up more than 5% sequentially and [indiscernible] presented year-over-year declined of $75.5 million at the end of the quarter. This was driven by multiple large contract wins during the quarter.

On a trailing 12-month basis, as we have said before, we view as a more meaningful reflection of the performance of the business given that quarter to quarter lumpiness of software license sale, which in innovates revenues of $196.4 million with gross margin of 67% and adjusted EBITDA of $15.7 million or 8% of revenues. Recurring revenue for the last 12 months was $101.6 million and as a potential of revenue over the trailing 12 months was 52% versus 48% for the trailing 12 months end of December 2015 and 46% for the trailing 12 months end at September 2015.

On previously calls I had noted that we were confident that would see some of the sizeable potential contract we were in discussions to come to fruition. And that has in fact indicated since the end of Q2, we have booked over $35 million of orders including strategically important wins against our competitors.

In more detail, [indiscernible] $8 million order with a leading Tier 1 telecom provider in America. This win is notable and it demonstrates our ability to for complex multi-brand business models across multiple countries with our cloud service operating.

Last week we had secured a $20 million plus three-year license expansion with a leading Tier 1 telecom provider in Asia- Pacific. This win is notable and that it’s note meaningful returns of license extensions that we have committed here over past several calls.

These are all in addition to the $15 million contract with a Tier 1 Asia pacific operator as well as multi-million, Telecom Italia Mobile Brazil contract which were both included in the order backlog for Q2. As I noted on our last call, we’re especially proud of the A-Pac win given that as part of this contract, we are replacing a competitor legacy postpaid billing system.

Moreover, during the quarter we signed a multiyear expansion of our existing contract with Turk Telecom, a leading mobile operator in Turkey with over 70 million subscribers. The expense includes license, support and other consulting services to support their allowance of new LTE services.

Turk Telecom will be one of the first to offer LTE in the country and will pave the way for the introduction of leading-edge product and services to strengthen their compared positioned. Each of these contracts is further evidence of both the compared transfer solutions in helping Tier 1 telecom providers around the world and keep, their key business objective of driving higher sales and reducing costs while offering unique user experience to enhance your own competitiveness.

These contracts have further strengthened our order backlog for quarter-end. We expect to see this backlog to contribute to revenue growth in the coming quarters.

The first half market caps [ph] have noted this strategy out from our short-term business priorities. One of our timing for business during the quarter was the factoring it was part of the business plan by acquisition.

We have recently achieved a critical milestone in this regard reaching an agreement with the Workers’ Council in Berlin where we realized the vast majority of the restructuring savings. I’ve got that agreement we plan to open the global center for technical excellence and global operations leadership tender which will be based in Berlin.

These tenders will be focused on highly skilled resources. Germany remains for us a tremendous hub of technical skill and expertise and will remain integral to our commitment to the highest level of value to our global customers.

We are now far enough long in restructuring to say that we do not expect the cost of this strategy to come in between $26 million to $28 million, which we expect get an annual cost savings of up to $25 million in fiscal 2017. As I noted on our last call, the acquired Orga business of continue to perform in line with expectation.

And that for clarity regards with this year we’re centered around the core support revenues and subscription services. And we do plan to add license and additional service revenues in fiscal 2017 and beyond.

Performance, there is on plan and continue to expand the acquired business [indiscernible] for fiscal 2016. We recently formed business unit on leveraging our technology in other vertical markets and this continues to progress.

And we have seen tripling of our sales pipeline over the past quarter. We remain very encouraged.

I’d like to now to turn the call over to our CFO, David Charron to walk you through the financial results for the quarter in detail.

Thank you Lucas and good morning everyone. In the interest of time, I’ll restrict my remarks primarily to the Q2 results.

Our complete financial statements MD&A and earnings release for the quarter and the six-month period are available on SEDAR and our website. And I encourage you to view them.

As a reminder, our financial results are presented under International Financial Reporting Standards and are presented in U.S. dollars.

For comparative purposes, our previous year's results are also shown under equivalent accounting standards and functional currency. Currency fluctuations, does not have pronounced impact on our results this quarter.

We therefore won’t be providing our results on a constant currency basis. Now to our results.

Total revenue for the second quarter was $39.8 million compared with $53.7 million for the same quarter last year. As Lucas discussed, the decrease is due primarily to purchasing decision delays for contracts by our telecom customers.

This was partially offset by the revenue contribution from our Orga acquisition which was acquired during the fourth quarter of fiscal 2015. Recurring revenue which we define as revenue from support and maintenance agreements, term based product licenses and long-term service agreements were $25.1 million or 63% of revenue in the quarter, that’s compared to $24.8 million or 46% of revenue in the same year ago quarter.

Adjusted EBITDA for the second quarter was a loss of $2.4 million compared with positive adjusted EBITDA of $10.5 million in the same year-ago quarter. Net loss for the quarter was $35.6 million or $0.33 per share compared with a net loss of $2 million or $0.02 per share for Q2 of last year.

And please note that net loss includes restructuring costs of $24.5 million booked in the quarter resulting from our previously announced cost structure optimization plan under which we quote certain offices and we focused our activities in key regions reducing our headcount globally. Drilling down into the components of revenue, for software and services revenue, the estimated split between the two was $4.7 million for software and $11.6 million for services compared with $18.7 million for software and $10.1 million for services revenue in Q2 of 2015.

Support and subscription revenue increased marginally to $22.7 million or 57% of revenue from $22.5 million or 42% of revenue for the same period last year. The increase is mainly attributable to higher support revenue in the Americas region which was partially offset by the non-removal of certain support contracts in A-Pac and EMEA.

However, support and subscription revenue decreased when compared to Q1 of fiscal 2016 for the following three reasons. First; the impact of the final roll-off as a discontinued customer from the NSN DSS acquisition, second; a one-time catch-up of support revenue in Q1 from some Orga customers, and third; several smaller support contracts that will reduce at lower levels to lower levels of support.

Sales of third party hardware and software components decreased significantly to $0.8 million or 2% of total revenue from $2.4 million or 5% of total revenues for Q2 of last year. Gross margin for the second quarter was 54% versus 61% in the same quarter of last year.

The lower gross margin in Q2 of this year was a result of lower revenue and high margin software license deals, which was partially offset by the higher margins on support and subscription contracts. On a trailing 12-month basis, our gross margin was 57%.

Total operating expenses for Q2 were $53.7 million which improved from $24.5 million in restructuring cost. Excluding these restructuring costs, as well as acquisition costs and amortization, operating expenses for Q2 were $25.4 million or 64% of total revenue compared with $23.9 million or 45% of total revenue a year ago.

The year-over-year increase of $1.5 million is primarily the result of the additional expenses which resulted from the acquisition of Orga. Now looking at each of the OpEx lines individually, sales and marketing costs totaled $7.8 million, a 2% increase over the same period last year.

As a percentage of revenue, sales and marketing expenses were 20% up from 14% when compared to the same year ago quarter. General and administrative costs increased 15% to $8.6 million from the $7.5 million for Q2 of last year.

Excluding stock compensation and amortization, G&A increased 9% to $4.9 million or 12% of revenue from $4.5 million or 8% of revenue in Q2 of last year. The increase is mainly due to the contribution of Orga cost.

R&D expenditures increased to $12.6 million from $11.4 million for the same period last year and as a percentage of revenue, R&D expenditures increased to 32% from 21%. The increase in R&D cost primarily results from the additional headcount associated with acquisition of Orga which was partially offset by restructuring initiatives over the past 12 months.

Total costs related to the acquisition were $0.1 million compared with $0.3 million for Q2 of last year and these costs were associated with legal and professional fees again for the Orga acquisition. Now turning to key balance sheet items for the quarter.

Cash and equivalents including restricted cash at the end of Q2 totaled $44.3 million down from the $49 million at the end of Q1. Adjusted cash from operations excluding cash used for our restructuring initiatives for the quarter was $2.7 million.

During Q2, we used cash of $2.9 million for restructuring related costs, with an additional amount of $19.5 million estimated as payable in the next 12 months. We also used cash of approximately CAD2 million to purchase shares onto our normal course this year and this commenced late last year.

And as of March 31, 2016, we had purchased and canceled aggregate of almost 1.3 million shares investing cash of CAD3.5 million. Accounts receivable at the end of Q2 was $61.3 million down 9% from the $67.4 million at the end of fiscal 2015.

And as a result of reduced revenues, our days sales outstanding increased to 106 days from the 96 days as of year-end and remains in the middle of our target range of between 100 and 110 days. Improvements in our balance sheet that helped generate cash from working capital are as follows.

First, unbilled revenues was $34.9 million down 9% from the $38.6 million as at the end of fiscal 2015 and deferred revenue was $19 million up $4.8 million or 33% from the $14.2 million at the end of fiscal 2015. Overall, working capital was $58.8 million down 34% from the $88.1 million as at the end of fiscal 2015.

As we discussed on our last call, the company has amended its credit facility, the first; adjusted for financial covenants for the quarter ended March 31, 2016. Second; is to agree to certain temporary restrictions in the use of cash versus making business acquisitions or share capital transactions, and three; to temporarily limit advances against the company’s revolver to $20 million out of the available $40 million.

I’d like to take a few moments to comment regarding our financial covenant. First, we have built both EBITDA and fixed charge base covenants that are tested on the rolling first quarter basis.

Second, we have the benefit of working license, continuing to work with very support credit partners, which continues to believe in our business and do understand the quarterly volatility of licensing. Third, we do not expect that any of the restrictions imposed on our usable revolver will impair our normal operations including the planned payments against the restructuring position and remaining on our payments.

And number four, while I won’t be discussing any specifics regarding the covenants for the upcoming Q3 and Q4 quarters, I can say that we’re encouraged by the suite of software we’ve announced. And we hope that will help future revenue.

As well, the agreement we’ve reached with the Workers’ Council further improves our progress in reducing our cost structure both faster and more economically than originally planned. And finally, as Lucas discussed our order backlog at the end of Q2 increased to $175.5 million in the $157.2 million in the same year ago quarter.

And of the $175.5 million order backlog, we expect approximately 65% to be converted to revenue in the next 12 months with the remainder converted in future periods. This concludes my financial review.

And I’d like to turn the call back over to Lucas for his operational update. Lucas.

Thank you, David. We remain encouraged by the build-up of momentum in sales activity and order bookings and the resulting expansion of our order backlog.

Our associates are essentially to the competitiveness for the stability and success of our customers. While they may be taking longer to make capital investment decisions, we remain confident that these decisions will be made and we remain well positioned to the provider of choice when they do.

Still, we are relentless in our, pursue to further solidify the position. To this end, Q2 saw the latest release of our Redknee Unified as Mobile World Congress in Barcelona, which was physically designed to support the evolution of the data service providers and digital service providers, enable them to enter new markets and launch new services that address ever expanding and increasing customer demand.

Redknee Unified 2016 enable service providers to deliver a digital content experience to the subscriber with simple and faster acquisition and hence operating promotions to real-time software applications and on the web and support for the evolution of high speed. We have demonstrated this latest release to customers and analysts of Mobile World Congress with a very positive feedback from both.

As we look out the remainder of 2016, our pipeline remains robust. Our discussions with existing and new customers remain active and we expect that we’ll be able to announce digital contract wins in the coming quarters.

These new contracts will drive recurring revenue growth which will in turn grab our gross margins. We remain focused on optimizing the business to fully capitalize on the return to revenue momentum focusing on the three near-term priorities, as paying out for business model and EBITDA margin as we continue to grow our current revenues with the medium-term goal by an annual margin of 20% to 25%.

Number two, disciplined cost management to maximize the profitability and three; driving cash flow generations to working capital optimization and disciplined production. We will do this as we continue to progress on the three pillars of our long-term growth strategy.

Number one; continued evolution of our business critical temporary product offering, number two, growing our current market content on customer for light strategy and number three; steadily increasing our proportion of sustainable recurring revenues. On behalf of the entire management team, I want to again expect our shareholders, partners, customers for continued support.

And acknowledge the effort of more than 1,600 employees in our offices around the globe. I’d like to now open the call to your questions.

Operator?

Good morning, Lucas. Thanks for taking my question.

So, I have two lines of enquiry here this morning. One is on fails and two is on the balance sheet.

So, if we look at fails, you’ve announced some good contracts, $35 million subsequent to the quarter, what’s your sense of whether the drought on software purchases is starting to end?

That’s a good question. I think we need to see over next few quarters how we continue that momentum.

I do expect this quarter to continue to build on the last quarter and continue to increase some of the decisions that we’ve seen been I guess on holding pattern for a while as a group. But I would say that over the next few quarters I think we’ll see increase, as I think as I commented before what we are counting on is our deals which customers need to make decisions on, they’re not optional.

They might be delayed by a year some of them have been but in the end have to be awarded. I do also feel from a competitive position, we are emerging to be better student among the other larger players in this space.

So I think you see more analysis expect throughout next several months. Let’s keep added and from my perspective I think this will shape slightly better end of the second half as well as next year.

Okay. And then, you have a helpful slide that lists five contract wins.

Can you make it clear to me, have any of those been booked at revenue at this point?

I think so all those contracts, they will be, some of them, will be booked converting to revenue in the next quarter. But usually the larger contract implementation will take time.

The license expansion will probably happen between this and next quarter, subsequent quarter. But I think now the product is aiming, need contribution to Q2.

I think they will have a more positive vision Q2 to Q4 and beyond.

Okay, thank you. And then if we look at the balance sheet, if I kind of look at net cash balance, you’re at minus $9 million right now.

And two years ago to net cash position was $69 million, you’ve had some amendments from covenants, you’ve had some restrictions put on your use of cash by the lenders. How do you think this is going to play out?

Maybe Michael, I’ll answer that question by saying that we don’t expect any of these restrictions that are placed on the use of our revolver to impact our operations going forward, specifically our ability to pay for the restructuring and pay for the remaining earn-out. We are expecting to generate cash from operations in the second half of this year and into fiscal ‘17.

I think the orders that we closed that are encouraging for additional revenue in the future as well as the progress we’re making in our restructuring of both adding a lot of confidence that we have and our ability to generate cash again starting next half of the year and into fiscal ‘17.

And do you think you can get to significant levels of cash generation or is it just happy to be above zero?

Our plan is to generate substantial levels of cash from operations. Again, into the second half and into fiscal ‘17, with the orders that we see are now seeing closed as well as the progress we’re making on restructuring and other cost reduction initiatives.

Okay, thank you. I appreciate that.

Yes, thank you, Michael.

Thank you. Nice to see the contract wins.

The five contracts on your slide, how many new logos?

Could you repeat that Steven? Sorry.

The five contracts you listed on one of your slides, how many of those are new logos, new customers?

I think there are, I don’t remember the slide, but I think we have couple or at least another two new countries are new logos. If I looked through the business, the one we announced was existing customers to make an expansion, if I go back the previous, the one in Americas is two new countries, two new logos.

We’re active in Brazil is acquired business that we obviously been able to expand and do more Telecom Italia Mobile at Brazil. The Q1 is completely new area for us so we’re expecting competitor.

And the Turkey was acquired business with Turk Telecom was acquired business through Orga. Is that helpful?

Yes, very helpful. Thanks Lucas.

And then on the decline in support sequentially, you mentioned three factors. Are they more like equal?

No, I think again, just roughly speaking Steven, the decline, the loss of the last discontinued customer was a bulk of it. And two smaller components were the other two items I mentioned which was some smaller contracts being renewed at lower levels, the lower levels of support and a catch-up from previous quarters with Orga.

So, and I would be, if I would just ballpark it Steven, it would be probably 50% of it was the discontinued customer and then 25-25 for the other two items.

And if I can comment on as well, the support, what we see with customers, we brought our support into three different levels. All of our customers today, quite majority of them are in the kind of the middle tier support some more customers in emerging markets are moved into lower tier which actually has a limit on how much support it can receive.

And when they cross the limit, they threshold they need to actually pay additional support fee to take them to a next level. Some of our customers are now aggressively moving to third level support for example, Telecom Italia Mobile is on the third level of support with additional services while cost of assurance for mobility which allows them to get additional coverage.

So, I think to us, if you look at the recurring revenue lines that continue to be quite robust. And we expect that number to continue to go up over next several quarters.

Okay, that helps. And so, so $22 million, that’s the new base going forward for your support or can you factor a $25 million level?

I think we would see that number coming back probably as we go into 2017. And probably it would be depending on how we work with our customers, probably $24 million to $25 million is probably the level that we anticipate in the future.

I do want to point out that I mean, some investors ask us, are we tasking up the value with our customers given that we’re customer polite approach. I think to be fair its customers do not pay on a timely basis.

We do support. That’s why we committed a portion of those customers on revenue for the CFOs, on their side for them to pay up more rapidly.

But we expect from quarter-to-quarter to have some disputes and that’s what happens, that’s why kind of the range probably is $24 million to $25 million as we probably move into 2017, okay?

Yes, thanks. And one last one from me, I might have missed it.

But David, what was the cash restructuring disbursements in the quarter?

I think it was approximately $2.9 million this last quarter.

$2.9 million, thank you.

Yes, thanks Steven.

Thanks, thanks for taking my question, just touching on that previous question on the disbursement. You made a comment about cash flows recovering or being positive in the second half.

Is that net of the restructuring outflows or is that beforehand?

That’s before restructuring. So the point you want to make here Eyal is that, we expect that our cash flow will cover all of the requirements for restructuring and beyond that.

Okay. So you expect the magnitude you’ll be able to cover all this up, get us a break given yourself?

Yes, that’s correct, yes.

Okay, that’s good clarification. The second question just on the support question for as well.

Do you guys have any more of these contracts that need to be renewed that you could potentially see some lower support levels coming in or are they pretty much behind you?

I think the contracts where we see in terms of the, I think the view is, it’s a very important aspect. We derive from profitability of the contract.

So when customer is not willing to pay a price, the adequate price at the current level, we’re lowering the support level. They can call either less of a time or have a lower number of tickets they can raise, these are the system.

And when they continue to raise ticket and go over that limit, they have to increase that more, okay. Some of the customers, in the discussion who have demonstrated reluctant we’re putting very tight guidelines around so that we have no confusion and we’re not willing to meet those thresholds in terms of doing the work for free for them.

So I think that’s been kind of the approach. That’s I would say is more number of customers that we face and mainly markets which they have been impacted by FX, the emerging markets.

And we expect those accounts to be competitive on the other side, because we see those their support would be mission critical if we hit that. And also, larger customers are relying more on anything that become interesting more in the Tier 3 support being the highest level of support with the third functionality which we feel will provide also additional leverage for our gross margin.

And that should expand with it. Does that help Eyal?

Yes, just one clarification on that. In terms of the ticket volume, is it based on what they put in request throughout the year, is it volume per month or something like that, how should we think about that?

It’s given throughout the year we’ve got kind of our limits. And this is mainly for small customers then they are to help other Tier 3 customers in terms of helping to the larger customers.

Is it helpful?

Yes, okay, that’s good. And then before I pass the line, one quick question as well.

And you talked about the pipeline in terms of tripling, I mean, is that, over what duration is that occurred and also what’s in there now, is it more incremental net new customers or is it just trying to up-sell current client business from either Orga or?

Very good question. I actually recommended this really was with respect to our new business that we formed within our organization to focus on outside of the telecom area.

So, we’re looking at new on energy management, on the side of transportation and industrial applications. And we think that pipeline tripled into I would say nice number and multi-million dollars of pipeline over the past quarter.

It’s been actually fairly rapid increase. And as a result, we’re actually hiring additional people into that group to support the business development and business realization opportunity.

With respect to our core business, we’ve seen robust pipeline both on new customers, so we actually have the level of interest in these kinds of ability has grown both over the partner opportunity we announced, the work we’re doing with Wipro, probably takes along. And we’ve got work with some other partners that we have not announced that we will announce once we co huge with them by giving them very good attention against some of the larger players like Ericsson or Amdocs where we’ll partner in a great way to both increase our size while also to increase number of services we can do with these partners to give it capture the opportunity that operators are asking us to capture.

So, I would say both new customers that actually pipeline over next 12 months as longer is very robust. But also we’re very encouraged by the pipeline we see of we’re looking to close between now and end of our fiscal year.

Is that helpful?

Okay, great. Thanks.

Yes, very good. Thank you.

Well, thanks very much and good morning. Just in regards to your comment about targeting or getting to $24 million to $25 million in support revenue.

What do you see as the drivers behind that increase, is it the new deal momentum, larger customers moving to your Tier 3 support, if you can just elaborate on that?

It’s a combination. So we see obviously some of the increases for licenses over last two years following phones grew.

Some customers had preferable requirement to be on a warranty period before they would go to support. We also continue to drive adjustment into forward pricing across the three customers, where we feel they’re still not in the level where it should be.

And we are actively accelerating higher tier support and I’m sure that new customers are both doing well and also to meet their needs, we’ve continued to strengthening to ask us to do actually more for them. And our view is to capture it into a more structure and into contractual recurring revenue.

And then on the last customer, the NSN customer dropping off, is there any other customer since then announced their indications to leave the platform at some point in the future?

Very good question. No, we had no other customers announce or indicate to us, no, at this time, with one and obviously also with from our benchmark of our KPI or key performance indicators see our customers really continues to improve quarter-over-quarter.

So, we expect to be able to continue to leverage our existing customer base as a great reference to be able to win us new customers in the future.

And then, on the several, the $35 million in new deal announcements, generally speaking, how should we think about the cash collection terms of those contracts?

I think in new contracts, I think they continue to be improved and in comparison probably to the contract inherited from Nokia. All of the customers continue to have very much aligned with our expectations in our industry with respect to collection.

But David, do you want to comment on that?

That’s the correct assumption, Lucas. I think both the invoicing and the payment terms on those contracts are good.

And what we expect again there will be some lumpiness in the quarters with respect to the balance sheet but overall we should continue to see our unbilled revenue decline and our deferred revenue increase. And then we start to see that happening, that’s a very good indication of the contractual terms.

Okay. Thank you.

I’ll pass, yes, thank you. I’ll pass the line at this point.

Thank you, Paul.

Hi, good morning. I was hoping I can nail you down a little tighter on the expectation over next couple of quarters.

You’ve given an idea of where the support can go. In the past you’d said that the license revenue could go to $15 million to $18 million kind of a normalized rate and the service component $10 million to $12 million.

You’ve had a lot of bookings recently, is that kind of the area - the range we should expect for the next couple of quarters or should we be a little higher than that with the bookings strength?

Robert on this, we are encouraged by the not only the magnitude of the [indiscernible] curve. And again some of these have been delayed [indiscernible] cycle.

The other thing that occurred is that in regard to the contract is just a mix. These aren’t just support contracts as we closed, they’re all multiyear support.

These are expansions with customers and do include support license revenues, that do include services revenue. And so the mix of these contracts that we’re announcing is also very encouraging that we were confident that we’ll improve the mix of revenues compared to the quarter we just recorded.

And Lucas, do you have anything to add?

Yes, I think as I said before, with an aim to be encouraged by the orders, they will require time to convert to revenue. So we will remain probably more considerate than you are Robert.

But on the other side you can see to drive cost out, I know as you really continue to advance our position for to be with a chief sooner in 2017 EBITDA target at least [indiscernible] itself. I would say, however you model conservative in this probably on everybody’s side.

Okay. And if you could give us a frame around competitive environment Ericsson while we’re having a hard time and been more traditional to have network business.

And you could assume they might turn a little more tension into OSS, BSS and be more competitive against Redknee, so, maybe if you could attack or confirm that assumption that would be great.

Yes, good question. So, I think we see them in the results from the market I think everybody want to agree on other I think has seen the headwinds we’ve spoken to you guys over the last several quarters.

I cannot comment for the business but I think in my perspective our competitors are I think being restrained with respect to making sure that the business that they’re doing is commercially viable. So, I think that is something used to be a good strength because I think we also we are not adequate provider in the market with probably the most cost effective one with pick up as the implement and delivery speed.

And the platform probably is I would say remains in a top-two right now with technology capability in the market. So, I do feel from a technology effective, we remain in the number one position in most of the deals that we’re negotiating in.

People question our size. I think with partners we’re directing that where we need to.

But also we’re 1,600 employees today. And we’ve been able to deliver all the contracts into our core product, on time and on budget.

So, I think I feel that we’re well positioned there as well to explain it to our customers of how we can direct the need. So, I feel competitively actually situation normalizing so I believe.

Also it remains highly competitive space. The good thing about it is one; existing customers like what we do.

They might say that we’re not the cheapest but that’s probably a good thing for all of us as shareholders. Number two, I think customers are very excited about the roadmap and the investments we’ve made.

So you should see more multi-play deals where we are both doing as we have announced in A-Pac we’re doing taking on the cost base, taking over broadband, taking over the fixed line business and IPTV. So that should be quite exciting over the probably next 12 to 24 months.

And I feel very important to remember, we’re in the top-5 [indiscernible] providers in the world probably top 3 as of our platform capitalization forward. There is no new competitive space that can challenge our position.

Some players are bigger and they have been able to deliver. So, I think the competitive situation is moving in our favor.

But let’s not, I don’t want to sit on our laurels unless book more deals and make sure that we’ve got more market share. So I think let’s take queue and then between now and end of the year, we’ve got work cut out to ourselves to close those deals and make people understand that we are here to stay.

Okay, that’s great. And some of the conservatives you’re talking about - that’s related to continued delays on customer spending.

And so that would be related not to competitive factors, it would be more driven by the currency impact you talked about before?

Yes, I mean, overall customer decision. But I think I don’t actually, we haven’t lost the deal to our competitors so far.

Now the deals that we are actually looking around and building our business around who are really competitive threat, it’s really more about customer’s decision which is some of the markets is back some of them their priorities is hardware expansion in their core business. So, I think I actually feel encouraged on that side.

And I know that as we make some of the relationship happen and some of the partners I think we can navigate the picture of larger players. And really remove that they’re only backed by competitive advantage, we can really grab more market share away from them, so.

Okay. And last question from me.

Just to, maybe wrap up some of the other questions on the renewal at a lower level. Does that change in any way your ability to sort of increase the level of support revenue to bringing to more normalized software support terms?

Or is that just like a micro factor with smaller companies or is there a broader trend there that we should worry about and then I’ll pass the line.

Yes, I would say, this actually helps it’s a very essential way for us to be able to improve profitability and drive the right level of profitability and levels of supported paying. As you can imagine, if you buy less support you pay more for the less, just for clarity in terms of on per-unit basis of activity.

So, and then ready to decide to buy limited keypads you see less than you might be able to do it by full pad. That I guess important as we sort of understand, we see, we are able to provide all the logistics for each customer of how they utilize and how we have helped them.

And how we have reduced their potential impacts to their business as we support them through their activity, outages, fire and so on that’s happened around the world. And that means some customers they want to think there is a pilot to see whether it makes sense.

I expect that vast majority of customers will remain in the middle tier, the biggest customers will move to a higher tier because I think it makes sense for them, it helps them better budget. And but we have option for the customers who want to remain protected but maybe they’re willing to more go down their almost kind of pay as you go methodology which ends up with being more expensive but they want the flexibility.

Hopefully that helps?

Yes, that helps a lot. Thanks a lot.

I’ll pass the line.

Thank you.

Great. Thank you again for joining us on our conference call.

We look forward to update you on the progress and wins as we would release on a timely basis. And I look forward to speaking with all of you again in the next quarter.