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Tuesday, November 11, 2014 8:11:59 AM
Top Image Systems' (TISA) CEO Michael Schrader on Q3 2014 Results - Earnings Call Transcript
Nov. 10, 2014 5:49 PM ET | About: Top Image Systems, Ltd. (TISA)
Top Image Systems, Ltd. (NASDAQ:TISA)
Q3 2014 Earnings Conference Call
November 10, 2014 10:00 AM ET
Executives
Shelli Zargary – Director, Corporate Marketing & Investor Relations
Michael Schrader – Chief Executive Officer
Lyron Bentovim – Chief Operations Officer & Chief Financial Officer
Izhak Nakar – Active Chairman
Analysts
David E. Hynes – Canaccord Genuity, Inc.
Mark Scheffel – The Benchmark Co. LLC
Richard Baldry – ROTH Capital Partners
Kevin Dede – H.C. Wainwright & Company
Operator
Greetings and welcome to the Top Image Systems Third Quarter 2014 Earnings Release Teleconference. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Shelli Zargary, Director of Corporate Marketing and Investor Relations. You may begin.
Shelli Zargary - Director, Corporate Marketing & Investor Relations
Thank you very much. Thank you everyone and good day. Our earnings release was issued before the market opened this morning and it’s been posted on the company's website at www.topimagesystems.com. Additionally, in conjunction with the release of our earnings report we posted on our website, under the Investor Relations tab, additional charts in the form of a PowerPoint presentation to correspond with our prepared remarks. If you click the link in the press release for the webcast, you can automatically see these slides as you listen. If you’re dialing-in by phone, you can access the slides on the Investor Relations tab of our website or click over to the webcast.
Representing the company on the call today are Mr. Michael Schrader, our CEO; Mr. Lyron Bentovim, our new COO and CFO; and in addition, Mr. Izhak Nakar, our Active Chairman is on the call and will be available to participate in the question-and-answer session.
Before we start, we'd like to remind everyone that the conference call may contain projections or forward-looking statements and the Safe Harbor provision in the press release issued today also applies to the contents of the call. Top Image Systems expressly disclaims any obligation to update or revise any of these forward-looking statements whether because of future events, new information, a change in its views or expectations or otherwise.
The call is the property of Top Image Systems Limited. Any distribution, transmission, broadcast or rebroadcast of this call in any form without the expressed written consent of the Company is prohibited. A replay of this call will be available from the day after the call on our Investor Relations section of the website at www.topimagesystems.com or via the webcast link, which appeared in the release that we published today.
At this point I'm very happy to give the floor to Mr. Michael Schrader to make opening remarks. Michael.
Michael Schrader - Chief Executive Officer
Thank you Shelli, and thanks to everyone on the call for joining us. I'm pleased to be here and share with you some details about the exciting and positive advancements that have been taking place lately at TIS. I'll open my remarks by discussing our (indiscernible) acquisition of eGisticks the U.S. cloud-based document management company, which is very synergetic from a strategic, geographical, technological and financial perspective.
Underscoring the financial impact, this transaction has led to an increasing mix of predictable, highly visible recurring revenue and therefore we are able to give Q4 revenue guidance of $10.5 million to $11.5 million. In terms of expense guidance, as the extraordinary onetime expense in Q3 are behind us, expenses were stabilized at a level of $9.3 million to $9.7 million which coupled with our revenue guidance recommends a return to profitability forecast for Q4 and a solid base to build upon as we look forward into 2015.
Operationally, over the four months including the transactions, tremendous headway has been made as we have consolidated our product portfolio, retained all of the employees and promoted some of the executives into corporate roles.
TIS has proudly added Don Dixon, a member (indiscernible) Board of Directors and Managing Director and Co-Founder of Trident Capital, to our Board of Directors. With years of experience investing in IT security, business services, financial payments and enterprise software, Mr. Dixon has helped many of the companies in this portfolio to become industry leaders. We are confident that Don's deep investment experience will be an important contribution to TIS' strategic decision making.
Based on the rapid and successful completion of the merger integration, we consolidated the operations of TIS Americas into eGisticks and relocated TIS Americas' headquarters to the Texas-based corporate offices of eGisticks. I'm pleased to say that the move has energized the team on both sides. The consolidation of products and development of a joint vision and joint roadmap has moved more quickly than we had anticipated. In the U.S. we are getting leads from eGisticks customers for cost-optimized solutions and outside of the U.S. we are seeing opportunities for eGisticks solutions to be sold by our worldwide sales team.
In summary, we have been pleasantly surprised at the speed at which we have been able to move forward together.
In September, the TIS Board of Directors approved the appointment of TIS CFO Lyron Bentovim to the additional role of COO and my appointment to the position of CEO. Together we will grow TIS operations worldwide and more specifically in the strategic U.S. growth market as we focus on offsetting traditional TIS offerings to the eGisticks installed base and winning new enterprise, cloud and mobile content capture and business processing opportunities.
We will discuss today progress towards each including building our strongest mobile pipeline to date, which has more than doubled since the beginning of the year. The substantial growth in leads is indicative of the rapidly growing mobile market and (indiscernible) momentum as a leader in this market. We expect to begin converting this pipeline in Q4 which will provide a solid foundation for growth in 2015.
Looking more closely at the third quarter results, total revenue grew 35% to $10.7 million, a new record for TIS. Recurring revenue including staff contracts, ongoing services and maintenance, were $4.8 million or 45% of revenue, giving us a solid growing base of recurring revenue.
Although year to date we saw positive business expansion markets by the addition of 39 new [local] (ph) account, an increase of more than 25% over the last year's addition. As I stated earlier, we're also experiencing great successes in an important segment of the U.S. market for us, namely mobile imaging, where we had identified and are pursuing numerous new business opportunities such that our pipeline has more than doubled since the beginning of the year. We expect to begin converting the pipeline in Q4 laying solid groundwork for significant growth in mobile imaging sales in 2015.
We are discussing with very large financial service providers and one of the mobile solutions that continues to garner the most interest with MobiPAY, our mobile bill paying solution. Already, this quarter we announced the long-term transaction-based deal with Allied Payment Network to increment MobiPAY within Picture Pay, Allied's mobile photo bill pay solution.
On the one hand, we are working closely with our existing partners (indiscernible) traditional mobile payment vendors as well as increase customer induction and transaction volume in existing accounts. On the other hand we continue to identify and pursue additional partners via (indiscernible) our mobile bill payment and other mobile capture (indiscernible).
Thirdly, the mobile pipeline contains myriad opportunities for new solutions based on newly emerging (indiscernible) diverse use cases for mobile imaging capture and for testing in different industries, driven in part by the U.S. Patent Office's approval of our innovative technology to accurately capture documents of any size and manuscript pages. These opportunities range from mobile insurance claims capture to various types of mobile involvement that are becoming increasingly relevant as (indiscernible) availability and convenience of mobile devices to optimize transaction execution growth.
This quarter MobiFLOW was selected as the winner of the prestigious Mobile Innovations Award and TIS mobile imaging and financial products and solutions were mentioned (indiscernible) application. In addition, we achieved great exposure for our mobile technologies with our demo at FinovateFall featuring our cutting edge Google Glass capture solution for mobile capture (indiscernible) device.
TIS' presence at FinovateFall garnered the company excellent media coverage and analyst attention including a write-up in American Banker's Bank Technology News and mentions in research published by [ABC] (ph) and other analysts.
I'd like to very briefly update you on the current state of the mobile capture market. Studies and surveys of generations X and Y and the (indiscernible) showed a strong predilection of possible transactions via mobile devices and it has given way to broader public dialog about the millennials for whom mobile devices have become the primary focus in their daily life.
In a (indiscernible) published this august, 63% of the 18-25 age group reported having made a mobile-money related transaction. The release of Apple Pay has even further increased the hype and raised the figures in the mobile payment market forecast.
Just two days NASDAQ published an (indiscernible) with e-marketers (indiscernible) forecast predicting growth in the mobile payments market by 2017 to reach well over $60 billion. These broad cultural changes underline the (indiscernible) financial institutions without (indiscernible) without customer-facing enterprises right behind them aiming to retain their market share by meeting consumer demand with (indiscernible) enable their customers to interface and conduct business with them via mobile.
In order for banks to maintain their trust advantage and build their trust younger consumers, retail banks must deliver the mobile services that consumers demand. The evolution of the mobile payments markets with new providers will not happen tomorrow and this means vendors that bring innovative technologies to banks and enterprises to retain their position in the market will continue to play a huge role in this dynamic and growing market.
Of course we can talk about mobile imaging forever but TIS doesn't place all its bets in mobile. Gartner's Magic Quadrant for Enterprise Client Management released last month says that the worldwide market for ECM software grew by 8.6% in 2013 to a revenue total of $5.1 billion, which indicates that ECM technologies continue to attract more users and deliver value to enterprises. More ECM vendors are offering cloud-based environments, mobile interfaces, and social capabilities to meet the market needs and as the use of ECM increases by cloud-based deployment and mobile devices, Gartner expects to see generational makeover in this market as well.
While they didn't realize they were quoting TIS corporate vision, Gartner says enterprises increasingly need content to be delivered in a personalized fashion to the right people at the right time on the right devices and in the context of particular business processes or needs.
TIS is conceptually and technologically fully aligned with this market driver. While TIS does not purport to be a full ECM vendor, the Gartner Magic Quadrant for ECM classified TIS as one of the three providers of image (indiscernible) applications mentioned, applications that are one of the key core components of ECM and mentions Top Images as an image capture vendor that offers market differentiators to the financial services world.
TIS strategy going forward reinforced by the eGisticks acquisition will continue to reinforce our (indiscernible) core competencies with new cloud and mobile technologies leading the industry with innovative market channel content driven (indiscernible) applications that enterprises are demanding to stay competitive, efficient and responsive to the rapidly changing business environment.
Subsequent to the end of the third quarter, Genpact, the $2 billion multinational business process outsourcing and information technology services company, headquartered in New York, announced its partnership with us. Genpact will leverage Top Image Systems solutions to develop innovative cloud, mobile and (indiscernible) in accounting (indiscernible) applications designed to provide operational efficiencies for global clients, looking to leverage advanced technologies to drive (indiscernible).
In partnership with Genpact, TIS will look to co-develop the next generation of solutions for business process management. (Indiscernible) to win this partnership, we're presenting additional validation of our technology leadership. To communicate these positive developments, management will be (indiscernible) upcoming investment conferences. Next week we are going to participate at the ROTH Software Corporate Access Day in San Francisco and in December we will participate at the Benchmark Micro Cap Discovery conference in Chicago. In between these conferences we'll be traveling to multiple cities putting on road-shows to meet with investors across the United States and with analysts providing research coverage on Top Image Systems. Following the successful acquisition of eGisticks and considering our outlook for Q4 and beyond, we have a great story to tell in our upcoming meetings with investors.
At this point, I would like to the turn the call over to Lyron Bentovim, our Chief Operating Officer and Chief Financial Officer, to review the Q3 financials in greater detail. Lyron?
Lyron L. Bentovim
Thank you, Michael. Total revenues for the third quarter were $10.7 million, an increase of 35% from the $7.9 million for the third quarter of 2013. Total recurring revenues were $4.8 million, an increase of 140% year-over-year. Adjusted EBITDA was a loss of $1.5 million compared to a gain of $1.2 million for the third quarter of 2013.
GAAP net loss was $4.8 million compared to $1 million gain for the third quarter of 2013. Non-GAAP diluted loss per share was $0.11 compared to $0.09 gain in the third quarter of 2013. GAAP diluted loss per share was $0.29 compared to a gain of $0.08 for the third quarter of 2013. The total number of shares in Q3, both basic and diluted, were 16.9 million.
Operating expenses were $10.8 million compared to $4.1 million in the year-ago period. In Q3 the cost of revenue was $4.6 million compared to $3 million in the Q3 of last year.
These expenses in cost include non-recurring expenses related to the acquisition of eGisticks, EMI costs, debt reserve adjustments, the legal fees related to the settlement and withdrawal of litigation by Mitek, as well as the impact of the changes made to the company's [record] (ph) policies.
It is important to note that in the settlement just reached Mitek withdrew the litigation and TIS was not required to make any payments whatsoever to Mitek.
Gross margin for the third quarter was 67%, compared to 61% in the third quarter last year. Sales and marketing expenses increased to $4.6 million, R&D expenses increased to $1.5 million from $0.7 million in the year-ago period and G&A costs were $3.2 million compared to $1.2 million in the same period a year ago.
This concludes my remarks and I'd like to return the call back to Michael.
Michael Schrader - Chief Executive Officer
Thank you, Lyron. Looking ahead, this is a very exciting for Top Image Systems as we have both expanded our revenue base and has made an important goal of making the Americas our largest geography by revenue. As result of the eGisticks acquisition we now have a substantially larger U.S. footprint, direct access to an installed base which contains premier customer relationships, securing long-term contracts and opportunities in the cloud that enhance existing products and (indiscernible) new product development.
We are especially pleased by the developments in the mobile imaging processing (indiscernible) business where we are reaping the benefits of our investments and have tangible better projects in the pipeline as well as partnership wins that (indiscernible) in media coverage, all of which validate our leadership positioning and enable us to recognize monetary benefit from increased adoption and transactions.
As documented in Gartner's recently published IT Market Clock for the (indiscernible) Gartner's survey shows that the mobile [RBC] (ph) usage has (indiscernible) that of online. Online banking growth has (indiscernible) the banks as decision-makers in the industry now points to mobile for growth opportunities. The Market Clock (indiscernible) TIS mobile application as an example of the evolution in the market for general banking mobile-based capture technology solutions.
TIS' strategy of offering financial institutions a range of statutory banking transactions, mobile apps that (indiscernible) and our drive sales of our multichannel back office (indiscernible) solutions serves this evolution.
And finally we continue to pursue opportunities beyond the financial vertical into broader enterprise market channel content capture and (indiscernible) space. We see (indiscernible) M&A in this market. For example we recently purchased a restock by (indiscernible).
Organically as we enter 2015, we are ideally positioned to achieve profitability growth with significantly increased revenue visibility and augmented U.S. footprint and diversified innovative solutions on the market and in development. With numerous types of different avenues to drive shareholder value, it is an exciting time to be heading out to meet new and existing investors, but before then we'd be glad to open up the call for Q&A.
Question-and-Answer Session
Operator
At this time we will be conducting a question-and-answer session. (Operator Instructions) Our first question is from David Hynes with Canaccord. Please proceed with your question.
David E. Hynes - Canaccord Genuity, Inc.
Hey guys, how are you? Maybe first, can you let us know how much eGistics contributed in the quarter?
Michael Schrader - Chief Executive Officer
Lyron?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Hi David, yes. David, as we stated in the previous conference calls and since we've – Michael stated in his remarks – consolidated eGisticks into our U.S. operations, we're not planning on disclosing eGisticks numbers as a standalone.
David E. Hynes - Canaccord Genuity, Inc.
Okay. Maybe then along those lines, where do we stand from an integration standpoint? What needs to be done still and you called out that having had eGisticks in this for a few months now, you're more convinced of the synergies. So maybe what specifically have you seen that makes you more confident?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
I'll start and then maybe Michael can follow up on the important stuff, which is the product integration and going for a combined roadmap. In terms of the integration of the teams, the people we have done all of the steps as we've put in the press release. We've moved our U.S. headquarters to Plano, Texas. Some of the leadership team in eGisticks is now in the leadership team at TIS. And we've really integrated the whole company; we're acting as one company, everybody sees themselves TIS employees and we've started working with our customers on both ends to try and find opportunities for cross-selling our solutions between them.
Michael, if you want to expand on the overall roadmap and vision?
Michael Schrader - Chief Executive Officer
Yes. As we pointed out in the calls before, we had several points of synergy between these two companies and one is of course that eGisticks is running a cloud operation, so one of the goals we are having is to put our eFLOW multichannel capture platform into the cloud at eGisticks operations. Another option or another potential for us is to go to eGisticks – existing eGisticks clients and sell the frontend for our capture and of course also our mobile solutions. And the third is that we are looking at our global international market, not just Asia-Pacific, Europe, et cetera, to sell the existing CloudDocs and (indiscernible) solutions into that market.
But also what we see in the last two months is that we are finding opportunities that are new opportunities where we can offer both. Of course we have to consider that the deal was closed two months ago, after one month in Q3, and looking at the sales cycle, it will take us some time to find of course the (indiscernible) but we definitely can see the potentials and the pipeline for that and going forward, we also integrate both product to one product platform.
David E. Hynes - Canaccord Genuity, Inc.
Got it, okay. And then maybe on the core capture side, you guys gave a lot of color on mobile and what's going on with eGisticks but if my math is right it was a so-so quarter on the core capture side. So I'd be curious to get color there, maybe specifically a license number, I think you guys have traditionally broken that out, I didn't see it anywhere in the materials and then curious what you're seeing from a macro-perspective, other companies in this space have said that they have seen some headwinds particularly in Europe on the core capture side, curious if you're seeing the same or if the softness is maybe because the sales force maybe took their eye off the ball with the new products being integrated. Any color on that would be helpful.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Let me take firstly the numbers and then I'll let Michael add some color on the overall focus of our sales force. In terms of license, we actually worked it out in the press release. The official the full number of license is 5.8 million and in essence if you take out the SaaS revenue which we also brought out a few million, you have around 3.8 million of license revenue.
David E. Hynes - Canaccord Genuity, Inc.
And how much of that is maintenance though? I mean, you said recurring –
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
It's not included in that number.
David E. Hynes - Canaccord Genuity, Inc.
Okay.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
It's pure licensing.
David E. Hynes - Canaccord Genuity, Inc.
So it's 3.8 million pure license.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Yeah.
Michael Schrader - Chief Executive Officer
Correct.
David E. Hynes - Canaccord Genuity, Inc.
Okay. And then so what makes up the total recurring number, I think you said 4.8 recurring?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Yes, so the recurring –
David E. Hynes - Canaccord Genuity, Inc.
That's 2 million in SaaS and what's the balance to get to that 4.8?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
The balance is maintenance as well as recurring services that eGisticks provides to customers.
David E. Hynes - Canaccord Genuity, Inc.
Okay, all right. Got it. So it's a little bit of a different reporting structure than we've seen in the last couple of quarters, is that right, some of that recurring revenue is coming out of the service (indiscernible)?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Yes, there is definitely some of the recurring revenue is obviously – we've always had them there because they were SaaS revenues that in our view licensed. Since we break down to three categories we don't consider recurring SaaS revenues of maintenance, we (indiscernible) license revenues that are recurring and also the delta of the (indiscernible) comes in the same area.
But this structure we have here is going to be the structure we're going to report going forward, so obviously there's some changes, obviously the company has changed, but going forward you have stability from this point on onwards.
David E. Hynes - Canaccord Genuity, Inc.
Okay, got it. And then maybe as you think about the cost synergies and the guidance for Q4, that's helpful, thanks for providing guidance. But we're looking at a market improvement in Q4 in terms of profitability on the modest sequential revenue growth, so where are you expecting to see the most operating leverage? Obviously some of it with the transaction costs in G&A and I assume some on gross margins but any additional color would be helpful.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Yes, so what we've done is really aligned our cost structure is to be expected revenue that we're expecting in the next coming quarters. Again, overall our goal as a company is to go back to the last couple of years where we were really invested in both the development of our product and R&D as well as development in building the sales and marketing structure in North America, and now really the focus is back on profitability. If we look at our overall operating model that we want to start to establish in Q4 going forward towards 2015 we're looking at gross margins in the 60% to 65% range and that will give us EBITDA margin in the mid-teens. So that's the model we're trying to aim towards and Q4 will be a first step in that direction.
Q3 has been an [emerging] (ph) quarter with a lot of different pieces not going to be part of the model going forward. We think that the guidance we've given for Q4 is a good starting place for us as we emerge in 2015 and then grow from there onwards.
David E. Hynes - Canaccord Genuity, Inc.
Got it, okay, thanks a lot for the color guys. I'll hop back in the queue.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Thank you.
Michael Schrader - Chief Executive Officer
Thank you.
Operator
Our next question is from Mark Scheffel with the Benchmark Company. Please proceed with your question.
Mark Scheffel - The Benchmark Co. LLC
Hi, good morning. Thank you for taking my question. Michael, is it fair to assume that the eGisticks revenue that was generated in the quarter was pretty consistent with its revenue run rate when you acquired the company, its quarterly revenue run rate?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Yeah, overall –
Michael Schrader - Chief Executive Officer
Yes, this is what we can assume.
Mark Scheffel - The Benchmark Co. LLC
Sorry?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Go ahead Michael.
Michael Schrader - Chief Executive Officer
Yes, this is what you can assume overall but we also have to consider that as it was mentioned before, usually Q3 in Europe is a bit of a weaker quarter because of the vacation time, et cetera. But what we can say is – and which gives us of course the potential for growth if you compare Q3 to Q4 but now as a company we are differently positioned because we have a good balance between the business in the Americas and the business in Europe and this balance makes our revenue more predictable going forward.
Mark Scheffel - The Benchmark Co. LLC
Okay, thank you. And then the next question, Michael, when can we expect to get some more definitive quantitative metrics around your mobile business?
Michael Schrader - Chief Executive Officer
I think that we have given some of those in the call here because we can see that basically (indiscernible) as we have said from the beginning of the year the pipeline has doubled and we think that in Q4, we can show the results of the doubling (indiscernible) revenues and what we also see is that it's sometimes not just the pure mobile revenue, it's also a combination of different solutions that we're offering to the client.
Mobile can be a different solution or like a specific solution like MobiCHECK and MobiPAY but it also can be integrated in our offering for the full mobile – for the multichannel capture platform where mobile is a part of it. So the (indiscernible) especially if you look in Europe sometimes mobile can be part of a bigger offering to a client. So it's more difficult to separate it, that's what I want to say but in terms of especially MobiCHECK and MobiPay in North America, this is what we would see in Q4 and the pipeline (indiscernible).
Izhak Nakar - Active Chairman
It's Izhak. Well, if something goes that we see actually three main drivers for growth in mobile worldwide. The first one we are expanding the number of customers for financial market like banking and insurance. This is one. And mainly, and the target of (indiscernible) account opening and involvement. And insurance company, we are talking about the (indiscernible) this is just expanding the number of customers that are going to use the mobile.
The second one is the growing the number of use cases and we see a lot of use cases around the world, especially when we are talking about the customer retention. When the customer going in uses and (indiscernible) used by the customer we will see more and more revenue and of course we are talking about expanding more and more use cases. And this is all part actually the grow and the revenue of the mobile as we have mentioned several times when we are setting the mobile there are three elements of the business model, it's setup [phase] (ph), (indiscernible) and maintenance. So the setup phase is quite slower and then when the customer and the consumer uses, it's growing down the road and these (indiscernible).
Mark Scheffel - The Benchmark Co. LLC
Thank you.
Operator
Our next question is from Richard Baldry with ROTH Capital. Please proceed with your question.
Richard Baldry - ROTH Capital Partners
Thanks. Could you talk a little bit about the accrual policy change, what that's related to, and the impact on the quarter?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
I can try. I am not going to go into the impact on the quarter because as far as the change it's really hard when you change how you measure things to really see what it would have been, I didn't do the calculation of what it would have been in the previous one but my guess is we would have been mildly (indiscernible) but I don't know that for a fact. Outside of all the one-times and so on on the adjusted EBITDA level.
What I did as I was coming in, I obviously brought my philosophy on virtually how I would tie costs to revenue and introduce some project management tools that really allowed us to have the ability to plan the cost of some of the ongoing projects tied into where the revenue is recognized. And that had a basically one-time impact on the expenses much of it in the cost of goods but going forward that would lead us to have financials that tie into my relatively conservative philosophy on tying revenue and expense.
Richard Baldry - ROTH Capital Partners
Thanks, and the uptick to the sale and marketing line was pretty significant compared to the (indiscernible) on the revenue side. So can you talk a bit about how large eGisticks sales team was versus your existing sales team? It seems like it might have been a little bigger than we thought coming in.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Yeah, the uptick in the sales and marketing is tied to some adjustments not related to eGisticks. Mostly on Asia Pacific and Australia and the eGisticks sales team is not large and it's not fully integrated into the TIS Americas sales team and we expect the sales and marketing to return to normal rates in Q4.
Richard Baldry - ROTH Capital Partners
Okay. And then when you look up to the Q4 revenue forecast, what would really gate the company coming in either at the lower end versus the upper end, is it about the timing of certain recurring launches or is it really about (indiscernible) license revenue type line?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Obviously since we've put that guidance we have the pipeline to support those numbers and as anyone that have been trying to sell large licenses knows, at the end of the day where we've fallen in our range is subject to whether the timing and it's not just related to us obviously, it depends on the end customers and the timing of the projects and where they want them to happen in 2014 or 2015 and that will really determine whether we're at the upper end or midlevel of our guidance.
Richard Baldry - ROTH Capital Partners
And last thing would be can you talk about any real changes you've seen to the competitive landscape, maybe with the lawsuit put behind you, do you see any change to that? Specific competitive positioning or even broader throughout the marketplace, thanks.
Izhak Nakar - Active Chairman
We can talk about – it's two markets, the ECM market and the mobile market. Definitely when we are talking about the ECM market we have the traditional competitor (indiscernible) more reach of features. We don't see any dramatic change on the landscape of the competitors especially in the ECM outside of U.S. and in the U.S. This is what we call the traditional competitor that we compared with (indiscernible) which right now is (indiscernible). This is the main competitor that we see in the ECM market.
With the mobile it is something that we have always and we add more and more feature in order to really be the nice and rich user experience in their mobile and as you all know we really came in to the market with new and new features that give us some advantage on the technology aspect, and especially when we are talking about the (indiscernible) there were chromatic (indiscernible) mobile image which is patent-pending that gives really to the user the option to pick good and very good quality of the image. They don't need to push the button and of course we can go in a serial of features as working language and some other that has really been very nice user experience that we see in the market.
Richard Baldry - ROTH Capital Partners
Right, thanks.
Operator
Our next question is from Kevin Dede with H.C. Wainwright. Please proceed with your question.
Kevin Dede - H.C. Wainwright & Company
Hello gentlemen. I am curious about – Lyron, you mentioned about sales and marketing and how you expect integration to try to – to help reduce that number a little bit next quarter. Could you quantify that at all? Could you give – I understand that our OpEx expectations are $9.3 million to 9.7 million, I got that, but I'm just hoping you'd give us a little more color on how they break down.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Yeah, so overall I am going to aim towards my long-term model so I am going to try the marketing towards 25%. We'll see how successful I am in the fourth quarter but that's the long-term model to sales and marketing towards 25%. So if you take – I'm not going to try and do the math on $9.3 million, but what I'm saying is $2.5 million, so we can be slightly below that.
Kevin Dede - H.C. Wainwright & Company
Right, got you, okay. And you said your gross margin target was what, 60% to 65%?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
60% to 65%, yes.
Kevin Dede - H.C. Wainwright & Company
Okay. Can you help us – well, me especially, and maybe the other gentlemen have this figured out but I haven't been able to make that calculation. You're saying that your – the reported gross margin was what, 55%, and yet you're saying that you reported 60%, I didn't get the adjustment there.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
I'm not sure I understand the question. We reported 55% this quarter. I believe then we'll get back to the 60% to 65% gross margin for Q4.
Kevin Dede - H.C. Wainwright & Company
Okay. Can you help me get my arms around any GAAP to non-GAAP adjustments that you make and specifically – I know the question was asked, but as it pertains specifically to gross margin you said you made some accrual adjustments, so I'm just wondering how that may have impacted the 55% you reported versus the 60% to 65% target.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Exactly. So in essence I recorded some cost of projects in a different way than it was done in the past and therefore we have a one-time increase in the cost of goods and therefore that's caused the margin to go down to 55%. It's not in the GAAP to non-GAAP because it's still GAAP – it's a real expense of the business, it's not a one-time expense. It's just the timing is different than it was done before, trying to get the timing right for the way I like to track projects going forward.
Kevin Dede - H.C. Wainwright & Company
Right, okay. So would it be fair to assume that on a legacy accounting basis that you would have been at that 60% to 65%?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Yes.
Kevin Dede - H.C. Wainwright & Company
Okay. Michael, you mentioned that things were coming together a little bit more quickly than you had expected. And that's obviously a good thing. I'm just hoping you might be able to give me a little more detail on how you see that happening. Now, granted you are – you said your mobile pipeline is up 2x, you said you are seeing more cloud business but could you just give us maybe a little more color on how you see things coming together more quickly than you expected?
Michael Schrader - Chief Executive Officer
Yes, when I said things are going more quickly than expected I meant that the flexibility, the integration with eGisticks and basically also the fact that now we have some executives in our management team that going forward will support the management team and that we maintained all the clients, we maintained all the employees after the merger, it was very important for us.
And also what worked quicker is to put the offerings together also for international deliveries, where we see some demand for the same solution. Obviously we need to translate that into the results and this could happen to accelerate that growth but we see that from an operational point, to put these two companies together, put the management teams together, put the roadmaps together, we were a bit faster than we thought. That’s what I meant with the faster.
Kevin Dede - H.C. Wainwright & Company
Okay, thank you. I know you addressed a little about what's happening from a geographic perspective, specifically Europe, but in the June quarter, the EMEA region was done pretty sharply sequentially and I'm just wondering if you think there might be a broader-based economic driver there or if you think that there is a potential turnaround in what happens in Europe and the EMEA region.
Michael Schrader - Chief Executive Officer
Okay, first of all, if we compare 2013 to '14 for TIS this region is growing as the whole company does. That would mean we don't see a global economical thing impacting us right now, we're obviously seeing the things that we always saw in Q3, so going forward usually Q4 is stronger in Europe. Of course, we have some impact on the currencies also if we are comparing Q1, Q2, to Q3, and this would impact our results at the end a little bit but the impact is not so big anymore as we now we have this balance between US and Europe, or Americas and Europe.
Kevin Dede - H.C. Wainwright & Company
Okay, fair enough. Can you just – I know you've touched on the Genpact deal but could you give us a little more insight on how you see your two companies working together?
Michael Schrader - Chief Executive Officer
Yes. The original thing that we started to work together is that Genpact of course is one of the biggest business process outsourcers which traditionally is a very good consumer base with TIS, one of our strong verticals is BPO and the platform was originally built to support BPOs and their services to clients; to recognize documents automatically and have huge document volume for the platform. And Genpact is one of these players and they benchmarked our solution against existing solutions and other companies on the market and we started now to work together in this space, but we also see a potential to work together in developing solutions for Genpact clients to improve positives also not just in the BPO module but also for their clients.
Kevin Dede - H.C. Wainwright & Company
Okay. Can you just put some color on – obviously we're talking about a huge company here with relationships with GE, and I'm just curious about how some of the – well, how they specifically and some of their clients might look at you folks and your balance sheet and just scratch their heads on whether or not you'd be able to meet their requirements in terms of breadth of service and support? I guess what I'm asking specifically is how do you resolve the difference between a $2 billion company and one that has $4.5 million on its balance sheet.
Michael Schrader - Chief Executive Officer
Okay, I understand, but I would say this is not the only big company that we're (indiscernible) technology, there are a lot of other big banks and other big BPO players that are using our technologies to improve their processes so this is not the first client that we are supporting globally and we have 24/7 support across their – across the globe for them.
They have their – they have big operations in India and they have clients in North America and of course we are training also the team because it's very important for a company like Genpact that their team has the knowledge about our platform, so that they can also support their clients directly. So in a way Genpact is also an integration partner for us for their client but also maybe for other clients in the future. And this is a model that we have worked with other companies for a long time already.
Kevin Dede - H.C. Wainwright & Company
Would Fiserv serve as an example of that as well?
Michael Schrader - Chief Executive Officer
For instance, yes, exactly.
Kevin Dede - H.C. Wainwright & Company
Okay.
Michael Schrader - Chief Executive Officer
Yeah.
Kevin Dede - H.C. Wainwright & Company
We also talked – or you touched on the new patent, the mobile document capture patent and you talked about a couple of indications. I'm wondering how difficult it is for you to fully commercialize that technology and how quickly you might be able to recognize revenue from it?
Michael Schrader - Chief Executive Officer
Okay, I think that patent is very important because looking at the mobile use cases if you see and talking to especially some of the banking and financial service providers (indiscernible) for them it's important not just to have a solution to capture a check or a bill which is usually a bit smaller than a letter size document, it's important for instance in an enrolment application that they will capture an ID card, they will capture a salary statement or the (indiscernible) in other countries in other to involve a client. And therefore it's important that they have technology that (indiscernible) can capture smaller size documents but also bigger size documents.
So already in the offerings that we are doing today, that's been a very important part in the project, in the proof of concept that we're running today, it's very important to get a very good quality document on the larger side.
Izhak Nakar - Active Chairman
Kevin, just to add to Michael, actually we already use this technology. The project in Berlin is done with this kind of technology with Xerox. In this project we actually capture full page and it's already there and they, I believe, they're using since last January or February (indiscernible).
Kevin Dede - H.C. Wainwright & Company
Right, right, right, okay, yeah I remember you talking about that in fact, thank you. So that means that's already commercialized and you're recognizing or have recognized revenue – yes, I agree with you 100% Michael, I think it's a very important patent as well and it has huge opportunity. I'm just curious because you did talk about some of these other applications. I'm wondering when you think you might be able to speak to them more specifically. Is this something in the first half of next year more maybe later?
Michael Schrader - Chief Executive Officer
As (indiscernible) we're already doing the project and of course we are running other proofs of concept so we're setting up projects in that space and I think the time – somewhere next year we will see more (indiscernible) solutions I'm quite sure because some of them will translate to two-year projects. Some market (indiscernible) some markets could be slower, even in Europe there are differences in certain countries which are more privy to mobile solutions and cloud solutions than other markets but we think that it will not be possible to enter all these other markets without technology for a larger size document.
So I think next year we are going to see the result, I'm not sure if it will be in Q1 or Q2 but of course we have tried to make it as fast as possible.
Kevin Dede - H.C. Wainwright & Company
(Indiscernible), okay.
Izhak Nakar - Active Chairman
Kevin, we see a great advantage of this technology mainly when we are talking about with enterprise because the flexibility that we give to the customer…
Kevin Dede - H.C. Wainwright & Company
Right, right, okay. All right, so given that we are six or seven weeks left in the year, I appreciate seeing your expectations for the balance. I'm a little more curious though given the process and the progress you've made in integrating eGisticks I'm just wondering what you think a reasonable organic growth rate assumption would be for next year, 2015?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
I think as we look at next year our goal just like this year is to continue to grow organically, double digits, and we're in the process of putting together financial plans internally obviously for 2015 and we will see whether we are comfortable enough with the direction to set an overall direction for the market but for now we're committed to growing the company organically double digits, obviously as an integrated entity going into 2015.
Kevin Dede - H.C. Wainwright & Company
Great, well, thank you gentlemen for taking my questions. Appreciate it.
Operator
It appears there are no more questions at this time. I'd like to turn the floor back over to Shelli Zargary for closing remarks.
Shelli Zargary - Director, Corporate Marketing & Investor Relations
Thank you very much. Okay, first of all, I'd like to apologize, we got some information that there were some problems with – technical problems with the webcast slides, but they did get up and they are available so you can go back of course and see them on the link and you can also download the slides as a PDF from the financial release section of the site. You can download the tables.
There were some issues and we apologize for the delay but anybody who wants any of the files can now please go back to the PR on the Financial Release section, in the Investor section of our website and then do download the slides and tables and the PR. That's one area.
Another thing I wanted to mention, unfortunately it was very last-minute, we didn't have time to put it in but we certainly want to advise you that our customer bank (indiscernible) who is using our MobiCHECK product has been nominated for a FinTech innovation award by PaymentEye, and the case study is available on the PaymentEye website. So we think it's really exciting and we did talk about commercializing the value of our mobile applications and this could be a good step in the right direction, we think it's going to give us a lot of exposure and the bank as well, because it's a very successful project.
So I'd like to recommend that you take a look at that and we will be putting in the link to that case study on our TIS – in the News section in our website very soon.
So thank you very much. And we appreciate your questions and your time and attention and we wish you all a very pleasant rest of your day. Thank you for joining us.
Nov. 10, 2014 5:49 PM ET | About: Top Image Systems, Ltd. (TISA)
Top Image Systems, Ltd. (NASDAQ:TISA)
Q3 2014 Earnings Conference Call
November 10, 2014 10:00 AM ET
Executives
Shelli Zargary – Director, Corporate Marketing & Investor Relations
Michael Schrader – Chief Executive Officer
Lyron Bentovim – Chief Operations Officer & Chief Financial Officer
Izhak Nakar – Active Chairman
Analysts
David E. Hynes – Canaccord Genuity, Inc.
Mark Scheffel – The Benchmark Co. LLC
Richard Baldry – ROTH Capital Partners
Kevin Dede – H.C. Wainwright & Company
Operator
Greetings and welcome to the Top Image Systems Third Quarter 2014 Earnings Release Teleconference. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Shelli Zargary, Director of Corporate Marketing and Investor Relations. You may begin.
Shelli Zargary - Director, Corporate Marketing & Investor Relations
Thank you very much. Thank you everyone and good day. Our earnings release was issued before the market opened this morning and it’s been posted on the company's website at www.topimagesystems.com. Additionally, in conjunction with the release of our earnings report we posted on our website, under the Investor Relations tab, additional charts in the form of a PowerPoint presentation to correspond with our prepared remarks. If you click the link in the press release for the webcast, you can automatically see these slides as you listen. If you’re dialing-in by phone, you can access the slides on the Investor Relations tab of our website or click over to the webcast.
Representing the company on the call today are Mr. Michael Schrader, our CEO; Mr. Lyron Bentovim, our new COO and CFO; and in addition, Mr. Izhak Nakar, our Active Chairman is on the call and will be available to participate in the question-and-answer session.
Before we start, we'd like to remind everyone that the conference call may contain projections or forward-looking statements and the Safe Harbor provision in the press release issued today also applies to the contents of the call. Top Image Systems expressly disclaims any obligation to update or revise any of these forward-looking statements whether because of future events, new information, a change in its views or expectations or otherwise.
The call is the property of Top Image Systems Limited. Any distribution, transmission, broadcast or rebroadcast of this call in any form without the expressed written consent of the Company is prohibited. A replay of this call will be available from the day after the call on our Investor Relations section of the website at www.topimagesystems.com or via the webcast link, which appeared in the release that we published today.
At this point I'm very happy to give the floor to Mr. Michael Schrader to make opening remarks. Michael.
Michael Schrader - Chief Executive Officer
Thank you Shelli, and thanks to everyone on the call for joining us. I'm pleased to be here and share with you some details about the exciting and positive advancements that have been taking place lately at TIS. I'll open my remarks by discussing our (indiscernible) acquisition of eGisticks the U.S. cloud-based document management company, which is very synergetic from a strategic, geographical, technological and financial perspective.
Underscoring the financial impact, this transaction has led to an increasing mix of predictable, highly visible recurring revenue and therefore we are able to give Q4 revenue guidance of $10.5 million to $11.5 million. In terms of expense guidance, as the extraordinary onetime expense in Q3 are behind us, expenses were stabilized at a level of $9.3 million to $9.7 million which coupled with our revenue guidance recommends a return to profitability forecast for Q4 and a solid base to build upon as we look forward into 2015.
Operationally, over the four months including the transactions, tremendous headway has been made as we have consolidated our product portfolio, retained all of the employees and promoted some of the executives into corporate roles.
TIS has proudly added Don Dixon, a member (indiscernible) Board of Directors and Managing Director and Co-Founder of Trident Capital, to our Board of Directors. With years of experience investing in IT security, business services, financial payments and enterprise software, Mr. Dixon has helped many of the companies in this portfolio to become industry leaders. We are confident that Don's deep investment experience will be an important contribution to TIS' strategic decision making.
Based on the rapid and successful completion of the merger integration, we consolidated the operations of TIS Americas into eGisticks and relocated TIS Americas' headquarters to the Texas-based corporate offices of eGisticks. I'm pleased to say that the move has energized the team on both sides. The consolidation of products and development of a joint vision and joint roadmap has moved more quickly than we had anticipated. In the U.S. we are getting leads from eGisticks customers for cost-optimized solutions and outside of the U.S. we are seeing opportunities for eGisticks solutions to be sold by our worldwide sales team.
In summary, we have been pleasantly surprised at the speed at which we have been able to move forward together.
In September, the TIS Board of Directors approved the appointment of TIS CFO Lyron Bentovim to the additional role of COO and my appointment to the position of CEO. Together we will grow TIS operations worldwide and more specifically in the strategic U.S. growth market as we focus on offsetting traditional TIS offerings to the eGisticks installed base and winning new enterprise, cloud and mobile content capture and business processing opportunities.
We will discuss today progress towards each including building our strongest mobile pipeline to date, which has more than doubled since the beginning of the year. The substantial growth in leads is indicative of the rapidly growing mobile market and (indiscernible) momentum as a leader in this market. We expect to begin converting this pipeline in Q4 which will provide a solid foundation for growth in 2015.
Looking more closely at the third quarter results, total revenue grew 35% to $10.7 million, a new record for TIS. Recurring revenue including staff contracts, ongoing services and maintenance, were $4.8 million or 45% of revenue, giving us a solid growing base of recurring revenue.
Although year to date we saw positive business expansion markets by the addition of 39 new [local] (ph) account, an increase of more than 25% over the last year's addition. As I stated earlier, we're also experiencing great successes in an important segment of the U.S. market for us, namely mobile imaging, where we had identified and are pursuing numerous new business opportunities such that our pipeline has more than doubled since the beginning of the year. We expect to begin converting the pipeline in Q4 laying solid groundwork for significant growth in mobile imaging sales in 2015.
We are discussing with very large financial service providers and one of the mobile solutions that continues to garner the most interest with MobiPAY, our mobile bill paying solution. Already, this quarter we announced the long-term transaction-based deal with Allied Payment Network to increment MobiPAY within Picture Pay, Allied's mobile photo bill pay solution.
On the one hand, we are working closely with our existing partners (indiscernible) traditional mobile payment vendors as well as increase customer induction and transaction volume in existing accounts. On the other hand we continue to identify and pursue additional partners via (indiscernible) our mobile bill payment and other mobile capture (indiscernible).
Thirdly, the mobile pipeline contains myriad opportunities for new solutions based on newly emerging (indiscernible) diverse use cases for mobile imaging capture and for testing in different industries, driven in part by the U.S. Patent Office's approval of our innovative technology to accurately capture documents of any size and manuscript pages. These opportunities range from mobile insurance claims capture to various types of mobile involvement that are becoming increasingly relevant as (indiscernible) availability and convenience of mobile devices to optimize transaction execution growth.
This quarter MobiFLOW was selected as the winner of the prestigious Mobile Innovations Award and TIS mobile imaging and financial products and solutions were mentioned (indiscernible) application. In addition, we achieved great exposure for our mobile technologies with our demo at FinovateFall featuring our cutting edge Google Glass capture solution for mobile capture (indiscernible) device.
TIS' presence at FinovateFall garnered the company excellent media coverage and analyst attention including a write-up in American Banker's Bank Technology News and mentions in research published by [ABC] (ph) and other analysts.
I'd like to very briefly update you on the current state of the mobile capture market. Studies and surveys of generations X and Y and the (indiscernible) showed a strong predilection of possible transactions via mobile devices and it has given way to broader public dialog about the millennials for whom mobile devices have become the primary focus in their daily life.
In a (indiscernible) published this august, 63% of the 18-25 age group reported having made a mobile-money related transaction. The release of Apple Pay has even further increased the hype and raised the figures in the mobile payment market forecast.
Just two days NASDAQ published an (indiscernible) with e-marketers (indiscernible) forecast predicting growth in the mobile payments market by 2017 to reach well over $60 billion. These broad cultural changes underline the (indiscernible) financial institutions without (indiscernible) without customer-facing enterprises right behind them aiming to retain their market share by meeting consumer demand with (indiscernible) enable their customers to interface and conduct business with them via mobile.
In order for banks to maintain their trust advantage and build their trust younger consumers, retail banks must deliver the mobile services that consumers demand. The evolution of the mobile payments markets with new providers will not happen tomorrow and this means vendors that bring innovative technologies to banks and enterprises to retain their position in the market will continue to play a huge role in this dynamic and growing market.
Of course we can talk about mobile imaging forever but TIS doesn't place all its bets in mobile. Gartner's Magic Quadrant for Enterprise Client Management released last month says that the worldwide market for ECM software grew by 8.6% in 2013 to a revenue total of $5.1 billion, which indicates that ECM technologies continue to attract more users and deliver value to enterprises. More ECM vendors are offering cloud-based environments, mobile interfaces, and social capabilities to meet the market needs and as the use of ECM increases by cloud-based deployment and mobile devices, Gartner expects to see generational makeover in this market as well.
While they didn't realize they were quoting TIS corporate vision, Gartner says enterprises increasingly need content to be delivered in a personalized fashion to the right people at the right time on the right devices and in the context of particular business processes or needs.
TIS is conceptually and technologically fully aligned with this market driver. While TIS does not purport to be a full ECM vendor, the Gartner Magic Quadrant for ECM classified TIS as one of the three providers of image (indiscernible) applications mentioned, applications that are one of the key core components of ECM and mentions Top Images as an image capture vendor that offers market differentiators to the financial services world.
TIS strategy going forward reinforced by the eGisticks acquisition will continue to reinforce our (indiscernible) core competencies with new cloud and mobile technologies leading the industry with innovative market channel content driven (indiscernible) applications that enterprises are demanding to stay competitive, efficient and responsive to the rapidly changing business environment.
Subsequent to the end of the third quarter, Genpact, the $2 billion multinational business process outsourcing and information technology services company, headquartered in New York, announced its partnership with us. Genpact will leverage Top Image Systems solutions to develop innovative cloud, mobile and (indiscernible) in accounting (indiscernible) applications designed to provide operational efficiencies for global clients, looking to leverage advanced technologies to drive (indiscernible).
In partnership with Genpact, TIS will look to co-develop the next generation of solutions for business process management. (Indiscernible) to win this partnership, we're presenting additional validation of our technology leadership. To communicate these positive developments, management will be (indiscernible) upcoming investment conferences. Next week we are going to participate at the ROTH Software Corporate Access Day in San Francisco and in December we will participate at the Benchmark Micro Cap Discovery conference in Chicago. In between these conferences we'll be traveling to multiple cities putting on road-shows to meet with investors across the United States and with analysts providing research coverage on Top Image Systems. Following the successful acquisition of eGisticks and considering our outlook for Q4 and beyond, we have a great story to tell in our upcoming meetings with investors.
At this point, I would like to the turn the call over to Lyron Bentovim, our Chief Operating Officer and Chief Financial Officer, to review the Q3 financials in greater detail. Lyron?
Lyron L. Bentovim
Thank you, Michael. Total revenues for the third quarter were $10.7 million, an increase of 35% from the $7.9 million for the third quarter of 2013. Total recurring revenues were $4.8 million, an increase of 140% year-over-year. Adjusted EBITDA was a loss of $1.5 million compared to a gain of $1.2 million for the third quarter of 2013.
GAAP net loss was $4.8 million compared to $1 million gain for the third quarter of 2013. Non-GAAP diluted loss per share was $0.11 compared to $0.09 gain in the third quarter of 2013. GAAP diluted loss per share was $0.29 compared to a gain of $0.08 for the third quarter of 2013. The total number of shares in Q3, both basic and diluted, were 16.9 million.
Operating expenses were $10.8 million compared to $4.1 million in the year-ago period. In Q3 the cost of revenue was $4.6 million compared to $3 million in the Q3 of last year.
These expenses in cost include non-recurring expenses related to the acquisition of eGisticks, EMI costs, debt reserve adjustments, the legal fees related to the settlement and withdrawal of litigation by Mitek, as well as the impact of the changes made to the company's [record] (ph) policies.
It is important to note that in the settlement just reached Mitek withdrew the litigation and TIS was not required to make any payments whatsoever to Mitek.
Gross margin for the third quarter was 67%, compared to 61% in the third quarter last year. Sales and marketing expenses increased to $4.6 million, R&D expenses increased to $1.5 million from $0.7 million in the year-ago period and G&A costs were $3.2 million compared to $1.2 million in the same period a year ago.
This concludes my remarks and I'd like to return the call back to Michael.
Michael Schrader - Chief Executive Officer
Thank you, Lyron. Looking ahead, this is a very exciting for Top Image Systems as we have both expanded our revenue base and has made an important goal of making the Americas our largest geography by revenue. As result of the eGisticks acquisition we now have a substantially larger U.S. footprint, direct access to an installed base which contains premier customer relationships, securing long-term contracts and opportunities in the cloud that enhance existing products and (indiscernible) new product development.
We are especially pleased by the developments in the mobile imaging processing (indiscernible) business where we are reaping the benefits of our investments and have tangible better projects in the pipeline as well as partnership wins that (indiscernible) in media coverage, all of which validate our leadership positioning and enable us to recognize monetary benefit from increased adoption and transactions.
As documented in Gartner's recently published IT Market Clock for the (indiscernible) Gartner's survey shows that the mobile [RBC] (ph) usage has (indiscernible) that of online. Online banking growth has (indiscernible) the banks as decision-makers in the industry now points to mobile for growth opportunities. The Market Clock (indiscernible) TIS mobile application as an example of the evolution in the market for general banking mobile-based capture technology solutions.
TIS' strategy of offering financial institutions a range of statutory banking transactions, mobile apps that (indiscernible) and our drive sales of our multichannel back office (indiscernible) solutions serves this evolution.
And finally we continue to pursue opportunities beyond the financial vertical into broader enterprise market channel content capture and (indiscernible) space. We see (indiscernible) M&A in this market. For example we recently purchased a restock by (indiscernible).
Organically as we enter 2015, we are ideally positioned to achieve profitability growth with significantly increased revenue visibility and augmented U.S. footprint and diversified innovative solutions on the market and in development. With numerous types of different avenues to drive shareholder value, it is an exciting time to be heading out to meet new and existing investors, but before then we'd be glad to open up the call for Q&A.
Question-and-Answer Session
Operator
At this time we will be conducting a question-and-answer session. (Operator Instructions) Our first question is from David Hynes with Canaccord. Please proceed with your question.
David E. Hynes - Canaccord Genuity, Inc.
Hey guys, how are you? Maybe first, can you let us know how much eGistics contributed in the quarter?
Michael Schrader - Chief Executive Officer
Lyron?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Hi David, yes. David, as we stated in the previous conference calls and since we've – Michael stated in his remarks – consolidated eGisticks into our U.S. operations, we're not planning on disclosing eGisticks numbers as a standalone.
David E. Hynes - Canaccord Genuity, Inc.
Okay. Maybe then along those lines, where do we stand from an integration standpoint? What needs to be done still and you called out that having had eGisticks in this for a few months now, you're more convinced of the synergies. So maybe what specifically have you seen that makes you more confident?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
I'll start and then maybe Michael can follow up on the important stuff, which is the product integration and going for a combined roadmap. In terms of the integration of the teams, the people we have done all of the steps as we've put in the press release. We've moved our U.S. headquarters to Plano, Texas. Some of the leadership team in eGisticks is now in the leadership team at TIS. And we've really integrated the whole company; we're acting as one company, everybody sees themselves TIS employees and we've started working with our customers on both ends to try and find opportunities for cross-selling our solutions between them.
Michael, if you want to expand on the overall roadmap and vision?
Michael Schrader - Chief Executive Officer
Yes. As we pointed out in the calls before, we had several points of synergy between these two companies and one is of course that eGisticks is running a cloud operation, so one of the goals we are having is to put our eFLOW multichannel capture platform into the cloud at eGisticks operations. Another option or another potential for us is to go to eGisticks – existing eGisticks clients and sell the frontend for our capture and of course also our mobile solutions. And the third is that we are looking at our global international market, not just Asia-Pacific, Europe, et cetera, to sell the existing CloudDocs and (indiscernible) solutions into that market.
But also what we see in the last two months is that we are finding opportunities that are new opportunities where we can offer both. Of course we have to consider that the deal was closed two months ago, after one month in Q3, and looking at the sales cycle, it will take us some time to find of course the (indiscernible) but we definitely can see the potentials and the pipeline for that and going forward, we also integrate both product to one product platform.
David E. Hynes - Canaccord Genuity, Inc.
Got it, okay. And then maybe on the core capture side, you guys gave a lot of color on mobile and what's going on with eGisticks but if my math is right it was a so-so quarter on the core capture side. So I'd be curious to get color there, maybe specifically a license number, I think you guys have traditionally broken that out, I didn't see it anywhere in the materials and then curious what you're seeing from a macro-perspective, other companies in this space have said that they have seen some headwinds particularly in Europe on the core capture side, curious if you're seeing the same or if the softness is maybe because the sales force maybe took their eye off the ball with the new products being integrated. Any color on that would be helpful.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Let me take firstly the numbers and then I'll let Michael add some color on the overall focus of our sales force. In terms of license, we actually worked it out in the press release. The official the full number of license is 5.8 million and in essence if you take out the SaaS revenue which we also brought out a few million, you have around 3.8 million of license revenue.
David E. Hynes - Canaccord Genuity, Inc.
And how much of that is maintenance though? I mean, you said recurring –
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
It's not included in that number.
David E. Hynes - Canaccord Genuity, Inc.
Okay.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
It's pure licensing.
David E. Hynes - Canaccord Genuity, Inc.
So it's 3.8 million pure license.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Yeah.
Michael Schrader - Chief Executive Officer
Correct.
David E. Hynes - Canaccord Genuity, Inc.
Okay. And then so what makes up the total recurring number, I think you said 4.8 recurring?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Yes, so the recurring –
David E. Hynes - Canaccord Genuity, Inc.
That's 2 million in SaaS and what's the balance to get to that 4.8?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
The balance is maintenance as well as recurring services that eGisticks provides to customers.
David E. Hynes - Canaccord Genuity, Inc.
Okay, all right. Got it. So it's a little bit of a different reporting structure than we've seen in the last couple of quarters, is that right, some of that recurring revenue is coming out of the service (indiscernible)?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Yes, there is definitely some of the recurring revenue is obviously – we've always had them there because they were SaaS revenues that in our view licensed. Since we break down to three categories we don't consider recurring SaaS revenues of maintenance, we (indiscernible) license revenues that are recurring and also the delta of the (indiscernible) comes in the same area.
But this structure we have here is going to be the structure we're going to report going forward, so obviously there's some changes, obviously the company has changed, but going forward you have stability from this point on onwards.
David E. Hynes - Canaccord Genuity, Inc.
Okay, got it. And then maybe as you think about the cost synergies and the guidance for Q4, that's helpful, thanks for providing guidance. But we're looking at a market improvement in Q4 in terms of profitability on the modest sequential revenue growth, so where are you expecting to see the most operating leverage? Obviously some of it with the transaction costs in G&A and I assume some on gross margins but any additional color would be helpful.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Yes, so what we've done is really aligned our cost structure is to be expected revenue that we're expecting in the next coming quarters. Again, overall our goal as a company is to go back to the last couple of years where we were really invested in both the development of our product and R&D as well as development in building the sales and marketing structure in North America, and now really the focus is back on profitability. If we look at our overall operating model that we want to start to establish in Q4 going forward towards 2015 we're looking at gross margins in the 60% to 65% range and that will give us EBITDA margin in the mid-teens. So that's the model we're trying to aim towards and Q4 will be a first step in that direction.
Q3 has been an [emerging] (ph) quarter with a lot of different pieces not going to be part of the model going forward. We think that the guidance we've given for Q4 is a good starting place for us as we emerge in 2015 and then grow from there onwards.
David E. Hynes - Canaccord Genuity, Inc.
Got it, okay, thanks a lot for the color guys. I'll hop back in the queue.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Thank you.
Michael Schrader - Chief Executive Officer
Thank you.
Operator
Our next question is from Mark Scheffel with the Benchmark Company. Please proceed with your question.
Mark Scheffel - The Benchmark Co. LLC
Hi, good morning. Thank you for taking my question. Michael, is it fair to assume that the eGisticks revenue that was generated in the quarter was pretty consistent with its revenue run rate when you acquired the company, its quarterly revenue run rate?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Yeah, overall –
Michael Schrader - Chief Executive Officer
Yes, this is what we can assume.
Mark Scheffel - The Benchmark Co. LLC
Sorry?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Go ahead Michael.
Michael Schrader - Chief Executive Officer
Yes, this is what you can assume overall but we also have to consider that as it was mentioned before, usually Q3 in Europe is a bit of a weaker quarter because of the vacation time, et cetera. But what we can say is – and which gives us of course the potential for growth if you compare Q3 to Q4 but now as a company we are differently positioned because we have a good balance between the business in the Americas and the business in Europe and this balance makes our revenue more predictable going forward.
Mark Scheffel - The Benchmark Co. LLC
Okay, thank you. And then the next question, Michael, when can we expect to get some more definitive quantitative metrics around your mobile business?
Michael Schrader - Chief Executive Officer
I think that we have given some of those in the call here because we can see that basically (indiscernible) as we have said from the beginning of the year the pipeline has doubled and we think that in Q4, we can show the results of the doubling (indiscernible) revenues and what we also see is that it's sometimes not just the pure mobile revenue, it's also a combination of different solutions that we're offering to the client.
Mobile can be a different solution or like a specific solution like MobiCHECK and MobiPAY but it also can be integrated in our offering for the full mobile – for the multichannel capture platform where mobile is a part of it. So the (indiscernible) especially if you look in Europe sometimes mobile can be part of a bigger offering to a client. So it's more difficult to separate it, that's what I want to say but in terms of especially MobiCHECK and MobiPay in North America, this is what we would see in Q4 and the pipeline (indiscernible).
Izhak Nakar - Active Chairman
It's Izhak. Well, if something goes that we see actually three main drivers for growth in mobile worldwide. The first one we are expanding the number of customers for financial market like banking and insurance. This is one. And mainly, and the target of (indiscernible) account opening and involvement. And insurance company, we are talking about the (indiscernible) this is just expanding the number of customers that are going to use the mobile.
The second one is the growing the number of use cases and we see a lot of use cases around the world, especially when we are talking about the customer retention. When the customer going in uses and (indiscernible) used by the customer we will see more and more revenue and of course we are talking about expanding more and more use cases. And this is all part actually the grow and the revenue of the mobile as we have mentioned several times when we are setting the mobile there are three elements of the business model, it's setup [phase] (ph), (indiscernible) and maintenance. So the setup phase is quite slower and then when the customer and the consumer uses, it's growing down the road and these (indiscernible).
Mark Scheffel - The Benchmark Co. LLC
Thank you.
Operator
Our next question is from Richard Baldry with ROTH Capital. Please proceed with your question.
Richard Baldry - ROTH Capital Partners
Thanks. Could you talk a little bit about the accrual policy change, what that's related to, and the impact on the quarter?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
I can try. I am not going to go into the impact on the quarter because as far as the change it's really hard when you change how you measure things to really see what it would have been, I didn't do the calculation of what it would have been in the previous one but my guess is we would have been mildly (indiscernible) but I don't know that for a fact. Outside of all the one-times and so on on the adjusted EBITDA level.
What I did as I was coming in, I obviously brought my philosophy on virtually how I would tie costs to revenue and introduce some project management tools that really allowed us to have the ability to plan the cost of some of the ongoing projects tied into where the revenue is recognized. And that had a basically one-time impact on the expenses much of it in the cost of goods but going forward that would lead us to have financials that tie into my relatively conservative philosophy on tying revenue and expense.
Richard Baldry - ROTH Capital Partners
Thanks, and the uptick to the sale and marketing line was pretty significant compared to the (indiscernible) on the revenue side. So can you talk a bit about how large eGisticks sales team was versus your existing sales team? It seems like it might have been a little bigger than we thought coming in.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Yeah, the uptick in the sales and marketing is tied to some adjustments not related to eGisticks. Mostly on Asia Pacific and Australia and the eGisticks sales team is not large and it's not fully integrated into the TIS Americas sales team and we expect the sales and marketing to return to normal rates in Q4.
Richard Baldry - ROTH Capital Partners
Okay. And then when you look up to the Q4 revenue forecast, what would really gate the company coming in either at the lower end versus the upper end, is it about the timing of certain recurring launches or is it really about (indiscernible) license revenue type line?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Obviously since we've put that guidance we have the pipeline to support those numbers and as anyone that have been trying to sell large licenses knows, at the end of the day where we've fallen in our range is subject to whether the timing and it's not just related to us obviously, it depends on the end customers and the timing of the projects and where they want them to happen in 2014 or 2015 and that will really determine whether we're at the upper end or midlevel of our guidance.
Richard Baldry - ROTH Capital Partners
And last thing would be can you talk about any real changes you've seen to the competitive landscape, maybe with the lawsuit put behind you, do you see any change to that? Specific competitive positioning or even broader throughout the marketplace, thanks.
Izhak Nakar - Active Chairman
We can talk about – it's two markets, the ECM market and the mobile market. Definitely when we are talking about the ECM market we have the traditional competitor (indiscernible) more reach of features. We don't see any dramatic change on the landscape of the competitors especially in the ECM outside of U.S. and in the U.S. This is what we call the traditional competitor that we compared with (indiscernible) which right now is (indiscernible). This is the main competitor that we see in the ECM market.
With the mobile it is something that we have always and we add more and more feature in order to really be the nice and rich user experience in their mobile and as you all know we really came in to the market with new and new features that give us some advantage on the technology aspect, and especially when we are talking about the (indiscernible) there were chromatic (indiscernible) mobile image which is patent-pending that gives really to the user the option to pick good and very good quality of the image. They don't need to push the button and of course we can go in a serial of features as working language and some other that has really been very nice user experience that we see in the market.
Richard Baldry - ROTH Capital Partners
Right, thanks.
Operator
Our next question is from Kevin Dede with H.C. Wainwright. Please proceed with your question.
Kevin Dede - H.C. Wainwright & Company
Hello gentlemen. I am curious about – Lyron, you mentioned about sales and marketing and how you expect integration to try to – to help reduce that number a little bit next quarter. Could you quantify that at all? Could you give – I understand that our OpEx expectations are $9.3 million to 9.7 million, I got that, but I'm just hoping you'd give us a little more color on how they break down.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Yeah, so overall I am going to aim towards my long-term model so I am going to try the marketing towards 25%. We'll see how successful I am in the fourth quarter but that's the long-term model to sales and marketing towards 25%. So if you take – I'm not going to try and do the math on $9.3 million, but what I'm saying is $2.5 million, so we can be slightly below that.
Kevin Dede - H.C. Wainwright & Company
Right, got you, okay. And you said your gross margin target was what, 60% to 65%?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
60% to 65%, yes.
Kevin Dede - H.C. Wainwright & Company
Okay. Can you help us – well, me especially, and maybe the other gentlemen have this figured out but I haven't been able to make that calculation. You're saying that your – the reported gross margin was what, 55%, and yet you're saying that you reported 60%, I didn't get the adjustment there.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
I'm not sure I understand the question. We reported 55% this quarter. I believe then we'll get back to the 60% to 65% gross margin for Q4.
Kevin Dede - H.C. Wainwright & Company
Okay. Can you help me get my arms around any GAAP to non-GAAP adjustments that you make and specifically – I know the question was asked, but as it pertains specifically to gross margin you said you made some accrual adjustments, so I'm just wondering how that may have impacted the 55% you reported versus the 60% to 65% target.
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Exactly. So in essence I recorded some cost of projects in a different way than it was done in the past and therefore we have a one-time increase in the cost of goods and therefore that's caused the margin to go down to 55%. It's not in the GAAP to non-GAAP because it's still GAAP – it's a real expense of the business, it's not a one-time expense. It's just the timing is different than it was done before, trying to get the timing right for the way I like to track projects going forward.
Kevin Dede - H.C. Wainwright & Company
Right, okay. So would it be fair to assume that on a legacy accounting basis that you would have been at that 60% to 65%?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
Yes.
Kevin Dede - H.C. Wainwright & Company
Okay. Michael, you mentioned that things were coming together a little bit more quickly than you had expected. And that's obviously a good thing. I'm just hoping you might be able to give me a little more detail on how you see that happening. Now, granted you are – you said your mobile pipeline is up 2x, you said you are seeing more cloud business but could you just give us maybe a little more color on how you see things coming together more quickly than you expected?
Michael Schrader - Chief Executive Officer
Yes, when I said things are going more quickly than expected I meant that the flexibility, the integration with eGisticks and basically also the fact that now we have some executives in our management team that going forward will support the management team and that we maintained all the clients, we maintained all the employees after the merger, it was very important for us.
And also what worked quicker is to put the offerings together also for international deliveries, where we see some demand for the same solution. Obviously we need to translate that into the results and this could happen to accelerate that growth but we see that from an operational point, to put these two companies together, put the management teams together, put the roadmaps together, we were a bit faster than we thought. That’s what I meant with the faster.
Kevin Dede - H.C. Wainwright & Company
Okay, thank you. I know you addressed a little about what's happening from a geographic perspective, specifically Europe, but in the June quarter, the EMEA region was done pretty sharply sequentially and I'm just wondering if you think there might be a broader-based economic driver there or if you think that there is a potential turnaround in what happens in Europe and the EMEA region.
Michael Schrader - Chief Executive Officer
Okay, first of all, if we compare 2013 to '14 for TIS this region is growing as the whole company does. That would mean we don't see a global economical thing impacting us right now, we're obviously seeing the things that we always saw in Q3, so going forward usually Q4 is stronger in Europe. Of course, we have some impact on the currencies also if we are comparing Q1, Q2, to Q3, and this would impact our results at the end a little bit but the impact is not so big anymore as we now we have this balance between US and Europe, or Americas and Europe.
Kevin Dede - H.C. Wainwright & Company
Okay, fair enough. Can you just – I know you've touched on the Genpact deal but could you give us a little more insight on how you see your two companies working together?
Michael Schrader - Chief Executive Officer
Yes. The original thing that we started to work together is that Genpact of course is one of the biggest business process outsourcers which traditionally is a very good consumer base with TIS, one of our strong verticals is BPO and the platform was originally built to support BPOs and their services to clients; to recognize documents automatically and have huge document volume for the platform. And Genpact is one of these players and they benchmarked our solution against existing solutions and other companies on the market and we started now to work together in this space, but we also see a potential to work together in developing solutions for Genpact clients to improve positives also not just in the BPO module but also for their clients.
Kevin Dede - H.C. Wainwright & Company
Okay. Can you just put some color on – obviously we're talking about a huge company here with relationships with GE, and I'm just curious about how some of the – well, how they specifically and some of their clients might look at you folks and your balance sheet and just scratch their heads on whether or not you'd be able to meet their requirements in terms of breadth of service and support? I guess what I'm asking specifically is how do you resolve the difference between a $2 billion company and one that has $4.5 million on its balance sheet.
Michael Schrader - Chief Executive Officer
Okay, I understand, but I would say this is not the only big company that we're (indiscernible) technology, there are a lot of other big banks and other big BPO players that are using our technologies to improve their processes so this is not the first client that we are supporting globally and we have 24/7 support across their – across the globe for them.
They have their – they have big operations in India and they have clients in North America and of course we are training also the team because it's very important for a company like Genpact that their team has the knowledge about our platform, so that they can also support their clients directly. So in a way Genpact is also an integration partner for us for their client but also maybe for other clients in the future. And this is a model that we have worked with other companies for a long time already.
Kevin Dede - H.C. Wainwright & Company
Would Fiserv serve as an example of that as well?
Michael Schrader - Chief Executive Officer
For instance, yes, exactly.
Kevin Dede - H.C. Wainwright & Company
Okay.
Michael Schrader - Chief Executive Officer
Yeah.
Kevin Dede - H.C. Wainwright & Company
We also talked – or you touched on the new patent, the mobile document capture patent and you talked about a couple of indications. I'm wondering how difficult it is for you to fully commercialize that technology and how quickly you might be able to recognize revenue from it?
Michael Schrader - Chief Executive Officer
Okay, I think that patent is very important because looking at the mobile use cases if you see and talking to especially some of the banking and financial service providers (indiscernible) for them it's important not just to have a solution to capture a check or a bill which is usually a bit smaller than a letter size document, it's important for instance in an enrolment application that they will capture an ID card, they will capture a salary statement or the (indiscernible) in other countries in other to involve a client. And therefore it's important that they have technology that (indiscernible) can capture smaller size documents but also bigger size documents.
So already in the offerings that we are doing today, that's been a very important part in the project, in the proof of concept that we're running today, it's very important to get a very good quality document on the larger side.
Izhak Nakar - Active Chairman
Kevin, just to add to Michael, actually we already use this technology. The project in Berlin is done with this kind of technology with Xerox. In this project we actually capture full page and it's already there and they, I believe, they're using since last January or February (indiscernible).
Kevin Dede - H.C. Wainwright & Company
Right, right, right, okay, yeah I remember you talking about that in fact, thank you. So that means that's already commercialized and you're recognizing or have recognized revenue – yes, I agree with you 100% Michael, I think it's a very important patent as well and it has huge opportunity. I'm just curious because you did talk about some of these other applications. I'm wondering when you think you might be able to speak to them more specifically. Is this something in the first half of next year more maybe later?
Michael Schrader - Chief Executive Officer
As (indiscernible) we're already doing the project and of course we are running other proofs of concept so we're setting up projects in that space and I think the time – somewhere next year we will see more (indiscernible) solutions I'm quite sure because some of them will translate to two-year projects. Some market (indiscernible) some markets could be slower, even in Europe there are differences in certain countries which are more privy to mobile solutions and cloud solutions than other markets but we think that it will not be possible to enter all these other markets without technology for a larger size document.
So I think next year we are going to see the result, I'm not sure if it will be in Q1 or Q2 but of course we have tried to make it as fast as possible.
Kevin Dede - H.C. Wainwright & Company
(Indiscernible), okay.
Izhak Nakar - Active Chairman
Kevin, we see a great advantage of this technology mainly when we are talking about with enterprise because the flexibility that we give to the customer…
Kevin Dede - H.C. Wainwright & Company
Right, right, okay. All right, so given that we are six or seven weeks left in the year, I appreciate seeing your expectations for the balance. I'm a little more curious though given the process and the progress you've made in integrating eGisticks I'm just wondering what you think a reasonable organic growth rate assumption would be for next year, 2015?
Lyron Bentovim - Chief Operations Officer & Chief Financial Officer
I think as we look at next year our goal just like this year is to continue to grow organically, double digits, and we're in the process of putting together financial plans internally obviously for 2015 and we will see whether we are comfortable enough with the direction to set an overall direction for the market but for now we're committed to growing the company organically double digits, obviously as an integrated entity going into 2015.
Kevin Dede - H.C. Wainwright & Company
Great, well, thank you gentlemen for taking my questions. Appreciate it.
Operator
It appears there are no more questions at this time. I'd like to turn the floor back over to Shelli Zargary for closing remarks.
Shelli Zargary - Director, Corporate Marketing & Investor Relations
Thank you very much. Okay, first of all, I'd like to apologize, we got some information that there were some problems with – technical problems with the webcast slides, but they did get up and they are available so you can go back of course and see them on the link and you can also download the slides as a PDF from the financial release section of the site. You can download the tables.
There were some issues and we apologize for the delay but anybody who wants any of the files can now please go back to the PR on the Financial Release section, in the Investor section of our website and then do download the slides and tables and the PR. That's one area.
Another thing I wanted to mention, unfortunately it was very last-minute, we didn't have time to put it in but we certainly want to advise you that our customer bank (indiscernible) who is using our MobiCHECK product has been nominated for a FinTech innovation award by PaymentEye, and the case study is available on the PaymentEye website. So we think it's really exciting and we did talk about commercializing the value of our mobile applications and this could be a good step in the right direction, we think it's going to give us a lot of exposure and the bank as well, because it's a very successful project.
So I'd like to recommend that you take a look at that and we will be putting in the link to that case study on our TIS – in the News section in our website very soon.
So thank you very much. And we appreciate your questions and your time and attention and we wish you all a very pleasant rest of your day. Thank you for joining us.
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