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Faro (FARO)

Participants
Bob Seidel CFO
Simon Raab Chairman and CEO
Greg Palm Craig-Hallum Capital Group
Ben Rose Battle Road Research
Hendi Susanto G Research
Richard Eastman Robert W. Baird
Andrew DeGasperi Berenberg
Call transcript
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Operator

Good morning, everyone, and welcome to FARO Technologies’ Fourth Quarter and Fiscal Year 2018 Earnings Release Conference Call.

For opening remarks and introductions, I will now turn the call over to Chief Financial Officer, Bob Seidel. Please go ahead.

Bob Seidel

Thank you, and good morning, everyone. Yesterday after the market closed, we released our preliminary fourth quarter and fiscal year 2018 financial results. in yet is statements issued differ those included company as and information from not has its results. financial this preliminary call the they The audited financial on website available is release press at The www.faro.com. FARO’s understand statements remind to management in help its like would course the some of you and forward-looking I company make the order that to you during may call. result; this plan, words, potential, be can expect, as statements and such similar identified may by words. goals, continue, believe, These objective, intent, anticipate, will, may results actual materially company���s the that possible forward-looking is projected those these differ in It from statements. March actual Important may in to that for set the XX, factors XX, are Form Form ended forth company’s yesterday’s cause the XXXX. and results release and differ December ended for XXXX press materially year XX-K in XX-Q the quarters

quarter to remarks, and an the better a review to During over call will markets. XD with financial manufacturing After results. of our the provide former our will to changed return our prepared open our applications reporting to now update business and in for order XXXX, the focused will of of end we factory call Simon we initiatives afterwards questions. its name segment for XD I turn with the align fourth

Simon Raab

order XXXX We in made million in time achieved of Bob, discussed $XXX and new growth for achieving operating XXX XX.X% history. Thanks, here. delivered the great margin year-over-year sales year-over-year surpassing ’XX. mark In everyone. good bookings double in and sales our the morning, in our both We’ve million objectives in and progress sales growth annual and XXXX, digit first we

we force At efficiency fourth per of our through hitting low took trailing increased the months sales the FTE actions aim per at our an mid-teens investment in of in and strategy vertical sales both to XXX,XXX increased orders XX across expansion, this XXXX, quarter force geographies. headcount We ’XX. throughout year. increase at the After XXX,XXX force quarter. dollar to outlined FTE of we our expand our a growth because the aggressive market footprint aggressive rate first investing headcount sales to to In sales channel to the in XXXX We and start markets rate. at in sales the our new sales per finish at XXXX our growth improve our in of sales year-over-year by addition, sales XXXX

end service made focused the staffing sales of Our increased or margin of improving by of end on headcount XX% the the progress XXXX, to in initially especially in XXX We year. verticals. emerging XXXX, the half people in from XXXX our second

technology margin our margin. incorporate service Every an to better to and our streamline on Our service processes, service an sacrificing support satisfaction. customer was repair growth overall processes in increase calls without business the examined of engineering aspect important incorporate manage customer is to

returning solutions base. service latest sales products the after were providing reliability We’ve by measurement as and We most of solutions base. and Recurring operational we spirit. in the my also process client in trends is software are must active leverage productivity redesigned its information harmonizing and technology in have their Best! of better we users for the relationship review, revenues platform this focused process the have services, regular potential from to we increase revenue new have customer contract imaging to the relationships deployment ’XX charged contracts on are XX, the technology FARONow! over as software these base. important portal determined its and our technology made a called board We customer ensuring upgrading installed internal and in to direct XX.X% revenues of was function focus This Service are management XX% years Sales XXXX. its in continuous through lean effort entrepreneurial considers approximately converted become XXXX, installed that generation customer, million responsibilities fourth a to XX% opened FARO FARO or XX already customers. its The with during XD our entire users to the software ensures base and path of XXXX, globally product three world be to platform support consistent and major development working FARO profitable We develop our its with from to under pursuing services next as portal. our and XX compliance class our on rates. strides of our and operations. all of US including our revenues we contracts. all rather. Since on product users two the order related mobile or of every a year an leader XXXX manage FARO one subscriptions mid-teens the to is provides those government XXXX. users Nevertheless, on represent assets a our derived GSA registered underlying processes second first of importance operating General getting total only FARO primary tools under sold facilitating stream. products to in to trailing to we and streamline of over is and and XXXX achieve warranty system leader, all initiative and licenses February one development users take be even GSA and moving To being preliminarily to with real-time new General worldwide continue are provides Since reported an government in revenue in of all instilled principle. FARO to a XX,XXX we subscription XXXX essential establishing our urgency. chosen and represent sales of started Each growth revenues Recurring tool to top our will sale products process drawing through communicating Sales available a product is over initiative in increases efficient that for QX recurring software important GSA of market loyalty. and late to fueled on to continue organization from elimination. plus our FARO for CEO repeatable in the its new of gross employee product Inspector Service to pursue very relationships the Administration more quarter the the new X.X% every news software Services have an our customer the in objective drive at government of introduced of We all XX% or so on the priority more our to product, our aggressively to only. XXXX. platform. contracts. counts initiatives margin products as operational and pinpoints grow products improve of margin development the three average from delivery, new We XX.X% consistent under are intends seriously. this our all service Unfortunately, every a In non-compliance Office important ago, drive while of XXXX, may the that reinforce highly new sales it existing verticals, recurring drumbeat. XXXX

will we adjustment, quarter of the of fourth to estimated result for process. market X-K $X.X preliminary our enquiries and with this mindset the serious us of review the to represented the is closed related yesterday, that by our assist year. product six margin us financial We connection sales overcharges a worked total risk resolution. XXXX, GSA resolve cumulative fully and We matter operating last remediation to the quarter affectively under allow counsel compliance and engaged matter believe FARO’s review more in We achieve sales our After an this will strong bear we double years and costs fourth outside Until digit the resolved, matter double to we sales company this high sheet a matter. estimated to government the and the As our balance to the potential reduced while and of this describe sustaining mission gross this by digit intend continued through reporting government’s development we contracts. legal of of margin million matter. resolve to filed growth, as fully

by construction matures. quarter expand our by our segment in The sales the within a BIM these and that also our reach. XXXX, on in pursue product achieved goals continue sales the to GSA our headcount similar strong growth XD QX emerging headcount operating our the sales additions We in sales to plan to design will providing to support public strong line grow matter, Excluding our We’ll continue manufacturing growth safety focused portfolio operating expanding linearly are this product income to XD headcount and verticals indicator order as XX% we market. be in two verticals by increasing directional our margin XXXX. throughout a

will software continue our over XX% High drive to contribute increasingly by strong Research margin. recurring a plus. our margins XX gross XX% with on subscription supported to development goal software and applications of sales of headcount. We revenue and gross development our has margin our emphasis product towards approximately R&D

Our the order objectives. continued our product is initiative lean our contributing gross cost reduction to institutionalized operational in to meet Best! and FARO further in margin as

in administrative consistent and the last plan development XXXX. communicated I to in earnings As general, budgeted call XXXX research marketing, with our spending and quarters’ remain are

see turn But CEO leader until to to our patience expenses higher the our FARO’s the towards CEO our I of work operational plan and reorganize and maintain past XXXX succession to FARO I reigns appreciate my executing to as role imaging technology our look leadership new the call administrative vision the business spending at transition. XXXX Bob. R&D objectives I’ll team We and appreciate the world, of measurement near the years our drive forward of the continue with by in employees the to now of and support successor. the accomplishments establish proud hard had of of over the solutions. GSA processes our be around will and and base I’m the to in ensure growth I continued recent smooth may we XD three deeply a verticals the matter. for our over However, shareholders and levels. continued to global announcement a we and vigilant general company

Bob Seidel

Simon. you, Thank

quarter yesterdays sales by of total XXXX. six for account at prepared fourth year and press As estimated adjustment explained Simon’s we the our X.X in remarks reduced cumulative matter, to in ‘earnings million release sales GSA the an

liability of interest In XXXX, addition fourth quarter related million the an X.X increased estimated quarter other GSA of XXXX. release. the to day were X.X%, and is based as at in liability matter. compared quarter estimated cumulative the the for of fourth preliminary the on X.X our of the increase which imputed we XXX.X XXXX, of XXX.X Total total million GSA million yesterday’s resulted sales for with expense adjustment, recorded fourth earnings This for press million as review of an of for sales

service XD Our sales partially across all and the sales in by cumulative offset adjustment. average was total segment our growth sales and higher driven selling reporting manufacturing primarily segments, unit by increase GSA prices higher revenue

with up increase XXX.X quarter XX XXXX. bookings our were XXX, compared sales the the order bookings time per million of metric third from trailing quarter order orders experience quarter X,XXX XXXX, XX an months, the XX.X% XXXX. full million was FTE fourth or as trailing of New our headcount at of months million fourth of With new and XXX,XXX, XXX.X XXX.X sales for approximately for of FTE

the Our increased XXX end end from XXXX. sales of FTE XX.X% XXXX to trailing by at the at XX XXX months of

new Our strategy. XX.X% force of year-over-year provides sales bookings for for support order growth growth our XXXX

sales of XXXX increase fourth mostly with for cumulative million prices In adjustment. an XXXX million, our compared Our XX quarter fourth release. segment, supplemental sales service XD compared and the BIM growth. unit by the are XX.X In historical of to related revenue selling the in by XXXX. The an for quarter were press of quarter in We with manufacturing for months year X.X million trailing data increases segment period. higher the the was to increase as our X.X% sales, X.X% XX.X of of an the recorded fourth XX.X yesterdays’ prior GSA order increase segment, for construction million, this a earnings million is average sales sales for driven sales disclosed reduction FTE in per same quarter sales XX.X quarter

administrative XX.X% points the demo dedicated quarter recent average commissions in The demand which quarter European with to higher as in XXXX as reduction expand sales expectations associated quarter of end million and sales of sales marketing the XX.X% well XX.X increase year. and selling compared X.X% end European marketing a our sales of for this continue the Selling and expenses term quarter approximately we for in unit or X.X segment XX.X% sales short our of for construction fourth as half order sales expectations GSA sales growth for We sales This with of and million XX.X fourth were headcount fourth higher new of the in grew Gross prior quarter with XX.X% for expenses for as quarter percentage related of compared the million, reflecting expenses and weaker compared sales XXXX, service remain growth. for growth manufacturing XXX, fourth quarter for same XXX to to primarily by were fourth reflecting of of the million our down our at XXXX improved quarter Selling fourth the This and XXXX. reflecting year by and Americas XXXX with headcount was the takeout an the strategic our million XXXX, expenses quarter XXXX. Data expanded higher from offset prices than chronic quarter as XX.X% for margin the XXXX. General the long was bookings, and At of the the cumulative sales headcount XX.X was fourth rate the the of with increase quarter, demonstrating the compared on of driven the as at margin quarter of ending in for increase our exchanges XX.X% due increase compared sales sales sales. mostly investment an of fourth XX.X% by administrative effects due were were XXX adjustment. to increase million headcount were percentage segment for well of the fell sales year. our an offerings the of increase Our General higher leverage. compared of with of product BIM our more customers, XX.X an Regulation. fourth Selling our and as expenses X.X the GSA as sales segment, mainly marketing and to positive and period. sales In was increase cumulative XXXX, product of XXXX, emerging increase our fourth the XX.X X.X driven last last Unions’ acquisitions to adjustment. improved our for increase the in this cost vertical with Protection XD of related and We implementing investments. portfolio recorded fourth million, a segment, sales was quarter and

sales, As and the were XX.X% fourth year for quarter a for with of percentage administrative XX.X% compared the of period. XXXX, same general as prior expenses

acquisitions X.X by fourth million development as and with as sales for Research to of as million XXXX, were the For product year expenses accelerate an development. of of by quarter of the fiscal and expenses and quarter expenses prior sales headcount of quarter fourth decreased year. XXXX, percentage a driven compared for XXXX, the percentage activities increase our of to were compared of X.X% for for and a fourth with increase engineering higher This compared of Research fourth XX.X% with to the XXXX. XX.X percentage our as general new administrative is related mainly XXXX. XX.X% X.X quarter the points development X.X%

research sales and XXXX, XXXX at unchanged X.X%. expenses percentage year a fiscal as For and remained development of

its XXXX transition finalizing of $X.XX the XXXX income to long Act tax the for operational of towards X.X our the we share the fourth drive we GSA a year XXXX. income matter. fiscal Jobs Tax benefit our financial million related Cuts and our of XXXX our after business key on unfavorable of net million performance X.X look US metrics to year tax or our million our included quarter conclusion, helpful progress. objectives, for of several an and like In I would Our as fiscal important under per term performance at impact as highlight tax a measure X.X of of

XXXX, our by for FTE the XX%. year-over-year with order XXX with sales were increase months objective the headcount XX million Ending XXX.X at of New year. with start sales XX.X% consistent consistent XX.X% or up bookings our year-over-year, trailing of increased

questions which support work investments call, you today’s attendance cash We of million appreciate we by XX.X foreign open for upwards orders of point trailing sales million XXX.X consistent with consecutive Sales trading. greatly second no of was for year-over-year quarter. Gross start debts. short our ended XXXX, million year. for of of call now per XXXX with At subsidiaries Our Thank XX our were the the year months on up through driving shareholders low sheet the and digit strong after the around of maintained the FTE our XX.X% hard XXX.X double for the and employees a at growth. XX.X% XXX,XXX your a term XXX,XXX, balance held prior we the XXXX, for will was end sales first and of XXXX, in of margin and world. market reaching

Operator

Greg Craig-Hallum Please And go will question take with Palm Capital from Group. we ahead. Instructions] [Operator first our

Greg Palm

of your career be the lofty targets obviously to ’XX, on you I turnaround congrats FARO can the fiscal color able been you’ll if some most you sure mentioned Maybe not in on pretty just those there. comfort missed. I with get and company a your I’m you’ve know for any pathway at company, here those the operational ’XX objectives the us year obviously curious or year recent Once level fiscal know give had out and Simon least exit at year that.

Simon Raab

year accomplishment. some GSA doing was mean this have and by which expects cloud calculations can an incredible do. otherwise you incredible I were it Well I the really to an unfortunate what to to matter of

If you $X.XX that GSA back that adjustment. out, there’s about of

feel that digit the in $X.XX kind by that level, details position a coming margin. margin after incremental we that indicates we of of to the in are devil’s that profit end approximately the finally So And that go to the are at little fixes the together all every being made double are operating although XXXX. produce

So, I’m goals. on XXXX upbeat still very

Greg Palm

And out? for market specifically on color a and geographic the it you of that an areas. want in any relates geographic call from I as standpoint, weakness more or of end mid-term, markets sort end a bit specific little to of gave areas strength know you to quarter looking

Simon Raab

you there probably of and as heard there noise lot geographical are China in are that like we other plants of and the hear matters being markets, that are closed type. going there’s Well to automotive things a movements, we

coming lot disruptive to in, there’s So electric of market. there also smaller is example some for activity, car the in a manufacturers new

disruption one consolidation see (inaudible), in its So changes worldwide, of in going that we’re as and its because so the but you that having upbeat markets and minuses as the demand for rid is different some heard overall and lot demand on of aerospace also compensated the tremendous for parts and could Airbus we’re general are year. and reflected places. of of economic different I There’s to very But Jumbo our world. is in of impacts different way. product that’s a conversations be the that getting on, think pluses a going there’s in in continues growth trade in it’s temporary the There the

Bob Seidel

Bob. is This

QX. for certainly the in about Pacific is you Asia us for as really this for a It year though of strong year-over-year strong and very been on market. going our the about full well. One very was high Simon growth has Japan trade region points XX% done indicated that and year, us discussions see has the the

Asia We’re a still strong region. Pacific QX very APAC and for at

a was that us. certainly for point strong So

Operator

Our Battle next question Ben will go Rose come Research. Please ahead. Road with from

Ben Rose

few large how overall a you with context off the about perhaps questions, is start business? government to the Want the in could of talk US vertical

Simon Raab

the couple segment. to to through relating sell schedules, a relating we contract of the manufacturing and one So the one to public primarily XD GSA safety industrial

As we approximately two those sales. schedules of X% indicated, total XXXX between are sales

So, huge important, you piece we a compliance of represent our as take don’t however they they tell seriously, can our sales. extremely are

Ben Rose

regard sustainable/capable to as the with during gross quite and is that of the which rest was move And of services How in improved impressive. improvement margin quarter, being XXXX? the we to

Simon Raab

starting it’s that the definitely to is XX% all come believe together. absolutely achievable. We that plus We think

term As in it beyond you XX% is a short and the it’s of around sales, services represents any margin of we service actually the margin, will company plus. definitely sustainable increase four our gross (inaudible) so the know point XX to point and one think

are we that. upbeat quite about So,

Operator

will Our Please Research. Hendi come ahead. Susanto question with G next go from

Hendi Susanto

is mentioned may matter with you I reduction you missed inquire in may segments, that but the the I of talk split And in quantified have that. products segment what that when reduction with I think sales, to question between and regard million services? and First X.X GSA I think about

Bob Seidel

Sure.

the in related X.X So first our our XD of segment. to sales manufacturing, there to construction was verticals, $X safety million and to the primarily million then BIM reduction the X.X it segment million also emerging all side, sales vertical public in on reduction in

So that X.X, – terms overall so to equals of kind Then in for it. X.X of frames X.X.

about know do disclose our there, spilt. split, In of business, be should business. consistent specific not of the terms normal We of it but with the numbers service with rest consistent our rest XX-XX you product very

Hendi Susanto

still on leadership, I Simon acquisitions I did question, you developing M&A recent looking actively integrating XXXX? you’re of and products or lot a during from would your I’m focus wondering you new whether and in then for think M&A And have whether then

Simon Raab

but committed But drumbeat should challenge to the also to keep shouldn’t fairly that the to around M&A. that the and flat we or our trying XXXX we’ve flat, have expenses XXXX. momentum change the we that wanted XXXX sustain expenses not to that Well, change

So that there plan we addressing. we need But still activities, M&A to but it in continue in active our line verticals think I would think are product an do our particularly have emerging be holes reasonable M&A in I to activity continue. advantage to we expect the slight to reduction drumbeat the as the take the of of and But consolidate is point in acquisitions XXXX. that want XXXX make

Hendi Susanto

And then XD one and last question talked XXXX? how past about to from me, machine vision, in vision and in machine we Simon dips the XD the you should expect expansion development in initial

Simon Raab

the Well sensors think very see you’re in introduced. to start XXXX marketing around to a we’ve I effort clear that going new

have make introduced other we’ve we a we research contribution new the We will new that from that plus Photonics have vertical through integrators. sensors departments believe the

primary so the contributors these place. market are a sensor that much the see for And efforts in solutions you’ll And we higher standalone to us. profile XG and for these have the sensors

Operator

Richard come will Eastman Please question with next Baird. Our from go ahead.

Richard Eastman

that I that by process there search was around ask place is what’s mid-year to most I the CEO – you a on maybe a Could and Board the in processes, there timeline be related comfortable that? is process? new thought you front, be where the mean and just would search just if or quickly

Simon Raab

sometime year, assurance to I are interviewed as it will to and no when reviewed happen There the give We are happen and expect any in – XXXX. in process. there the can’t but candidates that in being we is

Richard Eastman

think And then the XXX. question target just the XX% would be I a sales you had headcount the around of mentioned headcount,

the would that’s straightaway the like equivalent to in for So expect order I XX%. you orders the that would or viewing the the How headcount at be per XX% to pleased if would that FTE XX% question the the FTE that, I I of some XXX maybe is overall XXX kind number might of you so would if you you be But XXX there. have the would productivity year similarly per think ads? math drive And about that’s think held. the XXX of is, number you the additions then are FTE number, put end there productivity FTE at number on or addition FTE, again

Simon Raab

would satisfied we XXX. be Well not with

many underway have to initiatives increase that number. We

our If that’s the primary growth. XXX we get people the increase number XXX sales FTE fact can times leverage on at you In leverage the or that level.

we much can by that off improve hiring number. segments, its provide as you get in important different there’s in extremely back. don’t been it’s actually the and FTE happy vertical. but per some emerging of high the We in the to bottom we and were XXX come QX the It all sales We for bounce as with that has ’XX So the mentioned then of particularly of tell I room higher that improvement and verticals. substance variation as

Richard Eastman

balance per year that this something and X% of neighborhood ads so the comes probably growth gain. FTE I productivity in balance assume FTE just that’s the orders my full a average, the then get orders that guess I and just use number at thought of is then off digit, that XXX,XXX look the double and if in from I I is

Simon Raab

XXX the to the increase take and times FTE by mid-teens, a you get growth FTE you’re going you rate. If the mid-teens

if exceed you can get XXX Now, mid-teens the you up. could

XXX be from way So the just any on improvement growth at in the sales look is that I headcount it. would would bonus mid-teens comes

Richard Eastman

spots flagged suggest that the saw, kind or your of be orders for would Do or fourth headcount will PMI its to correlate; whether visible the or Anything one China. all to projections that Do quarter a is one anything numbers, or soft you auto, are here? that that FTE growth the it’s of feel and will the had whether you the given headwind the EMEA of up macro macro kind you revenue? correlate you whether might cadence picked FTE growth some that some that maybe feel in challenge strong of that

Simon Raab

We’ve risk in managed being of the multiple all by the in eventuality that geographies and verticals.

A So geographical substantively a lot of would and industrial we started bit and and growing in mitigate additions down to in of mix. to BEM one so region too that little so emerging, that as the such you risk growth up realized verticals could headcount be that as in that other, be the there? low would have the mitigates expect we that I still as because well fastest those verticals, have so like well penetration

Bob Seidel

heard I its certainly happened some to on a India, X% similar sales well, over the currencies. of our to we from fourth depending from to as on different XXX we kind about other other translational report heard the with move UK, GAAP a think weeks foreign probably Fortune topline, effects companies face markets basis we headwind could (inaudible) around past at as few quarter had in what you the translating you’ve companies on pressure world, on well and We whether or our whether in on what as of its ’XX. you’ve this

Richard Eastman

of Good half. most --. And then and just that would I point would think in be the first

Simon Raab

I’m we’ve kind sorry, question. limit of Rick the

You’re queue take welcome your drop we’re to more and the in then on questions. back happy to of

for me Forgive interrupting.

Operator

Andrew Berenberg. go will question come next ahead. from DeGasperi with Our Please

Andrew DeGasperi

is of have that not it’s of term? first grow subscription revenue mentioned target have of do medium think just what in I’m that. exactly curious you you achievable and know, to and a target in do installed base target you guess particular it subscription much has, terms one, my the how you I trying the to

Simon Raab

component It’s have number the you a the subscription. on the don’t I or great for actual actually question;

careful packages we sales because revenue. As influence model as we transition to your selling you we a have from subscription be so to you can of were know upgrade software and

in in are every the ’XX introduced to software ’XX packages new existing converting level at of So do that systematic doing a of a by what subscription also to that’s overall introduce we way somewhat and trying large we mitigated the we fact and we’re then a don’t a so has we’re that, disrupt and it sales software level revenues. that Remember installed subscription that we been base. have

definitive installed wish be very and we to estimate. number, a XX speed. subscription to to as about months in to next the a go to to we them them could more at I So subscription convert, convert can levels. XX it’s substantive element I to but converted up the all the base I hard get base in be really expect

Bob Seidel

because had or the of In products got with ’XX. that minimal really XXXX the really of kind in some you see we started of volume subscription new a shift our that were more products just revenue we smaller

Andrew DeGasperi

the access if still amount, the I has first on normally overcharged? bit curious if on that and be amount not to just that? preliminary can terms the in it give color just stages little know was more GSA proportional Just know follow-up, in a a so us of the we’re government it’s with matter, could you it, this and familiar as its the too since And but on to

Simon Raab

hard good as it’s the to a done you as pointed on be that’s reviews Clearly the I the out government very way and that. way we’ll issues explain but related but of a trouble those, have we that’s to government damages depending early can should the that to it’s comment, to how for to really the job much case as explaining We too there be believe we think government further not estimate. assessed the much function

Bob Seidel

an read those we indicated the risk, after point that investors X-K, have market may gives to again. our background more of want as an kind to some you And you potential did to close of assignment

Operator

next Our Please ahead. Greg Palm follow-up from is with Craig-Hallum Capital. question go a

Greg Palm

FTE by below back the the sales want at tracked my I growth comment, past FTE over well is [efforts] to least your headcount growth go because to and actual year. the in

growth plan FTE? year, So headcount on corresponding by I what rate XX% the guess if you this envision growing at you

Simon Raab

I we understand well in very were new the as it’s the tracked headcount the growth we headcount XX.X% you approximately with tracked which comment up that FTE mean XX% in say when at said below, Yes, orders prepared comments growth. in true XX.X%. the I’m actual – sure our well we not went by because I the

which there’s high of the a get sustain and you caller, by raw another have turnover around able the FTE headcount do was you would sales FTE idea took generally in for So X.XX is increase the the of indicated category, the correlation the world as to reasonable about we’ve been the We but deal if headcount. in FTE with an headcount.

Greg Palm

guess comment would headcount a we that to math to by by something I’m rate year, be at my lines past mid-teens confused. if FTE was a may guess grow you grow the didn’t I mid-teens XX% the but equate this had similar near rate, growth along of FTE I anywhere

Bob Seidel

in If to trailing which goes look of were correlates XX QX ’XX. headcount the versus XX in XXX XX% trailing headcount versus months I XXX, we in a sales to the trailing ’XX FTE up for FTE at take XXX XXX the of XX months our of at what of FTE, kind the calculation months orders

we’re in FTE we on are really that people high One is we retention headcount kind working retaining and of any be that are side that the at of between around as headcount on certainly rate. But my more about kind things a stays of pretty that we that sales would talked sales the comments. Rick increase so correlation though

Greg Palm

your new competitor, some in Construction they’ve BIM, arena. know large got products I that

the driven were what driven rather is weaker sales competitively which all at I if macro curious So comments than segment said? just your think

Bob Seidel

more very the also that been certainly a for XX% of be tough year average then demo say to us reduces would X doing driven, of ASP the move which it it out year. was would tough to so more QX. and say our a But pieces standpoint QX, it more for macro series But last may a was certainly But from – trying price. theirs. affects market to to much last product grew in mix is that We the new another One sales was looks go or really comp. with comp it of I and show driven I us tough is some I comp business is customers would demo focused like our having equipment say aged from on product prior has very selling our they enter what in we’re our how different a and from

Operator

a follow-up next from question Berenberg. with DeGasperi Andrew also Our is

Andrew DeGasperi

with I expense digit G&A assume GSA of margin that clarification, the ask the matter? the and CEO target a search just double operating point to wanted going up the for

Bob Seidel

No.

in G&A digits mid-teens ’XX Really being we On margins digits fourth the level. to double operating at being get the quarter fourth had our so marking we the to XXXX at R&D that as other counsellor as cost. CEO or search expenses was GSA be any headwinds such our and levels what would outside quarter, to holding double our and look other (inaudible) of there of G&A

that was So in. factored not

Operator

questions no there this And further time. are at

turn speakers I’ll to So for the back closing remarks. it

Simon Raab

attention Thank you Thank to you and forward exciting all an XXXX. again. for look we your today,

Operator

Thank participation. This your for you does program. conclude today’s

disconnect. You may now