Yaron Ravkaie - Chief Executive Officer Ran Vered - Chief Financial Officer

Alex Henderson - Needham and Company Dmitry Netis - William Blair

Ladies and gentlemen, thank you for standing by. Welcome to the RADCOM Ltd Second Quarter 2017 Results Conference Call. All participants are at present in listen-only mode. [Operator Instructions]. As a reminder, this conference is being recorded, August 7, 2017. On the call today is Yaron Ravkaie, RADCOM’s CEO and Ran Vered, RADCOM’s CFO. By now, we assume you have seen the earnings press release, which was issued earlier today. It is available on all the major financial news feeds. Please note that the management has prepared a presentation for your reference that will be used during the call. If you have not downloaded it yet, you may do so through a link on the Investors section of RADCOM’s website at www.radcom.com/investor-relations. If you have any trouble, please send Mark Rolston an e-mail at markr@radcom.com and he will send it to you right away. Before we begin, I would like to review the Safe Harbor provision. Forward-looking statements in the conference call involve a number of risks and uncertainties, including but not limited to the Company’s statement about its 2017 financial guidance including revenues, growth margins, quarterly fluctuations and profitability. The expected impact of the changes in Israel, innovation authority grant cash available for new opportunities, strategy, market share growth and ext extension of its leadership position, potential pipeline and opportunities and investments in the infrastructure and research and development to support the Company’s growth. Expected continuance of the Company’s momentum in the second half of 2017, AT&Ts continuance as a important customer and key reference and its plan to virtualize approximately 55% of their network by the end of 2017 and projected sales cycle in relationships with top-tier carriers. The Company does not undertake to update forward-looking statements. The full Safe Harbor provisions including risks that could cause actual results to differ from these forward-looking statement are set forth in the presentation and in the Company’s SEC filings. In this conference call, management will be referring to certain non-GAAP financial measures, which are provided to enhance the user’s overall understanding of the Company’s financial performance. By excluding certain non-cash charges, non-GAAP results provide information that is useful in assessing RADCOM’s core operating performance and in evaluating and comparing our results of operations on a consistent basis from period to period. The presentation of this additional information is not meant to be considered a substitute for the corresponding financial measures prepared in accordance with Generally Accepted Accounting Principles. Investors are encouraged to review the reconciliations of GAAP to non-GAAP financial measures, which are included in the quarter’s earnings release. I would like to repeat the information about the presentation. If you have not downloaded it yet, you may do so through a link on the Investor section of RADCOM’s website at www.radcom.com-investor-relations. If you have any trouble, send Mark an e-mail at markr@radcom.com and he will send it to you directly. Now, I would like to turn over the call to Yaron. Please go ahead.

Thank you, operator and thank you all for joining us today. we were very pleased with our execution doing the second quarter as we made significant progress on our key initiatives. In particular, our relationship with AT&T continues to grow, on their most recent earnings call AT&T again emphasized their network virtualization efforts being one of the main factors for their improved operational efficiency. Also AT&T reiterated that there are well underway to virtualizing 55% of their network functions by the end of 2017, up from 34% at the end of 2016. As a result, we continue to expect AT&T to remain an important customer and key reference for the Company as we continue to play a major part in their network virtualization strategy over the coming years. Regarding our pipeline opportunities, we are pleased to say that we finalized a very comprehensive NFV trial with a top-tier service provider, which we now expect to result in a new important NFV project for the Company. We continue to engage with other top-tier service providers executing trials, as well as expanding our sales activities. We are focused on the service providers that are either planning and migrating to NFV, although that have already begun their NFV transformations. As a reminder, we expect the NFV transformation to be five to 10 year cycle with early adopters being followed by additional service providers. We now see the industry gravitating around open stack of the operating system for cloud network, as well as ONAP being the open source standard for advanced service and network orchestration. We are closely following these industry trends which are favorable to RADCOM as AT&T continues to drive the underlying architecture and requirement significantly and we are a major part of this ecosystem. As NFV transformation that is at the cutting edge of technology, it is difficult to forecast the path of the transformation. However, with the NFV trial mentioned previously, we see this when the service provider decides to virtualize their mobile network RADCOM is the go-to-standard and leading the industry for NFV service assurance. Another important factor that we are reiterating that the decision making cycle for the service provider is not sure. This is driven primarily by their ability to finalize the NFV transformation plan and move from trials as they are executing on their entire mobile network and then moving to actual deployment decisions. We are assuming that as more service provider transition to NFV, the technology maturity and standardization with ONAP would drive more service providers to start actual transformations and move from the lab stages. We also expect service provider to significantly reduce the equipment spend that they don’t want to - throw away as they evaluate and move forward with their NFV plan. This can create pent-up demand, which again is very favorable to us and can have a positive impact in the future. Given our strong and growing pipeline of opportunities, we are confident that our investment in infrastructure will pay off and as Ran will highlight in a few minutes. We plan to increased our investments to support its new NFV relationship. With this significant reflection point for the Company, we are expecting to remain with the moderate non-GAAP operating profit as we capture the NFV market. We believe, the increase in investment will results in future returns allowing us to capture additional opportunities, as well as advancing our product leadership given that the significant part of our investment is made into [R&D] (Ph). Now moving down to our results for the second quarter. We are very pleased with our second quarter results and as you can see on Slide 6. Revenues for the quarter increased by 24% year-over-year to $8.9 million. Our GAAP net loss was $204,000 or $0.02 per share. We achieved a non-GAAP net income of $0.4 million or $0.03 per diluted share. Similar to the past few quarters, we're focused on continuing the close relationship with AT&T executing our existing contracts including expansions with current customers running trials with new customers and investing in our engineering resources as we move to a new phase and prepare to engage with an additional top-tier operator. During the quarter, we're pleased to have closed an additional purchase order with one of our key accounts in APAC and an important expansion deal with Tier-1 operator in Latin America. The progress during the second quarter highlights the advantage of being a first mover in this space and participating the most aggressive transformation today. Our approach of enabling path to NFV future proofing purchasing decisions continues to resonate with customer and we expect the momentum to continue during the second half of the year and beyond. So to summarize, we're very pleased with our execution during the second quarter given that RADCOM remains the go to NAV vendor for customer experience. We're well positioned to maintain the momentum. With that, I will stop and turn the call over Ran Vered, our CFO to discuss the financial results. Ran, please.

Thank you, Yaron and all. To share the financial results, I will just go over the highlights in Slide 6. To help you understand the results, I will be referring mainly to non-GAAP numbers, which exclude share based compensation. Revenue for the quarter was $8.9 million, up 24% year-over-year. Our gross margin for the quarter was 71% on a non-GAAP basis. As a reminder, we expect gross margin to continue to fluctuate depending upon the mix of each quarter revenue. Our gross R&D for the quarter on a non-GAAP basis increased to $2.6 million from $1.6 million in the second quarter of 2016, which was in-line with our ramp up plan and highlights our strategy of investment to support future growth. Also we received approximately $312,000 from the Israel Innovation Authority during the period compared to $756,000 in the second quarter of last year. As a result, our net R&D for the quarter was $2.3 million compared to $807,000 last year. We wanted to point out that we now expect to receive approximately $600,000 from the Israel Innovation Authority during 2017 compared to 2016 when we received approximately $1.7 million. This is due to changes in the way the government manages the blend. It is important to note that this has not changed how we plan to operate the business as we remain committed to innovation and extending our technology leadership. Sales and marketing expenses for the quarter increased to $2.8 million on a non-GAAP basis, up from $1.7 million in the second quarter of 2016 due to the headcount increase we had over the past year aligned with our go-to-market strategy. G&A expenses for the quarter on a non-GAAP basis totaled $775,000 compared to $1 million in the second quarter of 2016. Operating income on a non-GAAP basis for the quarter was $380,000 compared with $1.6 million for the second quarter of 2016. Net income for the quarter on a non-GAAP basis was $416,000 or $0.03 per diluted share. On a GAAP as you can see on Slide 5, we reported a net loss for the quarter of approximately $204,000 or $0.02 per diluted share. Turning to balance sheet as you can see on Slide 9, our cash and cash equivalents as of the end of the quarter were $36.2 million. We believe that our strong cash balance places the Company on solid footing for addressing the big Tier-1 opportunities. Now turning to guidance. We are reiterating our fiscal 2017 guidance range of $36 million to $29 million in revenue, given the strong first half results combined with overall visibility with existing and potential new customer. While we don’t plan on providing quarterly guidance, we wanted to put out that the revenue can become lumpy due to the timing of specific product milestone. Therefore you can see Q2 revenue ranging from slightly down or above Q2 results, given the several key milestones for exactly the same of Q3 and can be put out to the next quarter while our annual guidance remains the same. Given our succession of the new NFV drive to result in project, we are increasing our growth R&D expense to [indiscernible] appropriate resources in place to service this new Tier-1 customer. This combined with the changes of the Israel Innovation Authority as I mentioned earlier is expected to result in operating profitability during the second half of the year to be roughly at the same level as the first half of the year as we continue to invest in infrastructure. As a reminder, we view and continue to manage our business on an annual basis, because our total result can [indiscernible] due to the timing of the implementation milestone. That ends our prepared remarks, Yaron and I will turn it back to the operator, so we can take questions.

Operator.

Thank you. Ladies and gentlemen, at this time we will begin the question-and-answer session. [Operator Instructions] The first question is from Alex Henderson of Needham and Company. Please go ahead.

Hey guys just wanted to make sure I got a clean statement of what you are saying here. So, the third quarter you are suggesting is probably fairly close to the second quarter on the revenue but you are not changing your full-year, so piling it a little bit more into the fourth quarter based on timing issues, could be up or down in the third quarter, what I caught. Is that correct?

Yes, it can be slightly down or slightly up, so there is range there and we decided to disclose it so everybody can model it accordingly.

And then the second thing is just to be clear, the NRE coming in at 600 or so for the year, should we be using that in 2018 as well, it’s hard for us to know what the changes in the NRE program in Israel looks like. So is that consistent with what we should be using next year as well?

It’s tough also for us also to say I think you know we modeled it a little bit different. I think one model can be to carry it to next year and as we get clarity into exactly the plans we will share it. It’s not a secret.

Right. But we still have to forecast tomorrow. Is it just using the same amount?

Yes.

Okay. And then just going back to the programs that you have announced here. Sounds like a large program and LATAM, can you kind of give us a sense of what the structure that is and similarly for the pack, when it is starting now, going to roll out over the next couple of quarters. Is it starting in 2018, when does those two contracts show up as revenues?

The LATAM and the APAC?

Yes, the LATAM and expansion in the [Packrem] (Ph) NFV project? You made two announcements of two contracts. On the call you just talked about a deal in LATAM and a deal in Packrem. When do we expect those revenues to accrue, is it going to be smooth, is it going to be starting this year, is it going to be next year. Can you give us some color on revenue recognition.

Both of them are going to start to impact let’s say positive this year.

So a little bit in 2017 and majority in 2018 or partly 50/50 or 75/25. Any sense of the cadence between the two years?

The majority will be in 2017 and the remainder in 2018.

Okay. And then we have talked about a number of projects, nine or so companies that are talking about doing field trials, three or four that were in field trials. Can you give us an update where we are on those projects. Is there any progress in bringing down some of these larger deals that you have been talking about in chasing after.

Yes, so first of all we are disclosing here that we are close to a project on one of them. So I think that’s very positive news for all of us. The remainder of the trials basically continue unless some finish the evaluation, the technical evaluation stage, now they are more like coupling the decision around us and exactly what type of project to do together with the how their transformation to NFV looks like. This is why you know when I referred to many of the comments in the scripted portion, I tried to give color on some of these carriers as they make decision. I’m expecting some of them to continue to evaluate how we fit into their plans and this can potentially turn into builds in 2018, I would say maybe with some early surprises this year. But the one that we disclosed, we expect it to materialize this year.

Okay. I will see the floor, thank you.

The next question is from Dmitri Netis of William Blair. Please go ahead.

Thank you very much. Congrats on a good quarter guys.

Thank you.

Okay. So I just want to make sure you have addressed Alex’s question and that we have captioned this correctly. I think what you had said was the two deals were the expansion deals in APAC and LATAM. And then on top of this efforts, you want an NFV with a fairly large Tier-1 operator, which is an NFV project. The other two is kind of continuation of your existing relationship. Is that correct?

Yes. That’s correct. I would discuss by being excited from our Tier-1 win and then if you recall that I mentioned, I think I touched on it last quarter that the Company did a very good job in doing work with our existing installed base. The result of the expansion in Latin America and the expansion in Asia-Pacific is a result of that work [multiple speakers].

Thank you Yaron,. Thanks for that clarification. Let’s focus on the NFV project in hand. Can you tell us the geography, you won that customer, roughly the size. Is that similar to the size of AT&T, smaller, I mean I can’t imagine anybody being bigger than AT&T at this point. But just give us a little bit of color around this project and just want to make sure, you will expect to see revenue in the back half of this year. Is that based to what you said, but just kind of correlating to the size of this project vis-à-vis the AT&T project you currently have.

Okay so, I’m going to disappoint you Dmitry, I need to stay quiet at least for the time being. And I do promise that when I can disclose I will. Just sensitive time with reaching the signature of phase and we discussed on that.

Okay. But do we know like the size, is it fairly material operator as big as AT&T can you comment on that or is that not possible at this point as well?

I would say that, it’s not possible. But I would say it’s a very important milestone for the project. And I think you can understand the importance also from the fact that you see the level of investment that we are preparing for it. And as this thing gets clear and fully secured, we will make an attempt to disclose more, of course without violating anything that we are not allowed to validate.

Okay, fair enough I will leave that be. Let’s then maybe focus on AT&T this quarter. What was the rough contribution of AT&T in the quarter?

Hi Dmitry. So AT&T contributed roughly 47% to the revenue this quarter.

47, okay. And when you guide that you expanded the relationship for the AT&T. What do you mean by that, was there additional - this is like the license and pretty define schedule. So are you winning new applications at AT&T. What you mean or do you have additional maintenance that’s rolling in the model right now? Can you give us a little color on what is going on for the AT&T?

Just one second Dmitry. So we are on an ongoing basis working with AT&T. And we're receiving additional work that was not contrasted in the original contract. What we can say is that we now focused till the end of the year to be at around 55% revenue coming from AT&T which is I think the higher than the 50% if I recall what we focused before. Just take into consideration, some of this is also impacting next year the relationship. To summarize AT&T, it's a positive relationship, we continue to deliver on the ground, it’s an active implementation at the cutting edge and we focus on the things that we were contracted to do and once in a while, we have to do additional things due to the positive nature of the relationship and it's going very well.

Okay, very good. So just to summarize, I mean whatever the run rate business you had which was a three year contract, so if I took that number split it in three next year is that number is going to be higher by that additional contracted work that you won during the quarter, is that fair?

Some of it might also impact this year. So we still don't know exactly, there is a lot of accounting math and project math involved. So, we'll see some of it this year and some of it next year. And there are still [indiscernible] also from the previous things that were assigned that still impact the coming quarters and also impact next year.

All right. Okay, very good. And on the OpEx side, I guess that's my last question. You said you are increasing the R&D levels, you did about $5 million excluding the OCF grants including the $4.7 million of R&D. So, what you are saying basically is that the projection for the remainder of the year, September, December, we should be thinking about kind of roughly $5 million in R&D just kind of clarify if that's the case. And then what are you investing as far as sales and marketing goes to support new projects. If you can give us additional personnel you are hiring and what that number is in support of this new project that would be super helpful.

I think what we're saying is that the overall profitability in the second half will be similar to the first half. Now when you model, you will see that the revenue projection for the second half are higher which means that the costs are going to be higher. A lot of them are going to go into the R&D. We were now because of the nature of this new Tier-1 and the fact that some of the exact scope and the things that I can disclose rather, because some of it I don't would know yet, how it impacted the year and how it impact our resource spend, we're actually going through this exercise in the coming weeks. But at the high level this is what we're modeling, what I just mentioned an increase in the R&D and increase not so much an increase in sales and marketing maybe there will be increase there and to maintain an overall profitability that we maintained in the first half.

Okay. Yes, I apologize I should have mentioned profitability. I was looking at sort of - I understand that revenue would go up [multiple speakers].

So the headcount will go up basically.

Okay understood. So okay and then how are we thinking about next year, I mean what should we be thinking right now the models that sort of touching kind as the 9%, 10% operating margin, what should we be thinking as far as operating margin coming into next year? Any guidance if you will or it too early?

I think it’s a little bit too early for us to accurately model next year. If you use some top down approaches, if we generate around a range that we are gravitating in the models for next year then we are going to see already higher profitability next year than this year. But we don’t have anything I think smarter to say than what is currently modeled and I think as we go into the second half of this year and the clarity with this Tier-1, and more ability to focus of course we will give the color and make sure that you guys modeled it as accurate as we can.

Okay, right. And Yaron, can you give us a sense of how many people you need to support this additional NFV win, either R&D or sales either way?

We are probably going to only be able to give it next quarter, probably next quarter. This is exactly what we are doing now. But you can roughly do the math, right, because we have disclosed most of the pieces of the equation.

Right okay. And then [Multiple Speakers].

Accurate number and exactly what goes to R&D what cost affecting. that’s what we are working now on.

Okay I appreciated it, Ran, Yaron. Thank you guys very much, I will take the rest off line. Thank you.

Thank you.

Thanks Dmitry.

The next question is from [Mike Arnold] (Ph). Please go ahead.

Hi Yaron, thanks for taking my questions. I’m just curious with this deal the Tier-1, I guess the top carrier when I was talking about here. Was that a direct-to-customer sort of sale or trial or you go-to-market with the partner on that one?

The you came across a little [gargled] (ph) so you are going to need to repeat.

I’m sorry. I’m curious on the top-tier customer that we are talking about in the call today, was that a direct-to-carrier sale or did you go to market with a partner?

Direct.

Okay. And I am curious also in terms of you partnerships. Amdocs on their call last week they talk about a couple ONAP deals that they apparently had won on their earnings transcripts with Dell, Orange and Comcast. Should we still assume sort of a high probability that RADCOM will go along for some of those deals or how do you guys sort of swat into that scenario?

First of all, there is the Amdocs angle and the ONAP angle, sometimes they align, but they don’t overlap not - always overlap, so both of them can have the potential of driving business. I would say that the Company’s focus today is more on the mobile network. This is where we see the big demand for customer experience. You need less customer experience in wire line and cable operators. Although we are checking these markets to see what type of customer experience needs do they have. And we take it from there. so the answer I think is as we see mobile operators grow to ONAP, there should be a direct correlation with our ability to generate business there and of course you need to work with these operators not only -not every - it’s not a automatic that they chose ONAP that we get a deal. We need to work on that and when it’s not a mobile operator its yet to be seen. So the need for customer experience of poll based assurance is still under definition and we are working on it and we will share this when it becomes more mature. We start to engage them, some of them.

Okay, very good. And then one more question regarding the competition. Your big incumbent competitor is sort of out there talking to analyst and investors. They still feel like they are in the front of line all the CSPs around the world for service assurance deal. I guess I just ask how you respond to those comments in terms of being first to line as it relates to the pure service assurance NAV deals going forward?

I will let [indiscernible]. So it’s a biblical question. You know with the rock between the eyes, so I can’t control what they comment. We’ve seen scout in some of the as a legacy provider in some of the installed base that we addressed that are moving to NAV. We see a lot of the positive feedback from older customer and what they are seeing from us and would clearly feedback that we have the differentiating technologies. So you can do the math of what they have, you know I don’t speak into R&D levels but feedback from the customer usually is the most valuable one and I think the progress that we are making and disclose what I can on this and more to come as we say is I think evident of the progress that we are making. They do have a huge installed base, so I do expect once in a while that they will announce a deal here and there that’s exactly like I announce here an extension of the APAC or it’s an extension of Latin America. They continue to do business, they are not out of this. So I’m assuming that we will see some of that as well. I’m trying to follow the big prices, so that’s where we are focused.

Okay. Thank you appreciate it. Good luck.

Thank you.

Thanks.

There is a follow-up question by Alex Henderson. Please go ahead.

Yes, so given your guidance here for the back half for the year with the substantial increase in R&D and fall off in the NRE. It sounds like you are talking about roughly 3.5 million plus in quarterly revenue or quarterly R&D in the fourth quarter. Is that the right ballpark that we should be thinking about?

So what we think Alex is as you know overall OpEx or either on that way around on our profitability. Our operating income, we say that taking the guidance on the revenue and taking the level of OpEx. That the second half in terms of nominal profitability will be the same level of the first half.

Yes. Ran I heard the guide and I’m just having a hard time making it work. So I’m trying to figure out how it works and it sounds you go to a pretty good loss in the third quarter and spike in revenues in the fourth quarter. So you are offsetting the loss, but still getting a pretty good size profit in the fourth quarter. But the fourth quarter exit rate on R&D is important, because I would assume and the second question is that that continues at that level as we go into first half of next year. So I’m just trying to right gauge my expense level exiting the year. So the R&D line is a critical variable here and it sounds like 3.5 million plus is the exit rate. Is that correct or it might off?

It makes sense.

And then second question along the same line then. Are we seeing any down draft in the gross margins in the back half are they staying in the 70s?

So we don’t see - currently our model is to have the gross margin to mid 70 plus.

Okay. So it’s all in the OpEx lines that causes the down draft in the EPS in the back half relative to prior forecast?

Yes.

Just Alex note that Q3 may be higher than Q2 or slightly low. We don’t know yet where it will fall so.

Yes. But clearly it’s going to produce a loss in the either case given the significant increase in R&D spend?

If it would be higher than Q2, it won’t result in a loss.

Well then how do you get the spike in the fourth quarter and not end up with the higher profitability than the first half. I mean the fourth quarter alone ought to be larger than the first half?

No. But then if you look at half-by-half then just make sure, it’s how to model third quarter, because we don’t know exactly what will happen with calculation.

All of that you have given is the third quarter guide and a full-year, the fourth quarter solvable by definition.

Let’s say keep in mind, we are in the process of ramping up and how is the ramp up.

Will happen in Q4.

We’ve been, as most of this is [indiscernible] have to predict, when the ramp up will be. So actually assume this most of the ramp up will be in the tail end of Q3 in the beginning of Q4.

Right. So again $3.5 million run rate in R&D. Is that the rate that we should be starting the year in 2018 at?

It makes sense.

Okay. And then could you tell us what the headcount was for the second quarter?

Yes, so currently its 205 people.

Okay. So, how much of the pressure on margins here is a function of the exchange rate swings that have occurred over the course of the quarter? I mean totally the Shekel has moved quite a bit.

Yes, that's a good question. So, actually comparing to Q1 on a constant currency basis, we actually took a hit of $2,000 this quarter, $200,000, yes, sorry.

So it's causing roughly $600,000 swing in the numbers over the course of the year?

Yes, exactly.

All right and just going back to the 2018 numbers, and I realized you guys have lots of variables here, but the straight numbers seem a pretty good ramp and they were predicated on a pretty strong fourth quarter exiting the year. It sounds like given what you are guiding towards that the full-year EPS for next year on the street maybe quite a bit too high, at least from the perspective of taking in NRE down, but also probably from the rate of spend in the fourth quarter being annualized over the course of 2018. It sounds like those numbers are too high. Would you give us some general guidance of how we should be thinking about that, I realize you don't want to be too explicit, but again the street does have to make forecasts and this is a fairly important determinant.

So, I think it's a little bit premature, we're just now concluding or start to conclude our ramp up plan, but I think it's a fair assumption to assume that this negative profitability will be a little bit less the cover forecast from both the NRE perspective as you mentioned and due to the ramp up how much it will be down it is going to be set of 14% it's going to be 10% or 12% or 8% it’s really a little bit premature to face.

So, just to be clear, this is success based spending as a result of your visibility on new contract wins that you think are likely to drive incremental needs to deliver both on the sales and marketing installation front as well as on the R&D support front.

Exactly.

All right. Thank you.

The next question is from [George Marama] (Ph) Please go ahead.

Hi good morning, everyone. I was wondering several months you had showcased the MaveriQ running on OSM and there are some rather I would say aggressive Tier-1s out there that sort of warming to the idea of merging OSM into ONAP. I was just curious with that ecosystem how RADCOMs position is?

We are positioned very well for this to happen, so with the key service providers that have been working on OSM with - we have an existing relationship with them and they see the potential. So, I would expect they adopt ONAP just to have magnifying positive impact to already a positive situation.

And then back in the summer time, you sort of talked about you were testing in the lab some additional used cases for [Vprobes] (ph). And on your website you have several different products that are listed in all kinds of areas. You have like an M2M, analytics products, like a marketing products. Can you give us some update on where those products are and when you might expect some kind of deployment of such products expansion?

Certainly everything we have under website installed [indiscernible], we didn’t put no futuristic modules on the website. I would tell you that the major focus of the Company is to do the heavy lifting required for carrier to move into NAV, which is basically providing them the eyes, the assurance size that their NAV network works. That’s where most of the focus of the Company is today and because we think this is the number one task that the industry is gravitating against. On the course of that, as we progress continue to progress, we do have additional things that we work on and we might work on in the future, which will adjacent to this. If completely go after another addressable market I will disclose it and I will give the color.

What it sounds like in general, sort of taking on a macro view of this, RADCOM is slowly but surely expanding its addressable market into - you have had recent announcements of Comcast cable moving with Amdocs, you have additional use cases we are testing, so is it fair to say that overtime that RADCOM will continue to expand its addressable markets?

Maybe missing something on the terminology, but the addressable market for us although the addressable market I would say that we have significant advantage is where service providers migrate to NAV, where like this the standard assurance because of everything that we have done with a AT&T and now we will be doing with this additional Tier-1 carrier and that’s where the focus is. Now you mentioned Comcast and Comcast is a cable operator, so it’s not in our addressable market here. What I mentioned earlier is that we are looking at the cable operators and also operators that launch solutions in the fixed time whether its business or is a venture to see how their assurance needs of poll based customers experience in assuring to the areas that we operate providing value. Now we believe that there is an angle there that will increase the addressable market, but it’s not the main focus of the Company as of today. It might be an area that we start to expand into 2018.

Okay thank you.

Thank you.

[Operator Instructions]. There are no further questions at this time. Thank you. This concludes RADCOM Ltd second quarter 2017 results conference call. Thank you for your participation. You may go ahead and disconnect.