Welcome to the NICE Systems Conference Call discussing second quarter 2011 results and thank you all for holding. (Operator Instructions). As a reminder, this conference is being recorded July 27, 2011. I would now like to turn this call over to Daphna Golden, VP Investor Relations at NICE. Please go ahead.

Thank you, Operator, and good day everyone. With me on the call are Zeev Bregman, President and Chief Executive Officer; Dafna Gruber, Corporate Vice President and Chief Financial Officer and Eran Liron, Corporate Vice President, Business Development. Before we start I would like to point out that some of the statements made on this call are considered forward-looking statements. In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, please be advised that the Company’s actual results could differ materially from these forward-looking statements. Additional information regarding the factors that could cause actual results or performance of the company to differ materially is contained under the subheading “Forward-Looking Statements” in the Company’s 2010 annual report on Form 20-F as filed with the Securities and Exchange Commission on March 31st, 2011. Such factors and forward-looking statements are based on the current expectations of the management of NICE Systems Ltd only and are subject to a number of risks and uncertainties that could cause the actual results and performance of the Company to differ materially from those described herein, including but not limited to the impact of the global economic environment on the Company’s customer base, particularly financial services regulations and the resulting uncertainties; changes in technology and market requirements; declining demand for the Company’s products; and ability to timely develop and produce new technologies, products and applications; difficulties or delays in absorbing and integrating acquired operations, products, technologies, and personnel; loss of market share; pressure on pricing resulting from competition; and inability to maintain certain marketing and distribution agreements. The Company undertakes no obligation to update or revise these forward-looking statements except as required by law. During today’s call we will present a more detailed discussion of the second quarter 2011 developments, the Company’s updated guidance for 2011 and guidance of the third quarter 2011. Following the comments there will be an opportunity for questions. Let me remind you that unless otherwise noted on this call we will be commenting on our adjusted results of operations, which differ in certain respects from Generally Accepted Accounting Principles as reflected mainly in our accounting for acquisition-related revenues and expenses, amortization of intangible assets and accounting for stock-based compensation. The differences between the non-GAAP adjusted results and their equivalent GAAP figures are detailed in today’s press release. With that I’ll turn the call over to Zeev Bregman. Zeev?

Welcome everyone to our second quarter 2011 earnings call. Q2 was a strong quarter for NICE. Q2 revenues came in at the high end of our expectations, reaching a record $197 million, increasing 16% from the second quarter of 2010. Non-GAAP EPS reached $0.50, up $0.9 from Q2 last year. Our book-to-bill ratio was greater than one and backlog was at the new record and we are raising our revenues and EPS expectations for the full year. We achieved growth from last year in both our enterprise and security businesses with record revenue for each of these two segments. We are very pleased with our goals in all regions and especially with the remarkable growth in APAC. We recently held our annual customer conference in the Americas and APAC. These were our largest ever event and we’re also close to 2000 industrial leaders. We also enjoyed in these conferences a significantly higher number of executives. Most of the presentations were given by customers who shared their experiences utilizing our analytics-based application. This presentations focus particularly on the business benefits and ROI that our customers enjoyed using our solution. Some of the most impressive stories were about our new back office and Situation Management Solutions. A key takeaway was that today, there is a great similarity in customers business requirements around the globe. We see customers from emerging markets such as India, China or Brazil facing the same opportunities and challenges as those coming from more mature markets. Moving on to our enterprise business, which is comprised of the customary direction business and the financial crime and compliance business. Revenue for this business grew 17.7% for Q2 2010. I will start with our customary direction business, which enjoyed a continued positive momentum and increasing demand for our advanced application in both…

Thanks Zeev. I am pleased to provide you with the analysis of our financial results and business performance for the second quarter of 2011 and our outlook for the third quarter and the rest of the year. Revenues for the second quarter reached a record of $197 million coming in at the high end of our expectations and were up 16% from $170 million in Q2 last year. Our book-to-bill ratio in Q2 was greater than one and backlog is strong representing more than two quarters of revenues. We achieved growth from last year in both our enterprise and security businesses as well as in all our regions. Our revenue by businesses were as follow. Enterprise revenue reached a record of $148.4 million into the second quarter, up 18% from last year. Security revenue reached a record of $48.3 million, up 11% from last year. By geography, the Americas region continue to perform well and revenue reached a new record $124 million in the second quarter. These revenues represent a 12% increase over Q2 last year. Our revenues in Europe, Middle East and Africa increased to $50 million, up 13% from last year. Revenues from the Asia Pacific region reached $23 million in Q2 up a remarkable 52% from last year. In summary, the Americas region accounted for 63% of total revenues in Q2, EMEA for 25% and A-Pac for 12%. Product revenues accounted for 45% of Q2 revenues. Revenues from maintenance accounted for 36% and revenues from professional services accounted for 19%. Our gross margin increased to 64.9% from 63.9% last year. Operating income in the second quarter, increased 21% from Q2 last year and reached a record of $36 million. Operating margin continued to improve and increased to 18.3% of revenues, up from 17.6% in Q2 2010. Net…

(Operator instructions) The first question is from Shaul Eyal of Oppenheimer.

Two quick questions on my end. Will there be strong showing in A-Pac, want to try and kind of dive more into it, what country specifically are you are kind of generating this type of growth.

We are seeing goals in A-Pac mostly in the emerging part of A-Pac and also even if is not a growth we are encouraged by the results in Japan and despite the crisis was there at the end of the first quarter and the beginning of the second quarter. But there you should pay attention, so the older results in A-Pac is small and therefore they can be a bit lumpy going forward.

With the respect to the video, since that kind of some improvement over the past couple of quarters, anything driving that or just kind of the nature of the business of being lumpy?

No, we have said in the previous call that we believe that this business is lumpy, but we are seeing an improvement and we are happy with the results and that we believe that the reason for the success is our executing on our strategy which is to focus on vertical market using our Situator as a differentiator and we’d say sometimes and in the selling of the Situator and sometimes they end in selling the video solutions.

One quick question for Dafna. How do you guys envision a continued expansion of the operating margin over the next two quarters?

Our plan is to continue to generate at least 25% increment proceeds out of incremental revenues and they also expect the gross margin to improve gradually over time and we have a target to reach 20% operating margin in the midterm.

The next question is from Daniel Meron of RBC Capital Markets. Please go ahead.

Thank you. Hi, Zeev and Dafna. There's been a little bit of crosswind going on in the macro picture, some folks in the industry, in the tech industry are pointing to some slowdown. Others like SAP are pointing to continued improvement in their business. What's your sense on what you are getting from your enterprise and security customers either on government budget or enterprise IT spending in general?

We are seeing a fraction of the market and we are by the way listening to the same analysts and we are seeing some analyst to be very optimistic and some that are more negative and when we are looking at the macro plans that we are seeing, we do not see much changes from Q1 to Q2.

Okay. I think that’s fair. In government spending what's your sense on our customers or lead times changing in anyway or sales cycles?

Its again, we had a good quarter in our security business. So we can say that everything that the government now are released their budget ways but again we are seeing a fraction of the market and it’s very, we had a good business in this quarter within the public sector and its not, its difficult from where we stand to predict a trend there.

Okay and just switching gears to the gross margins, the cost of the services in this quarter, kind of the little bit of a spike this quarter, anything behind that that we should be thinking of?

No I think it has a lot to do with the overall margin, has a lot to do with a combination and mix of deals and there are always some differences between quarters and gross margin. Overall, we are in line with our target to be at around 55% gross margin for our business.

Okay. And last one for you before I yield the floor, when we look at the operating margin this quarter, it was 16% top0line growth and then 21%, I think, operating income growth. Is that consistent with the 25% guideline that you provided or do you feel its not going to be necessarily linear and some quarters are going to be a little bit faster on the operating leverages than some quarters like this one are going to be little bit slower than that.

Yeah, it’s, to manage it on a quarterly basis is sometimes challenging. I think the overall current year is very, very clear. The overall trend is of continuous improvement in operating margin. And if you look at the annual guidance and you do the calculation, you will see that a nice improvement in operating margin is already embedded within this guidance. So, overall I can say that we are on track with our plans to improve deals for operating margin overtime.

And Daniel, this calculation applies mostly to organic growth and it doesn’t take in to account acquisition which can change the picture upward or downward, based on the target company that we are acquiring.

Right. So, we are still looking at a trajectory, at a mid-term target of 20% operating margins. Is that right?

Yes, correct.

Very good, thank you.

The next question is from Daniel Ives of FBR Capital Markets. Please go ahead.

Thank you. Great quarter. Question on deal sizes, I mean today you very much stood out this quarter, either in the Security business or the optimized, in terms of, deal sizes, you did sequentially year-over-year?

We don’t have these statistics offhand but the overall we had that several seven digits, a nice number of seven digit deals within this number.

Okay. And then just talk about the security business and obviously a nice improvement there, is that some and obviously last quarter, it was a little choppy, does it seem like we have kind of got over the hump there and now the backlog is starting to actually sort of come through, so the trajectory we expect to continue?

That’s partially a backlog and partially its things that the orders that is secured during the first quarter and the second one. But we don’t feel that security business is a lumpy business and we can see in quarters and there can be lumpiness in its result and we should expect lumpiness in its results. Overall as we said, we are satisfied with our performance within this sector.

Okay, thanks guys.

The next question is from Ari Bensinger of Standard & Poor’s. Please go ahead. Ari Bensinger - Standard & Poor’s: Yes, thank you. Just also curious on the macro economic headlines that have obviously hastened some demand in enterprise space, can you give us any more color on, on what your customers are saying, how they are releasing funds and may be on linearity in the quarter, was it fairly steady or did you see any slowdown as the quarter progressed?

When we looked at the quarter and what customers are saying, I mean, we are always in a situation; there is a regular pressure on budget from our customers. So it’s always, there is a concentration on these issues. It’s very difficult to trend them to macroeconomics. And when we look at the growth and the progress in the quarter, I believe that it was a normal quarter and there was no special thing around this quarter and then I think this is – now we have a very good quarter in our America and APAC region and I think this is basically what we see around the world. Ari Bensinger - Standard & Poor’s: And also there was a horrible crime done in New York where a boy was murdered and the lead to catch the killer was done through video set-up at enterprise and corners and there is a bill trying to be passed to New York which we give tax credit to enterprises that would install video surveillance equipment. And I am wondering is that something that could sort of spur demand or something that you would see that can maybe expand to other states and sort of…

Obviously, and unfortunately the security risks are on the rise and the project event earlier this week and always another example and this is – and we are not, we are all concerned about this. We believe that the – and part of the issues in terms of security installing censors, like video cameras but I think that this is we believe that this is not the most efficient way to prevent crimes and terror. And the only way is to connect the dots and this is where we are focusing and this is where our situation management is focused to correlate information that coming from the sensors and to get – and connect the dot and time to prevent crime before the happening and once there is a crime or terror attack to respond in real-time and to send information in real-time. And this is where we are focused, this is where is our strategy and this is where we can provide the best return on investment to our customers and to prevent both crime rate and terror rates in the future. Ari Bensinger - Standard & Poor’s: Thanks and congrats on a great quarter.

Thank you.

Thank you. And the next question is from line of Paul Coster of JPMorgan. Please go ahead.

Across the regions you’re obviously seeing very solid growth in North America and EMEA and rapid growth in Asia; are those regions likely to continue or do you see any material change in the rates of growth?

We have not heard the beginning of your question there Paul, if you could repeat the question?

Alright. What I am trying to get to is whether you are seeing – the growth prospects that you’ve outlined apply equally to each of the regions, are you particularly concerned about EMEA for instance?

We had a softer quarter in EMEA, but still we have seen growth in – we had a remarkable growth in APAC and we had a good growth in America.

The approach is similar across each of the regions?

I do not have the data, but I expect that there are no major differences.

And are you adding headcount in each of the regions?

We are adding headcount across the company.

Okay. And then in terms of your pipeline particularly on the security side, do you have any sort of elephant sized deals potentially could come to market?

We have some large deals, very large deals in the pipeline but again we are more, we are more focused on today on providing solutions to our (inaudible) and this is our prime strategy is to focus not on the major deals, but to focus on an ongoing business in many cases seven digit and may come to eight digit, but this is more -- it’s more a solution rather than a project.

Okay, thank you very much.

The next question is from Shyam Patil of Raymond James. Please go ahead.

Hey guys. Could you talk about the competitive landscape device for [Ag] device? It seems like one year competitors that was acquired recently is talking about becoming more aggressive in the market, just curious if you guys have seen that yet?

We are operating in competitive market. We believe that we have a unique position and unique offering in terms of the fact that we are both above the grade and also the fact that we are providing enterprise-wide solution and operating solution. Competition is always there and so far we are doing very well. Again, this competition we are planning to do it also in the future. And then regarding a specific competitor and I think that we can beat and we are beating and expanding our market share from competitors.

And Dafna, what was the revenue and EPS contribution from acquisitions this quarter?

We had some contribution obviously from the CyberTech acquisition; it was according to our plan by the way this acquisition is moving along very well. The business is fully integrated with the NICE business already and since it’s an acquisition of a competitor, there is already some cost sales and replacement by our customers of the product they are buying, so it’s already very much integrated within our offering and within our customers.

And then around the share buyback, it seems like you guys have been executing on that pretty nicely, how are you guys thinking about potentially raising that balance and if so kind of when we should expect something?

We have a plan that we announced in the third quarter and we intend to continue to execute on this plan until we reach share buyback or using about $100 million. I believe that once this plan is over and we purchased the shares using this amount, we would reconvene and decide what we want to do next.

And again we believe that the prime and best utilization of our cash is to acquire, for acquiring additional companies and technologies. And we are collectively pursuing such opportunities and this is the prime usage of the cash and we have targets, sometimes we don't like the valuation, but overall we have targets, we have prospects and this is going to be the prime usage of our case.

Maybe along those lines, can you comment on what you are seeing just generally for M&A valuations, are they becoming more reasonable or unreasonable, any color there?

The valuation, it depends on the different companies, but overall valuation are at the high-end we believe. But there are many companies that are in play at the moment.

The next questions is from Craig Nankervis of First Analysis. Please go ahead.

Thanks very much. I have a couple of questions. First of all, your results by geography, the Americas growth was sort of down. It was about half, what it was in Q1 and I guess I would like to get some sense of how you see that geography playing out, maybe the rest of the year and how that figures in your guidance, that it was relatively speaking a lower performer than we have seen of late.

Firstly really not, we should not look at the quarterly trends as an indicator for the overall performance of the different regions. And we believe that if you are looking, in terms of trends, we expect to have a strong growth on the annual basis. In A-Pac we all expect to see a two-digit growth in the two other geographies.

On the Security side, Zeev, you talked a couple of minutes ago about not so much of focus on major deals, but more solutions versus large projects and to me, I wonder is that somewhat of a change in NICE’s security strategy versus a year to year-and-half ago or two years ago, when very large projects were a key to the security strategy. Has the environment changed or has your approach changed for you to somewhat back off?

No, it’s not a back-off. It’s another scalability within the model and that we are playing less all of the system integrator and more overall of a solution provider. And this is a change in strategy. It may reduce average deal size, but it should improve the profitability of the deal and we still add our profitability in different markets, that we are going to specifically in the intelligence space that we have to provide an end-to-end solution, we are going to do so. And the profits that we have is on a vertical and to trying to cover these verticals, if it is public safety with [safe city], if it is transportation and mass transit, if it is utilities in critical facilities in the financial sector and banking. And in this verticals, we are pursuing major deals and large deals, significant deals but lesser the system integrator, then mostly the solution provider.

Okay. So is it fair to say that the strategy has changed moderately or it has changed somewhat?

I think that the (inaudible), will be no change, but evolve. And then, we believe that the current model is a more scalable model in terms of getting coverage and expanding the margins.

And then just on situation management, there was an acquisition a quarter or more ago and Proximex being taken out, has that resulted in any particular change in the market one way or the other from your view?

The answer is not, I mean, we are not and the answer is probably yes, but very little. But as we don’t see any change in the market, it’s another proof that this market is a very old market and the people are seeing the potential and the fact that Proximex was acquired by someone who is a system integrator is an advantage for us.

Is an advantage. Okay. Thanks for the help.

The next question is from Sean Barrett of HMI Capital. Please go ahead.

Hi guys. I am a little unfamiliar with current tax laws and with NICE becoming more active on share repurchase, what is the limitations those purchases face-to-face on a current tax law? Thanks.

There are separate limitation on because of tax laws. It’s not applicable to the amount of shares that we’ll buy now, the 100 million plan that we announced. And there was plenty of change in the law in Israel that enables more easily by buying shares going forward. So overall I don’t anticipate any major impacts share buyback plan.

Okay. Great. Thanks.

The next question is from Michael Kim of Imperial Capital. Please go ahead.

Hi, guys. First on a back office, can you talk a little about you know where you starting to see stronger activity and which verticals, whether its healthcare insurance or other that you starting do build the pipeline and then lastly in terms of revenue, I know it still continue into build but can you, call out you know what contribution we might see as a significant component of the revenues? Thanks.

First, we are very pleased with the progress that we made on back office but it still represents a small portion of our booking and also for revenue and we believe that it will grow overtime and we hope it will become mature actually and it will become significant, but it will take time for this to have that. When we look at the segment that we are in most of the pipeline it’s indeed healthcare and insurance and also customer service.

Okay. And then switching to emerging markets, you’ve talked a little about that on this call. Is the pipeline building ahead of the developed markets in terms of activity and then what will show the overall contribution from emerging markets?

I think the only role – first of all we have a very different definition of emerging market and others, when we have fast markets like our markets in Europe and EMEA for example or in APAC it will consider other industries as mature markets and for us they are emerging markets. And when we look at the prospect that we have we are selling more application and spending on application in our mature markets like the U.S. and then we are expanding in those applications and in a simple capturing solutions in the emerging markets. So we are seeing healthy growth plans in both segments.

And one last one for Dafna, in terms of the backlog was both enterprise and security are above two quarters or can you – was it fairly comparable between the two?

Not very different than one from the other, it is not very different.

Okay. Great, thank you very much.

The next question is from Jonathan Ho of William Blair. Please go ahead.

Great quarter guys. Just a quick question in terms of growth in the APAC market, has there been any change in terms of your distribution strategy or has that played much of a role in terms of the pickup in the APAC region?

First, we had I think that was all we – we are posed to grow in APAC and this is the growing market and we are growing there. When we are looking APAC, we invested in this region and expanded in some of the product and in addition, when we look at the APAC overall there was also some changes in the leadership, in the management and we should remember that this a quarter of a quarter, and the second quarter of last year was relatively week quarter in APAC.

Okay. And in terms of the Situator product, can you may be give us a little bit of color in terms of the new version and may be what features seem to be resonating with customers and what do you expect there to be a pickup now that its been in the market for a little while?

The new version that we spoke about is actually a version that we’re targeting the public safety market. So we are – and it’s in the customization or actually say adaptation of the product to the commitment of the public safety customers like emergency rooms and the 911 centers and things of this nature. When we look at the situation management what we see is that we look at it originally the security system and we are seeing more and more but it’s serving also operation analytics and that’s the combination of security and operation and this is a part of the demand that we are seeing, that it provides both security, but also provides benefit to the operation of the organization that we serve.

Just one last question on Situator, is this the bulk of your security business at this point or how should we think about it in terms of a product contribution standpoint?

The Situator present a small part of our business, but it’s a differentiator and therefore many people are talking with us and sharing with us the vision and anticipating this is going to be part of the future. In addition, when we are looking at our business model, normally our initial sales are relatively small and then we are expanding within our customers and we are pleased with the number, with the pipeline that we have and with the number of deals that we have, but the overall volume is still relatively small.

And just last one for Dafna, I mean in the past you guys have talked about your services business being at a higher capacity and you are going to add some capacity there, what's the utilization rate look like these days?

The utilization rate is very high. It’s very high over

With respect to any industry standard and actually we don't have bench.

There are no further questions at this time. Before I ask Mr. Bregman to go ahead with his closing statement I would like to remind participants that a replay of this call is scheduled to begin in two hours. In the US please call 1-888-782-4291. In the UK please call 0800-918-4256. In Israel, please call 03-92-55-900 and internationally, please call 972-3-92-55-900. Mr. Bregman, would you like to make your concluding statements?

Thank you. Thank you all for joining us today and have a nice day.

Thank you. This concludes the NICE Systems second quarter 2011 results conference call. Thank you for your participation, you may go ahead and disconnect.