Now turning to the details, our recurring revenue gross margin of 69.5% was consistent with our expectations as we continue to make investments in our tax filings and our SaaS infrastructure that we've discussed in the past. The services gross margin was 5.9%, which was impacted favorably by the higher services revenues. As a reminder, Q1 also includes annual revenues related to the production of W-2s for our clients. And these do not occur in any other quarter of the year. We are maintaining our 2% to 5% gross margin guidance for 2012 as we will continue to add billable consultants due to continued sales growth.The gross margin rate for total revenues was 55.7%. The change from 2011 was related to the expected lower recurring revenues gross margins based upon the planned headcount additions to our tax filing and SaaS infrastructure teams in the beginning of this year.
The Ultimate Software Group's CEO Discusses Q1 2012 Results - Earnings Call Transcript
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