The increase in subscription sales was the big revenue story. CEO Marc Chardon said in an earnings webcast that in new business sales, subscription units outnumbered perpetual licenses by five to one. Chardon said subscription sales represented one third of Raiser's Edge revenue, compared to single digits a year ago. The company also got a boost from a new subscription-based offering which spurred a 50-percent growth in Financial Edge sales. Chardon said subscription pricing helped Financial Edge reach a new market. Results were hampered by a decline in gross margins, which came in 56.6 percent in the most recently ended period, down from last year's 58.2 percent. Operating expenses rose 19 percent to $48.4 million in the first quarter, up from $40.7 million. In its prepared statement, the company stated its investments in improving back-office business processes "were more front-end weighted than originally expected ... " and that it had accelerated hiring in sales and marketing. CFO Anthony Boor said during the webcast that the company expects savings later in the year from the back-office project will offset some expenses from this quarter. He added the company considers many expenses non-recurring.