CSGS - Earnings call transcript Q3 2017 | CSG Systems International, Inc.

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Operator

Good day and welcome to the CSG Systems International Third Quarter 2017 Earnings Announcement Conference Call. [Operator Instructions] Today's conference is being recorded. At this time, I would like to turn the conference call over to Liz Bauer, Senior Vice President, Chief Communication and Investor Relations Officer. Please go ahead, ma'am.

Liz Bauer

Thank you, Will, and thanks everyone for joining us. a forward-looking contain will discussion number statements. of Today's and not statements ability successfully regarding will products, meet include, our projected convert to, in are but services, our customer through our These the our backlog ability accounts limited financial a clients' timely needs and of performance, our our onto to to solutions results, manner.

opinions that note to reflect call best reflect subject in these and only any uncertainties are differ obligation statements or of current to results or as actual Please revision they While could judgment, our our our of the these of that release light and to date this events. publicly statements forward-looking statements no we materially. future cause undertake forward-looking new to risks these revise

to accordance recently available are discuss be in today's found is of transparency in GAAP reviewed Also, used our measures conjunction our information GAAP. this We non-GAAP financial that more measures, our call, not operational In management in noted with our of well XX-K in most prepared we that to which Investor filed during when and with can will and investors website. the certain greater provide financial financial making. a all believe information financial team as these by with decision our factors addition on comprehensive factors the our Relations risk section as press release, discussion XX-Q,

phone Wiese, to Executive Griess, non-GAAP on Bret you Chief Financial which tables Officer; X-K. website, more the today's For on use Chief our and furnished Officer. on our and me non-GAAP today Form also we information regarding reconciliation SEC be Randy the With will to measures, our are of earnings release financial refer our

up cold with we a has woke voice. today. highly unusual and no the have Bret However, situation

remarks I this before to his be sharing turning you So Randy. will with prepared over

words? a like Before try to you we proceed, to say few Bret, would

Bret Griess

shareholders it happen making but to the to My for you for great customers Thank on here our you, thank for was say this long-term be me our and we’re a important employees my again. and CSG. for Liz. voice and apologies very in the for setup our success to confidence us. It’s business in and it for their does proud the apologies Thanks quarter for work of continued

Liz Bauer

Again hear he for lost voice. of those you who Bret, couldn’t has his

prepared So remarks, his let’s I be will begin. reviewing

from million. the of per history. grew we our earnings revenues our $XXX revenue non-GAAP we We quarter For to $X.XX million, share strongest quarter $XX ever operations generated of cash flow and third produced in

first the and revenues of flows of we year $XXX operations million. $XX months cash and grown the of For cash nine have organically we free X% million flow from approximately generated

traction our are topline We investments. certain on see a revenues our of result to as

rate transitioning the end with managed same are we software Our industry at recurring time services at business of based revenues SaaS our growing high visible into our platform. and revenues more are the and

will later We with performance far. call. are so details financial our more in Randy review in pleased our execution the

cloud four the quarter, first, some to the year at remind drive continuing the growth beginning that the we through want at of highlights we aimed discuss third revenue shareholder initiatives key to services particular Before you from include These and increasing that in value. we established managed offerings. our all based

international believe license globally we which broadband recurring multiyear based from client’s getting deeper expanding to operation and broader true Second, and relationship cable and software by footprint and our sustainable our transitioning is in partnering. engagements

proven say of competitive clients and our cloud-based in what clients in next-generation on and solution well our our us for platforms investing has continuing well highly executing go-to-market doing extremely And like our strategies. reputation a our relentless we focus in fourth, extremely our our investing Third, business on served environment. behalf

doing we’re those how share on me with initiatives. you Let

our First, been over our customer last years. extended earnings ours of DISH years. another for call XX has with DISH for since agreement four we

the continue thrilled Ascendon of digital their will stability customer we’re services. price, to promote We enhance platform innovate DISH and experience using to another and to be be our four partner years. sell for

personalized will Ascendon DISH’s experience all customer complement across robust mobile and devices.

and another customers legacy customers of off Next off their Comcast the competitors of partner on mid this XXXX. selected alone since we customers billing and a be of over billing converted year we’ve convergent million platform brings total legacy to platform. X.X for converted competitors number XXX,XXX our advanced to a to cable in us Comcast solutions This XX million that residential

next million count remaining time to sub We complex by the and resulting being CSG. service complete expect in residential experience a customer consuming within customer months customer is new base risky. conversion to and monetization six the entire platform Comcast Switching

this industry. However the CSG. record system customers, and and quite track our customers developed a proven differentiator for And competitors performance better superior else anyone a true than do internally off moving in was risk mitigator our or we for frankly

platform to voice, United their consumers existing we and in edge the to our engagement. Next progress on traditional service expanded services and play relationship TalkTalk agreement, Pay-TV, services business past we Kingdom. help operate will into multiyear with managed managed quad them a service clients we communications longer-term and our continue infrastructure. solution broadband software Under offering mobile our converting a Ascendon make quarter solid This provider surrounding

Ascendon You to TalkTalk selected earlier anytime. and device mobile on platform this services digital may any our recall year elevate and that viewing accelerate its

them a our to differentiated with pleased to ability customers. and continue for their intuitive create experience help seamless more We’re

Ascendon SaaS for another is in for product Xfinity of the Comcast's viewing extended Speaking Xfinity platform. Campus this Campus continue schools On to XX the TV Internet students our their Ascendon see around generation utilizing years contracts platform. college great in three momentum On over country. we marketplace for based next

and solution entertainment selected to services Kingdom. to provider computing addition, enterprise platform to components platform Arrow Ascendon IoT subscription direct them beyond entertainment we the companies and of In end-to-end operate their a quarter largest our help them Electronics their launch and is solution. This services our of the utilizing media solutions services one electronic expand Ireland commercial world's consumer Ascendon United help in and of past service users products, global to

will enable using launch models and and of This Arrow and partners the connected network that revenue-sharing collect such among IoT as exchange vehicle and services includes Ascendon in a objects products quickly home ecosystem. wearables, Internet IoT new monetize data Arrow to devices, smart sensors. and embedded configure

the a you the they monetized like We long-term. pleased meaningful are to all over provide who work that enormous, Arrow company are in are world is opportunities much with if the more service understands IoT a innovative

platforms that we haven’t excited other serviced digital firms see are We the are before. that services serving to that also gaining traditionally traction our

Next from only and commitment platforms we that come level our we but to invest on deliver processes from customers not in continue expect people, to to us. the us for to believe have our in our desire our space. We this delivery differentiates other that and reputation at our companies our ensure

Magic believe Magic platform us and recently the fact our Gartner's in In Gartner our and fact just recognized appreciate Ascendon in customers our that recognized quadrant. a leader CSG contributed quadrant. responsiveness leader as We flexibility a being that its as pricing,

integrated mega and to want deciding it over for Netflix. are cloud to results, different. The for we differentiated This quarter to We highly ever-increasing competitive offering help than landscape help includes like helping to and serve Before - providers brands businesses team to customers competitive Google, before. Amazon minimize make asked operations traditional create drive and managed their expectation being I going and doing are third more the to resources with employees associated attack leadership with ever the competitors industry to Through big work. and Operators solid hardest are the the frankly has We customers experience we decision at and with more the their offering fickle our Bret tremendous demanding do turn focused communication platforms. do hard costs for customer service on seamless review heart out smarter. change. in deliver risk under are of that our their services it opportunities through thank platforms our put customer our something quite employees for landscape CSG. and all, though with changed The help them fewer simpler Randy based more remain their of our

such We hard-working to dedicated and with is together our that believe group say be to our like are employees to associated and powerful every that a we day of proud that individuals. we Internally demonstrate clients.

to Finally, business we value. we have position fundamentals and with our well deliver us shareholder drive strong like enviable that model position

globe. with world and We have in some of with video grow and our new largest providers both unrivaled innovative broadband footprint the markets. and most We expertise clients we continue the to service around the clients work these the and in domain

a and for really technology proven have We reputation solutions our operating well. solid

to have shareholders. And in our employees clients over helping strong gives financially we it our investing and a company sound capital our us and company which and that, are have a have sheet strong generate globe I'll We flows the across greatness. and important, to for tremendous balance talented achieve our most our turn dedicated clients we flexibility cash committed to still who Randy. our With return solution, people,

Randy Wiese

to outlook welcome of our third financial quarter, Liz for today discuss well of remainder as you for to the the Thank results our all on you as the and XXXX. call

we solid continued on and are pleased process strategic results our with our year are We this for initiatives. making the

second walk to revenues the same through $XXX of in X% you increase Total the year an for from financial like results from increase the of million, detail. third Now the last an I’d were quarter more X% quarter. period

our solutions up For solutions driven predictable and the of were X%. countering strategy cloud as our solution year X% increased accounts and anticipated continue revenue our this first customer and revenues a increased revenues and we part our total execute by last services on decrease was business into our recurring cloud in model. growth from software revenue This the services of new conversion onto nine revenues over recurring largely transition months our more ended cloud managed to our related offerings,

of on income is of with our a in quarter non-GAAP third expectations. the $XX line operations XX% our Moving which results was with million operating to margin approximately

EBIT $XX adjusted for non-GAAP of the our Our XX% revenues. total million or was quarter

EPS for rate was non-GAAP non-GAAP in tax with Our at our effective XX%. $X.XX $X.XX last was the compared income quarter in year's to expectations line current

reflecting plan of business results reflect top in our current Our line opportunities in and commitment year-to-date invest of quarter growth our execution strength the to long-term continued our business. our and financial

$XXX Year-to-date million the cash the we flow quarter cash we $XXX million generated million from for on flow Moving of flow flow. operations million We generated the short-term $XX cash cash investments from free compared and free operations of of of with million of quarter. of and million to at end quarter. the cash ended $XXX and $XX second $XX

common of and under million Additionally $XX million of our buyback $XX stock dividends. program so year far this we repurchased paid

shareholders Our us balance future continues strong return operating cash consistent of business strengths. from ability also well invest sheet generate our our to to to cash This allows to flows while fundamental in activities as solid opportunities. plus being growth positioned one

result to million. now a Let's the execution balance in year of our come move of of the million our are outlook nine guidance between revenues as bottom the We XXXX the months of the solid to on end we follows. raising expect year our for $XXX to first XXXX $XXX the as for

expect $X.XX to at non-GAAP to and our approximate XX% the remain be of anticipate $XX now million. rate tax non-GAAP We shares We our to remain to outstanding range at our EPS in $X.XX.

summary to adjusted EBITDA a $XX million now $XXX $XXX of solid flows $XXX $XX million non-gap to is be now first range of the range CapEx for million. for nine within of million the And we to cash the are million finally $XXX to million with expected expected had year. In operating in performance year. Our months

to top our and and line long software Charter customer space evidenced arrangements clients while growing the strengthening market with largest term, to logo two cable by of new transitioning continuing share managed wins, our in relationships extensions long-term win are We our clients recent our services DISH. our with by contract

value strong. long-term our return what questions. we year are and and we We investing like to continue turn while we well-positioned so are clients to our accomplished addition that our in the the turn products In for this operator cash year shareholders. over to far I'll With our drive to to people, have finish

Operator

question open. Roderick will is line take our from Go from [Operator first ahead Stifel. Tom your Instructions] We

Matt VanVliet

just here I Matt VanVliet for to I kind the much process on you this of offer win something sort was of to this enter of know market afternoon little a thanks providers? a Ascendon. of the what how taking about there guess questions. you of a off like talk you is outside say my big new Arrow and something is bit in Tom addressable start longer-term for with would expansion to service Can with sort that can market

Liz Bauer

in. frankly plays the model things was And really going off significant moving am to. moving sit hits that components ecosystem quite digital solutions win to were beautifully was we that selling a really becoming to Bret Yes, investing on built there who they’re that. reinventing and I impressive billion get that’s their that start a talk revenue based from to Ascendon if are we’ve whole Matt he being recurring reinventing able subscription for to a and company $XX someone say could Arrow through significant because all would a They distributor management going win model. IoT transitioning from basically company a been Ascendon business themselves, pretty to transformation transaction which provider,

buy that that big someone sure there. component reinventing for lengthy more they going you’re and ecosystem as making Bret process if the the and look digital through in a they be go the to. monetization going forward us imagine win importantly to particular and like are from you is you the and affected a about process leaning themselves, transformation through getting pretty talk can So quite you frankly party and pretty all management

Bret Griess

we to CSPs put It is want helps open go IoT but value can to be can continue Ascendon was markets for and an in up but the share exciting that us we’ll that as to focus try way market it definitely tangential continue to win we that starts the and bring. our us

Liz Bauer

Could that at you hear all Matt.

Matt VanVliet

pipeline enabling sort the terms have of what success that of Ascendon maybe know Could past service. industry in sales think company you building of in the the media then and in their in still about to, some some talked terms give guess media but nontraditional maybe the within of nontraditional but the I talked some early of that you've streams on of of you past I had streaming sort an of still I sort our on update like top revenue sort to? looks U.K. that about broader having

Liz Bauer

is with that grow, you look you is the right we that ensuring what’s if that money growing you’re it to ecosystem started manage understand and monetization this think small make I at the really at IoT we’re pretty working and looking in important winners to way have you way in a big the platform.

is in potential our being media, the that or telco has So is and small while entertainment consumer them picking to means same other you're from to winners at to through to doing telecom outside at the for those cool new for the reach vertical seeing directly cable of the its things for to that basically content the of sector are opportunity East They’re really entertainment seeing opportunity packages some the right starting the with or whether customers them providers the and liberty Relative great the Middle what try - different iFlix we we're which us. that time complementary ways are to Netflix operators. and talk version content providers allow about. going

So there. pleased what we’re with seeing we’re

Matt VanVliet

next is How then that international revenue that out terms especially of that pillar metric this year How or growth the of look business bookings we recognizing. key here and the you as managed think a year overall to in we actual the mix? and year you then in being revenue that's progressing should growth that markets. been sort through about towards obviously And a whether services of date about looking talked at been

Randy Wiese

so Europe to strong in bookings the pretty pipeline our revenue think of for very things mentioned out on year continues year a this it services. year strong, and our continued managed got of There we time I I about and the different lot very business solid, with it's prospects is a multiple able very we’re for about itself we services services demand good in pipeline the than but of we've is to been are couple alone track the managed be globe teams is Bret of period likes of think that There a pursuing across a there probably comments regions. size who all having a to had and part the five lot we are zero and actually the across revenue Matt our revenue double are short ago fantastic well metrics meaningful our little the really started as in to We across managed talk closely different job that it's this of that a the we less done making years products. grow. strongest

Bret Griess

of long business. the we each keep it's recurring stabilize and we And in to terms mind them international and key help got that ones have been expanded they’re since that grow got over revenue to

Randy Wiese

MTN One relationships on we’re kind old and to the kind Bret the into once but things relationship, of just beauty I’ll the applications a only since that is really makes you that been our lost it to different those grow of initially and business expand nice quite services not very we've able sticky creates clients. and and ago. on years couple that application of us a lot as has Telstra for since and your of long across very so seeing of had we a recurring sizably And you of valuable point mainly more the your trouble they one services give demonstrate get able he to you're can touch some on that you just businesses client in skills perform the more success which managed

Operator

CJS line question our from Go Securities. is We'll Chris ahead, [Operator Instructions] your Moore with next take open.

Chris Moore

is than was Is little higher bit obviously for this bit, to and on few assume a little million next quarter to start just reasonable level QX QX? high forward R&D for or XX the that a that we Maybe that quarters QX. moving

Randy Wiese

No, R&D. talking up a more It's a started we're we’re making talk see say quarters is is run that that I’ll there probably surprise engine up I we've about more it the right. probably like products on think it's tick in we very uses feed million can again, last about couple opportunity look focus and as when investment. pretty huge which use rate to our wouldn't to use it Bret you me is that the in about beyond been but more the $XX growing consistent invest quarter and probably from all phrase year, it how so this we're if Chris, little looking XX% good a XX% bit the our because of maybe always it's to Ascendon can't having next talk he successes since to the I'd

so So you to to we’re lot into of us R&D expect that. having should Ascendon dollars with a continue success pump

Liz Bauer

really add I’ll the And that to up is a first going see you’ll especially investment mentioned us signing Chris you're just mode Xfinity couple Arrow, year but this see you engagements, that of for so when of you expect should you that expect should first our investing quarters names like that forward. the multiyear like year folks getting

Chris Moore

XXXX and at Ascendon say from Ascendon So a versus for if QX million looking year ago, related most $XX.X activities? is of million coming I'm delta that R&D $XX.X of

Randy Wiese

products that is in that few a share far lion other the increase. the of there's by Yes

Chris Moore

looks - talked terms historically X% minute, The a revenue. in Staying that be than like could potentially you I only really Arrow with from thing is know the less revenue significant. of Ascendon it standpoint agreement about a of for

XX% would few years needle Arrow Just know or - own a or take scope? XX sense its a idea a to few dollars trying it for the hundred move have just the be revenue to get agreements a to of you on by million could Arrow no I get to thousand the in maybe to as few

Randy Wiese

is subscription to a this is this a is not in have one that this mind Chris a think software you so is cloud I keep solution model model. Yes, thing that

kind streams and are business of size the clients the revenue of depends how So model. the the our and the of on successful revenue growth streams their in growth really

of regardless kind how get not client's of It’s that. well it's revenue a So model to chunk traditional hard gauge business of big license your progresses. we’ll software the

opportunity starting was for obviously is a early market us, So IoT this Arrow out very on great in area.

don't I know… So Liz

Liz Bauer

what’s people IoT think at like like XX with I data look by gathering they’re up. the unique need the is so some coming Arrow components then the to projected, manufacture especially projected they they of and the monetizing to but and someone billion have XXXX, on serve businesses they really all that successful connecting mean are I signing that you that. Arrow off world opportunities Yes of devices and what has because how customers get platform

say customer and important in there of sit inning game. still we ball this but the So first

Randy Wiese

Yes, to the it’s It’s business logos they then and and new the similar new getting our traditional your Ascendon grow. many bet business get is. as model want cloud you logos, of to can all you you on as clients

as your an well. enablement ecosystem monetization as platform so revenue business that's how we grow grows We’re

Chris Moore

Arrow with of that you're if upside? not it’s a fee share to that some this, successful getting flat on widely you’re So going - was

Randy Wiese

Absolutely.

Operator

are like time. Instructions] [Operator there other questions at no this Looks

Bret Griess

customers I for talking ongoing and and Well our appreciate in it. you everyone forward shareholders employees, to quarter. appreciate look support to We apologize our here. again next the the voice we thank being to for

Liz Bauer

bye. Bye, you. Thank

Randy Wiese

bye. Bye,

Operator

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

at You may time. disconnect any

CSG Systems International (CSGS) 1 Nov 172017 Q3 Earnings call transcript