CSGS - Earnings call transcript Q1 2018 | CSG Systems International, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the CSG Systems International First Quarter 2018 Earnings Announcement. All participants are in listen only, a question and answer session will follow today's presentation and instructions will be provided at that time. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Liz Bauer. ahead. go Please

Liz Bauer

needs our and discussion Stephanie, These everyone our goals. joining integrate statements performance; expected for successfully our products, manage include, our strategic, Thank achieve their acquired contain thanks a Today's regarding to, limited will businesses are statements. operating ability and clients' financial services number ability us. results; but you, not financial our to to through meet projected to and of to will and and in forward-looking order

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

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

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

Bret Griess

first Liz, and report you, earnings. all you us. pleased quarter revenues and joining I'm to for record non-GAAP thank Thank delivered we that

we $XX to flows the to and we per X% Overall, by cash had operations $XX of quarter, our finally, generated cash share solid detail million, first grew For year. the non-GAAP review grew and revenues of earnings to by we XX% from call. $X.XX. our our flow And performance our will free million in Randy million. later start a financial in more $XXX

outlined revenue and focusing and smart go-to-market industry at shareholder deeper our include, our As for creating SaaS-based our things delivering exceptional enable investing we relentlessly rate, growth initiatives cloud shareholders. the to experience IoT long-term and customers' platforms those They good and four aimed an happen strategies operations I getting or finally, value. power above broader second, started employees, proven enter things, like our growth with cities; we customers in solutions, revenue third, driving our us this and at our and customers. and year, markets, our our key first, When for in new our on to on execute

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

important, business. strong health a each common relationships Also recurring the platforms built talent, to healthy, the a Ink, transportation, have serve we announce now driving complementary delivering state-of-the-art of operations upon business and of acquisition business allows communications. leading the a vertical provider and segments. operational And together we First, security, multichannel end and communications the we our pleased markets care, This business services strengthened to home scale solution with culture. technology customer customer that diversify to government us at I'm bring our Business include our very history we profitable with utilities leverage of most models, of well-run, management February, combination and

value. delivering marketplace. in our successful with customers making happy competitive family, Ink We're with will in financials economics this our Business for our well to Simply obsessed combination to the Randy strengthening employees you advantage provides attractive of colleagues and shareholders. the walk as CSG outlook and through put, CSG are welcome as and financial and the the teams Our year. value impact are for create our will long-term customers, that this excited the we about deal quarter to the

disciplined Going capital forward, growth our driving delivered we will smart for approach with and profitable including continue allocation, acquisitions. our

sufficient shareholders. cash flows, being We It also a to business, that model be. return in cash place business positioned good a have with to is resources invest to strategically providing solid strong while well generates us our to

in continue to result momentum, a digital cloud-based next-generation as Next our create platform. we investments solid Ascendon, of our

This quarter, around the signature of roster. world racing provider we competitions added client Formula our motor premier to One, the

Ascendon feature opportunities will over will One FX X digital of subscribers. driver One's camera content transformation enable video their million with unique, experience interviews, FX viewing, expand Formula creating and TV, TV revenue by introduction live over-the-top subscription allows viewership fan more. platform. customer archived Formula their Formula One for their races, video to This and a

its One partner and engine Canada's for another expanded Eastlink of XXXX. digital long providers a as Eastlink, and to entertainment and with transform we enable for and offerings Ascendon's This will targeted exclusive their to promotions. one they valued through offerings commerce expand be Also digital video past and standing enhance Formula their digitally business. we're most-successful XX proud quarter, customer-focused service our communications extended partnership years

have means support believe In Overall, as this Canada. as executions wireless operating to legacy evolving businesses important solution contemplate will companies to service very look to I providers business, quad-play while also us our Ascendon their they the active addition, with in digital relationships. throughout digital their they pipeline partner and subscribers, as new seeing deploy true a we're models Eastlink their optimize our use as transformation approach a their to customer thrive world. what established that and our

their to a them challenges managed our continued a we next-generation service engagements. pleased South Rain, helping deeper broader mobile network and with Africa. managed successful be through operations agreement solve Finally, business to clients new international operator in announce services our by getting in within We're

expertise requirements partnership where market, alternatives with approach, and that to mobile to monetization advanced recurring a to offer leverage its the our subscribers. Rain will large-scale our in longer-term, offering, for consumers a cost-effective fast service with Our result fixed scalability and to its pleased rely reliable managed solutions network, simple, clients. and with Rain's data our relationships providing over digital and on aimed running of reliability market connectivity Internet our will time first at and needed CSG's solutions trusted progress in operations fast activation LTE and support agile growing We're to valued launch services in create we domain their - time

like So position. as quite would doing what simply, I we look back on the we We first really said do. quarter, our we're

some an as markets. broadband most have this us with strong And We with that work in a in and enviable shareholder innovative the service value. We world. journey. expertise largest position to partner well model domain trusted transformation and digital video fundamentals we're communications We've establishing the business ourselves of drive undertaking unrivaled with the providers companies

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

globe, company XXXX. clients dedicated outlook clients repurchases. we who flows our most And still investing are We have sheet, important, We it sound gives which our our through and and to flexibility the employees company. our our in solid return our a full for solutions, balance turn and helping financially generate results tremendous greatness. I'll Randy With for the committed across and strong talented year over capital quarter and cash have share to to shareholders people, our for us our the our a achieve to first review have that, and dividend

Randy Wiese

you our strategic remainder you, Welcome on we're with XXXX. Thank to year outlook for for and the as making today initiatives. the the of We're to Bret. our pleased as on results to solid all progress financial call quarter well first our the our start of the discuss

X% from driven acquisition Bret earlier at a Business is balance our growth I'd period serve. in of consistent growth more to the industries results Now year. first combination record in performance the with an Ink, last by to of as This walk or grow goal the million, through X%, reported the mentioned increase of from of the X% detail. organic comments. solid We his coming same with above quarter you This revenues growth of $XXX of is like our financial we

growth Let revenue attributed me X% provide some to additional areas. two The can color on organic be first quarter our revenues. primarily

continued we offerings. experience to our into and managed our services clients First, success software via in long-term transitioning services relationships

the Second, which year. have full year full quarter we customer $X from realized revenue completed last conversions that benefit million the we Comcast the this is first in

provide X revenues one more million In for in I of of addition, my $X growth of remaining percentage around added our accounted the Business for acquisition Ink this quarter. this ownership will comments. of current later quarter, points details which month the

drive combination inorganic to through should future You of continue expect sources. our business to growth both and us organic a

to Moving results on of operations.

quarter non-GAAP income first with line which margin a $XX of Our operating is million expectations. our in with XX.X%, was

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

of quarter the mainly resulting increase is non-GAAP XX% current compared enacted quarter rate driven from the as This $X.XX year's for reform. effective current EPS of year, tax tax recently U.S. for was XX%. last non-GAAP to last Our an to XX% income compared $X.XX, lower by increase the our

quarter. existing million also of quarter, over cash into paid and dividend the the at of of decrease sequential X improve dividend quarter our The million by free the this during with the from ended credit to excellent the $X agreement acquisition. reflects is of increase end attributed compared term our and our $XX Also from an this we quarter. share X% cash the our opportunity fourth to of rate short-term flow while on million sheet. to per balance quarter Moving economics which cash agreement. saw Business million We for an $XX the generated in We We XXXX. refinanced $XXX of over to year. last years flow operations Ink We the - in extending million as mainly $XXX investments

approximately in the quarter. addition, share buybacks In $X million totaled

in first historical Business I million a details price with with provider Moving the of $XX a Business Ink. some multichannel cash. get communications. Ink Xx of acquisition on, February I provide background little purchase before or is business acquisition into of end want our a you of completed on at our revenues over a this on guidance, We to

mentioned, Bret common CSG operations, profitable revenues Business long-term built have client relationships. and very As upon models with strong business Ink recurring and

further on and continued combined the us well-run Additionally, technology business customer. value and combining operations our as continue drive leverage increase long-term businesses and shareholder we scale to of talent our our our to focus through our platforms. believe will We operational allows healthy, profitable assets

include As to months our full guidance a acquired of the result, year updating we XX operations. are

Now the numbers. on to

million $XXX of guidance increased $XXX represents Our is last growth to the to million revenue a range over $XX XX% year. XXXX to million, by which new X%

Next non-GAAP we Ink about Business be XXXX expect EPS. to our accretive to $X.XX

which now As our EPS range last growth $X.XX, to a XX% year. result, to is $X.XX XXXX our up brings now XX% when non-GAAP compared to to

our approximately XX We our anticipate be continue approximately XX%, million XXXX year. shares tax outstanding be to rate and to the non-GAAP shares to for

are adjusted In to by increasing million addition, million range the $XXX for million. $XXX EBITDA non-GAAP expected to we $X

$XXX Finally, to to approximately million flows summary, we we the year. increasing are CapEx $XX of higher plan. million, according our executing for range are to $XXX with our operating In cash of million

We team to will to excited customers, our long-term create our for about Ink are colleagues the and acquisition value pleased employees this our shareholders. are Business welcome and

in our upon execute cash it And business invest our continuing people, questions. drive return value. that, to shareholders. to to for our operator clients over to With we continue products business long-term to long-term I'll objectives. And turn the and are We our our

Operator

And question [Operator Moore Instructions] first you. our from with Securities. take Thank CJS we'll Chris

Chris Moore

taking how Ink of Hey, of complementary? together. guys. a little a maybe fit the models - terms Thanks bit with be two selling for start my further kind how crossover we just are business could the of kind and may of Are Yes, there in Just questions. talk from Business there is kind perspective?

Bret Griess

very lines of out services, Appreciate Ink, the on call communications, you has lines the Business the it. and that CCM, where customer a communications along workforce can Any really we you. a the for thank the as similar along mail, leverage as opportunities far or we're touching it things, question. multichannel we management print you're time combined business Chris, as and management. areas as seeing great model customers. our Texas, of around set We being the view the digital of

the of The us great a since company. family the and working model the it. saw it's We have carrying around teams go-to-market get got combined together everybody on traditional customers built And sense we the to for as that on direct do our it, is are what by in know we a are of mean close make synergies acquisition its segments. They it out. strategy can things match of into can on and So that couple we One what along their where businesses that into economics things. executing with operated business they other been pull-through smaller and and do We I a also culture areas. is for board a put on private in doing. our were larger doing. to percentage with customers that And building the is

things of we and around So can it diversity puts that those of relationship health of management. greater things the worlds with some us the into leverage care other some customer

that can it we culture other. the great and drive just each ways we with together see economics great beyond tying So seriously market together,

Chris Moore

Roughly, have? Business you. kind margins what gross of Ink Got does

Randy Wiese

business similar CSG, would margins. Chris, it to so have you to very pretty a it's comparable expect

Chris Moore

- And XX $XX was a is months, right? million, that you. Got roughly there on revenue so is trailing

Liz Bauer

an basis, On yes. annual

Randy Wiese

correct. On an annual be Yes. that basis, will

Chris Moore

you Okay. talk One. doing Can through you to Got One for you conversation Formula kind FX skip we the just how of Can that kind of walk a exactly Can specifically a you're And digital get interesting. you TV bit? exactly Formula The commerce really Got about Ascendon - here? you. engine what took for positioned is outline maybe have as One? on long you. Formula and that just when just

Bret Griess

go ensuring to specific these are majority their They to not a at deals they're DBS's couple our as years of than our frame given been take But and team large Ascendon months to time sales that any that world, as and look with have as the on customer, car want racing. XX guess really then fit that concept contemplated be where the the Yes. dates and - to to the we The back times. problems their We How right digital transformation used or with just they into to around X the to may that behalf. would go has be like ensure is this and digital needs considered months Like further of of world. I'd shorter right Formula through. But much the business rest things having one I revenues. understanding usually transformation, average, top take over that. One activities they're we're for what deal how of get solutions solving recurring we're on them.

do right fast monetization, so the doing that, doing interviews lot interviews helping viewing, low-cost with around market, a drivers, different And video. them crews, mentioned, you in of the we're And management, a the what SaaS without all as solution, how strategy. is archived that to activities, time fits our long-term I cloud-based activity operation camera driver then we're with with they're that around into

Chris Moore

Ink kind Back that. appreciate to I non-organic of it. Got growth. the Business

of $XX fit in for You Is looking what - potentially million $XXX recurring pretty gross acquisitions. for good with good doing? million of at? a to that Is this looking revenues, kind additional you're kind model you're that at recurring things good the model about of what types pretty a talked margins you're revenue,

Randy Wiese

us. day acquisition If such we'll we it's take every day long those for because find a all solid those, can

on capital else's we pride And that lightly. good anybody truly before, and said using people. we we don't as ourselves being capital However, do first take or foremost believe we business your

just we out making in sake a actually to it's the and So the perspective companies. buying, of hard really differentiate XX last a be working things find that business. And over be we perspective, thoughtful to are going truly from years buying X We financial them. a to sure deliberate, reviewed sound work hard strategy not of for and one to years and from are but X.X they

in to on can different that also our pipeline way shareholders. continue forward. And as have we things for so go deliver to smart a we return multiple deploy investment We we the capital at, our good in solve for look that customers a

Chris Moore

kind EBITDA standpoint. was from just Got you. of multiple question, price What Business the purchase Last Ink? on a

Liz Bauer

From EBITDA.

Randy Wiese

one X EBITDA side. X Little times to about the X over X Probably times to revenue, times. on

Chris Moore

jump All Thank back I'll in right, guys. you. line.

Randy Wiese

Chris. Thanks,

Operator

[Operator go Stifel. Instructions] with We'll take Roderick from Tom Please question next our ahead.

Parker Lane

I Lane taking from wireless? have broadly Tom. the capitalized standpoint? And actually in market hoping an more impact question. if is of how provide you'd Hi. It's It's landscape. merger aligning will pay-TV go-to-market Parker conversions on the broadband emerging my itself for was and for the upcoming on expect - a evolving CSG and you Thanks Sprint can of the assessment T-Mobile's

Bret Griess

into that go They're and deny in used is are into in telco. And longer to there the forward. these as you're the which the is the now services, be our lines multiple smearing the the mobile, or attempted, in big we attempted in whenever If does that They're pull third very that for this our happening stuff think through always off. on all world lines it's space. consolidation where lines no starting the is in now it together mobile question, Parker. as they're happens. area It one news see like it's that news Thanks the industry time but this the being I of We'll time government well big something things. first It's way Thanks to to the the get cable the area, it's what world be telco competition it's work are along in video, as used who these in is says is we both for crossover. call. no Companies the seem about the talking like called positioned cable. can we to

activities have pressured they're to to models that where the So work. they consolidation, find be to continuing through that folks business continuing have and are

out utilizing companies more with it those their with and they compete and video of lines. levels Each of some out nothing with So of networks, a whom they great that - business have the different you we there Verizon Sprint do put those along Both they to they more as money that's nothing referenced, marketing view of that than they on are as companies are off wireless providers T-Mobile good as there. compete their and backbone expense also. network make AT&T

looking be this As would Sprint in of satisfy them if and together, come T-Mobile with help we always that. somebody we course, to can space

see as day and in it impacting we day us, As it out. far

to choosing on for mobile go-to-market customers we mentioned As compete and in We'll we activities and to the for try try call, monetizing, Eastlink do that help best to business continue platform solve their customers. to the in Ascendon and [ph] out, challenges fundizing our to all our find we their words our that listen way day complex the other go. day personalizing to

Parker Lane

the CSG Business to And working their you've it. sell you completed. broader what crossover just of solutions Got opportunities into back see base? the Thanks. integration Magnify the into to a your strategy go-to-market guess their the Understanding that you of platform? alignment solution Ink. the more that Can I since broadly customer And there? been existing step was on about your customer talk acquisition

Bret Griess

leverage see great you could the our really efficiencies our sell-through are The As pull-through quickly opportunities we there, with and forward in so activities together. excitement to cultures the we just to we in you that and happening. working are that sync. that that technology it combine scale, go activities And And as went meetings get it. around mentioned with see leverage

They how or we for people grow we important. early business customers. also are to play. problems of have hugely together model the very the contracts game the revenue, think too trying recurring diligently say customers. quickly fit - to solve it's to of do that of But just long-term And it's Y teams our on we have working is idea going have identical We is a X, So the Z. And meritocracy in healthy model. revenues get that the with to the important all synergies the know because our cultural see we in to

excited the thing. seriously about And do we as we that said, take very incredibly So of acquisition. capital we're the right to allocation

Parker Lane

Congrats it, quarter. Got on the

Bret Griess

Thanks.

Liz Bauer

Thanks.

Operator

there And there further the lines. on no the line. questions Instructions] [Operator are on no And further are questions phone

Bret Griess

see questions an he everything Well, who And that a on brings incredible Randy be this with incredible very our feel CFO team anybody's bring incredible and didn't support after are no make doing for ever to they to quarter. brought it But things end. would of call, for consecutive CSG helping as and we'll and and it We both a XX waste a great for the today time customers as happen. has our if remiss again, do thank and the further helping Thank we future we time. to what us don't I blessed us you of make to excited for for us. about CSG. quarters Have the We all the Randy, company.

CSG Systems International (CSGS) 2 May 182018 Q1 Earnings call transcript