CSGS - Earnings call transcript Q2 2019 | CSG Systems International, Inc.

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Operator

Good day, everyone, and welcome to the CSG System International Second Quarter 2019 Earnings Announcement. All participants are in a listen-only mode. 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 Ms. President, and Vice Relations Senior Bauer, Chief Investor Communication Officer. Liz ahead, ma'am. go Please

Liz Bauer

Thank for to thanks you, and Kelly, everyone joining us.

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

these statements best materially our actual could reflect subject to current to are While cause judgment, risks differ. results that they and uncertainties our

Please note release to or these call, our this and only that we light future forward-looking undertake events. statements any as revision in to reflect of publicly opinions of no new the or of forward-looking these date obligation statements revise

this recently noted our in be more to on most our website. release during discussion addition Relations press which XX-Q, the can today's call, In factors Investor our of found all section are of filed and a available XX-K as risk well factors comprehensive as

measures, we reviewed our discuss provide Also, operational used by with that in financial with financial team GAAP. conjunction our financial is in We greater and will decision-making. believe information to GAAP non-GAAP these financial in the information prepared with that not certain measures, transparency accordance investors when our management

you to the website, release information more earnings which non-GAAP to be regarding financial For today's also Form SEC furnished our refer use non-GAAP X-K. we on will reconciliation measures, and on tables our of

Rollie Johns, our Griess, are and on our Officer; today Officer. me With phone Executive Bret the Chief Financial Chief

to the call I'd that, now like With Bret. over to turn

Bret Griess

quite strong by for thank the frankly, and the today. months is XXXX. X and, the you our evidenced Liz, as us of second started joining quarter for you, first Thank all We results year

about grew per $X.XX. X.X%. share growth was to and grew X% again the adjusted $XXX once Organic For year-over-year million, to XX% quarter, revenues second non-GAAP earnings

We're strong Our operating that long-term the business. that stable these delivering results range higher margin at reinventing customers our to at way time of the of XX.X%, at end and came in do they our XX%. are target XX% a

our This of this, services to their quarter agile looking revenue revenue-generating be drive management do are solutions it whether customers capabilities. helping is classic to consolidating to introduce through flexible, onto how cloud-based clients we or example fewer a more and lower-cost platforms, utilizing new

Let me this. share examples some by mean what of I

This X.X Charter's onto quarter, off This and we approximately higher-quality the to management deliver customer a consistent of more solution of our conversion allows platform. customers million of third-party Charter revenue completed a experience. and

manage Charter's of reduces on. In vendors train that residential We of needs personnel to addition, this service technology the customers. and Charter approximately number its XX%

them customer day those customers. helping Our XX% goal serve the standardize the remaining experience right is one their to improving cost and overall by improve while their earn to to serve

truly Next, telco deploying signed next-generation a compelling contract Tier monetization year. their will this end-to-end services Scandinavian to digital customers to operator many This later X help with to solutions them for a new us be experience our launch of their digital a customers. deliver multi-year

relationships. great essence, solutions our with operator. providing engagements our our will lengthening in longer-term running are on behalf and solutions and driving be managed customers, services will strengthening is implementing, of be We agreement, configuring meaning This we our a international we of in a this how example

Ascendon and digital introduced Solutions include cloud-based monetization our be Orchestration our solution. will deployed recently Journey that solution

voice any in It with way real-time channel, customers' be portfolio. Journey text, meaningful our important, customer that communications a with solution most is across personalized, or that allows companies centralized, preferred e-mail, and to whether provides decision Our engage a others. engine of and, customers the Orchestration making management them part channel relevant their

solutions new a several investment And as finally, research of development. we our result in steady continued quarter, and introduced this

which The our just Orchestration discussed. solution, I first Journey is

we applied of to our the our approach cloud. industry-leading and availability mediation solution announced platform our cloud-first have Next, in the

With world, and that anticipate the increase will number connected deployments massive the of be sensors XG current we in of there around devices. upcoming the and

service However, predict this as this applications it will the to on connectivity. providers be leverage our difficult providers mediation of new able will to platform, scale service happens. it for demand that growth to number With be cloud-based support will

way platform for costs In for unpredictable current the XXX method billion traditional tie day their peaks. a provide events up scale to fact, to operators demand investing to could our versus per to account to of upfront cost-effective

using are customers that platforms. We have our cloud-based mediation several

next recently our suite. which taken cloud-first global Service just our Workforce approach with award-winning our we clients Next, evolution Management time. Express Field in our scalability provide we've and to real security again the introduced of in This data is availability, solution

experience of solutions quick in first that is Our return product ecosystem increase enables and new this become who grows. and more investment customer times productivity. a technicians, that believe person suite many that This due one even are the operations. to to integrated those optimizes substantial with, field very a on to is proactive will important provide the the as a more easy engages We providers' demonstrate worker customer service

and a how engage just of There a -- customers. a brands life some and trusted are clients monetize, retain that our over point XX doing acquire, partner just of Being are their consumer leading means touch helping the each of solutions companies been world's that help you few to cycle. we years. few must the are in optimize for these continually the examples deliver that We've customer invest, innovate

to the lengthen I their our earning of to our strengthen forward existing customers and we continuing As more and on where focused relationships remainder are. like We're with I business. year, of the look

customers' as in our are We solutions. to biggest people result well help our our positioned of investments and a challenges our business

intentional allows acquisitions us our have This the plan, in and acquisitions. to results we revenue we approach. current right Our to and delivering and formula the perform diversify mix to future continue believe a logical from anticipated for

platforms cost same right we to technology growth that the to but are right are revenue to which while not is growth organic have And that delivering structure last our least, ensure price on differentiator, the true point. ensuring our at promises is time we our above competitive we We evolve continue to rates. and at that the consistently people, delivering deliver industry the

thanks strategy we In strategy. as and we in summary, on the to of we're key to we executing fortunate the are that's several that of business. a are the characteristics our working, seeing position benefits look future, And

to business First, value. we enviable shareholder model with have fundamentals an well us that drive position strong

expertise payment industries. digital and customer have we the unrivaled in and Second, domain revenue experience, management monetization

largest work the services providers companies some in a with and establishing most transformation this of journey. as we're digital innovative world, the undertaking for we trusted partner and Third, ourselves

tremendous a greatness. technology balance solid and who verticals, cash creating a our more sheet, our return most proven which and for still committed shareholders. flexibility us and company the of helping reputation have clients solid really us The achieve flows we have capital engine. to we solutions growth generate and globe talented strength employees sustainable And are operating our to business grow our across well. important, these strong to diversify and have solutions diversified the gives dedicated we and Fourth, pursue new and Fifth, to allow a

turn second Rollie financial that, With it to over to our review performance I'll quarter. for the

Rollie Johns

for the call to quarter second XXXX. remainder outlook the to discuss everyone, for welcome, financial as results and today our our as well of the Bret, Thanks,

pleased are first start We of as we solid initiatives. on with year deliver the to the half strategic our our

X revenues, second Non-GAAP million managed to growth service from So our adjusted XXXX. of X.X% driven the Forte, arrangements; of key the revenues solutions This we our which exclude in million, year. and October financial $XXX of compared were we organic quarter delivered $XXX of about results. of second, let's first, second the items: increase by for up walk reflective through quarter. We cloud which acquired mostly continued is transaction fees, last early reported X% in growth contribution

Moving on, or non-GAAP XX.X% revenues. quarter was second million adjusted operating non-GAAP of our income $XX

results our clients. our deliver the alignment costs and people, invest reflect in consistency revenues to and in and revenue this the quarter-over-quarter of products those to operating continue quarter Our

Next, our was for or EBITDA non-GAAP adjusted of non-GAAP second adjusted million the quarter revenues. $XX XX%

quarter current to the due for was up $X.XX, mainly over strong year EPS operating last non-GAAP performance. our quarter Our XX%

non-GAAP rate XX%. was tax As expected, our

the moving operations and from balance We end. before. quarter We've Cash the shortly the short-term $XXX of cash and flow by and cash flow was ended million million of to of So million for payment quarter. cash received quarter investments. sheet. delayed that on We flow $X with this this of client impacted the for free quarter generated after seen significant $XX a was timing

that flow year. second in in full out the significant why way. in impacted is when the Then we the year, generated cash we full XXXX, example, flow first were for over half very working XXXX. same our the much confident the year guidance of we remain of half in For capital cash This our the leveled

we in in addition, buybacks share $X reflects approximately paid rate million of the per-share In quarter, for the approximately X% which And our finally, for increase last dividends quarter. over totaled an year. million dividend $X

those two quarters, and revenues $XXX a $XXX XXXX to range the at at revenue million on moving above $XXX we So of our the said, guidance to least adjusted the at, are ranges. the year, of second strong the million our and $XXX to we guidance. half non-GAAP considering to million, and for expect outlook sequential between performance year-to-date million. ending continue midpoint After of we That our reaffirming anticipate be year

the to adjusted revenue our traditional as well reflects reminder, contributions XXXX growth expected increase business our As acquisitions. the X% from as incremental revenue a in in XXXX X% over

guidance performance of previously outlook quarters Therefore, our X of remainder for the our follows. consistency provided in are The year. our we as reaffirming the confidence in first our the strengthens

of range. and path the margin operating to of higher XX.X% a adjusted clear to end that non-GAAP expect We XX% see

X% also $XXX to million over X% of We XXXX. adjusted EBITDA million, increase expect $XXX a to

XXXX. $X.XX In year non-GAAP to the XX% million. continued the addition, land to X% our This range we a anticipated XXXX rate $X.XX, of expect tax shares X% EPS for repurchases on under in over approximately a and XX is of share buyback outstanding of non-GAAP our increase based with to expectation program XXXX

flow of to And $XXX annual year, despite our short-term million range first with the to range we capital million an cash million. a expect half finally, operating $XX the $XXX spend of of in million of $XX capital to working continue headwinds

revenue to continue inorganic execute with growth. bottom solid and we organic well driving summary, performance In line

with quarter's long-term pleased on our value. to are returning to continue operating deliver long-term additional and to business cash shareholders this objectives us results, executing our allowing We

I'll the turn operator that, questions. With it for over to

Operator

Roderick instructions] [Operator Stifel. first today from hear with Tom We'll

Matt Van Vliet

Matt on for Vliet Van Tom.

So quarter. obviously, another solid very

from announcements about, to continues is play that that competitors just if out, maybe on the the XXX,XXX light mobile wondered how the of from some subs in touch moving recent conversation new those you talked announcement offerings of some providers? what you traditional your there Just Charter over, and ongoing around of some could pay-TV

Bret Griess

dedicated was that Sure, the the XX they missing that conversion being where subs team incredibly over one the opportunistic the that Matt. the in fact question, along looking once sticking of conversions, were Appreciate Yes. million pulled X.X proud company they losing to industry way. Thanks. a platform over without you of without consolidate really those to only we're today. has It onto and for team our that I'm had a on the years. market date, on moving anything again, the consolidated the

well by we've the really that an that for Charter and had fact as other as the positions we it's said that kiosks longer-term was including some at of we the on front. we dialogue it believe And happened effort some a in of around outstanding that it items that wins the notes, us formal So, go, team.

referenced, position. great-price-point these that have We're out that far good work consolidations a many activities continue environment. different of continue of deliver different day some to very and the of ones going in things come Charter we to their consistent, the very when customers future, create well momentum. some win we that are We'll we'll in As potential going competitives large to with and as within that and a be on. the up, view day well to that to way. us all And a serve things activities the say believe on, displacing We these just we positioned clients for opportunistic are will of in our that as high-quality, continue other positive this lot them, doing mobile positions

Matt Van Vliet

we've time MTN with to think deliver and selected in terms were go over contract telco seen areas And maybe in total that, with like like and said roll of services, just you or Scandinavian then length value that you out do the that that you you by guys where terms contract overall of other what looks Telstra? curious continuing could you at to like

Bret Griess

whole a contract this the platform. continue disclosing But can agreement, we're share I in execute more multi-year point. help on the the you've Yes. time. with lot we over through to But the services, managed past, where it Ascendon as and a areas a and we're value, is to total TCV, one, the those where is as to really solve I then We're always, and in we and plan seen challenges, behalf on not broad started mentioned, also, value our doing are that. And what get or we helping at get that with to it's add them

by multi-function executing asked and and for to us We like multi-year platform, a planning, problems, called area we if that we're as in model a relationship. very more positions next-generation in The as had XXXX, we when to having because multi-tenant, view to you just and marketplace taking way years well we've can DISH a our value do it been and the and startup is far them help with there expanding on drive same and Scandinavia in small were we beyond solutions. with it essence, it's go Comcast. that in developing, get years back solve international So it to believe our this XXXX when

Matt Van Vliet

the that what cross-sell to you in Forte And the the update any and with if wins of of had in then key quarter? comment any with terms curious some business just you or lastly, opportunities is progress had on if care

Bret Griess

Yes.

not. from and going they're the of mentioned in notes, the positive things that in to executing that and of bringing to the wins we working the quarter, there to just call see are lot been the There the have week plan. sales X quarters there's actually As pipeline, to continuing we things And No positive that execute good have going, this we're specific continue team on this a some and with team. that plan. reading last we're some front. been really momentum still on But really names to

positive our on very still on we're in going So space. what's Forte payments with

Operator

We'll next Burns hear Greg & Sidoti Company. from with

Greg Burns

I you're demand on if change if or with your could platform you're your was or the of bit maybe us of customers color just just terms operators types of give conversations interest Ascendon, any even wondering in you a or legacy and having over-the-tops. little kind around that pipeline seeing cable of deploying maybe

outlook demand the for like platform? what's that Just look

Bret Griess

Yes. question, It's a good Greg.

relevant that continue have and additional are so so has platform a customers current We next-generation one and to marketplace. to in be the solid important is Having that's It very that conversations one works. our customers and with strategic.

rolled we year, on We time there, out. today very one in in the like is going Ascendon we customers We this top of but lines deployed the which it couple of just for Scandinavian wins a us. we've have that new things around exciting a had have our three businesses different discussions then had

a So replacement happened the direct that things it's historically. have of some not for

platform, ACP So workforce digital management we monetization our net and in new platform, our can some models. it of provides just -- the meaning management revenue

So important. the is reality incredibly of each our is products

how Deloitte, of us lines. it's the others leading-edge, base keeps those a discussions by base with recognized a and very customer been and at impressive because high-functioning broader customer in and And Ascendon platform is. current the as table important on by it IDC

our We've Customers the the a look around continue with and we're portfolio. positive it, products Comcast, like got within of optimize to those getting continuing deployed. we'll all world, with it of to So sales. lot traction University

Rollie Johns

growth. double-digit reported we And

Bret Griess

And double-digit on outstanding. Yes. it been has growth the

So yes.

Greg Burns

share maybe kind a double-digit of revenue ballpark the is base you on a what of Can growth?

Rollie Johns

are Ascendon speak Rollie. base. of those don't right don't our XX% less or revenue revenues disclose -- When information. We someday We financial -- break publicly to we'll it’s results, becomes this I'd than now, speak is probably say out our material Ascendon. overall that But

Greg Burns

Ascendon that market? more addressable do when your acquire or management me and subscription have billing go or either to is about expand build so? Or to And maybe think to downmarket maybe scale solutions, organically Okay. you'd basic something down can

Bret Griess

A lot of go know contemplating to to and microservices of technology of start-up feature that. business build product. When into that that because models. scale there's that opportunity It's go-to-market. of some down just in not We It's versus We've been solution. are We the at buy. functionality more it capabilities the bear the the there. downmarket look those from a lot the the subscription entrepreneurial billing, the AWS the come has in incredible you the a

we're going you're But solutions competitors continuing So cycle. make at the sure apply ocean because places the make different right value we one you We'll into money working the just to to money that our that is the where in win into, drive daily the now for and see that bloody to verticals go can question contemplate to make some drive look and look asking and to all Greg, and continue we that prioritize want the resources business. we at try best where of places our to shareholders. are in of are actually that that we to to have

Operator

We'll with next Silver from hear B. Instructions] Zack [Operator Riley.

Zack Silver

another business do relationship on have you and evolving has call. this the opportunity DISH been a But how if asked. the time? with into Apologies see jumping potentially them over you scale, I'm bigger getting with with from over DISH already, wireless

Bret Griess

you're XX, the last with activities We We for great call a see DISH. think with asking And over with going are have on relationships of of that on opportunity, player of the to got resources going the done marketplace lot growth, net that we've it and bear a being it. you residential, least XX the lot assets on the years. From and to We've Zack. when as as bring a at brings thanks DISH great DISH space work or a has to that the and DISH all that. excitement and now that in Sprint T-Mobile, the consider new accelerating to

years, that happening. and are to bring excited We'll are be help continue we about that to DISH, discussions we've that it's that and change the that, We and the prepared that the in down And and want the So win they to compete entire solutions the as at and provide. they path, discussion. to the roll just marketplace market will team them to bringing opportunity Charlie to continuing we're the that over progress Ergen seen will it's to. believe out

we'll problems. those business and continue So them relationship discussions this got that helping and multi-decade solve to we've

Operator

[Operator other for this to closing to are And questions all you back Instructions] I'd at things like there no time. turn remarks.

Bret Griess

you for being thank here. Well,

progress solve the who's so everyone working that's and important momentum being our next-generation current good everyone our to to continue good employees platforms, have build and and with there done in about to to platforms to are investments importantly, the with call it's Street us working in and business and we're hard drumbeat our that our customers drive to For the to industry on always to this solutions. be made for hyper-competitive most that in the to able today, we've solve and share Wall the out

Have to you CSG is, who's a thank day. for company to and So being here. the thanks great helping everyone make great it

Operator

Thank you all us. conclude does conference. joining today's that for Again,

CSG Systems International (CSGS) 10 Aug 192019 Q2 Earnings call transcript