CSGS - Earnings call transcript Q3 2020 | CSG Systems International, Inc.

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Operator

Good day and welcome to the CSG Systems International Third Quarter 2020 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 would 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

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

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

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

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

Bret Griess

Thank we ones joining hoping at for all safe you, family, loved and and today. saying are that without that well. Liz, and It you, friends thank are goes your you CSG us

environment, to diligent when It headsets. homes use and out overcome ideation even consistent focused on have on do. to the and workshops, as of time social we issues has pandemic have of of and health agents' sessions. we would good we focused virtual energy supply collaborate as and first and that much it to helping whether to solving our don't finding these to the our though they While by And one in be headsets connect that work-from-home we through a also in customer sell moved employees concepts continue to impacts another seen proofs been service we our ways injustices, come can been has and rally all be employees shortages, that and creative and the of problem our to or improve. grow sending but clients safety around negative continue how includes are putting the we elaborate To customers our well new

on a Finally, responsible is and diversity more the inclusive person officer, one not first Xnd. we're substantial this towards inclusion creating alone. environment steps more creating December hiring with our for taking begins of diverse environment Obviously and who

results CSG last of going visibility. believe in create pandemic, from and with more predictable not provides the this financial a dedicated many believe so resilient I'd forward. key few call a I quarter, However, to will we highlights. business is do the like we that that but again, are out impact just immune detail, differentiated what better actions compared like we will a with sustainable these expertise, We company. and lots to shared focus of while can review this a fortunate Rollie And

Our quarter. earnings $X.XX. were was share last X% Non-GAAP adjusted million, third from per up revenue quarter $XXX

as Our of and the our about line far well continue flow million the the range. generated good in operating for cash the three meet our months in year year. free out operating with in flow cash our short, and in our guidance first strong we flow as feel continue with first the million free cash for is the margin nine quarters the thus being to XXXX in we metrics ability be adjusted set to operating May And target of In non-GAAP our of year. XX.X% to cash increase very in long-term performance flow expectations $XXX financial $XX remainder

let some the now with highlights me business. So parts various share the from you of

clients American to business. cable continue of wireless to newly acquired for we traffic strength enabled First, are serviced network. Recently, one satellite being and cable subscribers, see satellite on our large our in raise which North the another its and we

as kiosk able over some consumers through channels. October, add demonstrate exponentially. towards In we being their life, entertainment quickly of the consumption service aspects activity upgrade in digital or top OTT with solutions. growing to in different of $X a billion pay, addition, also in that with We've want host our surpassed customers move through streaming all volumes seen our These positive and digital payments customers over processed to be

MBC seen its Middle in Broadcasting example, almost one long-time the sevenfold a or our Group, Ascendon past increase year. East in clients just has subscribers For of

locations again holiday season. the to using service our time In addition, solution in gifting streaming several media the for and just global a mass of is international in major year enable its conglomerate entertainment this also Ascendon

pipeline that been company. global sales sales and opportunities is the our are and we one ever that quarter, What sales we slowdown Second, has the say see the in cycle positive leads the implementations of to as our opportunities opportunities would line spite markets. pipeline, our in. sized service whether of the these Net-net, dollars signs I've a our tier of stages stronger revenue we for me the size in associated fact In cycles our wireless advanced more that to stage have continue be in with at providers we the discussions in wireline pandemic. two slight the result tier and of some it the than pipeline since activities a that absolute in discussed been as that with and like larger average are world around chances. Last

a air. lengthen Inmarsat managed signed is mobile sea global to services continue we operating provide past operational a and Inmarsat our maritime Third, several and deeply enterprise. core model. relationships billing, leader rating, went and mediation government, and other satellite This strengthen and satellite This cloud support in CSG embed verticals: deal to Inmarsat's quarter, several multi-year and applications their a across providing aviation, on including these upgrade to all business land, of and migrate party four Inmarsat. to customers, with communications third

ways Next, would or as world communicate relevant to personalized in look that more customers channel email, channels. their their choice text, for companies the with whether to around of communications be And important voice, continue and other through ways.

reference a This Chase. deal engagement to customer support Chase expected with yet collection with a the help to COVID-XX. able For to again improved of quarter, the area our to experience. collection customer impacts JPMorgan team example, past will aimed and we customers solution, give interline of expanded be With growth Chase footprint our cross our to allowing due collections in accounts, them streamlined consolidated, financial

pleased with lower points number customer the expand presence addition, our cost collection of our with the to overall improve our touch to We rates, organization. efforts In were solution land the within them of this continued service will customer. help and and that

providers stabilized, the have happy a to yet to Finally, I'm which for businesses. in education we the not processing All recovered that we're small global volumes since we all, there that serve, is to fully the we that retail, particular and the the remind the progress have but to our levels solutions have from in payment services, agencies, payments many experienced in were with have. It making so includes severe pleased in medium other pandemic. year decline which everyone early been Thanks not important governmental we markets obstacles. have that

across well metrics. set executing broad are We of a

new adding wireless diverse to a to of set ranging to from from retail clients are technology. healthcare logos We

our our are diversifying new from revenue the growing We market. from revenue cable the time the at verticals same while

We earning and our strengthening lengthening business and more of by customers are widening with move our existing business. their relationships

And In delivering our initiatives very are we last but stay in structure times. evolving while even to to distributing we line in we challenging new growth. these market. shareholders In the least, capital top not longer-term summary, drive and are to addition, acquisitions investing competitive are in cost continuously

be our growth of our along of leaving in team. will shareholders, leadership. you I'm employees, Before Brian's we've recruited what built, Shepherd, reins benefit with that company a throughout year our of very who out, as of ambitions. at I'm I team Brian help most leadership handing and and brought know, and and end proud to leaders talented which customers, I from He mindset XXXX had the will in delivered. the close the to me in communities join we confident further operate Brian to CSG I I the

investors like for I'd analysts addition, company. your our take our continued thank to opportunity and In in this to interest

and to you long-term had believe creating you have look we've is for value. understand what us our years, the Over that some at business conversations constructive helped how best

and in that our the Brian our committed Finally, clients dedicated turn I'd clients for like achieved words. their I'll greatness. a our to it employees few and With to talented thank globe over say us company to we're and thank to our across helping trust

Brian Shepherd

Bret. Thanks,

personally, and done of you, X,XXX XX and all of First your that at behalf our for me thank fantastic on over year customers CSG. Bret, career shareholders, for here all our for us our you've employees,

importantly values I we helped You as and company you priorities do accomplish what me heart the into are you we four with industry-leading build sustainable it. When core CEO. first to and ago, just as met that shared you wanted at our CSG do how where years of five a

responsive First, unleashed market people. a you our potential focused wanted full more to and we become of as

to CSG's regain you growth Second, mindset. wanted

commitments Third, knew for those product industry and CSG, our the with attract customers invest you to deliver strengthen our gap differentiators to technology, so these between solve wanted and our talent, leading innovative CSG better. values because plan great our companies clearly provide customers. culture and greater as who to humbly better could our are value who to finally, And serve and our you retain and our our solutions that customers people in CSG like companies resilient on average more bring you platforms key to even you then that

clearly that everyone all you've in back, succeeded sees Bret, Looking four.

question response has weeks, of meet six at with try the leadership last fill the to of Over under going the range investors from great one top been is the big to has What Bret change shoes? opportunity take I've My and list. his and consistent. many I been our everyone's my to as had

more You're five of out to faster that strong growing, and With delivers. growth. momentum set the share with and in the our goal engaged day their the working business toughest crystal solve around We so talented, right the day healthier, me the laid creating phrase will teams serve CSG all earn And will highly of win not accelerate going have turns know creatively logo we're determination the more to new right every the foundation in who a and relentlessly about the to highly single just growth it the both retain are any employees every their position hear to see us to more to ago you there's repeatedly clear in globe, we us and in turn business our the one What not do that that I to to this customers Bret brands existing to ready for build and the always customers. of talk innovative accelerate is team sustainable could every geography our be and CSG's a enviable trust executive in CSG guarantee right, the help up sharp CSG whatever and marketplace. the and and do continue day world most challenges. CSG earn years wake minds. because has leaders continue takes our many future and to CSG customers foundation, having every to has choices. grateful, you'll can

thank so you leading for Bret, well for for so long So of the all way this.

and honor the and from With as been our it plus customers you over I'll to X,XXX as continue our Our Rollie pleasure great an to update. to CSG CSG, of value financial are employees and to your committed provide learn a ever hand It's that, shareholders. Bret. work legacy bringing to

Rollie Johns

Thanks, Brian.

Before side what been years, Bret say last financials, I you has I with want over pleasure to get I working the few these all wish it you into the a just and best. side by

You will certainly be missed.

So quarter and our welcome discuss today results XXXX. of our the remainder outlook the financial for call to to the everyone third for

global of Our business is met that the pandemic. operating this economic well challenges

As in cash phase our create both now pandemic, the continues to flows generate into Bret stability to value strong the deliver and to highlighted, our resilient us model shareholder necessary the of which business and on continue provides with strategic initiatives the future.

quarter, year-over-year decreases $XXX of and million, through We excludes reported So $XXX $XX revenue for both of of the our the are which financial year. results. and fees adjustments foreign approximately revenue of associated not COVID-XX. fluctuations adjusted walk let's the Comcast movements transaction unexpected million, non-GAAP million of X% pricing continued in These from the unfavorable currency with when extension, considering the are impacts prior the

to to rebound in in However, adjusted implementation along increased reflects we're stabilization revenue, compared processing second volumes. which to the beginning our that see the quarter when and our increase of sales with the with non-GAAP X% cycles, XXXX, X% revenue

was XX% So tax $XXX was adjusted income of for non-GAAP on, our adjusted $XX the was year-to-date our was or adjusted to income quarter. moving approximately million, Non-GAAP non-GAAP XX.X% the revenue, EPS income revenue. and third XX% EBITDA bringing current the for revenue. representing or of $XX adjusted Non-GAAP non-GAAP for XX.X% non-GAAP operating adjusted million rate quarter effective non-GAAP of quarter non-GAAP quarter $X.XX million,

investments. million of flow cash quarter. of generated the $XXX Moving operations million sheet and balance cash flow short-term on We and quarter million free to cash the ended the flow. We $XX cash $XX from with of for and

$XX $XX respectable. under repurchase flow of stock which cash third we was million cash inorganic providing Year-to-date on opportunities and were focusing $XX invested resumed use dividends repurchased $XXX return a quarter. million shareholders. return balancing of We year-to-date during to flow and million common our Our program, of stock paid operations free from million and and the growth investment, internal committed remain cash capital, to our and on

such that we're outlook to XXXX financial outlook COVID-XX, of am In pleased our to guidance. the of on remain effects our financial moving for flow for of in XXXX remainder the So spite we lingering cash as XXXX. our I confident report increasing

remains unchanged. In addition, guidance our XXXX non-GAAP

the million. said, however, is to expect excluding that guidance adjusted range operating updating agreement. in fees and margin billion, are, operating EPS recurring separation they the $XXX the to results. reflect and unchanged million departure the continue range as adjusted we results transaction are $X costs non-GAAP XXXX With follows. our reflective million as transition percentage revenue, are the and of our of Revenue in related We remain revenue $XXX to to $XXX to revenue of non-GAAP as GAAP These his from of guidance under inclusion not of our non-GAAP costs excluded executive terms Bret's

million our shares and range in range operating to and also XX.X% our We XX% percentage the XX% adjusted of on approximately EPS non-GAAP of XX to are within performance for rate non-GAAP of count XX%. the our XX% range about tax $X.XX year-to-date year. in a remains margin with unchanged of a share of based the $X.XX, consistent to long-term Non-GAAP maintaining

to of flow million after cash continue expect third in of EBITDA to are we our We a range increasing range expectation million. $XX expected environment. to of million And to with $XXX this we $XXX with cash expected adjusted solid still in the free quarter a finally, flows, $XXX CapEx $XXX pleased on be In $XX flows challenging range. results are of operating this summary, the to million quarter's based to in $XXX $XXX cash operating to million

I'll shareholders. cash facilitate flows business, our long-term on strong to objectives to to to resiliency value and continued With Our allowing to execute our the continue session. return that, of over the the question-and-answer our operator demonstrate it business turn us

Operator

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

Unidentified Analyst

I Max to churn worried about rates talk may have you're that that ticking seeing little payment you know Hi on closer. about businesses and what but just like COVID with small And exposure. if was you business pretty – a said year could the more steady, becomes if wanted more guys, see Tom. I the for up as it's bit you're from

Bret Griess

nicely daycare in positive Yes where soon. level that but – with and the have our to as long-term others focused more go around the see and Brian, it's we direction, business payments we said that leveled of get you we'll programs. so that to do our school there government, to plans, not market that's the share the be businesses space the retail that as was business? It's energies child early as many in and but not impacted, now heading that we go type off activities have and some to efforts our closer activities payments back expected to with on your we

Brian Shepherd

No, We've quarter-over-quarter and performing sequential We got and the like the X% new Bret. volumes but volume, you well, we've see keep transaction come to seen back. hit to well selling X% it growth. just

Unidentified Analyst

just think And variable spend Thanks. economy about overall, necessarily there to starting just, than in guess, to components come sooner are cost again then come back the back certainly talk in that me structure, of the will I not payments, Great. you but the others?

Bret Griess

you little that if you more sectors quicker, it? repeat back I Max. ask the is – is parts bit, and are think macro can But up that or was heard about come I question broke there would the a what That or economy that

Unidentified Analyst

Yes.

back does [indiscernible]… just the cost you parts like quicker Sorry. come in economy as if structure of come back think that variable the spending, in there your I macro, just terms will – exactly

Bret Griess

evolves, As do healthcare of the the in challenges some that are addition happening. the crisis with variances are economy we to financial happening see that

extremely be quarter have over as world have that and and flow business, are raising built that the with the the because incredibly cash the as transformation huge transformational the sectors my discussed our evolve payments we'll revenue. we said, what years a have in continue we've of do right a healthy strong but As things as the the see online models the stable been recurring pipeline where guidance is There it's to bit, we at will led that win. major to We through but that also there flow of to that still large see digital as may said, of the and business we where model things we stability lot in some with digital CSG. in long-term are it's an cash separation to career as the we front in a as things bit has moved moved of pandemic process. easier is It's just as hit, the go that,

we we forward. see continue move as So your I hope front question. I activities that got to on

Unidentified Analyst

Thank it. that's Yes, you.

Bret Griess

Max. Thanks,

Operator

At additional no there questions are in the queue. this it you. Thank appears time,

Bret Griess

I again, wonderful of for in of the you. we'd of the employees input your my in evolve CSG appreciate problems, lead And Cody, that as employees, these, and for time improve me, lifts to employees a to an it, proud CSG team. to time. for that what incredible to, because to quarters and have toughest allowed about solve continuing three so and have optimistic We like again, business have leadership a the their us grateful and made Thank CSG. these last all CSG. taking phenomenal just the whole. first a because the individuals, to We're of just in We're continue grow, thank – customers a blessing and and Once the our of provide grateful everyone help performance everyone that evolve, year. to us our I always fashion, care honor board and very for for CEO place three to been helpful holds as course, as call, valuable an in like this future today continues about I the which a it get them thing, learn,

So Have time. rest your your day. great of thank appreciate everybody it. you a We for for

Operator

Thank you. all today's Thank That you does your participation. for conclude conference.

may You disconnect. now

CSG Systems International (CSGS) 4 Nov 202020 Q3 Earnings call transcript