CSGS - Earnings call transcript Q4 2020 | CSG Systems International, Inc.

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Operator

Good day, and welcome to the CSG Systems International Fourth 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'd like to turn the conference over to Mr. Investor of Head Rea, Relations. John sir. Please go ahead,

John Rea

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

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

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

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

Brian Shepherd

CSG and that here. John, and of and also for business, customers reminds business people safe. are all grateful our day our today. you employees X,XXX to our family pandemic put couldn't to forward. hopes thank us Glad dedicated and be joining do entire all The healthy every way our us we and for we priorities you first. Thanks, the start, To do more world to be everything changed propel the the first has our It global and staying put

the have to announce As finish, our end We're XXXX high had leading I of team XXXX. QX XXXX challenging recurring by heading relationships SaaS-based prouder good and revenue business be with couldn't cash strong model results our generates that These very strength into fortunate COVID CSG a were a to the was, performance visibility. underpinned as ranges. customer many finished with guidance created earnings resilient our momentum brands XXXX which global of high flows verticals. in notwithstanding industry financial that at different strong

CSG Our acquire, and their help retain better know can engage monetize, they customers. trust that clients to them

committed our CSG phase into honored employees our CEO, I'm and evolution. next and growth As to lead of our the

my CSG. team better Specifically, look a building forward and bigger, and more I to future-ready

the the our we our by right vision wanted way, this do. will working of our accomplish will one goals, and common moment mind, underpin pillars With strategic this people CSG that doing take culture, of our are future employees every where key I towards highlight shared to to for in We that our at having CSG. of way everything the CSG we heart and will the a X accomplish business

customers insights the here position advancements in and to CSG is the now will edge done world as all and real-time relentlessly for for digital, the and will invest to decades. industry-leading pave First, around technology we are our defend and cloud continue The over every and our provider. computing customer lead we've innovative extraordinary technology way an stay, data will industry advancements And experiences innovation as in world. for way X

portfolio pre-integrated by solutions, to competitive an of digital give new and quickly advantage broad on-premise our Our a services cloud, experience. personalized more them customers with more even deliver allowing

Second, our but new into verticals we diversify customer existing product relationships will customers, industry engagement with revenue also continue and to our via growth base strengthen our higher we payment our offerings.

main values. to reflecting is one and to and have where are we inclusion, still that With communities customer do, global work as we represent growth, culture industry people and drive into respect elevating apart and power Responsibility CSG. like world-class a in our the experience, our our embracing, to our equity operations streams, day, work customer customer challenges. customer CSG in exceptional telecom of solve centricity. than the evolve and core we corporate Every business an care enabling with and embed much employees verticals continue customers committed global of diversifying big we make goals, our and our And we help grow to inclusion and our to Officer, and market-leading is. Chief focus know retail, and seeking diversity We protect, of and revenue competitive will the stronger, set respect we also their third, on on innovation recently will to we market. to and focus employees, our new our key will our diversity, new existing me platforms product goal unleashing CSG will partner help to advantages, while serve, to we the that our competitive CSG us easier being commitments who nurture agile us our And team satellite, will is to delivering media diversity toughest relentless leadership with Our government, and health in the hired our our on competitors and do more accomplish our our with cable, whose continue more and To Diversity Social base. culture win

we employee much financial who forward CSG customers extend you to serve Before To so employees, to XXXX. in cash to well I'll highlights, recently XXXX business thank gave our every our to move CSG to a a few I and our standard $XXX achievements the did our so highlight a addition turn that, thank want in XXXX. bonus every you single programs. COVID with onetime employee thank from special we incentive financial huge And

made also the of free with the into cash headwinds, full year-over-year of finally, $XXX spent even revenue, our million a with flow momentarily. XXXX. CSG CSG of from for $XXX million on results cash on detail up million promise on the First, year, adjusted in financial basis. and money returning $XXX generated generated share operations you, will go currency our And constant good and we shareholders, Changing gears. slightly Rollie on more COVID in flow. dividends repurchases to $XX million

Let me business. with share the various our highlights from you parts some of

is keys growth we exceptionally momentum. commitments sustained consistently being As been, our closed than strong and you're in we've has win highlighted in previous to and seeing compete our well our market. turning customer sales ever sales delivering last and optimism into our When X significantly continues earnings as deals and larger are team CSG and calls, number sales, wins business to priority, talk global growth our one it pipeline about our X in the customer

seeing strength. North our CSG cable American in and satellite business, ongoing is First,

deepen evidenced relationship XXth revenue We with of and our continue customer. this by consecutive with to our sequential strengthen Charter, growth quarter great as

to on-campus enhanced programs. have offerings solutions, experience, customer We college students customer help of communication variety including deliver that expanded kiosk marketing solutions deployed university a in a differentiated and

to continues in also X this market expanding entertainment the we vertical. go world digital, with this in market, increasing cable forward to industry-leading won share our relationship the As provider. look broadband our CSG deals

solutions. with deploy The to across television, of first provider phone Zito Media is Internet customer digital and industry-leading high-speed states, a customers XX Group, services engagement

deal accelerate their this business, wireless million brand Saudi was signed CSG in was provider with providing digital provider. while customer our and telecom is customers And with the States number and revenue entertainment business, sales second that Mobily leading Hargray CSG nearly in revenue to an future-proof by experience. wireless our for we service telecom Arabia advanced all leader Communications, positions management to Southeastern Demonstrating our Mobily, exciting subscribers. our strength XX CSG communications and illustrated wireless global field our their largest services their revenue prime technology management to with in as space, and solutions. United deploy management partner innovation, in regional selected the second significant full looking new wireline as a wireless wins. deploy improving the in clearly the one leader made integrator for platform as as The a challenger management QX to systems progress market wireless, a the

service business. operating services we units Airtel efficiency We bring Paraguay convergent Airtel services, into of revenue as big bring has telecom how nice This to EMEA win reduce our is highlight The completed Telecom management footprint. in it expect business and solutions XX beyond to Argentina field its CSG charging win help I with consistency to support continue America, quickly, grown Africa our Latin Africa's operational Africa, market, their solutions across to deployment Telecom telecom management surrounding and managed management and our was scalability showcased country and South enabling want solution. Airtel boost Argentina's cost. including across across a where with growth last relationship growth implementation These the customer America. In relationship operations, initial provide to new and will will our

vertical with for our as In other with in retail inbound the provide contract wins with one engagement payments is retail And world engage with of goals on solution our experience. Next, and their around to enhance to order to an chains ways we appointments. the their communicate vaccinations This largest the revenue, for to to nation's update new industry business. clinic health increasingly highlight pharmacies providers, consistent diversify related to wanted and and key finally, industry look our care COVID customers. grow and companies important QX, I operations drugstore new customer to request some a unprecedented and agencies verticals customers' signed government in messaging

weathering a on midsized businesses XXXX we experienced solutions from to our is storm the of as business payments extremely downturn moderate volumes well. saw While small in middle our during transaction COVID, the impacts payment

are with to businesses. are I'm government that to pleased previous extremely declines is due our to services, times. the deliver our navigate and across agencies, success to small us. you making that we're we we're for And closing, committed payment in and deliver proud takes to calls, these and we and the dedicated global for helping achieve the on in serve, CSG to customers employees fullest CSG it superior which we early your believing in least, mentioned thank In retail space. our the we've medium we've you other are markets globe not that will our had for what trust payment our As you. and that doing Overall, providers education who customers potential. not the but difficult that experiencing includes last the talented progress the shareholders to Thank ongoing Thank you

review We is resilient and strong to are that, initiatives new our the as drive I'll our and growth diversifying XXXX management team distribute of ever is this to and and business in financial turn top our while been, ever as and With capital to accelerating CSG's proved as performance on revenue. committed details shareholders simply, it the line it healthy, XXXX long-term acquisitions to over growth. our as guidance. results Put and has to our Rollie bottom we laser-focused invest

Rollie Johns

Thanks, Brian.

necessary to resilient generate us COVID continues we with believe our visibility We and highlighted, gives strategic that deliver our to earnings a on into value, business into the provides strong cash Brian continue business and the even of us and future. stability shareholder this As in both both model flows initiatives revenue high create now face growth and pandemic. have to the

XXXX in our at well performance, of guidance deliver and beyond. are business to pleased solid with XXXX high finishing we end the We feel and strong metrics, positioned results our

our as The offset as outlook quarter year-over-year full well in results $XXX of full fourth million So for XXXX. year-over-year. up XXXX million the fourth for X% our financial and revenue $XXX for down year be and let's X% the for fourth walk year, increase revenue is revenue can through with quarter the We effective strong quarter our associated and quarter, professional reported the as The software a managed to X-year contract primarily in was XXXX, attributed services, well revenue. quarter pricing partially annual mainly performance. Comcast revenue fourth strong January services decrease foreign headwinds, to by our X, of as extension due our currency that adjustments

year-over-year and full of which million for X% $XXX year, quarter In million addition, the and non-GAAP adjusted of $XXX representing was X%, a a the for decline fees, revenue, transaction respectively. excludes increase

second sales revenue sequential a customer revenue quarter picked adjusted fourth performance This during acceleration X% slowed at our that XXXX as trend Our non-GAAP each activities the up. quarter-over-quarter. more revenue pandemic quarter even the was of from looking increased and to saw half and third the implementation apparent as had when

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

our Our full income areas employee-related by travel adjusted range exceeding the and of such year million end and XX.X% as non-GAAP benefited guidance XXXX significantly $XXX of was operating or costs revenue, less high in entertainment.

and revenue, full income respectively, EBITDA tax adjusted per exceeding by the a end of operating XXXX fourth finishing of adjusted and full non-GAAP at down quarter EPS With was year million non-GAAP rate, range. non-GAAP our the Year-over-year for or our current for with EPS adjusted XX% effective guidance the with our non-GAAP XXXX X% XX% primarily were adjusted end full high non-GAAP XX%, the also revenue, right or to the year high for the our range. income. million to share, of EPS $XX due of respect was XXXX earnings quarter lower year impacted year $X.XX, $XXX of $X.XX non-GAAP quarter non-GAAP both non-GAAP Next, EBITDA lower and the EPS our guidance was

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

$XXX expectations, movements. by cash flow, capital cash working both of For and from year, mostly million full the guidance we driven flow generated our of operations with these free metrics million of $XXX favorable exceeding

of $XX our million For million the full $XX dividends program. XXXX, paid stock common repurchased in repurchase we year under stock and

we've time. the We If on return to committed and on million XX% $XXX investment you that and and of share invested returned free look balancing internal in cash flow over the approximately growth representing past our cash inorganic capital, repurchases, dividends X of shareholders our opportunities, providing years, of over remain use focusing per highlight of form a return Since a XXXX, dividend be quarter will to $X $X.XX per will our our we to we our shareholders. have on annual year. I'd an or initiated quarterly increasing which increased pay in like approximately per by rate that X%, we our at basis. payout out share dividend every share annual to

$XXX the year non-GAAP So pandemic, our to financial initial XXXX. After some that in us uncertainty to business, the to are impacted moving a face do unquestionably excluding this to way revenue of optimistic we in we brought about even on XXXX. million and and of ongoing the the fees, results million. Therefore, come outlook in, expecting million for our $XXX we in range $X.XXX billion adjusted are revenue, of in $XXX transaction range

Charter in higher We to range XX% and costs, in due the such our consideration between of range with that percentage travel and of into of DISH the December also repricing XX.XX% early within for with expect in the XX%. execution growth periods, consistent entertainment number long-term pre potential were both our non-GAAP are organic percentage employee-related levels and including target pandemic takes expenses associated of pandemic single range up pressure low as This adjusted the to for XX.XX%, well to avoided items, and that contracts operating digits, renewal a margin XXXX XXXX.

a for between our year. the and $X.XX XX range of anticipate approximately non-GAAP of and rate share shares XX% about also non-GAAP on tax million count EPS $X.XX a We to based

CapEx non-GAAP $XX the come million. expect $XXX and with flows to based to of EBITDA we $XX expected million and be million be our flow Additionally, between $XXX and range cash adjusted million. million And $XXX operating between finally, cash million, expected expect $XXX to to on free we $XXX of in range a $XXX million million of between

incurred the will certain collections strong our earlier our special and employee as bonus cash including our historical costs they results, to mentioned are that pleased flow XXXX CEO. capital costs former challenging departure XXXX paid in In that take results of and expected such be impacting of Brian well XXXX receivable we XXXX environment. this are expectations, in not accounts XXXX in and XXXX, trends these movements related ranges in were our below repeat our significant into excess with While that separation our in operating XXXX reported in summary, working to consideration

the execute of strong returning importantly, operator business Our session. and, resiliency us it most facilitate turn our to including continued to XXXX to in balance With demonstrate that, allow strong objectives, our I'll with our sheet, that, coupled and our business. long-term the growth shareholders. And strategic cash the flows over value on to beyond continue to questions-and-answer

Operator

will Roderick we And question from Instructions] [Operator with our Stifel. take Tom first

Tom Roderick

So I going you to really question, and handled very but footing. on well very to kind be want quite high-level a And of is start guys solid year this a you. with Brian, finishing really difficult

world you year, of consumer a a customers were of little and perhaps back more than decisions to tell to. might your their kind they the spring nature little hand where concept how CX, evolve experience, evolve the how faster this in about go wanted If bit changing things be me and the just their over forcing of back the to

You mentioned Mobily.

I mentioned think Charter. you

common some and have on far threads what the front? Any force hands as done as Argentina. that making pandemic decision Telecom customers' might mentioned accelerated You to

Brian Shepherd

Tom. to your New that question, role new you on and be congrats the for taking. year, Thanks you'll Happy

of what to middle figure COVID think around saw. year, points key what I part every all In out business first, trying So was about. couple we a this was of the

about into I where slowdown. really couple going, little transition and all to the a of world. drove things our QX, QX of wins. pipeline saw talked were in and and But a that. think turn sales all saw the we that is around with digital we is we we strength of as we the returning the bit saw sales And One accelerating So

see vertical with basically they them do how how going and they do business to they into ideas business be improve without And consumers' operate say, all so customer their coming problems us do industry do for we easier customers how experience, it in and every homes, make to to with digital.

without so And had, we the accelerated our to both management we've having and to do solve continue support things in do in easier and our physically that technicians rates like is done but for how and and what you experience care revenue problems enable you that's pipeline do an customer an of win home. some that's them solutions, the business. to help with also the and How environment customers' where a home make improved go in it enable do can online

that more just We also merchants in saw to do They're complete payments to online. still transactions. going need where it

So actually momentum our the we've acceleration earnings helping in that's seen of driving and adoption the business of script. talked about we digital some this the

Tom Roderick

year? payments. Rollie, growth home bit relative tying I'm this we the year. growth That we the give much mentioned level the thinking that little this about as recovery. of sense and a should this as ask bring headwind and next Just us have guys how business, of Yes. saw was recovery of might guidance you in to And terms you just for might how be part a to a you as directionally cyclical all should about issue your you worthwhile wanted year, the flattish? what question, you of payments glad second but to been it of be a payments overall a can business in about, you kind thing I to think

Rollie Johns

Yes. want want to touch Brian, on? do me you Or to? you

Brian Shepherd

level Maybe you I'll the can specifics. Yes. and give the give high

reduction in transaction downturn did we kind nearly volume. in saw Specifically payments, We the of didn't in volume. -- we see reduction single-digit see and

COVID, it result, as we a in well middle a pretty all wasn't us. still of So for but actually 'XX, fared the We we growth 'XX to year-over-year know. Tom, as from year are

we we our to before expect be feel to growth. as hopes business expectations so and I focus business that And we for as notwithstanding have first getting in year. of couple that we get back we to that level, come months our any of any in will color first talked payments in, we're to headwinds year-over-year revenue watch growth the that? And strong part about think the double-digit cautiously back to a want optimistic pandemic other the on Rollie, high business us, hit, that's our add XXXX, you in good this payments

Rollie Johns

lose Yes. year-over-year, look double-digit with didn't flat payments I'd just we're to forward And to our which essentially point, we business back your getting growth thankful, significant ground the expectations. considering. say all year this in to we're business, in that line we

Tom Roderick

context appreciate one did quick me, were expectation, year the outlook what what guidance in it's might repricing the if margin and if renewal potential that just a happened, mean advance Tier of But a the X we think know customer, of that Rollie, guys last of would about an is. the nice that that One on I potential, to the early mean if can guidance what you renewal Dish. encapsulate getting for guidance on early? the mind. on some of that go how a for frame solved component don't Fantastic. you into exactly the we in on that help potentially it so say, margins I basis the impact margin room outlining your up to for, to from early job. might of wiggle historically, impossible an sort just Charter

Rollie Johns

we'd like longer look Obviously, we we to it that, of That's later our timing. get sides. base specific both to historically, Yes. but than rather in of ballpark those a range on and I'd with at low a look It's with don't Comcast end significant, DISH. think large the if But to nice if you it well, to revenue for it like standpoint in repricing that to. range. I done Charter associated to would and sooner no know a the you color our additional X% to that's want on to -- Obviously, and I disclosed that. contracts, of now any renewal provide from anticipate range but you put deal obviously, hard there kind the of Charter, terms this Brian, shoot When XX%. about

Brian Shepherd

No. We track extremely serve both a just forward. the good continue moving We're to and well, customers we've focused on record. had business

Operator

And [Operator Sidoti comes question Instructions] our Burns next & Company. Greg with from

Greg Burns

we're looking Charter, at And having with that renewal you're the the is renewal on as with of when the remaining platform, your deal? conversation them subscribers of part that not is are that part

Brian Shepherd

XX Yes. done like them just ago. do the subs and did to thanks can a bring their give years, that. Amdocs subs over many to the an for reason we'd problems. every on day Charter a Greg, we joining incentive What specifically the we've today. million Comcast love obviously, about to What is And about talk by try question couple today. do serve served of can't come moving not to that them off we we us, with more years and highlight our there's business that, of call past to We almost as well, XX solve million has future-ready ideas direction subs

direction. to tuned. Stay but them just obviously that's and day to we things of them won't every give behalf serve in try Charter, in think So that well We our on about on interest. moving speak

Greg Burns

close then coming entirely I been not it's Great. I Charter. from you've the highlighted services. of it's guess some very done, And And more with you've incremental incremental Okay. from areas subscriber,

the up what are I maybe with But tie could tie with that just So seeing the for you large maybe of took you those refill Comcast we that know could pipeline gap? areas back business And to into we're these some revenue adjustment. customer then because in picking you price maybe customers? that

Brian Shepherd

Yes.

problems think world, with focus their engagement, of more Charter. payments helping them revenue management, and across all-digital our on customers, more more to an bringing customer business across and grow and not thing subscriber from that just The their across can is more solutions all base. of solve in I come we

make having with easier benefit to own through do platform, talk also other doing customers our subscribers that a some And our said, them partnerships brings R&D, And CSG Those and world. value. and helping getting that, couple that internal we business then as technology or where lower store acquisitions our and them, kiosk a broadband in trying do done sell Charter both do and that and on that's platforms on, part to lot walk what more revenue. but will of on focuses do on into to a change also digital human to the continuing also adding our and without that new we a are we cable to bring a So a their our we've care they are engagement it also individuals payment to and that from when more with being. of want kiosk both work is We're through solutions around into to customers. at you at solutions, are highlighted, us cost retail service make

we try those -- expand to our revenue the our we with our customers of kind from things do that and existing relationships to earn it's So of all that them.

Greg Burns

drugstore, solutions is pipeline looks the not with But the your Okay. And that non-cable. market of and currently? like outside big then your part contract for customer a the how of cable experience the business

Brian Shepherd

typically look out an end upper we one today. that engagement market that of markets we -- the compete falls we in it we mid-single-digit the all is is see that into, actually what a of kind do revenue. standpoint. at the that, we in see growing space the break can it organic to of is don't And when organically. customer grow market the What We try say do things of material we And part our Yes. we growth at from

have strong, and customers in in large like brands continue do world. So that that's deals broad with and industry different is a healthy, a on big of verticals, winning lots with digital customers material. we'll it We focus pipeline big where to

Greg Burns

cable the market like What's there outside those the competitive with once solutions? landscape move of you

Brian Shepherd

Each invest of that we've got more we like fair business. of in intensity competitive. I when our say the competitors game means good seeing want less The a and customers, to of and is compete we going I that's A the of it's win share, which in. our innovation quality the want it. robustness in there's doing Greg, one the accordingly the competitive has more as the markets and we've or quality than would solutions the markets, a that operations, and we're to after wouldn't intense, around to than market, say commit and bring be of space, day healthy every But every we leader kind technology, the ease what of and we space. those the one bring proven, to

Operator

And this remarks. I'll turn no for back further now questions. over Brian are the to closing conference Mr. there time, Shepherd any or at additional

Brian Shepherd

would deliver. diversified of and keep and our shareholders, say what us. via of closing, grateful our about thank to I business do themselves in the We're forward, just business laser-focused investing thank all results. our day. a strong We're extremely results growth, proud to capital move having We're try more they committed returning today. base, we and earn and give and And a year, the for the we it's you serve higher XXXX the more safe, you to us, that every employee do we're in to global call the as for more deliver return. on We're joining customers Yes. the business -- proud customers, our the for

thank call. joining for best. the So you All the

Operator

excellent your conclude We you. for an day. today's conference. That do thank participation. Thank does you Have

CSG Systems International (CSGS) 4 Feb 212020 Q4 Earnings call transcript