EPAY - Earnings call transcript Q4 2018 | Bottomline Technologies Inc

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Bottomline Technologies Fourth Quarter 2018 Earnings Conference Call. Statements made on today's call will include forward-looking statements about Bottomline's future expectations, plans and prospects. All such forward-looking statements are subject to risks and uncertainties. Please refer to the cautionary language in today's earnings release and Bottomline's most recent periodic reports filed with the SEC for a discussion of the risks and uncertainties that could cause the company's actual results to be materially different from those contemplated in these forward-looking statements. Bottomline does not assume any obligation to update any forward-looking statements.

financial presented Bottomline's basis. a call, this results on are non-GAAP During per non-GAAP constant EBITDA, operating earnings others, include, net growth and These among margins, currency results rates, gross income, share. income, financial measures reconciliation GAAP is Bottomline's in available these of A Investor section www.bottomline.com. to measures Resources of the website, most directly the comparable non-GAAP Bottomline will on guidance call. be the providing forward-looking the the company from summary A is call of the guidance available request. provided during upon Mr. to turn the over I host, would like now to conference our Eberle. Rob Please go ahead.

Robert A. Eberle

the for even FY XXXX for subs $XXX growth, EBITDA, I'm $XX million committed are and increased track those exactly and FY $XXX and $XX business. in results step your we've forward, more to I'm executed successful targets. interest here $XXX following questions million trans excited prospects today: outstanding QX EBITDA, the and was quarter's outstanding guidance for Rick Bottomline what quarter, afternoon, consistently million Technologies, our completes XXXX both we meet XXXX always, Rick and and to to the you quarter Good and as we're very Bottomline. with the targets as results everyone. our remarks. the an I against of to will welcome year. goals available going and bookings. and to in $XXX million in million fourth Officer, Since it of XXXX trans detailed we Financial an earnings Booth, and would. exceed Thank delighted we're I'm The The was on revenue with Chief for reporting another million quarter fourth FY review we call. $XXX future report financial XX% subs who results demonstrate fiscal revenue in our million be or a quarter about forward will I'm then, said delighted his recently in for and on a provide

the opportunity against product technology Our addressing, business shareholder years market payments and market drive the our and all opportunity, XXXX come. execution are going business our FY to to our I'm will in focus my topics. strategy model of and we're growth continued to size value on set for set, and several The remarks aligned. response important

are which opportunity, our market business the Our profitable large; which priorities. and dynamics consistently XXXX produces model, we competitive finally, our why and is growth; FY long-term, winning;

This revenue XX% transaction briefly Subscription demand the Before transaction traditionally sold fourth the XX-plus-percent doing cloud-based our growth products quarter. the and revenue in XX%. and second of the Subscription business fully by so, quarter now had of converted for we've in broad-based me highlights let payment is grew offerings. and driven financial revenues subscription for transaction on touch the grew quarter. and subscription

opportunity, continued win, of I'm fiscal market, turn the from going the of up execution. we'll $X.XX, year. why profit the demonstrating quarters grown $XX and year was XX% four million, model. was run and products business, priorities XX% expectations. seeing million. the product prior our of million cash for value $XXX in and with quarter financial in market drive generated $XX.X Subscription have we our income the $XXX that's the from year-over-year. The we of alignment reflecting XX% was our $XX.X ahead our now, million, quarter. For Revenue Operating growth million, how our a over how rate year, was demonstrates these up ended at target $XXX.X to XX%. overall prior in was revenue plan, and And the strategic free million we're EBITDA transaction cash, flow growth $XX EPS million. potential of the now our the and the to we success set,

make at We the BXB payment early trillion, of huge and a most Bottomline. is already the to of payments. the The amplified one ever our thing are We more payment it opportunity. payment and look exciting estimated with XX% dynamics is market it interest digital our committed is a their being compete transformation We the on the who breaking $XX are see first way. now is to it. see No by position volume The still It to on standards or We're customers. most Bottomline opportunity is and U.S. payments about those see innings that in paper over better for and next-generation very of We of business new than capitalize check. more XX% positioned favorable than businesses from fabulous banks capabilities. in by regulation. in it of bookings. And foremost new making changing technology in this

FY transaction in strong market value, and new subscription the for evidenced each Our results help in customer comment the was success, sales $XX To had opportunity, bookings position leadership, in next I'll of competitive XXXX, market bookings over million on $XX total a product by bookings generating bookings new The of evidence quarter understand $XX sales this We've million in execution. million year. and dynamics. QX.

customers why hear we provide While the virtually across and from same these products is the I themes across geographies. of our we regularly globe. dynamics, different number around win, payment a all competitive products, the the

experience. First, have and scale we

a have and world experience. capability proven We real

some existing idea if can of prospective That we others While hundreds lot, means our and something. may customer lot using our of means funding, software thousands show have even technology. It not customers and actually. a an a

expertise. domain deep have also We

the payments. to none, as has accelerated. We pace Payments, payments particularly asset of have have change guide That's to Faster Whether direct strategy. become Open or cybersecurity, expertise Banking, incredible and we second around of the a valuable business clients institutional knowledge, product

delivering well. we with innovation product have theme. is to we We're built And we us see forward all, capability and principal trusted committed it I team, success way We It's record a leadership. employee, have and that and best-in-market, culture and first-to-market that today, on trust, but a focus hear the innovation. about customer being regularly, most as and product of leadership. on of all as track do partner, just going Customers and customers not delighting our

Turning now drive market creation. model, to drives dynamics model leadership and sustained competitive value our wins, while business our business

industry deploying business drive of customer, monetize we've a select model to platforms us, we've we're month extraordinary creation. a nature platform. hundreds our with the that business significant Bottomline customers And of have manner We're that are on are long-term of year Open platform a know as of of win capabilities change. deep new of platforms. a not they When When these are forefront we've continue to We're latest change a ways. We with to benefits changes converted. embraced, are there or a become our they on our unpredictable because day, recent customers do industry Bottomline, for or relationships. and standards back That's don't, the essential been the been and count integrated PSDX we've We've can and often payment part providing we become we been infrastructure thousands payment vendors Banking and not operations. because technology our deploying be commitment innovate. all connected who business' Faster and is in (X:XX) tested, at want ROI dependency. ensures enrolled They deploying even the the of examples value Organizations they can which and law both go firms on by operating the which everyday are to each When become We're their mission-critical into of they'll crucial thousands This engaged Payments, app. customers office market. customers live systems, in consumer seeing heavy-duty them. success.

paying alluded we is for wants our systemic of mission-critical to. that value $XX our customers itself. or our as Bottomline customer customer the be relationship or will a our more. our of add-on focus mutually highly attractive us XX, relationship platforms From current model. our $XX model result, new million. the leave. keep I've These Part a customers But business equally capabilities. important buying As perspective, grows. but and many for revenue technology a just nature beneficial grows capability, $XX not new with the and years even of major or a And is lifetime It's a also to will the our million, be move of XX Nobody products, already million,

is As who a our we central we enter and FY commitments of exceed two-fold; Achieving are achieve or benefits. XXXX, multiple are our get targets, our important our part priorities and the financial committed $XXX Nothing product our about. exceed our may product what are we million well million $XXX targets, leadership. financial committed we Equally and our $XXX to extending achieving is and which in leadership of has them. will million extend way

for capabilities customers, First, more of it our an part success. our important means

is to drive and TAM, The growth competitive years product payment product Second, even for front entrants. our is perhaps Extending leadership growth growth. come us. business distances key. for TAM landscape, and competition, readily market to and we edge to market us or right it the further opportunity participants most a enabling new our established translates deeper have XX-plus-percent of our growth the even position The that and accelerate drive moat, leadership opportunity further importantly, frankly significant to against increased XX-plus-percent is And securing into competitive there. opportunity dynamics is available. the the changing advantage, in from With

So result $XX fiscal market Customers leveraged early is this recorded in it's grew that in in will demand innings And post responding EBITDA an offerings, and conclusion, which way. our are XX% the XX%. growth, million relationships total big breaking significant excellent transaction strong new year. and subscription revenue the in and lifetime million quarter. market establishing EBITDA We fourth most quarter importantly, the We $XX value. a revenue customer our was and

strategy are is our opportunity. opportunity and large market aligned that and with Our execution

EBITDA. achieve including transaction $XXX our to We the high $XXX specifically million and have revenue subscription confidence of the goals a and million million $XXX of we'll

establish way the Bottomline a what it Our multiple doing today. and as to paid businesses value of this and, of pay the get bigger is goal company is in so, drive to

So of that, I'll turn questions then both us over remarks. for available of with his and course Rick following be it will to

Richard Douglas Booth

three to a I'll capping strong successful quarter pleased focus report I'm exceptionally Rob. an you, on on very Thank my remarks topics. year.

as for position I'll our Then, comment we financial the our results in and enter I'll I'll provide First, on upcoming year. financial And finally, review briefly new fourth detail. the quarter period. strategic guidance

a financial results and channel innovation by driven partners. and as customers strategic We financial our large a are for seen business address our partner trusted and Our market strong We're payments. position. our by growing

market. clearly platforms differentiated product are in the Our

value million converted trans well. quarter, and It's model us addition, we've that teams the run. I'll XX% reference. business growth revenue and as transaction current the overall subscription. investments QX on us supplementary we tremendous these is products X million to trans Overall trans value means $XXX our revenue and results to of to to each expand and XX% growth, in subs percentage it year-over-year. extend With the they and Beginning our of which grew in from trans by $XX.X and our to $XX.X XX% Our recorded trans basis. is need and, subs grow we in by Each and website which propositions equivalent million revenue, customers long offerings to our results financial briefly evidenced these profitable of our revenue our million up as in as is allows subs predictable fully simultaneously continue the this of led and and make priority. use and quarter, products sales subs to in $XX.X today factors subscription Highlighted and This an have of our points revenue, new review the came deliver is to XX% their in and momentum to in from profitable quarter our with annualized of for to revenue them we growth, predictable your P&L growth and and positions subs in financial detail, drive bookings. our line these EBITDA And posted materials with speak results.

traditional Moving X% cloud total solutions. product only a down this, customers revenue continue design, newer of expected, our And was to to small our QX, license overall as license part only revenue, we embrace business as by our of by set. in is driven

we Moving recognized the professional to our expectations. of reflects services slightly we ahead and customers offer services to of this million services our the quarter, succeed revenue, ensure $XX in

valuable Now, component revenue highly of maintenance mix. a is our and profitable revenue

rates long very of applications the and quarter each high our Given enabled year the combination which million XX% we to renewal upcoming central $XX.X enjoy visibility year-over-year million and excellent revenue importance our up slightly revenue of and of year-over-year. Maintenance results. customer maintenance customers relationships, increase subs recurring of our revenue in to $XX.X for maintenance and provides with trans the us and the were to and

Now, is less total. revenue of other typically than X%

million recognized In $XXX.X around quarter, which $X.X retirement of the revenue the EBITDA. which to XX% million also also total, for in well other we sharing related brought revenue This quarter and ahead year-over-year certain revenue arrangements of of $X million overall this produced was up potential plan. to

to bookings growth We as quarter, is million report trans a customers innovation and their subs the trusted $XX.X signed strong $XX choose bookings subs and business as momentum the to sales continue year. us to revenue I'm sales Now, of million and for new pleased bringing indicator trans Bottomline leading of automate new in payments. in partner to performance

customers figures future are in implement with and and us ramp full and beyond. take bookings growth production, and revenue trans time this subs to visibility estimates While fiscal provides to to XXXX

Looking proposition. at channel new of recognized the the partnerships. XX of as our value legal million existing further payment We three of spend yet well to proposition in have their value which Paymode-X set signings, the others attractiveness product depth full which not of that automation with being seven expanded new network new customer our further annual signed and P&L. effectiveness payers, signed relationships our $XX and to We approximately management three new network validating Banking our are us, Digital added breadth customers our as subscriptions, and validates our insurers

revenue, profitability, This brought to This of EBITDA EBITDA an sales this year-over-year. from of $XX.X of percentage is margin EBITDA us $XX.X million Turning X up we the adjusted and delivered is full million. of XX% XX% up to is for year-over-year which points year.

year-over-year, operating and up XX% were drove of earnings and $XX.X respectively. also core income per share million XX% We which $X.XX, core of

So, predictable in the our of evidenced business model. total, profitability these results

year-over-year expense increased margin of gross and points year-over-year. XX% revenue, for million, is and of quarter was plan. and percentage Our in of and operating also sales $XX.X investment market $XX.X both us, we is was of million, expense percentage revenue, or X marketing into XX% $XX.X our in XX% From million, standpoint, the opportunity our of up the And expense of points margin an these gross revenue. front subs development with or see or XXXX XX% we up feel X trans areas fiscal

sheet, Turning strong from in profitability to cash flow and had the we balance cash QX. flow

we presence flow to expands $X.X XXXX warrants of stock million the which performance of we in around stock offering into U.K., the extinguished. the our in further June. we of with cash quarter was consequence QX. in which, XXX,XXX million million, our XXX,XXX of to CapEx stock cash the operating and X% converted cash our free the million to that is at And capabilities today's after strong Our shares shares which year. facility and investments provided end QX, And $XX.X point our acquisition and warrants tuck-in million $XXX $XX associated deployed in bond region. for at subsequent with convert quarter-end, our of $XX.X price, those for drove that $XX.X One to expect will pay us on-hand more U.K. down fully convertible a and small be at payment credit This made million, of flow cash

on report our million million and $XXX trans Turning subs deliver that enter of of guidance, XXXX, EBITDA. full-year revenue million as we to pleased and well to to fiscal $XXX $XXX to guidance, track I'm we're including

and guidance. of income, million to ASC to is of in million core it to to favorable, million modestly of $XX million which revenue, $XX XXX trans impact of expect adjusted $XX we the of million the operating earnings $XX subs share evaluate $X.XX that deliver first to $XX $XXX $X.XX. quarter to total and million per $XX revenue, In expect to be continue the core reflected of million $XX we to We year, EBITDA, and million

exceptional bookings. our of of of come. we XXXX that, million growth, in fiscal conclusion, $XXX $XXX closeout overall and And guidance, and EBITDA to to subs year million with the million drive of call $XXX in EBITDA. model subs million and including and This broad momentum we million XX% to have trans trans open revenue and So $XX.X trans position confidence can our equally important, years provides subs and $XX.X we an new value But, a strong for including quarter, will strategic financial questions. with a which

Operator

CitiFinancial. the ahead. from of And question our first with line go Schmidt Andrew Please

Andrew Schmidt

I puts terms context understand Yeah. helpful. question margin you through expecting general looks XXXX outlook, year. and XXXX. incremental taking for contributing flattish my on us for much EBITDA Thanks margins, that's I it be in some incremental I margins look a investment line would wondering of could of prudence. implied you're terms guess just the like, bit looking was takes that just Rick. in a how Hi, investment, outlook in with just the Hi, but the the versus question. Rob. the is Any FY Starting if the at walk of flattish bottom to little FY

Richard Douglas Booth

from Andrew. $XX.X thank This is million you million. your and Rick, We're question. growing Hi, to for actually EBITDA $XXX

for a our the order was going think investment at us and things you the I right, that's facing market, we in to large increasing in quarter. year development innings early thing we of our very upcoming in We We're an spend when and had the do. in capabilities. product look extraordinary extend QX, lot are appropriate QX to think

Andrew Schmidt

that note, detail the in areas growth? just relate to a little you're future how granular that in you guess about talk investing which and more can I on could

Richard Douglas Booth

won't and investments, into a the year lot detail but get priorities well, upcoming here is we key at I investments look our primary of calls, competitors listen because our in to our our development. Yeah, as as product

one-third the of line. and So two-thirds, sales a marketing, some other below or to the key gross which three-to-one area development of ratio operating relative terms – the investment margin of in is investment

Andrew Schmidt

Okay.

So and sales and some it's I say, fair product of it's of distribution? just some to think

Richard Douglas Booth

about across talked capabilities range interoperability including we calls, we're and these as areas. expand those continuing and of of Yes, the on of products, same our some platforms to the before

Andrew Schmidt

a the growth Can like to a starting looks the It just growth that Should QX the gears over frame outlook. bit I from But point? contextualize as any bit that switching think couple of of growth trans I in bookings would be subs a think imagine, should just the there's perspective. little the I – FY And subs help outlook? a would XXXX FY just past trans and us that there more Understood. little we given you think robust be just a and that years to growth faster. help helpful. deceleration

Richard Douglas Booth

well. I'll QX, some Starting certainly. Yeah, with the make about commentary and year, as

reflects of So QX and I'll milestones the normal certain those speak impact absence to from reflects seasonality each It QX. XXX benefited of in about the also QX. which of contractual QX turn.

First, related we ratable previous of under recognition that's installations. benefit XXX, to the some lose revenue

the Although the our and our maintain impacts us growth confidently subs guidance this allows for short-term, underlying to us in year. trans

down overall a just on in basis can and transaction and in an volume, resulted recognition with up move of don't recur that Next, in to contractual sequential completion trans subs the been costs. associated fees. contractual due comment, expect of price And then QX. We along QX revenue limits to in certain and had which previously bands, the finally, deferred, success terms revenue

Andrew Schmidt

Okay.

that those like? guess in legal? to it in and So more a like of quarter is that what subs know bookings such down the helpful the question. explanation. break just take in That's – If Is an do in could the down, but those And parts look terms break Paymode-X? there in out? granular those we How I fashion, of my and break final got growth. don't few moving you trans does – I growth terms a that

Richard Douglas Booth

to booking banking strength bookings We quarter, even the that had trans that model lines. where we we this in the about, on established our prior broad products quarter, would normalized had contrast subs large talked were more and I banking strongly. product are performing say with across the already more

Andrew Schmidt

Appreciate Okay. Understood. Thank guys. you, it.

Operator

we to And Craig-Hallum. George Sutton go with

open. is line Your

George Frederick Sutton

results. Nice you. Thank

in So, did from innovation to think is front product channel a the everything you, perspective what are increase doing Rob, from were and I'm from in stay I you sales profile a of direct explaining the a partner good ahead. job and you a context doing go-to-market to perspective. of you both that opportunity right really that curious

some you're mentioned increased making investments. You

I wondered a us you So give little bit detail if could more there.

Robert A. Eberle

say fraud. product market seeing experience, mentioned they're elements. user are looking going in Rick forum particularly as most things It's roadmaps to not that we're go we But multi-channel, to what Well, we're talked of machine secure the Simple, for specifics such a that's doing on are this an channels, seeing and before, people standpoint, From that product you're call. Europe. of lot go-to-market into competitors what quickly, to, a we're and doing alluded we bringing just smart, the for easy set. same what increasing feature-rich to in with learning, is terms really the about

U.K. in increase payment products, on some of in channel We have our to our efforts partnerships particular. Europe underway

our and the channel This had Paymode-X with was a channel mix our an remains significant wonderful We continuing in – from quarter. partners in we're part virtually channel every this more saw important transaction So partners a one to success deals of of quarter. see a across U.S. for

pleased Bottomline's we're we grow with to expect success. really to working that and So contribute how and continue to that's

George Frederick Sutton

a sense give any pay? you Can vendor additional to customers of of historic conversions us Paymode

Robert A. Eberle

of significant one two past Yeah, size. this there were in quarter,

kind conversions quarter. as in than past but by program account account established be rather this continues there two to you an that, an So of know, were

George Frederick Sutton

And would assume, that remains I forward? focus, going a

Robert A. Eberle

it control America an be would call it forward. that. going don't wouldn't really Bank Actually, focus because for I that. we controls upside a of us

and really going that What influence. the make shooting beyond to on in from our capture selling deals. fish obviously you upside new market, that's time, much We our that of we're deals if TAM But than deals. effectively to or barrel focus, is new winning the is and new to existing installed frankly, the bank that see a a know we're telling that, where a is focus, will. base, fact how we that when huge over accelerate The bigger population. new like Our

So it'll to occur time. could a point, At stronger continue program there's Bank focus driven but see and some that by be of a America. over will we conversion where

George Frederick Sutton

you. Got

Lastly for Rick, if I could, you typically number could give you annual Paymode if volume of on vendors network. the also on network on and I'm the wondering us update the

Robert A. Eberle

volume a vendors the have by but we're if don't clear quarter, thereafter. to the we'd approaching and on today the of I number this not XXX,XXX, end through number the shortly network, of expect XXX,XXX

George Frederick Sutton

Okay. Thanks, guys.

Robert A. Eberle

Yes.

Operator

a with Please have Research. ahead. question go from Barrington We Gary Prestopino

Gary Frank Prestopino

you How doing? everyone. Hey,

Robert A. Eberle

thanks. Good,

Gary Frank Prestopino

Can vertical the some sign some Hey. markets start partners if able if channel you've about maybe than Paymode-X the you vertical to signings talk to in you started up been stronger and have past? different for of markets have your and – you to

Robert A. Eberle

Well, having I'd the we're off, penetrating from vertical where we're first far say that, that say is great success. the markets thing I'd

is vertical also seeing and a quarter management seen continue the (XX:XX). us healthcare in property to that. very and see vertical – success huge So successful that traditionally We're for fourth a have in

seeing government, and government. more more interest on local We're interest higher are universities ed. municipal seeing from We

an believe, is are we any the It verticals businesses, will is needs pay. pay other So of business couple this that application real really way fits a that But us. and to potential that get those have paid. for

on just focused a vertical not we're basis. So

shoe brand. We a everything this brand have past from a quarter chocolate to major

all have whole of We all and in variety customers a different verticals. in industries

Gary Frank Prestopino

networks of cards us the you payment what's idea using as you're credit since on of both uptake modes? Can been some give and

Robert A. Eberle

(XX:XX) card as will approaching to a to all customers, through of also somebody that monetization from automated a is because and credit rebate it offer higher maximum we're some monetizing and payables ability the card new means Paymode-X. realize and funnel It is leverage important, we offer what their because already can program. continue that Our taken a really that's means, it steps

a the at large So, (XX:XX) what last full from it's what same piece. It's really is capability, and Paymode-X an for are corporate medium-sized fabulous bid the banks we're are offering, all a payers, payables which which of thing, with. It's small- businesses aligned offers. and looking element working integrated (XX:XX) payments market, integrated

Gary Frank Prestopino

don't the in give some idea Okay. what have And you dollar-volume then can us I this a range fiscal within growth or of process was of number, but XXXX dollar-volume a year know you payments?

Richard Douglas Booth

have figure Yeah, we don't that here.

Robert A. Eberle

the actually Yeah, enrolled a that almost to to. – to on we we're on getting the population the model, our I vendor continue of that vendor XX% think on close metric piece dividend getting basis close exciting so being pretty we're watch is that's

Gary Frank Prestopino

Okay. Thank you.

Operator

go line Tandon Needham And Please our with of next Company. question from the & ahead. Mayank

Mayank Tandon

color on overall maybe be you. your go the Thank year just gave evening. maybe very Congrats some competitors. rates flow, fiscal Rob about the speak quarter, little the rates, deal pipeline a market. to Rob, into also but win new trends, key talk levels, you a little versus wanted as would about helpful. you conversion Good on the us you I and Rick. could to just talk That

Robert A. Eberle

First digital as The particularly markets remarks, I thing fantastic a market. positioned really that. believe we're said in well We I I'd transformation for it's beginnings sit the were – payments. just my say of of in business the

looking they consumer at providing experience customers also to and are looking do and day. the to mimic more For fabulous at a banks. their that and experience the to every selling Banks offering technology experience, technology and time be they're They as me, both how more business are technology providers customers. a all it's principal consumers

made that on thing in last I'd Europe a say rate standards on perspective. from been position a the mention has in haven't products, a as type payment great haven't I'd or particular really a because investment to change move smaller as in U.K., to quickly it's trending the in we're and have. Banking of able organizations us helped So, that across is win we Open a make

we're that customers share there. as well we're PT-X migrating our our market winning, as So, platform actually to seeing

of to because to three-quarters We've decided we're the Digital the that bank clear that about we're terms has we're in. of to if Banking more lose, continued we're opportunities we market leader In say the winning traditionally there. likely majority of the win legal in. the engaged I'd move elsewhere. lose, We're win platform opportunities rates, not spend

pipeline buying drive very opportunity initiatives. FY actually advantage rate and strong with even an strong, see higher to competitive are So growth and a continue hopefully we growth is this XXXX and bigger product indications

Mayank Tandon

could any A comment on much and That's much Rick, revenue items in Rick. a line? that than was also noticeable margin you then number, like was impact higher bookings how seems the other a helpful for very the color. that normal you in higher And few had it year-on-year? also, housekeeping Because up segment.

Richard Douglas Booth

of (XX:XX) million up, Yeah. so, believe, $XX.X Yeah, bookings XX%. I were

Robert A. Eberle

It's up XX%.

Richard Douglas Booth

the year. a success dropped was fees then, by factors. had volume transaction quarter, profitability in down. prior We of helped number And some Versus the related the which

dropped our exceeded by saw you million EBITDA. to revenue $X in million expectations that profit. down So of $X.X

Robert A. Eberle

wanted this of The other out sold partner rights we've of the question rights buyer and market a – We about cash partner. being business he asked the other that business share was a to had royalty with the set up on variety revenue. asked who's you and

and a royalty actually whether paid the strategic, So that $X.X in million pretty or really It was grow not. not we year was last cancel particularly weren't future about about stream small, were to would $XX,XXX. that we certain

million, pretty The associated, but $X the core actually costs a good were million excluded the we of with And from out $XX.X was $X.X numbers. revenue all that that transaction it EBITDA. about deal. thought additional of million proceeds total but produced we So

to future revenue of lines revenue So other relates that falling. The those line buyout on rights. is a are the of the mix –

Mayank Tandon

Great. lot. That a helps

Richard Douglas Booth

proceeds of included and XX% transaction. associated all excluded we with the that overall, the so, costs Yeah,

Mayank Tandon

much. Got it. Thank you so

Operator

ahead. Huff We go Please have Stephens, with Brett from question a Inc.

Blake Anderson

Brett. is you Hi. I This Blake my Banking, couple. on Digital taking questions. for appreciate On a just

few the pick million growth? specifically, revenue You've wins couple us transitioning recently. quarter, then implementations quarters? had $X update if a there maybe the those, been seems and sequential in next I should could has so the that on see we the about It was up you per should big wondering like that accelerate growth help and the of

Richard Douglas Booth

question, Blake. Great

had So Digital have with implementations and success going sales we those are well. extraordinary Banking,

remainder in of reflected growth the that rates see year. the the across You

are quarter, really it's majority as large Intuit the and, the unimplemented live to half contribution XXXX. attrition. going got good ARR the year, about primarily of in fiscal feel during we've in We $XX due in of the million down year-over-year will back So live be year. the the vast that to first several its of actually banks going the fact, But

Blake Anderson

Great. on And then Paymode.

your functionality? new unique? maybe customers a how may Are that talked that's more to on entrants market. of more some the market demand you are – little in Can differ in seeing those features specifically like your talk and is bit kind product more the of product feel general. features? from on just Just still Maybe others do you market you about the that trying replicate in from You

Richard Douglas Booth

We payers. primarily in Yeah, with which dealing see the that for vendor a address. does a really dividend we small very is combination of entrants players, the full-payment the particularly model, continue which but are new from a model, significant us, large market entrants, be with pay automation different to a new advantage with

Robert A. Eberle

I commented remarks. a as new sort bit the (XX:XX) went of on thesis my through I win of we entrants why

can software. You have

of lot funding. a have can You

great a have can You (XX:XX).

time fraud, those to that through, the here's all really here's to metrics, so prevent here's have, or can platform, those experience. for gain that able real-life that and hundreds what point are put without to the the customers our pieces, other we've this much of here's only the to we all And a here it's You real-world, are harder scale, without what years, ex volume being software. to (XX:XX). done CFO is on frankly, way here's experience Treasurer getting Time do say, we that

we So vehicle a market. of lump interest they and have for tremendous over in those brand-new funding a a anything, idea, If big and more a marketing advantage spin-up they like work the organizations. competitive us,

itself, it's money, moving creates significant moat. in and So of a

just You're are in try likely than other to less new you entrants spaces.

Richard Douglas Booth

which Rob, of theme. actually built that was recently, I exactly a in off involved sale

And a new the then to company, to a So us. and had actually talk security. was entrant deciding they factor to gone large began

more and their they reputation looked the corporate was data bank-grade our was player. it security that but way industry-leading to the company wouldn't newer they anything their at trust As that clear center, an deeply versus approaching smaller

Blake Anderson

Great. Appreciate it.

Operator

Bob Company. question Napoli ahead. & next from And with you. Blair Thank our William Please go

Robert Paul Napoli

nice quarter. afternoon, is on for that job the much bookings year-over-year? Rob Rick, million. year, you, and and The and the How Thank $XX good up

Richard Douglas Booth

XX%.

Robert Paul Napoli

the the year, as and For the quarter well, full full year?

Richard Douglas Booth

(XX:XX) XX% XX% for the the year for and full quarter, yes.

Robert Paul Napoli

revenue full Okay. once was run Great. are what you say on the are new trans implemented? year bookings, those clients that you and And that generally would rate sub that, when a the expect

Richard Douglas Booth

fully Yes, they're they're and implemented ramped. once once

Robert Paul Napoli

That's you. Thank Okay. very helpful.

any Paymode for million business, quarter getting $XX that those year, or of you full trans give mix which expect? would sub Digital the of is the some or the businesses, you – With Banking idea added are idea, you can me you of and this or European

Richard Douglas Booth

Yeah, talk had at at as because the about established quarter, platform, last our that's we stuff. level The been it very just the Banking level our so traditional strong this versus Digital I'll just Digital Banking, which well keep generally of SaaS products. as

closer were were they to products their established run relatively quarter, more – were average speaking. our rate outperforming, they This and

Robert Paul Napoli

Great.

Richard Douglas Booth

strength. Broad

Robert Paul Napoli

in market? see you are not Rick, a other these parts you of Are they companies that I mean may would players Or a clearly a other at are I you that look in of they position not how these some mean, the just different FLEETCOR great in PrimeRevenue, growing see SMB? broad but, generally job out even or that some are markets, And, of and – or of some them? such market you there, competitors similar WEX it's doing are this do guys AvidXchange market. have like, these great bill.com, in a an or you

Richard Douglas Booth

your best that of industry many is you I for and with think you market. market large report after pointed room in parts the goes recently particular of a when growing out stories it this said winners. those Each

but we is, we're nonetheless, platforms. in to areas that the well. that's adjacent overlapping no find as the those with of capabilities head in on. critical to We focused is sometimes That continue ourselves to so or one either we key competing invest expanding head think our players And a why reason

Robert Paul Napoli

– XXX guess, there a make wondered for there obviously, that's significant I are thoughts I have if at acquisitions interesting generate related. a know might Are of globally built that I a tuck-in I sense? any progressed and cash strong deals changed mean, now Rob, sworn while bit off you you've that these quite lot a on really have you all? that And, guys you any are private guys now had but sheet, flow mean, balance probably than and more companies I

Robert A. Eberle

right very There We I'll certainly answer $XXX – or always million looking wouldn't to dilutive the to have the to $XXX that. comment our jeopardize about you not going win. but quarter, is disciplined on a same we've significant that's we've do always deal we We're for every we opportunities. need We're tell capabilities had to the million anything we're going target.

we see an So that either to have our in we can fashion. on set we'll or used. and is engine it's a a ourselves you that best there don't It's good a reporting for product driving have of to add word (XX:XX) us. a say today that today, upgrade we or we're and platforms, opportunities word and any older that don't extend. continuing the have extend customers we tuck-in's a But pretty we for a there hole the organic M&A we That's growth in wherever can capability is technology good

Robert Paul Napoli

much. it. very Appreciate you Thank Great.

Operator

Perlin Capital Please with go We ahead. have a question RBC Markets. from Dan

Daniel R. Perlin

guys. Hey,

XXX. a said quick ones. Just couple you Rick,

Can say reconcile reason a favorable help be that? it have I subs then just trans and think you heard modestly was but why growth to implied you growth. as I going lower used me you to

Richard Douglas Booth

Yeah. true. are Both

our was So which we flowing that's lose under subs implementations and line. revenue with XXX, trans some prior deferred impacting associated through and

us in on our that, short-term we slight deferral. hand, So but down trans full some implementation our strong as from we allow despite to favorability the guidance. bookings And other cost is subs costs, maintain, our ramp year get and then the the

factor, considering of our guidance. So it's material not have but overall, we all weighed a in that

Daniel R. Perlin

Okay.

but bit you're in So on reduction line? Just so costs and it's not potentially EBITDA of saying a towards I'm much terms of more favorable so so little clear. top

Richard Douglas Booth

Correct.

Daniel R. Perlin

exactly that what guys? or...? in it to you, to advantage And what quarter, could the thought enable Open then you acquisition have the Is did to it with of Banking, you a piece take just that tuck-in business bring to do is U.K. Like, more you of? going

Richard Douglas Booth

Exactly.

Daniel R. Perlin

I'd love hear that. more to about

Richard Douglas Booth

Yeah, exactly.

platform this, to set up-sell capable. And small through develop our tuck-in, had Open PT-X. a we We able is companies so of called have unique Banking a a have been many customers leading platform, which for business to platforms not appropriate market-leading this onto opportunity,

Daniel R. Perlin

of take of be that up market you is the different part Does overstatement? little weren't Okay. even that you it Is sounds open It like that or...? a that a may addressing. to Or market maybe bit an fair? might a

Richard Douglas Booth

little that the I to existing But, business a tuck-in. but now importantly, strengthens opportunity extends it up-sell capability an customers existing it's have would platform on, say small those a small and we position our bit. us very the in an is market, this

Daniel R. Perlin

and and of together. now. Digital taking more bundled, right some about opportunities had lastly, It like that little just to think Banking wondering great. look flows kind Okay. of a a was Paymode-X. And That's those a it both they both with quite Paymode-X of always the away was There's people Are from and those. talked then, couple I'm of them management clients quarters we ago, robust? I you bigger but backed discussions that? pull into opportunity this what Are not cash

wonder if that just I if I period. So actually Thanks. that momentum that's – during is of or just maybe don't ahead got gaining – know itself

Robert A. Eberle

capability. not of that any in of sales terms we'll end offering It's year, discussions, but in today the and say unique central capability part hasn't I of ahead lost calendar available a in Bottomline, quarter market. that have the a We're the third by of ourselves it's certainly Well, for momentum. it's wouldn't

unique a get makes And certainly many network bigger. to becomes a competitive settlement even common pay Paymode-X more cash unique way that I but capabilities, in and have paid, management capability. it's We for as the product our the advantage for set businesses think

So, No. certainly, no loss that. of momentum on

Daniel R. Perlin

(XX:XX). Thanks

Richard Douglas Booth

conversations just more Yeah, I those holistic. think get all

the and but is time it's cash and together, And, management this some going. be course, see to payment The is holistic across pieces both around the a it's takes just absolutely right payment ACH network. crystallizing. direction If It conversation card holistic of of really into these that us monetizing proposition you pieces. contracts, value translate network you for pull to

Daniel R. Perlin

great. That's

resonating. guys. right. it's All Thanks, like Sounds

Operator

back it I'll any speakers closing our And remarks. turn for to

Robert A. Eberle

QX Well, large thank for EBITDA you thank interest, market. fiscal continuing $XX year. growth, strong for the questions. and trans to making $XX We the and Thank look reporting million forward and quarter, we're on you subs your EBITDA, this A you. million XX% for your in progress

So you much. very thank

Operator

participation, you. today. this teleconference for Ladies your using Service. gentlemen, our you for and AT&T Executive thank TeleConference for We and conclude Thank will

may disconnect. now You

Bottomline (EPAY) 9 Aug 182018 Q4 Earnings call transcript