CLPS - Earnings call transcript Q1 2021

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Operator

Hello, everyone. Welcome to the First Half of Fiscal Year 2021 Earnings Conference Call for the CLPS Incorporation. Please note that today’s conference is being recorded. At this time, I would like to turn the call over to Mr. Rhon Galicha from CLPS Investor Relations for opening remarks and introductions. ahead. go Please

Rhon Galicha

An Hello, on operator. half thank for website this you fiscal on now Thank company’s the call. everyone, CLPS us IR morning. earlier results today’s XXXX www.ir.clpsglobal.com. first release Incorporation joining is year available you, at financial and earnings announced of its

the that Litigation of provisions the Private Securities please Before today include harbor we note continue, forward-looking safe may Act of XXXX. Reform discussions our statements made under U.S.

of number risks a involve uncertainties. statements Forward-looking and

of may results today. would statements these uncertainties, that Exchange I of Certain today SEC. statements U.S. our documents As respect, disclaimer following Form Act to different the as the expressed U.S. Securities the as with assumptions results materially that factors amended within of In such XX-F Section such, meaning XXA the are views financial the like applicable XXE our other our filed Securities be Securities amended. Further with and from other statements. to included our protections information risks, of Act of in and made the could filed Section discussion and forward-looking is Exchange regarding of affect XXXX in XXXX the and the read Commission and

may expressed described statements entirety qualified us future by and the forward-looking include their performance, and expectations known actual expressly company’s unknown cautionary expectations, to in to with company’s notice, outlook and statements guidance and beyond company or intentions XXXX. of Forward-looking cause are statements the or objectives, most from company’s including performance from with other operational uncertainties of the results, which its as to and and implied the reports involve of may performance, in risks, this this which be the company’s such goals, or and fiscal the achievements company’s Its and Internet Such different at ownership factors, such future plans, filed are reports beliefs, be discussion limitation, and respect control financial SEC’s Securities those anticipations, attributable uncertainties achievements and the half www.sec.gov. the All future website the without the assumptions, materially performance well SEC Commission, statements. and estimates, uncertainties to results, recently capital risks Exchange the from offered in including, in through first performance available upon company risks request related preliminary the filings. as or

undertake date the any not update, except applicable forward-looking statements update statements call, company does statements, of after We issued obligation any made. undertake after any law. CLPS measures such today date in call, any reconciliation provided to are respect required correct days this of to not earlier is related the to measures earnings release found With the can during any the those the information on be today’s of forward-looking have do non-GAAP today. and under as obligation revise or which no discussed otherwise the information to the and hereof All or respective

detail. followed on been discuss Please will Chief at the off management to results; developments have will CLPS, of recent call allow with to Director review prevent results and noise. the placed team company that the introduce Officer Raymond CLPS, Yang, financial operating of Ms. present who lines Now by Executive Chief of Officer start Mr. me mute all a Financial Rui background note Lin, call. and more in

Raymond. Raymond, turn CLPS, join Mr. that the Vice will session. now prepared to like I call management’s up said, company’s go President Wilson Executive the Operating remarks, Q&A Chief Mr. would the please With session. ahead. a of open Following also Li to for and we’ll the Li, Officer; call Wong, over Q&A

Raymond Lin

Yes.

The Okay. you, has here with I’m very and Thank Thank for happy the things many been everyone. today. all you very has pandemic changed everyone. and call you to be you, year Rhon. on levels, to past many COVID-XX Thank operator. joining challenging

before, change everywhere. will our I said As life COVID-XX

hope you and family I our happy. Henry, strong to in staff, increasement to and Thank and you say want safe And to thank growth. I Anyway, support team my and Okay. your and the the have business, are and team, Wilson, you. Jenson Rita, thank you IR here, my

Thank you. job. are doing You the well

Okay.

that our reflected showed Now the been core that has year implemented specifically this XXXX. of I’m financial fiscal on business strategy for morning. first half pleased to as early results We announce the

services. XX% demand the by increased revenue due continued to IT Our for our

enhanced by same XXX%, As earnings net share compared increased diluted the US$X.X the income increased also US$X.XX significantly earnings efficiency, operating The which basic the period operating per income as we diluted and XXX%. on per our to year. with the basic and last share results by of

was strategy It we During growth. by significant in Mainland aggressive contributed increase the achieving more implementation, In this our business, which period, generated during in partnership core periods. XX% in past have our revenue expansion generated we the the attested global outside been China.

First, to China we in opportunities lease as loan China partnership The banking specialized got global the the a market. system management partnership company explore the is in area well. aims company. agreement The in with a market

with system. project China. biggest the opened in largest and automotive China. technology Latest, our the car data IT energy the Shanghai the in lessons, one service manufacturer with be presence We in used automobile also deepened have utilized industry with of big in Second, associations partnership and to new we an driver agreement in navigation the cost

industry. diversified we in penetrating in technology We In chip efforts terms of robotics growth. the in investments, venture the our business in the

framework in invest in to set opportunity And telecom XX% our and in Asia media Guangdong headquarters. Singapore our ownership company social area. business industry acquired up remaining Zhichuang the We and the Singapore, we explore also Ridik Southeast as stake

in the qualified always demand global Singapore and technical developing completion business dependent training, talent for maintaining and expansion. a our been will which meet Ridik global In overseas, to advance we focus to order have As Asia, banking the supply our the and IT on enable Kong. About further the in expand will our wholly-owned talent training subsidiary, training, have Southeast integrate us chain. fully IT insurance we and in Singapore including the Hong IT company business some we the department. Upon our on department been clients, our of in projects and will

already some them joined clients. has And of our

over to For for I’m talents. the years, proud past the you, IT very trained of has CLPS training, XX thousands tell

they all Now about happy I’m work the in They institutions and really, few different make really financial world. contribution. distributed the jobs and different over are that.

I’m love forward, Looking too to to them, of much. IT tell will you." I service I the very Here, proud you want all to guys, we continue high-quality "Hey, clients. provide

to This clients. We emboldening digital are efficiency. committed improve among and productivity transformations their to our is

addition, to In continue new will in business, invest new we and products technologies. new

Business technology will for high-end clients’ on year business in our order on business to remainder fiscal requirement. footing of growth We will strategy provide based continue and our put the us goals reach and to our beyond. and streamlined training XXXX a firm in and

like ahead. would fiscal about tell to turn you I will year the financial CFO, half Yang. on our Rita please XXXX. She of our Now over go more Rita, call first results to the

Rui Yang

that due demand million from from increase decreased IT $X.X solution update services, on services XX.X%, XX.X% primarily revenue service. revenue services clients. will due you, primarily up was now increased That’s to terms to other an U.S. fiscal XX% IT year-over-year from IT XX.X% the from other million. down was Thank million The increased $X.X I made all was the an in million. due joining $X.X up Mainland to areas. from from first up provided revenues from Thank banking and from $XX.X are revenue generated increase existing management wealth the Raymond. million. in that to performance up headhunting earnings decrease all Revenue for $XX.X the mainly due million demand dollar revenue The In from Mainland you million in million. and XX.X% clients $XX.X up the to to XXXX, our $X.X new numbers call. increase the million. successful financial $XX.X and on customized including from Revenue to million demand comparisons profit increase Please to The to by all reflects from by $XX.X strategy. outside half revenue [indiscernible] provide outside particular, in $XX.X for geography, reporting to our $X.X are China today’s China services. This And consulting services The from in and was of existing a note revenue company’s about period. million. Gross continuous is our from in increase from expansion XX.X% services, million to revenue from consulting generated $X.X global basis.

increase due the of staff expense up marketing The and operating as of salary million for new expense $X.X implementation was company’s to expense, strategy. the million. enabling increase hired, from As selling expansion XX.X% global $X.X to the were

was continued R&D XX.X% AI. robotic due development from and the automation, a revenue, to and up global decrease result a the was X.X% economics of million. which to computing, to scale process company’s primarily The and data, expansion from artificial As X.X%. brought increase research efforts Research strategy. that’s decreased about the percentage efficiency The marketing big as expense personnel-related $X.X primarily total in due by expense $X.X of RPA, expense, development million enables cloud with increase operational to selling and of company’s intelligence,

of $X.X a administrative increase to due As the General a from economics development decreased The XX.X% research and to million total operational revenues, $X.X decrease efficiency XX.X% in result to of from million. percentage was expense scale. of and down primarily expense XX.X%. as

economics total XX.X% As of The administrative of as of from a the general was and personnel administrative result decreased due decrease a increase efficiency scale and and expense. in decrease operational percentage in and primarily to XX.X%. to revenues, management expense refined general

in the excluding half million of year impact As up a XX.X% After to up XXX.X% income was the basic compensation CLPS attributable compared the to was million. net Operating $X.X million. the $X.X million from million share-based diluted X.X% shareholders share. to to income Net compared net excluding $X.X income fiscal $X.X earnings Incorporation’s and net income fiscal the from of result attributable operating to attributable net Total CLPS or to million. After attributable in share other basic CLPS $X.X other income million. first diluted or Incorporation’s net $X.XX is Incorporation’s shareholders to $X.X $X.X compensation XXXX diluted CLPS compared first $X.X income the shareholders X.X% from per $X.X million $X.XX in or non-GAAP $X.XX After share non-GAAP non-controlling prior non-cash expense million the non-cash interest, $X.X and per share-based basic non-GAAP the of impact This XXXX excluding $X.X of up diluted half income from Incorporation’s million income, million shareholders of of to share. $X.X per basic of million expense, $X.X to of period. in period. to expense, and of prior XXX.X% year to impact earnings was and a margin per decreased net or above,

XX, As $XX.X compared XXXX, equivalents of of XXXX. million XX, as June $XX cash December million and we to of had cash

December we As year-over-year. numbers XX% up XX, had XXXX, X,XXX, of total of of employees

we fiscal forecast of the ready questions. release. mentioned our net we previously year the from forecasted our This Operator, Looking for the by The to to adjusted earnings XX% income XXXX, subject financial year second report. change range in to This non-GAAP financial fiscal approximately in XX% expect total XX% XX% the half for in forward, as remarks. prepared factors to XXXX full XX% is in of was sales now concludes XX% company’s year of growth XXXX to compared approximately growth are range fiscal results. and

Operator

Greenridge Thank you. first ahead. now William take of go Gregozeski our We’ll Global. Instructions] Please [Operator from question

William Gregozeski

to Can results. new driving your win ability growth great revenue talk and you clients? Hi, what’s to your about continue

Raymond Lin

Henry, can me? help you

Li Li

will first. the question, take I

Okay.

No Okay. problem.

Raymond Lin

Henry?

Li Li

industry. global First clients maintain win questions. our with wealth Actually, thanks your banking, competitive to We off, rapid strategic for well-known in management, clients in are automotive our ability growth and engagement advantages. and in e-commerce actually new our by driven

Rita we of bilingual multilingual with also training capital programs. than human mentioned them As our CFO, base X,XXX world-class just have now, by of which has more capability, professional our underwent or majority IT

ensure progress attract we data, our enhance on. the cutting-edge it’s the maintains by by team cloud to success service and through our horizontally, to clients. And operational global continuously And management consulting And big innovation. delivery vertically, addition, through our solution. through so our we and our is presence clients experienced this such So in like IT as highly and M&As. on And new our driven also IT technology also innovation our technological IPA, services, innovation investing customized the line in in

William Gregozeski

target the you’ve then the also few Asia over year expand regions at or last but U.S. those for the of end and fiscal a of in grow even Do where of China, years, And the in be Great. to want different you mix continued to next Okay. rest have fiscal year? you by this

Rui Yang

for lot a Thanks your Okay. question.

the the still global business revenue distribution overseas although operation-wise, effectively aggressive For to in been in to the significantly implemented. contributes have by visible forecast Mainland and we hand, growth. on But more our be of other has geography, China market financial our our the expansion strategy been

period. to total half first generated revenue the revenue by of fiscal has XX.X% to in increased the million of outside compared XX.X% For China year significantly the the XX.X% XXXX, Mainland prior $X.X or

China, that the absent from be whole is at year U.S. view may generated this Mainland and you. material approximately or XX% subject at company outside non-recurring of for XXXX revenue Please for transaction, the XX% fiscal will for to Thank XXXX. be from preliminary forward, fiscal that change. the informed Going including acquisition expects, and

William Gregozeski

then planning to you about disclose can Great. cash or generally it to growth? And specific you’re brands the last you raised use question, have even further how Okay. any you your do

Li Li

Okay.

Rui Yang

this answer you can Raymond, question?

Raymond Lin

Yes. the Yes. question, sorry? Can you repeat

William Gregozeski

have cash it generally, even how or plans the for you raised Yes. Do just just you you use to can growth? further any specific

Wilson Wong

Yes.

the Mr. Let question, me take Raymond.

Raymond Lin

Yes.

Okay.

Wilson Wong

Yes.

e-commerce, along out talent. investment of clients. the continuing Mainland our that as in our of clients, strategies global global also, will automotive will we has mentioned, In that will China. mentioned, we hedge Rita our well-known IT management, also that invest, the we work terms And outside will to expansion we raised, as of training Raymond capital we with And grow

recent our I’m will with XX% Ridik. market, international so We remaining the actually continue in acquisition based expansion in the of global in Singapore, like stake that the

IT allow and Asia Southeast penetrate will to Pacific in neighboring the us that So market regions. the the in services country,

also we rollout for that, in business of top the on So U.S. plan to

are As we’ve from our that two existing contracts based headquartered you – all they U.S. know which new just got in the client,

moving So exposure we and businesses in U.S. also are developing market. forward, the more

that lever moving that or that spending – and the we cash are that So capital international the and that is we in raised ahead market. – the concentrating

William Gregozeski

Okay. Thank Great. you.

Rui Yang

of X, closed per share yes, addition for in $XX offering million – registered at In we direct successfully addition, the this priced offering, direct $X worth March XXXX. have on

Operator

now Thank [ph], Hu you. go next please take Melissa our question from ahead. We’ll

Unidentified Analyst

Congratulations your U.S. from client new on contracts the in

the question. However, to my I of would like know all if you That’s this disclose name can client.

Raymond Lin

our you such your Okay. client, Can CLPS the and the we we your Thank them, requested are the I those to release. answer It’s certain enable to press questions? as only questions. growth. to that long-term the between in agreement disclose value information, which we for shareholders. our Due will us relationship for confidence also protect with in to continued And return, mentioned our bring business more will

contract the – in and reviewed thoroughly have release terms counsel press follow the and strictly. U.S. that contents to the ensure our we addition, of In conditions of the

We have market, to and global a more the strategy, we inform with market looking forward gain the business aggressive about expansion shareholders company. opportunities. to all major takeaway, news been of significant and are overseas as is priority From our our

Operator

We’ll ahead. you. please go next from now question Thank take our [indiscernible]

Unidentified Analyst

Okay. performance. Congratulations your on financial outstanding

behind strategy the spread has What’s outside global market the China. the your Mainland However, expansion?

Raymond Lin

help you me please. the answer to question, can Wilson, Wilson?

Wilson Wong

Singapore, IT region. of a as based outside can attest services Mainland and demand for already well acquired that that also in in earlier, XXX% mentioned there terms as strategies as is in I’m Ridik strong So our Singapore have this in Singapore I as know our we you China, global in

got we two and based we have in are reason And clients, grow we the the the share earlier they will – that investment remaining the acquired developing Ridik, that also – with the of the countries help recently U.S. us as contract XXX% in in addition, to which the our Pacific. in in penetrate that our Asia in focus XX% from IT so Asia our also customers mentioned and business So nearby Southeast development new existing U.S. services

give we going and market. deepen expansion will the that Thank forward, to begin exposure in Last strategy develop but and sound, not moving and is effective pleased that are our fundamentally U.S. to a So business us to is global our highlighted least, our new, CFO. and you. as opportunity our financials now by

Operator

Thank you. [indiscernible] now from go ahead. take We’ll our next question please

Unidentified Analyst

business how taking is, affected your the management question. Hello, my Thank team. pandemic? for by COVID-XX does question you Hello. My

Li Li

Okay.

Raymond Lin

Henry, can answer? you help to

Li Li

be questions. to the financial our Yes. growth. continues Thanks and like to in contributes in Mainland wise, question. overseas visible China although aggressive – take Sure. business been Actually, Sure. the operational your our more I have we for market, would to

pandemic, pandemic, not fact, has the has So and industry. as which, the from COVID-XX recovered for Mainland affected COVID-XX CLPS greatly in China quickly

technology demand and the businesses more on and products moved to since fact, In were market has China. been the pandemic

from So ensure are of globally employees, you. of our them encouraged clients our the by home. speaking, Thank to to work safety some

Operator

question Louise ahead. Thank you. our We’ll now from [ph], please take next go Wang

Unidentified Analyst

you, Thank operator.

congratulations First, it the financial economics And you. you performance. does color more is, on improve operating give of my Thank could strong scale? efficiency? How question your on the

Rui Yang

question. Thank for you Okay. your

Raymond Lin

Rita...

Rui Yang

answer will question, I this Raymond. Yes,

Raymond Lin

Go Yes. ahead.

Rui Yang

Yes.

our also increased. line As our top we expanded revenue business,

more to to as our in also business support growing have our We reflected employees returns. needed

a experience to our meet extensive On been the percentage decreased more total IT ratio. of growing staff in has other tested as as hand, from services, demand in clients revenue with our our able expense

our will That’s you. better generated we provide to a which all. result, Thank bottom line, a As more shareholders. value

Operator

take now [indiscernible] Thank you. ahead. next please We’ll go from question our

Unidentified Analyst

Thank forecast? you. net My everybody. the what’s reason gross is, adjusted question Hi, the for non-GAAP income

Rui Yang

question. will I for take Okay. Thanks this your question.

of net have our efficiency, income As XXXX XX% to XX% demand fiscal That’s the our from and clients year from XX%. you. so IT forecast a adjusted enhanced of services Yes. to non-GAAP all. for for operational network Thank strong XX% growing result to we

Operator

our from go please [ph], next Thank you. ahead. Zhang Alice now We’ll take question

Unidentified Analyst

Yes. revenue? a to I question have do recognize your CFO. you How

Rui Yang

you. Thanks lot your Thank a for question.

year. incurred for hourly basis reimbursement time hours solution based planning like to customers’ the significant from the Upon less perform design, for to contracts In you. The for customer services the company for same – customization require customer billing company months period one required application is the customization. generally customer price is on is generally which and company Thank pre your period already requires for one question. negotiated integrating customized the than context, provide services, the post but and after actual required is As expense delivery year of acceptance the contract, techniques, required. and three at revenues generally from that rate, That’s a is system production all Yes. support fixed delivered. to

Operator

We’ll question from take next [ph], please Lee you. ahead. now Thank Casey our go

Unidentified Analyst

you. Thank you. Thank COO. your What’s your among for is My competitors? question age the

Raymond Lin

Hello, question – Henry, you. for your

Li Li

Thanks. expertise has our question. I’d CLPS Thanks competitors. – IT like one to among providing in the the been great our take XX We for high-quality Actually, in believe industry. in of service question. advantage that the your is years

and clients are addition, companies our big sectors. international In focus the financial in technology the and

competitors. are those So our edge the Thanks. among

Operator

now next please our go Thank ahead. We’ll from take you. [indiscernible] question

Unidentified Analyst

during outside CFO. have your a question is these periods? Okay. China I the How revenue trending for Mainland

Rui Yang

from generated and strategy. revenue generated Singapore, Hong question. all. continuous for implication thanks significantly increase successful China and Kong, outside Malaysia. outside Mainland has China our The increased by Japan global XX.X% expansion India, you. The the to comes to revenue Mainland in $X.X Thank That’s Thanks Okay. million, your

Operator

to closing to no would any the Galicha you. back at or conference like Mr. Thank for over additional are time. turn There remarks. questions you. this I Thank further

Rhon Galicha

Raymond, remarks. please closing go ahead for the

Raymond Lin

Yes.

joining for very progress a you, you, everybody. your Thank We the Have And today’s Rhon. to investors. for you call. you, And weeks look support. in ahead. we you. on much. ongoing Thank operator. you day, Thank Thank us and you updating again, to Thank our your you questions. appreciate thank forward Okay. Thank good on monthly

Li Li

Bye-bye.

Wilson Wong

Bye.

Raymond Lin

Thank you.

Operator

concludes for and you Thank call. today’s gentlemen, this your Ladies participation.

You may disconnect. now

CLPS Incorporation (CLPS) 6 Mar 212021 Q1 Earnings call transcript