CLPS - Earnings call transcript Q4 2021

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Operator

Please standby. Hello, everyone. Welcome to the Second Half and Full Year Fiscal 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. Investor opening CLPS and from Galicha Relations remarks for introductions. Rhon ahead. go Please

Rhon Galicha

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

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

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

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

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

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

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

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

Raymond Lin

including Thank Rhon. joining financial you to and each I today's and tell call. our CLPS XXXX financial both your further both for fiscal fiscal performance of and thanks family profitable business I'm it today's bottom year performance, you hope in everyone Hello we financial are [ph] XXXX well. going growth. our and strategy, Rhon. in Okay excited In sustainable strategic The with will and years call on, you, as are line line. pipeline safe top our reflect competent results us other year both drive our and

Our with CFO, and million my year-over-year. XX% revenue later. net $X will by to to US$XXX.X million by increased share you Rita, XXX% detail Further our income increased

say our to Now, fiscal about this costs contributed let me financial our year. strategies that

more of family is consistently my golfing of our than say backbone our greatly X,XXX continued appreciate success. dedication thank more that to and the First all, staff, than year. I'm CLPS the I'd company's your to happy you We like every

IT professionals our of in and to On delivery We fiscal talent number new IT the efficient company meet XXXX. progress also with fulfillment so hire we existing the initiative more ensure for with acquisition very our clients. positive demand prospective, services achieved manpower and of

this We the million M&A, rich of capital. overseas CLPS In working markets offering, existing continued investments, various on maintaining this the raised we in been our of product to in to which while registered financial of joint of operation trend our improvement the year we organic venture, execute technology the finance. our digital through and in February contributing global domestic and capabilities $XX top business. have dual-engine development our growth strategy and utilized partly through direct committed

MSCT in of we a lot Holdings Limited. is Creative a acquired Technology initiative company. listing me have subsidiary They system stake banking XX.XX% one This Hong That Kong products. reveal is a Let we Minshang The have Limited. done. of of Investment Holdings is a

first the system. Our project upgrade is loan to

MSA Development card order and distribution integrate For will custody, category were of credit Also, in [ph] me as put In and payment delivery overseas blockchain This in our team provider. expand such platforms. need develop both solutions products the institutions and our future. regulation. management aims every that limited holding NFT financial high finance Maybe for more wealth Asia Century at we we our and future, exchange, further others. joint Asia among upgrading solution governments Company Limited, Columbus in we with with to to blockchain-based a development CLPS with solutions banks venture asset system. transaction in research first in and we advantage more our technology finance, Business strategy the is work Southeast investments bank company various truly Private Southeast team business, upgrade and at China. digital But

region. on can Asia. set a Southeast operation, reveal CLPS we that us facility operational others our service coverage And in reach be generate to secondly, technology we in the comprehensively So the business clients and will of and out our facility demand revenues. allow CLPS this wider IT which

financial is on server. on account distributed X,XXX is launched service structure and portal is been multi-institution by the now -- Southeast next well a which rental and for we expected flexible So market system. our based a management. in Philippines in portfolios credit for provides to Pacific Hong on Australia we small and be I'd far like physical Singapore, is With complete system It integration. location. different has a high banks, and experience unitized powered business in services services out India, such be multi-language our and this third the It than for to asset credit card cost will management. and kinds credit of delivery all trigger and which developed based any IT life supporting more API support limited institutions, all and allows architecture Malaysia, the account capabilities develop allow and ability. the office Singapore, generation new system invest party and or in and authorization But real structure, is architecture credit engine improvement phase, to efficiently. properties has data our from on card a year. more effective country in of commercial system as card pots structure, to to lay primary infrastructure high more APIs and issuers. and concepts, backed phase Asia is development us the estate of [indiscernible] online say its position [ph] Asia [Indiscernible] become in so This to The This enable full allowing to a microservices new by multi-product, rates key year system. can investment MSCT who activities Japan, to reach managed issuance across issuers global the provide companies. pilot Kong financial multi-core, version have different in mobilization institutions The early promising And and turn scenario purchased circle large early locations, This active

comes which to area, and our launch of connection, products especially in In to pots. our R&D, big and next to data marketing integrated AI continue systemization improve to brand efficiencies and the research our decision-making. and be company we for plan in beneficial and engine insurance then data data We sales a by automobile data and year, it by clients data down with help It analytics, will terms data to big technology, sector.

client the and resources going too utilization We base. important will we [indiscernible] more continually [indiscernible]. industry, high, RPA research hope in very such in for it’s tech effect input and it’s our reconnaissance, conduct with And were because financial as on for we

business. recent we services, IT management, U.S. measurement We including gained XXXX majority data big payment and in industry. provide their risk with international this During e-commerce IT analysts the in the contracts services for data

area During the e-commerce second increased half revenue XXX%. of our from by XXXX fiscal

business companies the our XXXX. intelligent services $X remaining IT the the Furthermore, revenue year during the console of addition, feel in XX% learning, Interlink order million to underlined In navigation automotive machine vehicle jumped we project. system with by vehicle [indiscernible] consulting fiscal service work solution service increase leading competition. and increase also the in central efficiency. period In we automotive new manufacturing, industry our Within and we in system, to past

sales organizational structure blockchain on such be our our the enable with as with of as and and executives well we senior and So our Us top moving company's [indiscernible] current client reorganized streamline improve [ph] to technology, digital big and tier to guide our we top in efficiency data, the advanced leverage remind operation. for and financial transformation time, and the investment extension business efforts and At R&D trajectory. cloud we generally. focused same hire to forward, the function [indiscernible] as management dedicated company's the business

in generation system. also next process innovation our are and We streamlining of bank loan

We old reforming the will system. bank, study our

role function. However, high is degree and of configurable automation what central [indiscernible] control

risk and result, the centralized, control. a make easier the interest more bank we As easier will

in revenue [indiscernible] trend the by overseas will of U.S. potential is in upward Asia We further Southeast present business other trend. and -- industry what parts push to to drive our the our

I and on family, our shareholder. Lastly, you. support Thank honor of trust behalf CLPS and [indiscernible] continue

to I half Now to the results. would over CFO, year to XXXX fiscal full like turn of our and second Rita financial the year discuss Yang, call

go ahead, Rita Okay, please.

Rui Yang

of million Thank due XXXX note fiscal The services million. to from half including increased XXXX. dollar service. XX.X%, by I revenue increased demand in second performance clients. increase financial followed to to $XX.X our Okay. services increased $X.X customized consulting $XX.X now improved capability XX% in consulting for and increase was $XX.X increase services. you, terms revenue XX.X% primarily due IT $X.X from from an due million results $XX.X demand by The revenues the an comparisons Raymond. all U.S. Gross The to year was from our particular million. XXX.X% for provided existing the from fiscal all In Revenue from so increased to provide In million. update primarily consulting the are full are half that demand from second on The $XX.X from of $XX.X. IT due headhunting to to million made in will services, million clients on IT IT increased $XX.X new $X.X or was was our Revenue for profit revenue increase million the increased year-over-year mainly existing service increased increase services Please numbers from company's our to solution from and that a increased from and for other million by the services million. $X.X other delivery. basis. XX.X%

to due increased from staff primarily $X.X of salary and As company's million. expenses, hired capability increase expenses to improve clients' marketing $X.X delivery selling service to increase as was expenses meet XX.X% operating The million to the the new demand. were for of

million. a to As the development decrease and scale. result a total R&D in establishment computing, and percentage from the the efficiency increase of to primarily automation, due new Research XX.X% selling marketing to robotic resulted big continued artificial decreased blockchain, to increased increased projects of X.X% operational the The RPA, revenues, economies company's expenses as $X.X and and primarily cloud research of in X.X%. $X.X was process from from million data, intelligence. expenses efforts The of

$X.X to increase was increased After and administrative As The expenses million decrease the share-based expenses non-GAAP to economies compensation a development research non-cash compensation $X.X efficiency to million in increase XX.X% expenses was to administrative the scale. primarily result from increased decreased million. and and The excluding General administrative non-cash expenses due due of of the revenues, increase general primarily and million. of expenses. total expenses, personnel from from and percentage $XX.X XX.X%. general a related XX.X% XX.X% as $X.X operational share-based to of

from year total the million period. the share, other administrative result attributable which impact Incorporation's and efficiency million to income, from of income half CLPS non-controlling million XXXX of attributable compared net period up revenues, million scale XXX.X% net to income of million increased from of shareholders CLPS or second After non-cash million to year. compensation diluted compensation in fiscal total income per $X.X share. decrease earnings $X.X CLPS last After of from to $X.X per year income, to the income to impact in in million. XX.X% shareholders XX%. interests, of in $X.X general and other expenses of second increased XX% excluding earnings million Operating of Provision taxes a by and expenses, $X.X other Total the was compared and basic After compared The of $X.X to million. share-based to margin period. $X.X income due over in operational increased $X.X income X.X% million percentage $X.X a $X.X non-GAAP of $X.X $X.XX other shareholders increase the attributable as diluted for by million. Net million and fiscal X.X% the excluding XXX% prior to expenses, net expenses non-cash share-based $X.XX XXXX Incorporation's same of refined non-GAAP was was $X.XX the $X.X management. the million to or $X.X of prior primarily Operating expenses, Incorporation's net decreased As economies was to million $X.X non-GAAP impact the net diluted was basic basic per income $X.X earnings or is net $X.X half to excluding from share.

an Now XXXX year I fiscal will results. provide overview of full

customized in increase of continuous revenue increased Revenue and China increased increase including existing $X.X profit XX.X% was delivery. The to strategy. million XX.X% demand $XX.X Revenue increased ended million million. $XX.X million. from the increase from the from million expansion for existing $XX.X to the For revenue XX.X% demand from mainland from was million the $XX.X demand company's Revenue was IT reflects to successful In primarily an increase $X.X XX.X% due capability million. in increased $XX.X $X.X our service primarily from $XXX.X million. service. revenue improved The XX% XX, due from particular outside of consulting from revenues to XX.X% million was generated increased million new $XX.X services, services. to XXXX, to services $X.X June million. other $XXX.X services other the to increased to from from solution revenue increase IT generated The due and The headhunting in due to clients increased million. and IT increased China Gross increase from year services consulting to mainland from clients. outside increased mainly The global

delivery was operating to demand. of the for As expenses clients' new to service million and capability company's as $X.X to due XX.X% the salary expenses, from selling hired marketing staff increase $X.X meet increased expenses The increase to improve million. of primarily were

of As in of XX.X% projects and a development Research to $XX.X from research increased total $XX.X artificial efforts intelligence. scale. decrease as increase million. of X.X%. expenses reflects selling decreased in million RPA company's operational increase big marketing The a the X% to and primarily new The from establishment and R&D and percentage cloud computing, efficiency result economies expenses of an data, the resulted continued blockchain, from revenues,

increase administrative result a As research increased and XX.X% and total of scale. decreased General million the percentage of and decreased million expenses. to expenses, from increase decrease X.X% compensation revenues, as from $XX.X general efficiency to compensation million. development of XX.X%. a $XX.X The expenses $XX.X administrative share-based due share-based million. $XX.X an excluding operational from X.X% non-cash in expenses reflects was primarily economies to non-GAAP The After the to non-cash increase expenses of

Incorporation's XX.X% as Operating As $X.X in a XX.X%. X.X% and million After compared million to million income from from for of in total reflects to $X.X year increase million percentage The $X.XX was income other XXXX, million XX, share-based Net attributable expenses, was $XX.X $X per by shareholders non-GAAP result June increased to net $X.X the to excluding interests, $X.X net million attributable Provision After the $X.XX compared diluted non-cash period. compared compensation earnings compared to of to earnings to $X.X other is or This $X.X Incorporation's an share per of or prior XX, expenses, million $X.X prior CLPS net increased increased per management. net the other $XX.X CLPS XXXX or earnings expenses, excluding $X.XX non-GAAP share. non-controlling shareholders total XXX.X% million ended $X Operating prior net attributable basic general scale year million. earnings million decrease economies and was or to diluted to basic share. in of from total per was CLPS and for year income income to in and period. from by share compensation shareholders up decreased the to million. income million income $X.X income XX.X% for revenues, administrative of income $X.X million. the income, diluted income expenses non-cash million $X.XX CLPS margin and $X.X the of to Incorporation's $X.XX June taxes After basic efficiency by net refined share-based excluding earnings year basic expenses period. to non-GAAP share diluted attributable net $X.X XXX.X% per of million million The ended or Incorporation's shareholders year and from $X.X X.X%. operational impact of other

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

employee As of $X,XXX had X,XXX, to up of person, June of per by XX.X% employees XX% Revenue up [ph] per XX, total income numbers by per employee XXXX, net up year-over-year. we $XX,XXX XX.X% per person. to

approximately income This range year to expect Looking questions. XXXX sales of in XX% forward, concludes fiscal financial year are approximately the for we growth compared we XXXX, results. XX% and to fiscal the in our ready non-GAAP total growth remarks. XX% to the XX% net range Operator, of now prepared

Operator

Instructions] first We'll from [Operator Wing you. [ph]. question Thank Jaden take our

Unidentified Analyst

three remarkable results. Congratulations questions. for I Okay. the financial have

reason given has China, tech in your to There -- up in their China, last in Creckta The is the will services the tech significant first most question is overseas for the CLPS providing seen a competitive clients Creckta? new IT company more services advantage company smaller in since opportunities [ph] players and China? lot pick be what monopoly for

Li Li

Li, COO. Hello. the is Henry This company's

thanks for First of question. your all,

questions. these answer me let Now

strategy our very that's aggregate which generated XX.X% that's all extension specifically It Though, always fiscal year numbers from revenue the China shows significantly growth is IT pointed half year-over-year. Our revenue in mainland full China. clients all from the been outside effective of have the mainland by global for demand we and our has China strong financial out increased so of consistent for services, contributes, second revenue. of XXXX undeniable

large it's on always believe on. And the It That's that taking Creckta. tech of we hold advantage. competitive the a so, not measure is advantage we

growth delivery markets enhance international Thus, overall our and to of capabilities improve our addition, in investors dual-engine diversify and to more increase and improve vendors our the our effective to domestic IT valuation. to strategy income. benefits royalty our client In our product bringing

answered as this As mentioned, our hope provider, your IT service well. explore business professional questions. you. you have opportunity Thank given And we position as I I

Unidentified Analyst

Okay.

contract? My particularly using services, was though XXXX. they After in Even is, years, name provide platform. this their their with not consider if company services for China I'm wondering crypto would update can transaction released, CLPS for contract question Okay. the global transaction an the got on last your the you global February cross-border cloud IT and working company cloud

provide currency with the Do the outside Columbia are management So China? companies would you an for please this earlier up exploiting CLPS set year, of crypto link update? financial digital institutions continue opportunities

Wilson Wong

for you cannot This I the client. disclose agreement, we reiterate confidentiality questions. that Thank Hi. like Wilson. is to would due the the to the of name

standpoint. so to it stable your our ensure long-term -- that hope this will However our understanding We client. relationship way and we with for live

are global we because paid pleased U.S. already the we the of However, market client in came expansion that there. very specifically off our has

Going back your questions. to

Our business progressively is with going this well. client

to services IT provide, the client. addition providing are of exploring IT also the for solutions we services we this In possibilities consulting current

Rui Yang

of year also that operational area. XXXX is add the with let me In from our will half Yes. revenue question. collaboration capabilities e-commerce Rita. This RiDiK to this e-commerce that the We more depend delivery terms your contributes Thank revenue client by area second you Hello. XXX%. clients. And of strong Yeah. in further than products our IT believe for increased advanced fiscal and

Operator

with our from Jacob Global. Greenridge And Kurtz we'll take next question

Jacob Kurtz

Hi.

think you released going you're guys do a is? of continued around? think you have has you fall. positive stock the guys Why to turn series to this how that it And year. announcements So do But

Rui Yang

Hello. This is Rita.

question? repeat Sorry, can your you

Jacob Kurtz

you a turn series you but positive around? fall. stock do Why year, of how will announcements continued has guys to So you it the this released think And that have is?

Wilson Wong

want Rita, to me answer do the question. you

… yeah So,

Rui Yang

Hello. Yeah.

Wilson Wong

Yeah.

the take me questions. Let

And material price, that behavior is of disclosed. generally market Some volatile. been the so has of and the stock top because

will So of continue we Mr. strategy, as to Raymond, mentioned our by dual-engine strategies. some our implement in

to our We will I our that'll I answer hope deliver shareholders. and results your questions.

Jacob Kurtz

all. is Thank you. That Yes.

Operator

have no or remarks. questions [Operator for closing management time. at conference back the like further Instructions] to appears It any this additional turn I'd we to

Rhon Galicha

Raymond, go please would you like your your to to Raymond, remarks? closing do remarks. closing

Raymond Lin

Yeah.

right? Okay. questions, No Okay.

again your and us you. to you support. this look Thank we today's Thank on day in joining ahead. appreciate updating a ongoing our call Have for Okay. progress We and forward on week good everybody. months you

Operator

conference. your that We conclude And does participation. thank you today's for

may You now disconnect.

CLPS Incorporation (CLPS) 15 Oct 212021 Q4 Earnings call transcript