CCRD - Earnings call transcript Q1 2022

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Matt White

Good morning, everyone. With me on the call today is Leland Strange, Chairman and CEO of CoreCard Corporation. I'll provide an overview for the First Quarter of 2022, and Leland will add some additional comments, and we'll answer questions at the conclusion of our prepared remarks.

Before I start, I'd like to remind everyone that during the call, we will be making certain forward-looking statements to help you understand CoreCard and its business environment. These statements involve a number of risk factors, uncertainties and other factors that could cause actual results to differ materially from our expectations. future our included subsequent XXXX affect the filings filings. may including SEC, Form that operations in are with Factors XX-K and

results As our end our in our were quarter of we high at press expectations. the noted first release,

we revenue growth and and and processing both sequential Our professional strong, saw services maintenance. remained year-over-year in

the to million, of largest revenues to of Revenue quarter compared customer, customers. quarter first do revenue percentage continue also that and of making our in institutions, quarter from decline multiple for of would growth during future same quarter quarter the quarter We QX large expected continued a This amounted to a to quarters QX quarter. CoreCard. for the from customers other our were quarters the excluding impressive expect license total like first to we to in for had our was the XXXX completion we drivers revenue institution Goldman that more As compared additional to XXX% conversion and million, license from the come. XX% out first the customer as of remarks, largest Sachs, noted $XX.X in moving single XXXX the for $XX.X an quarter revenue was XX% was to first The the we XXXX. grow. of XXXX. significant license in XXXX. increase Revenue tiers of point growth Total for of license onetime We achieved for existing fees to revenue due first an expect

$X.X card the of prior crypto others, revenue $XX.X consisted an XXXX, of quarter of third-party East in versus of $X.X first of and Middle quarter live million, revenue go versus new professional exchange, a In company expanding addition of in an $X.X increase program first debit among to several had XX% the We revenue and fintech prior processing including, the an revenue of to customer U.S., XX% a million, year; and increase maintenance million, services million. of international year; revenue launched a license region. the for new customers the newly

regional performance which office the XXXX our a processing card program. to The mentioned also growth processing will that continued due We our bank's growth recently went maintenance drive from was Al our XXXX, customers. [indiscernible] existing debit platform added Exchange for revenues. in our is our in above processing strong and for quarter the and prepaid We with live in continued exciting and the Dubai Fardan step first of for another global customers

mentioned, license significant we in of quarter the As recognized XXXX. first previously revenue

a fourth XXXX. license in services $X.X in we similar tier million was We $X.X the professional anticipate services of expect of first strong the new to revenue in quarters third second in million. and quarter quarter, achieve to likely the range as the and/or second likely in the quarter Professional and revenue expected,

was operations our year. highlights of operations from quarter to from Turning the compared income to million income first statement $X.X the XXXX. million the $XX.X additional quarter on for Income last quarter for for same some first of

increased increase margin mix, for an XX% quarter some partially for the to margin driven -- last in the of quarter primarily compared revenue the XXXX. of bonus was year. This offset operating quarter first same Our quarter accruals by first for operating the was XX% by

the diluted was share $X compared for Our XX.X% quarter XXXX. $X.XX QX XXXX. QX to QX XXXX Earnings tax rate for compared per to XX.X% was in

the Turning to our outlook for year.

prospects hiring as investments to of our Leland. optimistic remain to talent training XXXX, wins over that, summary, our the for to about XX% believe it we an increase growth incredibly expect previous estimate line top incoming well In XXXX and We of XX% long-term turn continued compared from and infrastructure as to XX%. XX% with growth. will in I'll revenue and we've And new made customer yield our as

Leland Strange

Thanks, Okay. Matt.

pretty we've go the questions. article. straight question what description first we you been, a to what's has of answer elephant come And we me good to Bloomberg are let But gave in not which can with room, are, will and whole the to we where that. start where point in. the where I I obviously, expect. at some I that sure the is a I'm lot going think add I'm

realize You get still that we e-mail. questions over

we've think ones some got and good questions I at today. it's corecard.com,

yet the the take easy, the we early February Why looked to Company XX-Q, March but this, called the in we did purchasing and stock while for our at numbers, purchase is based stock significantly? were any XX. and Matt not as in April identical if but to the March March, outstanding does stock cannot realized invoicing place to know shares were I or on and we just asking at had we not, likely the sell the pertinent. like one. we answer inside while Question not beat activity that given. It's if shareholders going were that shareholders is informal many we shares, guidance April, April Institutional for throughout the shareholder, I'm So it take repurchase first Well, fell price the is information. per or XX

customers but You good believe, over numbers got the that would not when month, this. could recall, a control that able cannot We said quarter really we of for year, last exactly last as a we would side to second that several land shares and generally It's from liked earnings month weeks, days been this comment point after in calls. buy usually the few we to several the until early I first not have no we a quarter. a or license to decision knowing the have very have to last our a have make. I have expected over quarters,

and BTIG. from good two have We follow analysts that us Sidoti

I and with our do organic any disclosure. of growth to benefit selective have to color, as to they information What or their Generally, is not in more forbid digest best guess when job public get least. to think a While might on model of growth. shareholder at cards customers they Even well, additional their insight phenomenal model results. get choose -- promote do our except us order lay more of low they or of they really have questions us knowing to call their and make just CoreCard is models, more does than many from it kind us impossible the have information no types us sources they all any the to rules occasionally from

So a as the quarters, wrong analysts quarter. in wrong are assessments on in be just going their particular is to some management

I by with an this in a But we're that looking as good our quarter-to-quarter, following looked chicken taking on have think inevitable I lumpy assessments stuff. with analysts at confident heat say, way. take We time but it at wrong management but don't dare not the may averaged dealing a other good miss revenue our out quarters. a the over lumpy analysts owning way, pretty and always these several we in company was want they be risk to appreciate because

buybacks. has of I'm this. to shares. million story this approved for you release to not share CoreCard with in go $XX We're the observed our And up sure wild morning our buying going that's Board So that

Just simply we to buying want. and -- as approach conservative We're you might investors, we're the quarter our as and buying price done simply a shareholder approach reports. jack We're shares have tomorrow, behalf on going in not probably not quarterly not buying of to announce of what many might. prudent and only the up shares shares the today, during buying shareholders we

it's The year the to increase revenue revenue I'm is was, in primarily going question both? next is share guidance by that? full buyback. license driven by the or Matt, revenue, that's both. So driven say non-license your

Matt White

It's license right. of revenue a That's revenue. maintenance as processing as higher well combination and higher

Leland Strange

next furnish QX's is or a R&D, significant got The it, we license accruals million G&A bonus revenue? there strong because model the at a look Well, total good were Okay. QX, that's expenses, of and was, given question to base in and $XX.X which we for obviously, onetime periods. I Matt, did know a the that? their accruals it. don't modeling. put model in comment significant some prudent on accruals yes, It's those And any like answer this. to management would on to we how put bonus quarter hard just in is other really really,

Matt White

Not really.

for future to we base. QX better in there's some do we do QX do a last in and But yes, you Just in bit you to said, kind -- definitely probably a of there's as to significant more and did higher quarters. accruals of quarters. look hiring some expect to we continue bonus year than QX, little other going had that be And

Leland Strange

the And update expect large how do further, I And be answer license license remainder And license of new then would potential think many how deals? on then tiers. any 'XX? don't of additional tiers processing additional was hit I these other the you the or customers? question deals many can pipeline to

card do don't of know count. be promotion, Matt their additional We think some putting we how said increasing earlier, tiers. I hit to expect much into our license will customers

the try it Some do loader some in them the spring, summer. to late of in

for during be fall but tiers in in additional it order there purchases, push the license Christmas will ready year. Some be to the this

year I on had sometime but update to employees another terms able just overtime a At Colombia large of small don't work As happen customers, in year, new tons still have large getting to some contributed letting or dark the way, We're customer. order us do normal keep either in be for up. we'd in employees yet. a this hasn't an good this We're to like normal being lot to potential opposed looking degree, our be to in indirectly. really in hours announced far year but close is year going as of large opening pretty a pipeline to a to this to with to next and have we're as help point, past directly customer that expect stressed we've of as beginning the new to

difference. have some that Again, they're made trained. not certainly Additional well employees

looking the breath I'm of continue this So to rest catch pretty our hopefully to for be normal. year and

the Although, future. on They're processing. be this big said, They're big customers going could new as our them in of own quarter. adding live many but point, Matt not every at we're

working could feel we're is on a those in of customers the like that doing working significant is do We So the that not medium small Goldman, that other large truth. to people that be have number for all future.

Next that margin. product in falling been see I or around. margin the hoping any license comments me turn to good, the I shrinking The revenue but fell but could if so. I word how you gosh, answer, notice year offended future, and let can't help you last understand address was your is has but say, when let the investment services was just I'm but in very dramatically services turnaround. the question Well, I'll almost on by expect quite Matt

We not takes it CEO, what I could build to basis. what that. should to a are that's absolutely on and quarter-to-quarter say. good a margin Maybe company care right our not margin now. what is couldn't not trying a I thing less. my on large I care is trying to less do do And We're focus a But

Now him have that. may view. Matt is he on I'll a comment CFO, a different let

Matt White

we will Colombia and in certainly India. hire hiring invest in in Well, to continue and

as going last So margins those new are Leland customers, over of those the programs. in the all driver big some the the the that mentioned, few are decline -- of are live, quarters. But that's

to to other going to add they time to do And customers, as the up But ramp up. for expect continue improve. we as margins those it's and take we to So Company. to not the training be for right of going going the do and benefit and focused adding processing quarter-to-quarter. to long-term equipment still we're hiring the new on We're thing for ramp

Leland Strange

Thanks. Okay.

understand but back goes you going margins have the focused out comment the there. we're analysts or now. really So any and same on very our to compared profitable to my are some have model Company problem we're about us. problem, of obviously, in trying which that of that We focus have not the right a on what on to But the others to are we basis, building profitable we

elephant services own the Bloomberg So The the subject is about software. writing about Apple the the last be their room. comment are going financial to article in

can, probably be are to today, exactly so about probably repeat all want I much same more say subject the here expect the comments any I'll up pretty follow and and to if questions. I Our don't going

if go to it's that bound not also, will importantly legal, most we're and for First, confidential legally, And customers. information any more than of our not customers ethically, publicly their particularly about disclose available.

Sachs can CoreCard as Now to in are It's similar that two about, public, Goldman a on. us. them. seriously, we're important Apple. and very that comment talking obviously, companies equally It's the vein things to we important I take very and

in will indirectly I void So or no confidence. way that directly

pretty speculate, many disclosing any about CEOs, to am it this terms come an try here's subject, logical from follow rest I this through in say. at way that's this. I it. do. me I If than subject script a the offer press I'm It particularly and calls calls progression go as tell don't confidential the that stories and the for as have you the even surprise believe of you to a should And Now on like one. key see rigid straightforward comment I'm I that risk am to I just and as us. free more for didn't I of Matt I easy though of going no comments also see and transparent But any not that. information opinion don't what to in

used be Goldman to me many lead processing Sachs believe main information as have not software engine be clear, by years. So I that for to that would CoreCard will its no

privy on will reason to even for I But CoreCard to speak to not be similar Sachs And reason be many believe no the no Goldman Sachs contractual it software. have couldn't Apple I would the Card not them. my come. processed statement, believe Goldman years have between I not I earlier processing and And the customers. were, to arrangements I'm Now to their about if

as logical large warned corporate with facts, on I've just as do. always I'm Keep been you in decisions the I've entities. So to speculate, involved with willing that mind, not that, companies from count to

information fact, as but clearly theirs point view, might your really from case software can count angles. processing years. handle In be we But with logical guess, many something I different dealing price for on of calculating appears volumes my card CoreCard each different the my, perfectly confidence that assuming said from that's that and competitive. for logical of course, illogical believe of here's you're from sets that, Apple will their is be And our and having they

CoreCard very significant investment software. obvious large pretty in this earnings our a has last It's Goldman a First, investment. our the That's years. and based to revenue point in the on few

by And shot, introduction the new long would most incredibly I credit successful. Second, Card the is Apple rollout successful card in history. that's say a

be credit. of access aligned There Goldman in we're they and said, anyway, and be to different lot are I the but Of application. I can a Apple in as payment the happening. more a carry world offering such of partnership better. further. done assume complex software that's they not Goldman. course, and card an solutions, for being is to It's little that. a most processing. working Goldman somebody no you, neither would It rewrite, frankly, other say, I Apple for rewards I directly Apple in expect I There's Sachs question, to far probably would said, do continue course, do a that due plan. credit both I have line a features But to others press the article that of Goldman, or And from the human software Apple article flexible. this. Goldman. a a their that sales. I rewrite as ways credit them directly for They debit their will I It's be that, just debit functionality to There's believe ecosystem is that coding the make and people all code with knowledge guess, other the it with that to actually processor. installment and next offer me believe and And banking and difficult, card about ability code this asked sense buying to with than CoreCard to rewriting the inside can I'm much up and that a that's business. bit very with it telling difficult anything are own But establishment card to believe at ecosystem. makes I iPhone ways attractive capabilities way lot they're just information. doing card is believe retail not a also rewrite. I more makes make the just let better on And believe is and it our the on sense. diversify be suppliers, in much the as vendors imminent. perspective, family And next, easier. easier our talks But software to they're Apple probably I software just great due rewrite. perspective that another working It say can have the credit many but another absolutely absolutely and than operating for do a they or That's critical would to with the would have

While we credit. but we do inherent there, cards, advantage have debit with do advantage an we no have

CoreCard So or going point. offer to at not not That solution it mean to does another me process some even a simple processing. surprise them see on off will credit of the they're

of side more Let's obviously, on Goldman Bank, up calls we're their probably lot they're doing their thing other the than and diversify, customers our have Marcus CoreCard to same do the our aspirations what just with require face the it. big as has for business. And own. that's to going and could other on looking they building as expressed a

say, Goldman as business, term where they we're going believe processors. other we'll good to a While have to if will summary, should another partner of of customers. you I'd we a feel our for idea my on remain very just daily long have also our good with interactions with remain the what get shareholders, read hope letter you in all good we to and carefully based

said transparent the the adding growing with we as feel customers to ones. we way with As confident why well and we totally be the rewards. I our new current maintaining pretty do what want and know potential We're and as earlier, them outlining we risk

terms I been good transparent for pretty feel it's I the that and hope be I've and think we be We're can I'll in and end comments room. as as as I the clear my -- can business elephant with as as in us. of usual

at there if let's operator, can So we answer. this take point, that any are questions further

Operator

[Operator first is from question BTIG. Instructions] Palmer Our Mark with

Mark Palmer

Yes. the strong on Thank you and quarter. congratulations

the during As in we're And had beyond the the of occurred you revenue quarter, the anticipated to looking a reference Matt, significant obviously, few the and at a we made conversion that had that license drivers first license been that. revenue of quarter.

to color Just why to in some line incremental wanted understand this quarter. was item there outperformance get that the particular

mentioned You among that in to other drivers revenue case during had particular, license there understand transition multiple the were. great one one quarter. a the of growth But was was that other and what if there issuers Apple-related would be from it particular single customers. instance to any And in occurred

Leland Strange

this cannot our going let tell between Matt differentiate to speak customers. -- I'll Matt actually, bit. let to but calls looking be a We you, in at I'll little just And and total. but had license Apple other back here, I'm me about we talk like on

consistently -- revenue customers happen guess second probably we the had we're for that, isn't our license trying do. what would consistently well to change word might year, because You of to thought kind but we remember we when last

what first And for got it I it And and maybe third none to things into the -- maybe this, customers do conversion, into that that think keep then the on got emphasizing Then doing. quarter, anything had our last decisions be moved example, quarter. hit which based with of they're does. For CoreCard would make originally September, moved fourth scheduled I quarter. it would was

several talked it. Matt, Goldman's of a about totalized we with customers had what be revenue is that? once up I ended more would quarter, So feeling we from think anticipated. we than good we'd But seldomly there first

Matt White

combination. Yes. It was a

three institution was from converting tiers the So was was then which from there those the institutions, customers And you Mark. accounts. existing described multiple then mentioned, things move also that there conversion-related. of the additional it. as growth It single to from way kind was we And

was the three there really they was it -- quarter. in another So than tier And we things. just were those maybe expected

more So expect last it from wasn't way future QX out line what we anticipated of like be and QX, to quarters year.

Leland Strange

Yes.

predictable when things changing be you would compounded that others also a onetime transition, By that tier. with of more you got ended another categories, up couple working had The together. because license

expect than And more quarter. it's it it there. I frankly, So be that be quarter. I for for expect didn't what normally we to this

so And that's happened. what

Mark Palmer

Very Okay. good.

Goldman your do on tiers additional you adding over your would Goldman, this programs, additional clients of license to the a of to that terms going ability insight based a amount upgrading operations, years. is As that you that. the done of be you lot growth big But now that but point? of I Where be particular will a you tremendous lot know stand on additional volume? to add capacity on when going take work to it's last internal at with look in to investment at don't of much at how existing And the adding based of regard your clients. couple have also any do You've license judge Goldman more

Leland Strange

-- needed convert larger say the it end by to at we one we it a before out. really us XX year, now. would we could it of easy of year, in to do I end obviously, XX not to the it kind months We do another going one We're fill going us easy, like to would the to mean, terms practices. another on push last the yes, it. I we not it. it's one. hard not be game to Well, year, this enough do but It's be would over have of really under ahead of do take would one. able year the but if more normal But a business from on of take to be employees being for Goldman until But than that would

got have something, it. we kind if of we to the we've workforce do Now do that

in we're meantime, to not turn happen outside year. in have something settle going we're So but would the going position be of not to would down a that this that Goldman to something that,

Mark Palmer

Right.

just you that Now program forward time But you which as revenue. a their GM lag further, and you is between comes on the at seen, that, a point revenue program the we looking bit little have launches aware large more tiers of point that new along, become know which when coming and there's it that. like a you at and achieve prepare for license

on Given of to that before the a you're just Goldman get think programs. capacity. trying about would conversations with the kind that we to this will But that talking year, has the it to window seems realistic? to a forward point at there's have you end XX-month additional understand, would to be more by XXXX, fact position by as as here and you XXXX, end licensing it bigger time about XX- capacity, more pertains or whether of entertain of partner planning that fair to not, new regard a that Is that conversation you that brought in become me to

Leland Strange

the towards given Yes, of year. absolutely, entertain end time the question. to without in frame, a the Yes, be that we'd position

or will customers by of resources. we smaller get. part Because other take some driven medium-sized they that how many however, Now be also formula,

that little So If business. pushes ramp we up, that the of ramp up bit really longer. side that to guy we out a continue the bigger

Mark Palmer

one for And good. me. Very question more

quarter, previously, crypto other software. exchange. signings What institutions. crypto We're of seeing among exchange just space. those as was for a that you that that first How in are in know have tremendous had providing amount processing would CoreCard the said opportunity the that financial in But different no shown sorts I institutions of there? mentioned seeing growth is new than you of size customers You of during your in new terms interest terms up? the that processing you pipeline, for you

Leland Strange

I driver peripheral Not business. at main all. to change. huge main a the not it's still the mean It's

Matt White

grow direct. They and be big of but how to one pretty it's got We've to pretty kind then through a is going early tend stages, too one now it's to quickly, see we partner that the still second. early have but

is our customer second that that in space. So

Leland Strange

questions? Okay. Any other

Operator

question We Anja from Sidoti. Soderstrom with have a

Anja Soderstrom

on performance Congratulations good quarter. the this

good the asked about So coming I drove how pardon you increase a but this already, of quarter, that? a in questions in think just lot we And already. should me had R&D few, Matt, what addressed first and if the the quarters? that

Matt White

That we the is to bonus accruals previously that development space. employees our related in talked about

continue seeing in -- are India. -- We we are hiring hire to

work on line we software hired And and then continuing -- item. there's we're our folks and to that are So to earlier. that rewrite up to getting trained those in speed. talked that's going cause about And increase an

that's But costs some can of rules. CapEx. that So we under capitalize of portions accounting there the that's to additional are -- going those

three those items. really, So

Anja Soderstrom

for year guess, I in some third And at of the guidance, quarter, as on level to license you then And XX% year. just full Okay. -- tiers the fourth same for new be think hit the you're and going to the last and XX%.

of three said You Or maybe three two in all of the quarters? maybe them?

Matt White

be It what three could three out projecting out really at. could we're two be of is of It three.

Leland Strange

yet, one. know we're we're we believe probably don't be We -- we -- pretty Yes, but going believe X. it's to confident on

Matt White

It two. for be could three. Confident

Leland Strange

it could know. But But the don't we be. three,

Anja Soderstrom

then should little the my that mean, muted it -- segments then in And other had bit I -- so be a more than means Okay. at model. I least

Matt White

here. and revenue. processing maintenance The of kind in growth continued expect follows the maintenance We license after

that get we continue as in increase yes, we to growth that new in have well. process maintenance. -- an does before expect But it and maintenance So tier quarter-over-quarter to there's

Operator

I like the reached would to management turn end have to over conference for back our closing comments. We question-and-answer session. of the

Leland Strange

of right. thank can, year. listening forward for enough to you, we're everyone. and we we've you, and hope hope question to everyone, good a we're we're Well, what kind we and All doing, We -- to doing looking straight your answered going tuning as Thank as today. in to us continue

Operator

concludes This you. today's conference. Thank

time, You your this at may disconnect for your lines you participation. and thank

CoreCard (CCRD) 7 May 222022 Q1 Earnings call transcript