Earnings call transcript Q1 2023

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Matt White

Good morning, everyone. With me on the call today is Leland Strange, Chairman and CEO of CoreCard Corporation. He will add some additional comments and answer questions at the conclusion of my 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 Corporation 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 including included and our affect with our subsequent may SEC, the XXXX that operations in are filings filings. Factors Form XX-K

and performance $X.X year-over-year quarter first of professional noted revenue in million services are for maintenance revenue we in the XX% press quarter million, components our our As services and on of of a revenue our pleased with of the The $X.X revenue XXXX, of revenue strong first processing growth and basis. of we consisted of release, third-party continued million. our $X

we license quarter. not expected, As did have revenue for any the

related for the the General the portfolio revenue in was a a of conversion compared $XX.X million, Motors decline revenue again license which to quarter XX% expected. XXXX decrease license first revenue Total million in to quarter driven XXXX, $XX.X the by first of year-over-year, from zero was QX in

as quarter basis XX% a grew first total services revenues basis. revenue grew on revenue in license year-over-year Services XX% grew revenue processing professional maintenance year-over-year services, year-over-year a a revenue Within quarter on defined and plus the and the in on XX% basis.

our basis, GreenSky Goldman first in was customer on a March XXXX. Goldman quarter in completed year-over-year excluding XX% and growth, excluding Revenue both largest from of revenues the and acquisition

program We continue with Deserve, various such managers to have onboard new we as customers and both the directly and partnerships through Vervent Cardless.

implementations have progress live we currently in new multiple the to in in previous we quarters, months. As go expect with coming customers

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

The the last mentioned India. lower to our XX% margin in an was was of license primarily year. XX% margin previously same for decline operating and revenue hiring by margin operating operating XXXX in driven compared period year-over-year Our

without adding year-end we mostly new of to a was revenues people. flat from XXXX, as significant to and continue headcount grow our expect in number our headcount we Our stabilize

tax to was XXXX XX.X% QX XXXX. QX compared Our rate XX.X% in

tax per to between for ongoing compared for our Earnings to be expect the and XX%. XX% XXXX. share We QX rate quarter was $X $X.XX diluted

our revenue growth XX% revenue As $X $X approximately release million for and we services to in in press million. full this expect of be XXXX, license year noted between morning, and

We customer, from approximately expect be is services XX%. to growth our customers excluding largest which revenue all

We quarters license in the starting quarter. future revenue in XXXX in second expect

However, of previously. reasons it's QX difficult us for for discussed license QX the timing we've for to and predict revenue

expecting and as be anticipate Within professional to quarter million revenue to first of slowdown services, We're second Professional in we of processing maintenance continue be strong continue for continue the onboard services we our and to services some likely grow continued in $X.X quarter and customers professional as growth services to million. the growth XXXX we in in customers. the expect $X.X strong to rest the in revenue the to range of XXXX. of new

However, remain level. stream we that at high expect a revenue to

over And to I'll with Leland. that it turn

Leland Strange

add to much quarter But quarter. Matt. of going had was don't stronger we to beginning The actually is to at I we where anticipated what read want than Thanks, that. the little even very Matt's to Okay. I'm a had This comments. too the have quarter anticipated into

to year. the As the rest Matt going of for said, cautious we're be

as of are. we All carefully customers are spend our watching their

as smaller was year-to-year ones, or From the whom turmoil overall not banking large in as strong good, not ago a very of comparisons overall clients, offerings. today We a repeatable. perspective, a going we on The is it we in we likelihood new all the the with new live XXXX to be be Every even name of even the not sector. to six have quarter would grow months due quarter a ago, larger said continue that as an have to big of license hope future. had revenue the new business big was customers previously to record year conversion bring albeit

but diminished have We're having the for how appetite radar. conversations the to No surely lasts. believe under those they'll XX% one to couple is under We've banks for knows and XX%. We'll even remain are of that regional risk long go I still just see we prefer banks really major pricing gun as speak. the regional outcome a stock now as the seen the banks today down greatly

impact does that us. So

but right We how have bank and sure. don't what do as a be we're kind big have saying have things develop. are smaller two, I anything see see will talking – folks We you may now this year of for that can live going just

will -- I'm have then e-mail I'd before going conclude I my for him on questions. recommendations the It a an a question And got which ISS – going comment we you and comments I'm open I shareholder. share yesterday. was I from that my vote to with answers it to thought gave

one questions on not the asked So well the our Matt, an many being and there's shareholders e-mail call. of or said before yesterday send day

answer So have you this? would guys the answers. be I seen willing to

for the And here Apple CoreCard? CoreCard savings option of the questions. involve use software? if so Does impact is what So the there

that gathering, is in by the not Apple card used option. involved for savings but answered saying I directly credit Apple

to card to add X.XX% will so offering You helps credit of course savings number that the cards. a and have increase to get account I savings. with benefits they're CoreCard have of more the do cards

more added want cards So that to people causing is grab as Goldman. at to that savings definitely be

software? CoreCard? And what Apple. The CoreCard is answered the use to above. it. Second, Pay Now question for so Later is similar but I question tough go I there not with and was Buy a does directly involved option the for the Apple if is might next read one, impact CoreCard BNPL involve of

profits of the in working the engineers CoreCard? are So past to the months of are they such percentage hired contributing XX what software that directly net

engineers So this is engineers not you're hiring and still as that hiring they answerable, really or revenue-producing separate was my the making you're was, question are that are variety hired the think directly tasks of in answer people we tasks. not for a I money? do are

customers For working example, that will on of things are immediate that largely on and maintenance. pay and our license longer-term the have projects percent other maintenance us benefit others a as impact some license engineers

answer, then to free And the is upgrade two of being CoreCard's free don't more income significantly questions. One upgraded to is the expect streams completed? do how flow in you And cash cash separate develop when much the used flow. My the you be software?

So again answerable. not

never complete. Software in is this business

the to diversion. fully year, three least and years have maybe some this more We of but be at using a will new software be it two will

for used. over the be on new are pricing. finally, was still believes to will its the have lower will bidding advantage plus operating years management business be would software benefit though also competitive My but new provide new will functionality bullets answer, older significant be business. And made significant The no is how competition? CoreCard should attracting competitive three that There question costs even new and which in silver as software only not a features last software are required be out much for software the creating advantageous the decisions competitive advantage to or upgrade

said which taking find name. me I He I you So straightforward your if -- to answer we -- thanks answers my for see to the I his candor. I give my could which appreciate got and a said that surprising. thought let time response will He question. was

and the to Your brick when Atlanta shareholder's stock first company you're XX I ago. was bought moved stated said call. letter the conference I Then he to building years I around get forward I brick. by the look -- this

you say our long-term to questions thank thank the shareholders. for I will long and So also many you of

really a around we for the a long sense I who've unusual think stayed we're bunch very in that have time.

is about to comment ISS. going next My be

year, this audit the how against vote non-audit out the Committee. not that As institutions simply recommended meetings. institutions a all because certain the minimum. know, for And Audit higher it's also they ratio ISS year they is to the at Chairman annual sends -- the fees of actually but company's shareholders should than to corporate the vote the institutions Last of and recommendations know, on may

Now, we may your sure don't from In different it's agree that. somewhat with keep to you consulting fees on here. good and it's weigh completely pay separated in Matt and and policy audit case, frankly auditors totally our to make

fees Just to give $XXX,XXX, but past billed audit other you the were were fees an were that our year idea this $XXX,XXX.

companies other compliance are help they're formulas. So site of terms ratio totally is is audit Matt fees that's are $XXX,XXX consulting the processing is and we of that cutoff because reason That though services me have in but means The independent. required These of services. out here not for in greater other $XXX,XXX. $XXX,XXX which fees the their XX-XX than minimum in kind

Matt White

be our require They auditor to independent.

similar And to to services. they're be so to they the they audit be need way providing independent not services them if wouldn't able independent those for in provide

we kind Leland of way So just for looks services fees non-audit and in the the bucket And those purposes proxy that calculates said. a non-audit then although ratio they statement. at do view as fall of similar ISS the as under

Leland Strange

is to to our we other go get use And both the costs. up Audit be and Goldman to most so go third-party any and we whoever will a could others. I'm Sachs may order in the money Nicholas $XX,XXXX formula. you. spend some best of that just Now that of rather it the simply Committee and colleague vote particular the by actually Hope But choosing on that's a rule, beat We majority environments own of as as in well repaid environment year. it efficiency in particular for us can get than customers our in our some easily the the costs but about worry recommendation helpful way against would Chairman shareholder for the possible cause a

have open I'm of questions. going to really Don't it other that, lot a for up comments. With

Operator

will question-and-answer Ladies a you. we be this [Operator time gentlemen, conducting and Thank Instructions] at session.

Leland Strange

one in. If think we I no questions, there did have sent are

game me it, they any ask up? of rephrase are there changers Let kind coming

And game out environment, then I changers profitable coming to and up. to the changers. going think we'll staying go I game the settles brick-by-brick turmoil some of given this going the and answered any not environment project current the the banking look continue company build in to to time waiting We're I'm back that

you that just I thank your patience. for to want With

Operator

We do have I'm question a sorry.

Leland Strange

ahead. Okay, great. Go

Operator

your Riley. We have with proceed question a Hal with from B. Goetsch question. Please

Hal Goetsch

quick expense a on got I've -- first is guys. question growth. on question morning Good

think pretty over head mentioned hold the I investment big count year. you're steady last employee a after you going in count to

seeing XX-K did right months spend I -- and now? think we're said the when you it service XXX and filed ago. I G&A the your XX -- this a year employees was of pretty I rest Do good maybe spend and think total for the you the in think that mean -- is X,XXX of it around level maybe dollars that

Leland Strange

Well, I'm personnel. going share to

head of terms remain going In to steady. pretty count, it's

I of I predict know don't to think costs inflationary how all those yet.

I'm this may exactly not get people pretty much personnel depends you think there -- right control will But spend simply time. an generally under you to going have hire, to costs. a lose. be just lose it. the that even do to continue but we past to Matt…? be in that bit neighborhood. we what ratio and fact given little say on holding all we'll carefully increase It due more you the also the We'll in watching right always But all So it's going than be probably inflationary we're But is stay now. and

Matt White

up there's continue should count we a revenues current level able hiring year. said, to Maybe down the That's quarter-to-quarter that grow and right. We as steady that have. keep Yeah. of and to be little Leland with head bit stabilize but of this

Leland Strange

are other But to quite be expenses going mainly inflationary. the

out course. increase So there some of will be

Hal Goetsch

that question And on accounts card that fintechs Okay. kind small. are international still the are kind growing next lay maybe and large now right issuers, the of companies land what between you're programs is and issuers, mix add domestic going then card to quoting of what's now And speaking QX? emerging programs after for generally my of right what of the the new

Leland Strange

international There's going It's there hard little a percentage. be be and some put of growth going some huge all international. not to to of we to be expect. It's it's those Yeah. will a but

some your folks to maybe call continue have who continue some emerging some may be I'm add starting and -- do we're smaller smaller. to add fintechs continuing banks but do not that going they are -- We We to emerging going are fintechs, them progress, some to to we will things.

But going anything. the are not regional banks midsized do to

I'm can't going in conversations, imagine in I going that wanting Despite but whatsoever. conversations of them. to of get best are out So kind front of can't I give the -- trying I'm the to them you on any just we're of lay the guess regulators risk to happen. it's They to my have not land positivity. imagine just

Hal Goetsch

looking Okay, offering the like any…? okay. of can cards And ecocards. follow-up. for you new there one differentiation in ask Are you cards types seeing or issuers are if Is seeing I metal economically by marketplace --

Leland Strange

Yes.

So people seeing, faster. and in it's to we're change into want so we're really that able not that much, And that's seeing physical make what reason. offerings. their terms And legacy the with to do card is of we're large be program seeing mainly to processors hard good the for differentiation

to a to and reason, system to you've it you've got out on their good a very they got define So them advance. lot for not of And that's knock well careful. be in got people

the to offer they as quickly. out to be in And successful, people not market, to some is test them. want landscape guys So but things see I don't the new even they want know many change, bigger try we're seeing of they to some what to things hugely that going want the speed are want what -- cases or

who to So talking want -- bigger we see move flexibility. we to say, to more We quicker. have want guys the mainly we're

processing, ongoing But happy we're stuck. fine. getting. we'd like like can't the happy what of the we're have. really We getting. price we're to mobility would we're but terms -- We're it's In the have we And with

of what kind that's hearing. So, we're

Hal Goetsch

questions. what's on Is software kind get if the same But allowing quickly? -- question the to back And last of more of card from installment the Okay. I'll what's statement... loan you -- an out make tactical your like me the queue in allows example that have here and there's a example maybe in back queue change a an it to

Leland Strange

they in but one, where if I'm bank And could days, a pay we interest layer recently, to if XX want issue folks say and That to it's much. want pay as card no be we would it's XX, that example you it's not XX, you days, XX, much. a going rate, to if this might but just to to said -- that, there's an seven it don't just let want commercial allot it's credit. in And this goes it If over interest. maybe much want there's this if they more might

and when different parameters, -- regulators. those of boy in but really particular you the cycle a it start right the rates a make all take get cascading could that's month hard in sure you Now, interest for you particular statement

So,. that's just a little example.

Hal Goetsch

mean No. That's kind just that's pretty of... complex. Yes, I

Leland Strange

pretty months else. up could can can We where it We program. somewhere to and can week sample take we do do that that a it in to set or a it it's do test two, and They going fast. do

because we need where can't quickly really they anyway. that home, how could change it the is customers, we know a could about So, program, they I it our do of guys of think, larger state our they more mind are with don't innovative so what thinkers any do

they're they're them. we XXX sitting fast if with had happen, there we but we all there. What couldn't well and you, ideas, sitting come ideas and implement them? can not would we've implement say So, how got Well, we

Hal Goetsch

you. Thank Excellent.

Operator

Our next of your Please Khadir comes Capital from question Richie Richie proceed the with with line Group. question.

Khadir Richie

morning gentlemen. good Hi,

Leland Strange

Good morning.

Khadir Richie

processing you're as you my you us to question. -- And to going? future far strategic within it. opportunities? and high-level evolving what the strategy? as making if see the the gets where can taking your you upgrades on extent type get evolution ecosystem software also, more really give CoreCard excited then the of And and do see thoughts bit insights you the like card for could about market I on a to Thanks What's your wanted that to talk

Leland Strange

Sure.

What what than in In business new rewrite but using we're It's terms coming don't terms it we're I who of of doing difference. of written. blank doing a have other version, from we -- know sheet not is a called paper. what that it's

that, all the sure that And what But in uses it so place years make can including So, latest AI that even may things -- out being are want idea talk talked that. you add about, is are let have now about in. from you now anticipating to latest the three now you with the three next -- XX to that question tie happen. there software do and it ties more one into me from years then greatest your to I'll technologies

have internationally? made understanding do And -- the work around. thing how of do moving How settle will go do yes the originally, How the zones? software you is money most throughout cloud time you we other our this across out way applications you How didn't wrote many internationally? there? have And is full world we've of do obviously, the it data on centers moving cloud, be the of -- but that's when you us now. different The

So, next and we've projecting I'm taken we're what everything software. that in of writing we know new terms that's and why going

out, in landscape So talking wallet call it's account savings just installment whether different a is it on I card and it on about I'm of that really a or Pay bunch several is, decisions what to whatever it's [indiscernible] made utilize whether about in where or that. whether right Now a years is guiding best into an it's see wallet whether on and we'll a or the how it's Later then money your Buy of pockets, in or credit money. instead there's your just in now of And terms it's

that It's in future I've in credit is, going while saw one all it's on Buy be you'll in go these said things our Apple's -- wallet, all to account I'm Later on keeping mean, wallet. really well we're are not guess back just card. it's all I I Now, is now the vision to for not what money. better it's the the just of I same Now account and ago, Pay what call but a to a going What

that it account So, a a determine how we're then put That's build will very trying will in all system high and one wallets of distributed. to gets this level.

Khadir Richie

Okay. just And then follow-up. one

legacy making the with as stumble? feel where market With about like, evolving processes been the they'll do of haven't you this evolution like aggressive that

Leland Strange

It's It's a by from going erosion really doing They're going not little slow be stumble. to to what they're little. now. just

look now, And doing see see So tipping they're can what any I see don't erosion. I point, at that. you

Look of big global do, all rid Payments reorgs getting Global rid -- are back the guys. the Worldpay. trying they Getting of to at putting up,

just So will I nevertheless those reorgs, through by be which when or you it, acquisitions. stumbles. stumbles of see this look as they're just stumbles. Many But often covered happens,

Khadir Richie

Okay. you. Thank

Operator

question next Long of Our with Avi the Cast proceed comes Please from with line question. Advisers. Fisher your

Avi Fisher

Thank I questions. Leland. you. Hi, two had Matt. Hi, quick

one, The help math and first I'm at bad wondering with if I'm you could it. me

and year did million So guys line to XX% gets last in you XX%. to roughly guiding top you're $XX growth, sales which

of to You're X%. guiding license to X%

that the at -- So high end of

Leland Strange

Avi. year back not revenue services Definitely this we're license a Hi, to be to for add going growth. year. of that all said able said We've

Avi Fisher

Right.

growth you're on services XX% So the about talking side?

Leland Strange

Yes.

Matt White

That's right.

Avi Fisher

So XX plus X gets to XX-ish?

Matt White

Right.

Avi Fisher

thank top just -- flat. that And And on Goldman layer is for of the clarification. you to roughly

on of entirety roughly XX% board? incremental growth like is that new customers that So coming

Leland Strange

some increase know we Roughly. to I mean, there's be on. don't -- going Well,

Matt White

look to revenues the have of You there. components at the

from And you're then so So also $X some to to Goldman, from the services -- but $XX.X million related. decline to million Goldman then you've license That's going got million. $X -- in growth revenue see

Avi Fisher

But it's from most new customers. of

Matt White

Right. That's right.

Avi Fisher

that quarter? XX% some get So from therefore when you some you do the up on there, services of margin leverage this the side on were and scale sort in

Matt White

should expect XXXX. grow kind services costs our in leverage Well, just our we all and and the margin to some at stabilize count of see as look revenues, on continue we do we head of

Avi Fisher

Got it.

then invested Okay. the second Middle And question you've in is, the quick East.

of little small. the business wondered relative You've about Middle just is could in talked sort bit year-over-year, there to fairly grown Revenue that talk it about where has investments expectations? go, could your where East. it's if I still a you but And

Leland Strange

this grow. to it year. but things It's to grow. got it's continuing be expect to some small, We've We new continue planned going for

Avi Fisher

All right. you. Thank

Leland Strange

Yes.

Operator

the to back to There are I'd like for questions queue. the no remarks. call closing management further in hand

Leland Strange

We'll again placed you have to continued that I thank again, your ownership in Well, for if for those. trust thank be are to question you time. good and further your continue of Always, both try But answer try available us. to the you in to you your Matt stewards and for questions company.

So --

CoreCard (CCRD) 4 May 232023 Q1 Earnings call transcript