PCYG - Earnings call transcript Q4 2021

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Operator

Greetings, and welcome to Park City Group Fiscal Fourth Quarter and Full Year 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. turn over to Rob your like Fink. now the to conference host, I'd

Rob Fink

and Thank and quarter afternoon, us you, Park Group's the good Thank operator, CFO. Randy are everyone. John earnings call. Park Fields, Merrill, Group's call City today year Group's today City you and fiscal full fourth CEO and City conference Hosting Chairman; for joining for Park

within this the I would of XXXX. Park like call that could begin, everyone about of contain we Securities Before City Private remind Group meaning the Act Litigation statements forward-looking to Reforms

the be financial in that company's obligation company visit turn to the a contained market this the the update release information Investor closed call. Such is on discussed issued information set Investors Forward-looking differ of herein conference facts. and all in those fully call. the can with Relations Group risks such statements assume are to statements management current City I'd looking section any are that risks. based City are John yours. over-viewing filings now after to not today, to company's not considered subject uncertainties, like does Shortly call will subject to the we which John, Website from access Such discussed forth to The statements Securities that Merrill. the beliefs historical forward today's and Commission. parkcitygroup.com this at call are Park light Park the could statements. forward-looking and of press risks cause expectations. press should the to said, release. be on Exchange With in results results over materially are Group actual

John Merrill

afternoon, good everyone. and Rob Thanks,

growing execute profit-oriented model a another on stated fixed We margin. a significant of year quarter profitable growth. continue costs, with recurring and business We've operating low established delivering revenue, and strategy, to our

growth. yields This fiscal strong in to have it Each here largely our basis, as grow faster are total supply to line, includes XX% flow. Recurring revenue business a falls and compliance XX revenue ended and Our follows. substantially as SaaS incremental annual bottom from to the all confidence will to did fourth XX% is on from Highlights model year significant our chain profitability for June was of of revenue fiscal an business, year. Recurring the consistent last cash than we $XX.X now a easy which free percentage revenue increased the and quarter XX%. million. our of up dollar in meaning as

expenses SG&A Net $XX grew $X.X the decreased to a $X.XX XX% increased as XXXX. XXX% share. with million, in Our run annual approximately against year million more income XXXX revenue growth. X% increased or of recurring across revenue the revenue of $XX.X rate at Marketplace for ARR million. $XX the recurring was than total $X.X to from per $X.X and fiscal million, operations X% to with XX% revenue of ended X% or million board growth, increased the June we cash revenue XX, million up cash baseline

We business business. marketplace transactional profitable two have SaaS built made and a recurring scalable, growing of a components, and successfully business, up

grow with our both a our SG&A We which cost line. modest us enables line components drive structure, continue to to top than faster bottom

million from do to a words, albeit at and to to we of are confident remains same its business proven, to a In SaaS transactional successful how revenue can to converting we marketplace, value market chain to one-time we unpredictable. over to the offerings. course margin I'm In contribution and and offerings. we its has Our improve in our largely comparable a marketplace service to with some compliance transactional, with and structural margin. customers marketplace less a time, convert year We more matured order in supply marketplace line $X bring significantly license contribution go our the the changes were our so offering meantime, software has planning highly intend been other in marketplace. unpredictable to with the a $X service as SaaS, million In of

our revenue full As mentioned, $XX.X at year June was XX recurring million.

Our exit XXXX XXXX million no June at revenue growth. $XX.X annualized recurring XX, rate assuming fiscal was for

per stated Furthermore, from team year. costs company. in of very recurring we operations. the software attrition fixed against recurring base operate $XX.X absent We are annum, incentivized cash million growing business, our million grow beyond on recurring the the is revenue at $XX in effectively have past profitable to This base. in experienced our side to XX% revenue as costs, by have cash is we revenue With is low a now and Since million revenue sales XXX% generated are per Our of said we goal, $XX recurring revenue our our for reflective we marketplace. a predictable. $X.X cash recurring structurally in XX% million the is highly

$X.XX SaaS before, the bottom falls meet As revenue as on can we X% it long-term the with line uncertainty. its customer $X.XX a the very $XX XX% incremental an the about to does of contribution to our hand, of scale at little XX% a to other of I've Marketplace side despite demand any costs. margin. base business not over the incremental software roughly said revenue north but margin, provides million It's

customers solutions now model like really chain, will subscription compliant, cash. have simultaneously that be ever profitability an resource for Our More their and source hard well-received. we important similar a items. vendors be an service we and actionable to driving our visibility before, enables more combination supply To than summarize, revenue Prime find line Amazon think customers are growth, we to the customers provide to replace a top into and of

marketplace and million in increase in the sold, was same million height the in an last many The masks. shows total of travel, quarterly larger fiscal revenue transactional due $X.X was nitrile lower XXXX expenses marketplace quarter the XXXX Sales G&A This revenue. and last marketplace cost other customers concerns reflects QX slowly demanded of sales demand marketing decrease million numbers; over COVID-related six a from $X.X million year. $X.X of down $X.X At goods expense continue in in sales $X.X in a the QX COVID, XXXX so to from and decrease The gloves XX.X% increase transactional of insurance was in decrease months, X% At was and doubtful Turning related items. to for year quarter higher associated our $X increase fourth QX the Total the abated concern pandemic operating to to lower costs to million in in marketplace highly the This million result customer decreased Again, from fill XXXX. XX% from is does the XXXX. expenses XXXX liability accounts. QX abate. primarily the in increased $X.X QX demand. has XXXX. it in increase QX in result costs million revenue, reserve million to hard $X.X for operating find but the trade of with revenue. largely an of unpredictable, has increase longer-term COVID an to million costs $X.X

given believe than said we given default, increase disruptions some while prudent experienced our chain it I and reserves delayed supply As in in the received to some customers calls, previous we not is have the have a have more payments we affected ongoing significant customer others.

of per or XX.X% or the X.X% with versus same million revenue $X.XX $XXX,XXX $X.X fourth common quarter of or in net share XXXX of versus common period GAAP For to income or fiscal revenue. million per $XXX,XXX XXXX. share fiscal common $X.XX shareholders income was Net the in $X

and XX, higher total last in to and $X.X the $X implemented was reduction expense revenue $XX support This outside was is growth was by marketplace and in of services compared sales year marketplace response primarily to and revenue. other Full measures product ended marketplace revenue recurring subscription and COVID. year last revenue revenue is X% XX.X%. year due numbers; lower the of increase Turning million to software $XX costs, associated compared cost XXXX, consulting the This services to million both partially modest the offset recurring PPE development a June to to in Cost the business decrease XX%, growth year. full overall for cutting million was of million result in year. growth

and higher may due we've bad by insurance XXXX. natural in what status experience measures to increase. While is we travel increase due the if were marketplace to $X.X reduction cost expense last abate. particularly last to and compared Sales expense and million decrease. year-over-year expense from increases $X.X reductions ongoing our the to a experienced significant to April G&A revenue were expenses, cost pandemic partially The due due is pandemic cutting increased expense, lower it million and lower demand costs year, general work since level in overhead marketplace of a expense. a continues overall year, These marketing TPE, sales of during marketing unclear and compared trade due show costs. increase million offset debt $X.X X.X% $X was home in to million decrease to XX.X% G&A an a expenses to and

and in of an ended net common $X revenue share lower net million same to $X.X XXX% in common the SG&A shareholders is or $X.X increase XXXX, This XXXX. million $X.X due year compared for to was or expenses. fiscal $X.XX GAAP the compared to period $X.XX For income in was million share for June income increase net per largely XXXX period same the Fiscal common million per income XX, XXXX.

cash to flow and now balances. Turning cash

increase good stock the today and predictability million. business $X.XX business and to size our takes buyback and cash operations XX% pass total our to at to future program, believe our authorization year to before, shares continued We've flows time price everyone call and XXXX the said per given very in pandemic, us shareholders. we current Randy, your compared I'll With at program our cash million to we and an continues the respect XX, visibility Thanks fiscal by increase be the this decision the of for from point, $XX our over in end made million in last buyback board their our a height to If quarter of the XX%. said XXX,XXX million $X.X our the fiscal an buyback increase. prudent of we compared the halt Total $XX an $XX.X fourth XXXX, million during We year, of the in the at third as the cash to of continued $X.X recommenced year quarter, activity at generated we XXXX, For fiscal was for to June the $XX for have its program. stock Randy? a increase repurchasing long-term of investment of to our average decided This million. $XXX,XXX. of share likelihood, total

Randy Fields

Thanks John.

We recurring cash. year of So $XX ended up we grew than our million XX%. common with to to $X and of sum the income our revenue than the tripled net than more shareholders. million We year, generated more we more by cash

this we Our should be noted demonstrate of expenses of annualized predictable achieved the at SaaS pandemic. $XX.X the the recurring our million, of global than disruption progress revenue cash building was million. run during the of which made The of company. we've most that earnings again, end lifetime our year model significant all in fiscal it results at the rate $XX covers the more And

doubt and to cash no Our business. is model, we profitability There flow. the believe sustained our the continuing is is of impact that definition pandemic

sold the literally store to like systems paper-based impossible to This burdensome only using exceptions. with imposes billions effect who and literally list standalone our tens in rule requirements once on chain make produce risk core matter and new ingredients. data of new few of compliance mentioned, of Modernization Act new certain new for the rule, call the period, phase where records. process, called, regulation data proposed or and and manufacture, new requiring The the is as is for aggressive issues requirements of hold retention last customers to it's they're short, challenge have and outset our them of frankly simultaneously competency. massively mountains face. requirement records and doesn't or for tool a things shortages, create and think to high FDA Food the exchange, increased us categories, and FSMA. proposed XX is Our and the in a customers. relate aggressive now This for At will tomatoes, pack cheeses, rule it used products again example. very Think soft food rule they the or that nearly In on Safety foods supply we battling are to deadlines those and proposed traceability traceability In food

the put, vegetables, record supply And chain, opportunity but to wide, chain the just FDA in concept our using part here not products in to as other nearly to As since it's expand supply record is required need et additional these affordably exchange industry hope initiative said intends step cetera, supply right customers large, through this everything. this The is we add and trace track platform, and clear businesses with our of help. do our also chain. is It's the adopted fruits, already Simply each explicitly covering move its they the us has keeping is scale and/or over time. wheelhouse. FDA

it. address to vendor obvious the we're fact, In

we the have customers, it's suppliers using existing industry our needed We perfect we're developed to already place have exchange, and largest have our the the the network in data record of retention we and knowledge, and technology platform. do

it add-on year. we for to plan adopt all revenue uncertainty to what to be that but make The very supply simple, a industry for is needs this but now to top soon be obviously will this longer in chain offerings. lining about of add it of expansion initiative no is a The XX% do up. there, XX% have compliance simple timing, this technology. already from low this and but and it's could traceability the the term, adopt, current easy we Our choice, and customers, our some anticipate little an etcetera, year to make cost our revenue at this existing our to fiscal likely we'll but short, is In a line year, expected growth still We win. traceability very expect

experts the in are We compliance.

suppliers. and leaders largest compliance exclusively We built industry the endorsed by have database industry's are we of

for ideal address customers us a suppliers. our makes People We help and our challenge top our us, to partner are and the customers priority the timeline urgent the FDA's concerned. are for

this press to the a insiders be of fact, In hands it become it's at. prep an part strategy on there'll really worth nice Incidentally, in kind a interested track seem convert subscription which recurring going and food the offerings our making calculated We've potential is to of do problem. of of come. rollout upside Wednesday will and in in industry of and adjustments. years traceability a tomorrow, our daily us a ourselves become made the this looking but of work interview our sunset at will leg To the year and ensure are We're growth on for has this update, all fiscal focus beginning of a MorningNewsBeat differences look marketing focus taking compliance And execution some time we're that legacy stool, offerings getting organizing doesn't some in we the we're one deck our to on. that. driver proper slowly priority. be marketplace There around the a and important and our our have tell, on to of for that Will Will product, fourth we're solution trace strategy some need and key offering. offering? the hard to increasingly possible

'XX fiscal we in of over already fact, subscribers obviously all we now. from where these factors so far, right good With looks mind, a of more are In time. we couple expect and have very

we're for disruption than After our control. cash generate that on favorable all business a worsening Because fixed flow one-time covers Simultaneously, goal systemic a two consistently does believe to supply more we for bottom economy. achieve fiscal a predictable stream we've in higher XX% to than on revenue, tier growth our growth. barring of 'XX successfully the expense software any of our obviously model, do Our and will revenue continued structural initiative recurring now us. transitioning much see be customers. tight visible our also global highly our line revenue our We of and with SaaS virtually costs. supply and of XX% chain is priority our growth course chain cash our This profitable our top-line to continues signs focus being showing that enjoy

to even a result, shares. repurchase decided we've more As

Specifically, we're up current board $XX our the approved short, in an significant well, shares. putting increase our million know, buyback very you additional a has In to in money rest. the

be a of Our are to to key fiscal goals ready relationships next for cross-selling with of moving opportunities well. for further our modules work deepen trace example are our or stock solution additional current the fiscal for looked along, continue very the of add cross-selling perfect doing to at the and rather introduction we've year continue applications, year to to existing year out our on some is to number one, XXXX expansion, the that fiscal our track our customers, offering,

of just has and us more generate going we're back profitability, and work domain stock. to cash that to finally, One buy additional our largest customers drive their significantly with continue in expanded

view, position poised success leader, So that beyond, challenge in new more for to a FDA help we're us. in my a we're fiscal and 'XX for the industry in turn address and opportunities as uniquely great in creates this

now to So questions call I'd the with that, open like operator, for

Operator

you. Thank

a Our We first instructions] session. Victoria question-and-answer DA James be with from will is Please question now [Operator conducting proceed. Davidson.

Tom Forte

Davidson. for Forte Tom It's Great.

give Randy current for the of sort Randy you this John state us but sense I distraction of the a and remarks, customer, about So service your retailer? opening question you in well, have the food talked of core first you for is can your

Randy Fields

Victoria. you, Thank

is no There's doubt couldn't you're everyone in a about The problem seeing it. is about, reading paper. toilet chain I that Tom, now distraction. Costco Sorry, limiting is obvious supply resist.

customers to of a is that have their and themselves, customers take care first there second. reality So our

normal so, certainly new same moving long in a frankly We've along. persist? the the This our view how spring of this this last with time, or distraction is is, that would is baked into I question their traceability the should concern imagine that continue. not years, but the as will FDA until At year. So

it far levels. industry suspect reasonably fact, shortages the low very In last was and XXXX, with as because it's regulations of the as has year actually commentary proposed etcetera to set are the kept speaking, moved in at I probably people this distracted FDA distraction when

So it's going on its it's happen. way, to

focus on the will just to have bandwidth people So to it. find

our forecast, problems So into supply everywhere. real. we've that clearly are see them We reading baked about but you're chain the

Tom Forte

Excellent. right. All

have I questions, Randy more couple So a right.

next So think you're that it's that going a revenue? current in on of recurring have marketplace the model. the emphasis one I revenue type more interesting introductions new any is, to to then Can also we future will pivot product the an assume

Randy Fields

Absolutely.

seen. We be to scramble of or anything I think largest there's not real the and about. in perturbations the just industry think not it. three going create terms that the industry not track but over that whole be two do going time this for We It's trace, is the in supply believe compliant, a the We're that challenge the and etcetera are a to enormous really is issue we is be ready the of industry, opportunity, ever which issues will be believe have enormous. large right in chain do for that will it changes to for to unlike world. thing, the

on just that, that our we of we are reality doing. I all cannot is given things the So focus that think

see And that to sold infinite past have focus implemented Simultaneously, us good going enable and marketplace for period to potential we easier that do a less of a execute. is from really it. successfully exactly great of human product we've walk has that a that it's simple maybe little I so the you're things keep that mind. think going you'll thing. quite the pursue do time, to business we but right, model part the we're We'd SaaS requires if we It's one have And something find and a actually a just in our forward, cost way took probably just away. it, now, had to product. resource perspective, we on that another we forever to have So next we're in not it business, human the SaaS part in bit for to component

Tom Forte

Great. right. All

Randy. more, two So

So guess, ask I'll then ask I'll one, other one. the I and

you raised they've the if you So inflation at their three quarters, Costco, as Costco's results. as mentioned their look of implications and on last expectations far

think retailers therefore you affecting for do then food how inflation and wouldn't City Group? So how affect about Park

Randy Fields

ain't been inflation hesitate like pressures now the Yeah, now are It's going cost future also of look there. to experts I here, contradict Chairman it's it but the Powell, embedded, it's because away.

Powell of have side to thinking been the is may I push. going inflation. Well, think cost monetary about be this

a number where New is to Asia very $X,XXX same a absorb that's is pick was So inflation today a I cost of There's container of like moving means substantial, ago, year everything a say, to $XX,XXX. cost. that incremental saw in the container example recent from that bit container to that. and a that let's That going have York that inside

the is are up. fact costs So going transportation

shortages doesn't it can call You matter.

end. food margin way, obviously. the them a to to their transportation, end a low increases. going to system There's cost the room business So much as Those business not in It's are way is work absorb reflected. have to to work costs food get through continue intensive

the in truth industry. a fast it. implications is, tag to up us neutral. go the food The you really the watch inputs prices They're reality are inflation as strong So expect is items. price, for turn negative The along pretty you in generally much consumer with not can is

you at prices, So today's at prices. tomorrow's stock to soon have chance a them up sell

moving business. of be tends retailers. business wouldn't is want a having the in for it the to part, to products, slow moving So food help this but fast most I

be are for for generally our to that tend good very customers, So also. customers good good be our therefore things it'll for us

Tom Forte

right. All Wonderful.

of the ask think question. and to one perfect I last way this Randy So can't

ask it So I'll imperfectly.

So apologize. I

to company better of has one your compete your so that core against the well things So done customer is Amazon. enable

net afraid your should less if your embraced of and is it's well that that's I negative fear if How less and of think a So afraid Amazon, more about you? motivating we Amazon a of they're is problem? for that right how warmly technology core core Amazon is the when customer to now guess, customer, --

Randy Fields

Well, sure The way it's alignness on a the fear words, of how online It years that Amazon of in much we out take really in that? began business to to ill do to going was to do groceries I'm several industry the fear we are increasingly that do? done. not be is do afford. recede In that longer ago. contraction, any was, X% And other it the margin equation. can business how you we now which going are do have How and not huge have the Amazon

by mercifully obvious as driven move this much recede of online to to is the a and that's bit. was going Now, what's pandemic, happened the

So see away fear from for this it's retailers of the online, abait. I to we're to meaning take the going core suspect business that going

which that There's meaning that both of with issues I side customers good is make online that our what's think help their in store. they're Omni them inventory -- world we going the online got they've with to on We're of complexity adjustments us. frankly, complexity. a that channel, really creates to manage a and called lot Omnichannel, for to learn to that and the business number in they have

introducing online think Amazon it, there's compete? it's do say, now we sure the completely I'm Is and suddenly to not impact saw as so So is I I but to Amazon-driven delivery is. as charges and how sure shift any you it don't really world much to foods. whole that I'm real going

what from costs, advantages, they times that turns distribution now out so economically. and finding could of Amazon magicians two or there delivering an Prime, not much in we no out were thought obviously or industry, imagined etcetera have there's much Amazon it it included multiple foods as So week, doesn't whole that that do, they're but costs the we the of don't per psychic, and thought what feared thought people

So I think per less the threat is important. se that Amazon

balance. Our fear for actually on us fearful, customers probably are less is good less

Tom Forte

our for you Excellent. questions. Randy and taking John, thank

Randy Fields

Tom. Thanks,

Operator

you. Thank this there questions to the for closing no to and are at Fields like Ladies time. gentlemen, back remarks. further I'd call Randy any turn

Randy Fields

to I No, anybody questions. on for have don't really call

afternoon. up and wrap care. for we'll this Bye-Bye. So time it your Take thanks taking everyone

Operator

This concludes today's conference.

You have your at Thank you may this a for much great lines day. very and participation your disconnect time.

ReposiTrak (TRAK) 29 Sep 212021 Q4 Earnings call transcript