Q4 2021 CSG Systems International Inc Earnings Call
Yes.
Speaker 1: Thank you for standing by. And welcome to the CSG Systems International Inc. 4th Court.
Ladies and gentlemen, thank you for standing by and welcome to the C. S E Systems' International Inc fourth quarter.
Speaker 1: One learning is called. All questions you have to come in to prevent any background noise. After the speakers are marked, there will be a question.
One earnings call.
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After the Speakers' remarks, there will be a question and answer session.
Speaker 1: If you would like to ask a question during this time, simply press star, followed by the number one on your telephone key app. If you would like to withdraw your question, again press star one. Thank you. John Ray, head of investor relations. You may begin your call.
Like to ask a question during this time simply press star followed by the number one on your telephone.
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Yeah.
John <unk> head of Investor Relations you May begin your conference.
Thank you operator, and thanks to everyone for joining us like last quarter, we will be working from a slide deck, which can be found on the investor Relations section of our website. Please take a moment to locate these slides today's discussion will contain a number of forward looking statements.
Speaker 2: Thank you, operator, and thanks to everyone for joining us. Like last quarter, we will be working from a slide deck, which can be found on the Investor Relations section of our website. Please take a moment to...
Speaker 2: Today's discussion will contain a number of forward-looking statement. These include, but are not limited to, statements regarding our projected financial results, our ability to meet our clients needs through our product services and performance, and our ability to successfully integrate and manage acquired businesses in order to achieve their expected strategic operating and financial.
These include but are not limited to statements regarding our projected financial results our ability to meet our clients' needs through our products services and performance and our ability to successfully integrate and manage acquired businesses in order to achieve their expected strategic operating and financial goals.
Speaker 2: While these risks reflect our best current judgment, they are subject to risks and uncertainties that could cause our actual results to differ material.
All these risks reflect our best current judgment they are subject to risks and uncertainties that could cause our actual results to differ materially. Please note that these forward looking statements reflect our opinions only as of the date of this call and we undertake no obligation to revise or publicly release any revision to these forward looking statements.
Speaker 2: Please note that these forward-looking statements reflect our opinions only as of the date of this call. And we undertake no obligation to revise or publicly release any revision to these forward-looking statements in light of new or future events.
In light of new or future events.
Speaker 2: In addition to factors noted during this call, a more comprehensive discussion of our risk factors can be found in today's press release, as well as our most recently filed 10K and 10Q, which are all available in the Investor Relations section of our web.
In addition to factors noted during this call a more comprehensive discussion of our risk factors can be found in today's press release as well as our most recently filed 10-K and 10-Q, which are all available in the Investor Relations section of our website.
Speaker 2: Also, we will discuss certain financial information that is not prepared in accordance with GAP. We believe that these non- GAAP financial measures when reviewed in conjunction with our GAAP financial measures provide investors with greater transparency to the information used by our management team in our financial and operational decision.
Also we will discuss certain financial information that is not prepared in accordance with GAAP. We believe that these non-GAAP financial measures when reviewed in conjunction with our GAAP financial measures provide investors with greater transparency to the information used by our management team and our financial and operational decision, making for more information.
Speaker 2: For more information regarding our use of non-GAAP financial measures, we refer you to today's earnings release and non-GAAP reconciliation tables on our website, which will also be furnished to the SEC on Form 8K. With me today on the phone, our Brian Shepard, a chief executive officer and a high-trained chief financial officer. With that, I'd like to now turn the call over to Brian .
Regarding our use of non-GAAP financial measures. We refer you to today's earnings release, and non-GAAP reconciliation tables on our website, which will also be furnished to the SEC on form 8-K with me today on the phone or Brian Shepherd, Chief Executive Officer, and high Tran Chief Financial Officer with that.
I'd like to now turn the call over to Brian .
Speaker 2: Thanks, John . For those using our slides today, please join us on slide four. Over the past year, I've highlighted how CSG will strive to win big in the market and consistently outperform by investing in our culture, investing in our talents, and investing in our future ready software platform.
John for those using our slides today. Please join us on slide four over the past year I've highlighted ESG will strive to win big in the market and consistently outperform by investing in our culture investing in our talent and investing in our future writing software platforms. These investments combined with our.
Speaker 3: These investments combined with our customer obsessed values are elevating every part of CSG.
Customer obsessed values are elevating every part of ESG.
Speaker 3: Are Q4 and 4-year results proved that our strategy is working?
Our Q4 and full year results prove that our strategy is working 2021 was an exciting year for <unk> as we surpassed $1 billion in annual revenue for the first time ever we achieved this milestone by growing revenue five 6% year over year, ending the year with one.
Speaker 3: 2021 was an exciting year for CSG as we surpassed $1 billion in annual revenue for the first time.
Speaker 3: We achieved this milestone by growing revenue 5.6% year over year, ending the year with $1.046 billion in revenue.
Zero four $6 billion in revenue.
Speaker 3: We also delivered our fastest organic revenue growth in over a decade.
We also delivered our fastest organic revenue growth in over a decade or 2021 basically highlights also included the exciting six year contract renewal and significant expansion with our largest customer charter communications. This deal was the largest deal in company history and makes DSP.
Speaker 3: Our 2021 business highlights also included the exciting six year contract renewal and significant expansion with our largest customer charter communications. This deal is the largest deal in company history and makes CSG the BSS provider of choice for all 32 million charter customers supporting residential and small to medium business for high speed broadband video and voice.
The BSS provider of choice for all $32 million charter customers supporting residential and small to medium business for high speed broadband video and voice in this giant win proves that CST has the right SaaS platforms, the right industry leadership and the right talent to win.
Speaker 3: And this giant wind proves that CSG has the right SAS platforms, the right industry leadership, and the right talent to win meaningful market share away from our competitors.
April market share away from our competitors further on the customer renewal front, we announced an exciting renewal with dish networks, our third largest customer the contract extends our relationship with dish for four and a half more years with contractual guarantees and it paves the way to celebrate our 30th at birth.
Speaker 3: Further, on the customer renewal front, we announced an exciting renewal with DISH Networks, our third largest customer.
Speaker 3: The contract extends our relationship with DISH for four and a half more years with contractual guarantees and it pays the way to celebrate our 30th anniversary as we help this innovative leader achieve greater success. So what does all this contract renewal success and extension mean? It means that these renewals become the springboard for CISG's continual organic revenue growth in 2022 and beyond.
As we helped this innovative leader achieve greater success. So what does all this contract renewal success and expansion mean, it means that these renewals become the springboard for.
Continued organic revenue growth in 2022 and beyond.
Speaker 3: Additionally, when combined with our large healthy cells pipeline, with more life-stage deal value than ever, it also means that CSG is increasing our 2022 revenue guidance, which I will share the details on shorter.
Additionally, when combined with our large healthy sales pipeline with more late stage deal value than ever. It also means that <unk> is increasing our 2022 revenue guidance, which I will share the details on shortly.
Speaker 3: Turning to slide five, I will provide some updates on five strategic objectives that will continue to increase our velocity. At this point, these themes should be familiar to everyone who has been following our progress the last few quarters.
Turning to slide five I will provide some updates on five strategic objectives that will continue to increase our velocity at this point. These themes should be familiar to everyone who has been following our progress the last few quarters CFC aspires to more than double our long term organic revenue growth rate in the two person.
Speaker 3: CSG aspires to more than double our long-term organic revenue growth rate in the 2% to 6% range, which we proudly achieved at the upper end of 2021. We aim to add operating scale and extend our operating leverage by growing to at least $1.5 billion in revenue by year in 2025, with a stretch goal of $2 billion in revenue, which yes, is ambitious, but not out of the realm of possibility.
<unk> to 6% range, which we proudly achieved that the upper ended 2021.
We aim to add operating scale and expand our operating leverage by growing to at least one $5 billion in revenue by year end 2025, with a stretch goal of $2 billion in revenue, which is ambitious but not out of the realm of possibility. We also strive to be the number one SaaS.
Speaker 3: We also strive to be the number one SaaS provider of choice for global CSPs by providing the most value-adding technology solutions and by being easier to do business with than our competitors.
Provider of choice for global ESPN by providing the most value, adding technology solutions and by being easier to do business with than our competitors. We plan further revenue diversification as we expand our big faster growth industry verticals with more direct sales and channel partner success.
Speaker 3: We plan further revenue diversification as we expand in big, faster growth industry verticals with more direct sales and channel partner success in retail, government, financial services, healthcare technology, and more. And finally, we will complement our accelerated organic revenue growth with disciplined value-enhancing M&A to turbocharge the value we bring our customers.
In retail government financial services health care technology, and more and finally, we will complement our accelerated organic revenue growth with disciplined value enhancing M&A to turbocharge the value we bring our customers starting on slide six let's get into a little more detail on each.
Speaker 3: Starting on slide six, let's get into a little more detail on this.
Speaker 3: First, with respect to doubling our organic growth, our 2021 results prove that we are delivering on this event.
First with respect to doubling our organic growth. Our 2021 results prove that we are delivering on this commitment.
Speaker 3: We reported $1.046 billion in total revenue resulting in 5.6% year-over-year growth. Even better, our four-year adjusted revenue was $900 to $80 million, representing 6.2% year-over-year growth. Both of the fastest organic annual revenue growth for CSG in over a decade.
We reported $1 zero four $6 billion in total revenue, resulting in five 6% year over year growth, even better our full year adjusted revenue was $980 million, representing six 2% year over year growth.
The fastest organic annual revenue growth for <unk> in over a decade.
Speaker 3: I want to take a moment to thank our 5,000-plus CSGers all around the world for the big impact you all made in 2021. Your dedication, your excellence, and your continued obsession to wow our customers each and every day are what's powering CSG's resurgence. Thank you, everyone. On the right-hand side of slide 6,
I want to take a moment to thank our 5000 quasi adheres all around the world for the Big impact you. All made in 2021 your dedication your excellence and your continued obsession to Wow, our customers each and every day are what's powering <unk> resurgence. Thank you everyone on the right.
Hand side of slide six second we committed to boldly elevate our market aspiration and this is exactly what we're doing and we'll continue to do last quarter, we unveiled <unk> 2 billion and beyond growth strategy. So let me re share some of the details by 2025, we aspire to gain scale in the.
Speaker 3: Second, we committed to fully elevate our market aspirations. And this is exactly what we're doing and will continue to do. Last quarter, we unveiled CSG's $2 billion and beyond growth strategy. So let me reshare some of the details.
Speaker 3: By 2025, we aspire to gain scale in the markets where we compete to exceed $1.5 billion to $2 billion in annual revenue.
Markets, where we compete to exceed $1 5 billion to $2 billion in annual revenue, we aspire to expand <unk> operating leverage and use our strong healthy balance sheet to deliver EPS growth that outpaces revenue growth.
Speaker 3: We aspire to expand CSG's operating leverage and use our strong, healthy balance sheet to deliver EPS growth that outpaces revenue growth.
Speaker 3: And we aspire to consistently deliver better and better business results so that our shareholders are rewarded with the trading multiples that they deserve when they invest in a purpose-driven, faster growth, multi-industry vertical SaaS platform company like CSG.
We aspire to consistently deliver better and better business results. So that our shareholders are rewarded with a trading multiples that they deserve when they invest in a purpose driven faster growth multi industry vertical SaaS platform company likes ESG.
Speaker 3: The question we keep getting is, how will CSG get there? $2 billion revenue, EPS growth that outpaces revenue, and a true SAS trade multiple sounds ambitious.
The question, we keep getting is how will <unk> get their $2 billion revenue EPS growth that outpaces revenue and a true SaaS trading multiple sounds ambitious youre right. It is an ambitious plan. Yes. This management team absolutely believes that we can deliver against that with the same discipline.
Speaker 3: You're right, it is an ambitious plan, yet this management team absolutely believes that we can deliver against it with the same discipline and high integrity that consistently defines CSG.
High integrity that consistently defined PSG, our disciplined strategic plan includes a base case component and a stretch components. Our base case, we aspire to exceed $1 $5 billion in revenue, which means even if we come up a little short against our stretch case ambition.
Speaker 3: Our discipline strategic plan includes a base case component and a stretch component.
Speaker 3: Our base case, we aspire to exceed $1.5 billion in revenue, which means even if we come up a little short against our stretch case ambition CSG will still grow revenue.
ESG will still grow revenue by over 50% and add over $500 million and profitable recurring revenue by 2025 to reach the $2 billion stretch case revenue aspiration over the next five years, we will continue to allocate capital to its most productive and value added use.
Speaker 3: by over 50% and add over $500 million in profitable recurring revenue by 2025.
Speaker 3: To reach the $2 billion stretch case revenue aspiration over the next five years, we will continue to allocate capital to its most productive and value-added use and to eventually close bigger scale acquisitions that become even more transformational for both CSG and the industries that we serve.
And to eventually close bigger scale acquisitions have become even more transformational for both CST and the industries that we serve.
Speaker 3: On the last point, I'd like to reinforce a key point shared on many analysts and investor calls. This management team is laser focused on creating shareholder value, not building empires. We will hold ourselves accountable to adding scale, accelerating growth, expanding our operating leverage, and deploying capital to its highest and most productive use, all with a focus on rewarding our shareholders, just like we work hard every day to delight our customers and our employees.
On the last point I'd like to reinforce the key points shared on many analyst and Investor calls.
This management team is laser focused on creating shareholder value not building empires, we will hold ourselves accountable to adding scale accelerating growth expanding our operating leverage and deploying capital to its highest and most productive use all with a focus on rewarding our shareholders just like we are.
Work hard every day to delight, our customers and our employees.
Speaker 3: Turning to slide seven, we are committed to being the number one technology provider of choice for communication service providers globally and our continued sales success with both North American and global CSPs prove that we're executing well against this strategic priority.
Turning to slide seven we are committed to being the number one technology provider of choice for communication service providers globally, and our continued sales success with both North American and global Csp's prove that we are executing well against our strategic priority.
Speaker 3: In the cable market, we have long-term guaranteed contracts to be the BFS provider of choice for all 65 million combined Comcast and Charter subscribers, the two largest cable providers. With CSG having migrated tens of millions of subscribers off of both Amdocs and NetCracker over the last six years, we plan to build on this market share success in the years ahead.
In the cable market, we have long term guaranteed contracts could be the BSS provider of choice for all 65 billion combined Comcast and charter subscribers. The two largest cable providers with CSC, having migrated tens of millions of subscribers off of both Amdocs and net cracker over.
The last six years, we plan to build on this market share success in the years ahead.
Speaker 3: Working hand-in-hand with talented colleagues at Charter, CSG also successfully migrated over 5 million subscribers in the Ohio, Wisconsin, and Kansas City markets in 2021, including completing over 4 million migrations in the second half of 2021. While the timing could still vary a little, we anticipate migrating all remaining Charter customers over the next nine to 15 months.
Working hand in hand with talented colleagues at charter CFC also successfully migrated over 5 million subscribers, and the Ohio, Wisconsin, and Kansas City markets in 2021, including completing over $4 million migrations in the second half of 2021, while the timing is still.
Barry a little we anticipate migrating all remaining charter customers over the next nine to 15 months.
Speaker 3: And CSG's success is not limited to North America. In the global telecom market, we continue to grow with new wins and contract extensions with leading telecom operators all around the world. In early 2021, we signed an exciting new deal with Mobiley, the second largest wireless operator in Saudi Arabia with nearly 14 million customers.
<unk> success is not limited to North America, and the global Telecom market, we continue to grow with new wins and contract extensions with leading telecom operators all around the world in early 2021, we signed an exciting new deal with mobile is the second largest wireless operator in Saudi.
Arabia with nearly 14 million customers globally was looking for a partner to future proof their business accelerate innovation and improve their customer experience demonstrating our strength as a technology leader in wireless <unk> was selected as the prime systems integrator to deploy our full revenue management plat.
Speaker 3: Mobiley was looking for a partner to future-proof their business, accelerate innovation, and improve their customer experience. Demonstrating our strength as a technology leader in wireless, CSG was selected as the prime systems integrator to deploy our full revenue management platform for this digital leader. We expect big growth to continue in our Middle East and Africa telecom business.
Form for this digital leader, we expect big growth to continue in our Middle East and Africa Telecom business.
Speaker 3: Another exciting global telecom win is TalkTalk, the UK's leading value-for-money connectivity provider.
Another exciting global telecom win as Talktalk, the uk's, leading value for money connectivity provider Cft's cloud based <unk> SaaS platform enabled talk talk to launch the country's first ever Netflix subscription outside of the traditional TV bundle, where cft's marketplace solution at the heart.
Speaker 3: CSG's cloud-based end-to-end SaaS platform enabled TalkTalk to launch the country's first ever Netflix subscription outside of a traditional TV bundle. With CSG's marketplace solution at the heart of its entertainment operations, TalkTalk has the scalability to add new content providers and evolve its offering to keep pace with the ever-changing consumer demand.
It's entertainment operations Talktalk has the scale ability to add new content providers and evolve its offering to keep pace with the ever changing consumer demands and finally in May we announced a multi year contract expansion with MTN South Africa, the largest mobile network operator in Africa with <unk>.
Speaker 3: And finally, in May, we announced a multi-year contract expansion with MTN South Africa, the largest mobile network operator in Africa with over 30 million consumers. As part of this agreement, we are advancing and enhancing MTN's digital ecosystem, which includes migrating MTN's enterprise and consumer customers to a new technology platform that will drive future growth and enable rapid delivery of innovative new products and services.
Over 30 million consumers as part of this agreement, we are advancing and enhancing MTN digital ecosystem, which includes migrating mtm's enterprise and consumer customers to our new technology platform that will drive future growth and enable rapid delivery of innovative new products and services, we look forward.
Speaker 3: We look forward to continuing our journey with MTN as we help them digitally transform their business.
Continuing our journey with MTN as we help them digitally transform their business.
Speaker 3: Turning to slide eight, I shared that CSG would continue diversifying our industry vertical revenue. And we did exactly this in 2021, as we grew revenue coming from large, faster growth, new industry verticals.
Turning to slide eight I shared the CSC would continue diversifying our industry vertical revenue and we did exactly this in 2021 as we grew revenue coming from large faster growth new industry verticals since 2017, <unk> grown revenue from exciting new industry verticals like retail.
Speaker 3: Since 2017, CSG has grown revenue from exciting new industry verticals like retail, government, financial services, and health care from $55 million, or 7% of total revenue, to more than $250 million, or 24% of total revenue this year.
Government financial services, and healthcare from $55 million or 7% of total revenue to more than $250 million or 24% of total revenue this year.
Speaker 3: Being a partner of choice for some of the biggest brands and higher growth industry verticals where CSG helps them digitize and modernize their customer engagement and their cloud payments is a game changer for CSG. During the year, we've won and expanded many exciting new deals with leading brands and faster growth big industry verticals.
Being a partner of choice for some of the biggest brands in higher growth industry verticals, where <unk> helps them digitize and modernize their customer engagement and their cloud payments is a game changer for <unk>. During the year. We won an expanded many exciting new deals with leading brands and faster growth big industry verticals.
Speaker 3: we won and later in 2021 expanded deals with two of the largest drugstore chains in the U.S. and one of the largest retailers in the world who all selected CSG software to power their retail and clinic customer engagement.
We won in later in 2021 expanded deals with two of the largest drugstore chains in the U S and one of the largest retailers in the world.
Selected CSP software to power the retail clinic customer engagements. Our solution is increasingly important to all three of these large customers given the unprecedented number of inbound requests that healthcare providers retail pharmacies and government agencies are getting related to COVID-19 vaccinations appointments.
Speaker 3: Our solution is increasingly important to all three of these large customers, given the unprecedented number of inbound requests that healthcare providers, retail pharmacies, and government agencies are getting related to COVID vaccinations, appointments, and prescriptions.
And prescriptions, we also expanded our relationship with one of the largest software companies in the world as they continue to unlock value in different parts of their business by leveraging <unk> innovative conversational AI short for artificial intelligence SaaS platform. We also expanded our penetration in the pit.
Speaker 3: We also expanded our relationship with one of the largest software companies in the world as they continue to unlock value in different parts of their business by leveraging CSG's innovative conversational AI, short for artificial intelligence, SaaS platform. We also expanded our penetration in the fitness market by signing a good deal with 24 Hour Fitness, a leading fitness center chain to digitize their customer engagement.
This market by signing a good deal with 24 hour fitness, a leading fitness center chain to digitize their customer engagement and finally, we closed a deal with a leading insurance provider to also digitize their customer engagement. This important win as another great brand to our enterprise grade customer engagement <unk>.
Speaker 3: And finally, we close the deal with a leading insurance provider to also digitize their customer engagement. This important win adds another great brand to our enterprise grade customer engagement software platform, which also serves the property and casualty insurance market.
We're a platform, which also serves the property and casualty insurance market.
Speaker 3: In the payments market, we continue to see positive signs that post COVID growth is beginning to return with strong industry vertical sales results propelled by our industry leading recurring revenue fast payment platform.
In the payments market, we continue to see positive signs that post COVID-19 growth is beginning to return with strong industry vertical sales results propelled by our industry, leading recurring revenue SaaS payment platform CSP Forte provides award winning full payback short for payment facilitation.
Speaker 3: CSG Forte provides award-winning full payback, short for payment facilitation capabilities for over 81,000 active merchants and ISV partners who need ACH, credit, payment gateway, and payment processing capabilities, serving a wide range of recurring revenue industry verticals.
<unk> for over 81000, active merchants and ISP partners, who need.
H credit payment gateway and payment processing capabilities, serving a wide range of recurring revenue industry verticals. During 2021, we signed key wins in the government and healthcare Isd markets to further extend our payments leadership and these critical biller direct recurring revenue.
Speaker 3: During 2021, we signed key wins in the government and healthcare ISD markets to further extend our payments leadership in these critical biller direct recurring revenue industry verticals.
Industry verticals also as a leader in Hh processing, we continue to add scale by signing ISP partners and fast growing industry verticals like property management. Looking ahead, we built an exciting sales pipeline across multiple verticals and payments that are contributing to both sequential quarter over quarter.
Speaker 3: Also, as a leader in ACH processing, we continue to add scale by signing ISV partners in fast-growing industry verticals like property management.
Speaker 3: Looking ahead, we built an exciting sales pipeline across multiple verticals and payments that are contributing to both sequential quarter-over-quarter and Q4 year-over-year organic revenue growth, which bodes well for our return to double-digit organic growth in the payments market.
And Q4 year over year organic revenue growth, which bodes well for our return to double digit organic growth in the payments market.
Speaker 3: Fifth, we told you that CSG would be a disciplined, strategic acquirer of SaaS platforms, which is exactly what we did in 2021. We expanded our offering in the digital customer engagement market with the purchase of Kitewheel, a SaaS-based recurring revenue company that supports real-time interaction management through omni-channel journey orchestration and journey analytics.
We told you that <unk> would be a disciplined strategic acquirer of SaaS platforms, which is exactly what we did in 2021, we expanded our offering in the digital customer engagement market with the purchase of tight wheel SaaS based recurring revenue company that supports real time interaction management through Omnichannel.
Our journey orchestration and journey analytics I am pleased to report that the post merger integration is progressing well as we added an integrated fantastic new talent and SaaS capabilities, a few months ago, we unveiled <unk> exponent, a bold and innovative new multi vertical market offering the combined.
Speaker 3: I'm pleased to report that the post-merger integration is progressing well as we added and integrated fantastic new talent and fast capability.
Speaker 3: A few months ago, we unveiled CSG Exponent, a bold and innovative new multi-vertical market offering that combines CSG's proven digital engagement SaaS platform with our new journey as a service capabilities that Kygo brings to the table.
<unk> proven digital engagement SaaS platform with our new journey as a service capabilities that <unk> brings to the table. This new micro services based SaaS platform drive differentiated digital experiences.
Speaker 3: This new microservices-based SaaS platform drives differentiated digital experiences that are proactive, predictive, and personalized as CSG is helping leading brands compete and win with great customer experience all around the world.
So active predictive and personalized <unk> is helping leading brands compete and win with great customer experience all around the world. Our second half sales performance and the digital customer engagement market was also encouraging as we signed an extended deals with a number of leading brands and financial services.
Speaker 3: Our second half sales performance in the digital customer engagement market was also encouraging as we signed and extended deals with a number of leading brands in financial services and retail. We couldn't be more excited about our digital customer engagement growth opportunities in 2022 and beyond.
And retail we couldnt be more excited about our digital customer engagement growth opportunities in 2022 and beyond.
Speaker 3: In revenue management, we made two value-adding acquisitions this year.
In revenue management, we made two value, adding acquisitions. This year first we acquired Tango telecom, a leading supplier of convergent policy control and messaging solutions. The acquisition was a culmination of a long standing relationship that delivers into an digital monetization and <unk> solutions.
Speaker 3: First, we acquired Tango Telecom, a leading supplier of convergent policy control and messaging solutions. The acquisition was a culmination of a longstanding relationship that delivers into in digital monetization and 5G solutions to some of the world's largest and most successful CSPs. Second, we announced in October that CSP acquired digital systems a configure price quote.
To some of the world's largest and most successful Csp's second we announced in October that CST acquired digit systems, a configure price quote <unk> for short and order management technology platform that has a strong presence in adoption in the global telecommunications market digit is recognized.
Speaker 3: CPQ for short, and order management technology platform that has a strong presence and adoption in the global telecommunications market.
Speaker 3: Digit is recognized by PMForum as a leading multi-cloud microservices platform, which has won 11 major industry awards since 2015, including PMForum's Most Innovative Use of Assets Award, Excellent Award for Open APIs, and Outstanding Architects.
By GM Forum as a leading multi cloud micro services platform, which is 111 major industry awards since 2015, including TM forums. Most innovative use of assets Award excellent award for open API and outstanding architecture.
Speaker 3: As we look ahead, we will remain laser focused on winning more and more bigger deals in these exciting new arenas and unlocking even greater value from existing and new acquisitions that will help CSG grow and elevate even more.
As we look ahead, we will remain laser focused on winning more and more bigger deals and these exciting new arenas and unlocking even greater value from existing and new acquisitions that will help <unk> grow and elevate even more.
Speaker 3: As I wrapped up on slide nine, across all five strategic priorities, the results speak for themselves. CSG is building meaningful business momentum that we fully expect will fuel our continued long-term growth and transformation. We hope you see the same things we do when we analyze our business.
As I wrap up on slide nine across all five strategic priorities. The results speak for themselves <unk> is building meaningful business momentum that we fully expect will fuel our continued long term growth and transformation. We hope youll see the same things we do when we analyze our business csc's.
Speaker 3: CSG's purpose is bold and inspiring. Our strategic vision and our daily execution are focused and disciplined, and we are elevating our culture, our diversity, and our global talent.
Purpose is bold and inspiring our strategic vision and our daily execution, our focused and disciplined and we are elevating our culture, our diversity and our global talent and on this note I'm thrilled to introduce <unk>, New CFO , hi, and I have been working together.
Speaker 3: And on this note, I'm thrilled to introduce Hi-Trans CSG's new CFO . Hi-N-I have been working together now for several months, and I couldn't be more excited by what he brings to the table.
Together now for several months and I couldnt be more excited by what he brings to the table. His proven track record as a strategic growth oriented executive with deep public company technology and global SaaS experience make him the perfect fit for <unk> at this transformative moment in our history with that.
Speaker 3: His proven track record as a strategic growth-oriented executive with deep public company technology and global SaaS experience make him the perfect fit for CSG at this transformative moment in our history.
Speaker 3: With that as an introduction, I'll turn it over to Hyde to provide more detail on Q4 and full year 2021 financial results prior to digging deeper into our 2022 guidance.
As an introduction I will turn it over to high to provide more detail on Q4 and full year 2021 financial results prior to digging deeper into our 2022 guidance.
Speaker 3: Thank you, Brian , for the kind introduction. Before I get into my slides, I wanted to take a moment to say how excited I am to join PSG at this truly transformational time in the company's history.
Thank you Brian for the kind introduction before I get into my flight.
Wanted to take a moment to say how excited I am joined ESG at this truly transformational time in the company's history.
Speaker 3: I'm passionate about helping companies grow, and I see CSG as having all the critical ingredients for accelerating growth, including a robust strategy focused on being a purpose-driven SaaS platform company that helps the biggest and best brands monetize and engage their customers in the digital world, a strong balance sheet coupled with long-term customer relationships, passionate leadership, and
I am passionate about helping companies grow and I think ESG is having all the critical ingredients for accelerating growth, including a robust strategy focused on being a purpose driven platform company that helped the biggest and best brands monetize and engage their customers in the digital world.
Strong balance sheet, coupled with long term customer relationships.
<unk> leadership and empowering culture.
Speaker 3: In fact, CSG's guiding principles and mission resonate deeply with me by putting customers and employees at the center of everything we do, which will drive long-term and sustained value creation for all of our stakeholders.
In fact, ESG guiding principles and mission resonates deeply with me, that's pulling customers and employees at the center of everything we do.
We'll drive long term and sustained value creation for all of our stakeholders.
Now, let's review, our financial performance and jump right into slide 11.
Speaker 3: So now, let's review our financial performance and jump right into slide 11.
Speaker 3: We generated $275 million of revenue and $258 million of non-GAAP adjusted revenue during the fourth quarter. These results represent 5.6% and 5.9% year-over-year growth, respectively, which were both substantially driven by organic.
We generated $275 million of revenue and $258 million on a non-GAAP adjusted revenue during the fourth quarter.
These results represent five 6% and five 9% year over year growth, respectively, which were both substantially driven by organic growth.
Speaker 3: For the full year, both our revenue and non-GAAP-adjusted revenue were up approximately 6% year-over-year. The year-over-year increase in revenue and non-GAAP-adjusted revenue was driven primarily by the continued growth of our revenue management product platforms, where we serve many of the largest communication service providers in the world. In addition, we are seeing healthy growth in our customer engagement offerings, where we serve customers in large, high-growth industry networks.
For the full year, both our revenue and non-GAAP adjusted revenue were up approximately 6% year over year the.
The year over year increase in revenue and non-GAAP adjusted revenue was driven primarily by the continued growth of our revenue management product platforms, where we serve many of the largest communications service providers in the world.
In addition, we are seeing healthy growth in our customer engagement offering where we serve customers in large high growth industry vertical.
Speaker 3: While our revenue growth was primarily organic, inorganic growth through acquisitions is an important component of our overall growth strategy, focused on providing us access to and or increased penetration into multiple industry verticals where we can help our customers navigate and execute on their digital roadmap.
While our revenue growth was primarily organic inorganic growth through acquisition is an important component of our overall growth strategy focused on providing us access to and or increased penetration into multiple industry vertical where we can help our customers navigate and execute on their digital roadmap.
Speaker 4: Throughout 2021, you have seen us execute on that strategy as we close multiple new acquisitions, including Tango Telecom, KiteWheel, and Digit Systems.
Throughout 2021, you have seen us executing on that strategy as we closed multiple new acquisition, including tangled Telecom Cartwheel ended system.
Speaker 4: As we accelerate our inorganic revenue growth in the quarters ahead, we will remain disciplined by focusing on the strategic, financial, and cultural and integration fits with an appropriate risk-return profile for each acquisition we close.
As we accelerate our inorganic revenue growth in the quarters ahead, we will remain disciplined by focusing on the strategic financial and cultural and integrations that with an appropriate risk return profile for each acquisition.
Speaker 4: Our fourth quarter non-GAAP operating income was $40 million, or 15.6% of non-GAAP adjusted revenue, as compared to $43 million, or 17.7% in the same prior year period. Our Q4 2021 result was impacted by elevated one-time severance expense associated with changes intended to strengthen our growth-oriented executive leadership.
Our fourth quarter non-GAAP operating income was $40 million.
Or 15, 6% of non-GAAP adjusted revenue as compared to 43 million.
There were 17, 7% in the same prior year period.
Our Q4 2021 result was impacted by elevated one time severance expense associated with changes intended to strengthen our growth oriented executive leadership team, which totaled approximately $2 million we.
Speaker 4: which totaled approximately $2 million. We do not anticipate this elevated level of severance expense to recur in 2022.
We do not anticipate this elevated level of severance expense to recur in 2022.
Speaker 4: For the full year, our non-gap operating margin as a percentage of non-gap adjusted revenue was 16.5% consistent with our longer term target range of between 15% and 18%.
For the full year, our non-GAAP operating margin as a percentage of non-GAAP . Adjusted revenue was 16, 5% consistent with our longer term target range of between 16% and 18%.
Speaker 4: Our non-GAAP-adjusted EBITDA was $56 million for the fourth quarter, or 21.7% of non-GAAP-adjusted revenue, as compared to $57 million, or 23.3% in the same prior year period.
Our non-GAAP adjusted EBITDA.
$6 million for the fourth quarter or 21, 7% of non-GAAP adjusted revenue.
As compared to $57 million or 23, 3% in the same prior year period.
Speaker 4: For the full year, our non-gas-adjusted EPA data was $221 million, or 22.6% of non-gas-adjusted revenue.
For the full year on non-GAAP , adjusted EBITDA was $221 million or.
22, 6% of non-GAAP adjusted revenue.
Speaker 4: For the four year, I'm not getting paid for $3.35.
For the full year on non-GAAP EPS was $3 35.
Speaker 4: A 7.4% increase from the same prior year period.
A seven 4% increase from the same prior year period.
Speaker 4: As proud as we are to be accelerating top-line revenue growth, we're equally excited to deliver strong EPS growth for our shareholders, where our bottom line grew even faster than our top line. Turning to slide 12, I'll go through the balance sheet, our cash flow generation, and shareholder returns for the quarter and full year.
As proud as we are to be accelerating top line revenue growth. We are equally excited to deliver strong EPS growth for our shareholders for our Bottomline grew even faster than our topline.
Turning to slide 12, I'll go through the balance sheet cash flow generation and shareholder return for the quarter and full year.
Our fourth quarter 2021 cash flow from operations was $52 million.
Speaker 4: Our fourth quarter 2021 cash flow from operations was $52 million, as compared to $57 million in the prior year period.
As compared to $57 million in the prior year period.
Speaker 4: Further, we generated non-gap free cash flows of $48 million in Q4 of 2021. As compared to $52 million in Q4 of 2021.
Further we generated non-GAAP free cash flow of $48 million in Q4 of 2021 as compared to $52 million in Q4 of 2020.
Speaker 4: For the full year, we delivered $114 million in free cash flow, which, as we expected, was a decrease from the previous year's $144 million.
For the full year, we delivered $140 million.
Free cash flow, which as we expected was a decrease from the previous year to $144 million.
As we mentioned on our Q4 2020 earnings call.
Speaker 4: As we mentioned on our Q4 2020 early call, our recorded 2020 result benefited from one strong accounts receivable collections that were well in excess of historical trends and did not repeat in 2021.
Reported 2020 results benefited from one strong accounts receivable collections that were well in excess of historical trend and did not repeat in 2021.
Speaker 4: And two, certain costs that were incurred in 2020 that were paid in 2021, including separation costs related to the departure of our federal CEO , a company-wide COVID-related cash bonus of $500 that was given to each employee in early 2021 to recognize their hard work and dedication during the first year of their COVID pandemic and COVID-related deferred tax.
And to certain costs that were incurred in 2020 that were paid in 2021, including separation costs related to the departure of our former CEO a companywide Cobra related cash bonus of $500 that was given to each employee in early 2021 to recognize their hard work and dedication during the first year.
The Covid pandemic.
And COVID-19 related deferred tax payments.
Speaker 4: Additionally, the aforementioned elevated 75% of $2 million in Q4 2021. It was also detrimental to our Q4 and full year cash.
Italy, the aforementioned elevated severance expense of $2 million in Q4 2021.
Also detrimental to our Q4 and full year cash flow.
Speaker 4: The combination of these one time and timing related items shifted the working capital impact between 2020 and 2021.
The combination of these onetime and timing related items shifted the working capital impact between 2020 and 2021.
Speaker 4: That said, our whole year cash flow generated some operations. Before working capital movement increased from $164 million in 2020 to $179 million in 2021. A 9.1% year-with-year increase in cash flow from operations, which is the highest it's been in over a decade.
That said, our full year cash flow generated from operations before working capital movements increased from $164 million in 2020.
<unk> $79 million in.
In 2021, a nine 1% year on year increase in cash flow from operations, which is the highest it's been in.
For a decade.
Speaker 4: Moving on, we ended the fourth quarter with $234 million of cash and short term investment.
Moving on we ended the fourth quarter with $234 million of cash and short term investment.
Speaker 4: That, along with our outstanding debt quarter end, is up in $144 million in net debt. And a net debt leverage ratio of 0.6 times.
That along with our outstanding debt at quarter end resulted in $144 million and net debt.
And our net debt leverage ratio of 0.6 time.
As a reminder, we refinanced our existing term bank debt and revolving credit agreement in September .
Speaker 4: As a reminder, we refinanced our existing term bank debt and resolved a credit agreement in September . This transaction had multiple benefits, including extending the tenor of our debt, lowering our barn costs and increasing our currently unused barn capacity to $450 million. As we continue to review ways to officeodnistically enhance our capital.
This transaction had multiple benefits, including extending the tenor of our debt lowering our borrowing costs and increasing our currently unused borrowing capacity to $450 million as we continue to review ways to opportunistically enhance our capital structure.
Speaker 4: During the fourth quarter of 2021, we declared $8 million in dividends.
During the fourth quarter of 2021, we declared $8 million in dividend and.
Speaker 4: In addition, we repurchased $16 million of common stock under our stocking purchase code.
In addition, we repurchased $60 million of common stock under our <unk>.
Stock repurchase program.
Speaker 4: Looking ahead, we expect our 2022 share we purchased it to offset the expected delusion from employee stock.
Looking ahead, we expect our 2022 share repurchases to offset the expected dilution from employee stock expense.
Moving on to Slide 13, I'll conclude with 2022 guidance and some key takeaways.
Starting with the top line in November we announced preliminary 2022 guidance and we're pleased to increase our revenue range by $10 million with 2022 revenue expected to range from 1.07 billion.
The $1 1 billion.
Our non-GAAP adjusted revenue to range from one <unk> billion.
And $1 3 billion.
As a reminder, our revenue generation is slightly back end weighted as we have historically generated more revenue in the second half of any given year versus the first.
We expect this to be the same in 2022 in general please note that existing customer renewal discount begin January one.
Higher to more revenue growth coming in mid to later 2022, as our new sales bookings get implemented and revenues recognized.
Speaker 4: As such, we expect approximately 52% of our 2022 revenue generation to occur during the second half of the year.
Such.
Approximately 52% of our 2022 revenue generation that occurred during the second half of the year.
Similar to 2021, we also expect our non-GAAP adjusted operating margin percentage to range between 16, 5% to 17% even after factoring in customer no discount and our growth investments.
Speaker 4: Similar to 2021, we also expect our knocking gap adjusted operating margin percentage to range between 16.5% to 17%. Even after factoring in customer-know-discount and our growth investment, well within our long-term target range of 16 to 18.
Within our long term target range of 16% to 18%.
Further we anticipate our non-GAAP EPS to range between $3 44 to <unk>.
$3 68.
Just on a non-GAAP tax rate of 27, 4% and a share count of $32 1 million shares for the year.
Speaker 4: non-GAAP adjusted EBITDA is expected to range between $225 to $236 million.
non-GAAP adjusted EBITDA is expected to range between $225 million to $236 million.
Speaker 4: And finally, we expect the range of free cash flow to be $115,000, $125 million, based on expected operating cash flow of $150,000, $17 million. With cash, that's expected to come in between $35,000 to $45 million.
And finally, we expect the range of free cash flow to be $115 million to $125 million.
Just on expected operating cash flows of $150 million to $170 million with.
With Capex expected to come in between $35 million to $45 million.
Speaker 4: The driver for increased tax rate to year-over-year is additional pipe monetization investing that drives increased deficiencies and to a lesser extent, forward buying of ICD related equipment. And finally,
The driver of increased Capex range year over year as additional plant modernization investments drive improved efficiency and to a lesser extent toward buying of IP related equipment.
And finally I want to leave you with a few concluding thoughts.
2021 was a very strong year for <unk>, we believe that the momentum we are creating in the market. The result that we are generating and the laser focus of this leadership team has on executing against our strategic priority positions us well in the marketplace.
<unk> is committed to accelerating our revenue growth and diversifying our industry vertical, including closing and integrating disciplined value, adding acquisitions and we believe this investment in our future strategic growth combined with our consistent capital distribution in the form of both dividends and share buybacks will serve our shareholders well.
With that I'll turn it over to the operator to facilitate the question and answer session.
At this time I would like to remind everyone in order to ask a question. Please press star followed by the number one on your telephone keypad.
First question comes from Maggie Nolan with William Blair. Your line is open.
Thank you for taking my questions.
Hi, Thanks for that color on what the revenue first half versus second half would look like I'm wondering if there's anything qualitatively you can share with us about what margins will look like over the course of the year and then any other puts and takes on margins going into 2022 that we should be thinking about outside of that one time payment that.
You referenced.
Yes.
Hi.
Suggest that margins would.
Improve throughout the year as well Maggie once again.
As I said the part of the drivers of the spreading of the revenue. It's just a timing issue right that we have discounts.
That are hitting us January one.
That everybody knows about and then we had new business that it takes some time for us to ramp up and contribute meaningfully over time so.
We do expect the margins in the back half of the year to be better than margins in the first half of the year.
That's great. Thank you and then Brian could you give a little bit more.
Color on kind of the overall sales pipeline across your solution areas and specifically within ski accident payments would be helpful. Thank you.
No. Thanks, Matt I appreciate the question so yes across the board as we've been talking about the last several quarters. Our pipeline has never been major we've never had more mega deals larger deals in the pipeline. We've never had more late stage, we had a six stage sales pipeline. If you kind of look across our portfolio, we like what we see in terms of.
Deals in the shape of that pipeline across all parts of our business specifically in the digital engagement customer engagement space.
The multi vertical we love the number of deals we love the bigger brands. We're working with are these new verticals and it's just a matter of continuing to execute on the sale, we announced that CST exponent launch around the journey orchestration the journey as a service capability that can really.
<unk> a predictive proactive experience that's resonating a lot of it is we get and have closed in the last couple of quarters really good deals with that solution and it gives us the ability then to rinse and repeat and go sell other brands and verticals in the payment space. We've seen good steady progress on our sales bookings in payments with the paper.
Back payment gateway payment processing than sometimes you see a slight time.
Time period on which to activating onboard with transaction volumes and we're seeing a lot of those deals that we've actually closed in prior quarters, then begin to activate the beginning to come on and that's why we've seen a we've been growing increasingly optimistic about the return to double digit we liked what we saw in.
Fourth quarter and we do.
To push to get to double digit organic but the other thing I would maybe just add a little Colorado the payments, but we really like is also our IFC channel sales acceleration with partners. We do direct sales, but we also do a lot with ISP and awards that our CSD Forte platform at <unk>.
And again some of the biggest players of the industry best API best payment Gateway really is attractive and appealing.
To those Isd that could impact all of our solutions, while parts of our solutions. They do the selling for US and then we pick up the volume as they expand so we do like what we're seeing a lot of those parts of the business.
Thank you and congrats on the strong year.
Thank you very much. Thank you appreciate it.
Your next question comes from the line of Tom Roderick with Stifel. Your line is open.
Outstanding. Thank you for taking my questions and hi.
I should say welcome aboard.
On a nice first quarter here.
Brian Let me start with you because its hard enough, it's too tempting NASDAQ kind of hit the big Slide there, where you lay out a 1 billion and a half base case goal for 25% a $2 billion.
<unk>. So if you take base case, it's kind of like 13%, 14% compounded growth in stretch goal, maybe maybe closer to 25%.
Good to hear just the concepts around how much of that.
Would be sort of driven by organic versus M&A and then then on the M&A side, how appealing is it to sort of look outside of the core telco markets into places like financial services technology, and particularly health care and life Sciences that seem to hold some appeal relative to where the customer engagement digital engagement is going and some of the other things you can do on the paint.
Syed.
No. Thanks for the question Tom loves questions Hope Youre doing well so on the getting to the $1 5 billion growing by 50% top line, we still have the range of 2% to 6% organic as you saw this year. We came in at the top end of the range, we aspire to continue to come in at mid point.
To top into that range and continue to get better and better. We have made what we think are smart and disciplined investments in direct sales and brand awareness and lead generation and in channel partner sales and some of these higher growth areas like the digital customer engagement solutions and the payments that the.
He was asking about and we hold ourselves accountable to make sure that those investments deliver a return as well as making sure that we have that leading SaaS platform capability that can continue to build that strong organic sales and so getting to the 13 or 14% Youre exactly right getting to the upper end of our tar.
Or even beating our organic sales target we use the sprays, we earn the right to grow and we do that by delivering every each and every quarter. We then all we constantly look for is not buying just buying calories and more growth. We actually look at where we can find additive SaaS higher growth platforms that can be relevant.
For cable or telco customers or that could be relevant for multi verticals that kind of have cross unit cross vertical appeal around that and that would get us to the combination of those two are what would actually get us to the $1 5 billion and <unk>.
We're trying to stay quite disciplined and you have really pushed the envelope in terms of the value. We can create for our customers that's been winning in value for shareholders and that's why you hear us talking a lot about top line growth, but bottom line growing SaaS, the topline and it gets back to that earning the right to grow and how we do more.
On a cost side of the business. It also means we are going to continue to win market share and so this is something that we love. The fact that we have high recurring revenue and we have stickiness with our revenue management solutions. We also believe we can continue to win market share like we've done over the last several years and with the deal we announced with charter.
We've got to continue to do that both in the cable and the global Telecom space and we do that by bringing more value being easier to do business with and just winning more and more deals and letting our customers lead some of our great.
Customer references and testimonials.
New deals we're trying to get across the goal line specifically on the revenue diversification, we've talked in prior quarters about the fact that we've got into 24%, we aspire to get to 30% of our revenue.
To meet you come from financial services retail healthcare, if we can serve some of the giant customers that we're serving extremely well first we can continue to land and expand and do even more with those big brands and if we can while them region, while dozens of other brands in the same industry verticals in the U S.
Around the world. So that's what we talked about on this rinse and repeat and just continuing to grow our growth our global sales.
Yes.
Fantastic.
We're at I mean, if I think about the goal to grow EPS faster than revenue and conceptualize that where some of the acquisitions you've made.
Obviously, they've got to work well right and they have to integrate well and then the technical integrations have to sort of pan out over time.
Perhaps you could kind of talk about that in the context of kite wheel and digit I know, it's a little bit early on both of those but as you look at the proof points customers that are leaning into the core platform and then adopting tight wheel and perhaps digit or forte in the payment side, what are those technical integration proof points look.
Like how much work have you had to do in the back end and how does that scale going forward.
Yes.
Let me just maybe take it in a few different steps. So one we do not treat our business at <unk> as a one size fits all so we have faster growth earlier stage multi vertical solutions and we set very targeted.
Strategic parameters around what enables us to invest more capital in what's a good healthy return in the day. It all comes down to increase sales pipeline increased sales win rate keeps growing our revenue at a much faster pace. We have units inside of <unk> that could be strong strong double digit approaching that.
A rule of 40, and we want to continue to make sure that those units continue to perform quarter in quarter out we never take it for granted it's proven by ourselves win rate and what the points. They put on the board I think the second point is we see our larger more mature areas in 2021, and we don't think Thats an anomaly.
Can continue to grow at a much healthier organic rate in the half. We also with those businesses that have scale. We can do a continued better job of driving operating leverage which is why we're able to give the renewal discounts related to two of our customers and still expand.
And operating margin in 2022 by gaining operating scale operating leverage that can then lead to combination of smart investments of these growth units and some of what you talked about as well as delivering a nice return to our shareholders in terms of repurchase dividends and funding of our strategic.
Investments on the assets you talked about acquisition topped four about investment in R&D.
After we acquired Forte and it's a good example analogy for some of these other businesses, we did make significant investments in the quality of their AWS cloud platform. We expanded the capability, we did auto provisioning and what we really owe a lot of great. Thanks to our technology and ops teams and Forte, We also expanded the brand awareness.
The sales and marketing and effectively we're using the same disciplined playbook for Kai will four digit to rollout, we just announced.
The <unk> launch in Q4, we just announced this week.
The launch of a product launch around the digital solution for enterprise BTB on the telco side and we have made additional investments in R&D to be more value, adding to our customers and try to.
Show them the value to then lead you to the sales win rate acceleration.
Fantastic. Thank you for the details I will jump back in queue I appreciate it Brian .
Thanks Al.
Okay.
Your next question comes from the line of Greg Burns with Sidoti <unk> Company. Your line is open.
Good afternoon.
What percent of North American cable subscribers are currently on your BSS platform.
Great question, Hey, Greg Hope Youre doing well I guess, we'll follow up I don't have the precise I wanted to say.
It's the vast majority.
Would have said, it's approaching 70%, maybe even higher but we will get you the exact percentage.
Okay, and then I guess obviously.
Large percentage of the market already but when we think about maybe that 25 or so remaining subscribers has the conversation in any way change has anyone come come to you now that you've closed charter you've kind of prove that you could.
Port over a significant number of customers pretty quickly and seamlessly how's the has the conversations changed in any way and have you seen any opportunity to kind of go after the rest of that business.
Yes, I mean, nothing that I can comment on specifically, but I would just say even prior to the charter when we try to be active in all of the large customers in North America, but also not limited to North America in terms of the value. If we can deliver a fantastic value to Comcast charter dish and many of the other cable.
<unk> in North America and globally, we could do the same for them. While we've always found is is that needs to be a combination where there's something that's going on with the business, where they need more functionality. They may not be pleased with their incumbent they need to improve the speed and agility at which their platforms can support their business or they can bring more cars.
Effective best and usually there is a trigger that causes a customer to kind of stick their head up and say it now is the time to really look at that and what we're doing in all of our sales calls and have been is continuing to tell the story of what we think the value add is why it's a low risk move we've proven that with our successful conversions of the two largest.
Comcast and charter so lots of dialog nothing that I could comment on specifically beyond that that at this stage.
Okay.
When you look at the revenue split between charter and Comcast.
I think Comcast.
More subscribers on your billing platform, but charter has higher revenue so what what services charter consuming that Comcast is is there any opportunity to.
Maybe up sell more into Comcast.
I mean with all of our business objectives and sales objectives for the teams that run the accounts of the business as they always have targets to expand and grow more in every one of our customers. We don't think it's limited to just those two by any stretch, but really what we've seen it.
At charter with some of the stuff they've done there is some similarity but there are certain areas, where they just relied on us for more where some of our customers, including Comcast, sometimes we want to build some of the edge systems themselves. They want to do some of the integration themselves and it really just depends on the strategy.
Do I think there is upside in both accounts as big as those and successful as those two big customers are there's always a ton of headroom and we just got to work. It day in day out to try to bring innovative ideas showing the value of what they could do by even turning over more of their business to <unk> and what we're doing and.
That's always a focus and every one of our customers all around the world.
Okay, then maybe to that point when we look at the really strong growth in Carter with charter year over year.
Where is that growth coming from is that from the broadband subscriber growth there or is it from incremental services can.
Could you just maybe touch on that a little bit each yes, it's from all of the above so obviously the nice broadband net adds.
Cable industry is at it has benefited us in a significant way because we price on a per subscriber basis, regardless of the number of services of which services. They take we've been benefiting from that we've also been benefiting as we just bring them more value we bring in innovative ideas instead of doing it in house are using.
Someone else to provide some of those solutions they turned to <unk>. So it can be more small product sales. It can be more services. It can be customizing things that we do for them to build again through our SaaS platform. It's all of the above.
Okay, great. Thank you.
Thanks, so much Greg.
There are no further questions at this time I will turn the call back over to Brian Shepherd for closing remarks.
No I would just say thank you for the time and joining us on the call today, hopefully it's clear we have a clear focus on our vision. We're excited by what's going on in the business. We think our global leadership team and our global employees, we expect to every quarter deliver better and better results. We know that's what our shareholders are looking for and we're going to hold off.
Our selves accountable to do that so look forward to talking to you.
Quarters. Thank you.
This concludes today's conference call. Thank you for participating you may now disconnect.
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Yes.
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Okay.
Okay.
Yes.