Half Year 2022 CLPS Inc Earnings Call
Please standby we're about to begin.
Hello, everyone.
And welcome to the first half of fiscal year 2022 earnings conference call for C. L. P. S. Incorporation please know that.
I will turn the call over to Ron.
Yeah, He us investor relations for opening remarks and introductions.
Please note that today's call is being recorded.
Please go ahead Mr Iran.
Thank you operator, Hello, everyone and welcome to see L. P. S. Incorporation's first half of fiscal year 2022 earnings conference call.
L. P. S Corporation announced its first half of fiscal 2022 financial results. This morning. The earnings release is now available on the company's IR website at IR that C. L. P. S cobalt the calm.
Before we continue please note that our discussions today may include forward looking statements made under the Safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995 forward looking statements involve a number of risks and uncertainties as such our results may be materially different from the views expressed today further information.
Regarding these risks uncertainties assumptions and other factors that could affect our financial results is included in our form 20-F filed with the U S Securities and Exchange Commission and other documents filed with the U S. SEC In that respect I would like to read the following disclaimer applicable to such statements.
All of the statements made in this discussion are forward looking statements within the meaning of protections from section 27, eight under the Securities Act of 1933 as amended and section 21 E of the Securities Exchange Act was negative 34 as amended forward looking statements include statements with respect to the company's beliefs plans objectives.
<unk> goals expectations, anticipations assumptions estimates intentions, and future performance and involve known and unknown risks uncertainties and other factors, which may be beyond the company's control and which may cause the actual results performance capital ownership or achieve message the company to be materially different.
From future results performance or achievements expressed or implied by such forward looking statements. All such statements attributable to us are expressly qualified in their entirety by this cautionary notice, including without limitation, those risks and uncertainties related to the company's financial and operational performance in the first half of fiscal 'twenty 'twenty.
Two is just expectations for the company's future performance, it's preliminary outlook and guidance offered in this presentation the company's future.
As well as the risks and uncertainties described in the company's most recently filed SEC reports and filings.
These reports are available upon request from the company are from the Securities and Exchange Commission, including through the SEC's Internet website www that S. E. T that call, we have no obligation and do not undertake to update or revise or correct any of the forward looking statements. After the date hereof.
After their respective dates on which any such statements. Other wiser made all the information provided today is as hoped the date of this call and C. L. P. S does not undertake any obligation to update any forward looking statement, except as required under applicable law with respect on any non-GAAP measures discussed during today's call the comp.
Reconciliation information related to those measures can be found in the earnings release issued early today.
Now allow me to introduce the management team on the call today, Mr. Henry Lee Chief Operating Officer O C. L. P. S will start off the call with a review of recent company developments and operating results followed by a need to Ray Young Chief Financial Officer of C. L. P. S who will discuss financial results in more details. Please note that.
All lines have been placed on mute to prevent background noise.
Management's prepared remarks, we will open up for the call.
We will open up the call for a Q&A session. Let me started welcomed Wong executive Vice President of C. L. P. S will also be joined the Q&A session with that said I would now like to turn the call over to Henri Henri. Please go ahead.
Thank you all right. Thank you I'll creature since you all for joining the call today.
In the first half of fiscal year <unk> generally too.
She has had said she had impressive results.
Both the financial and the business perspectives.
We again and then as I'm sure you all saw the market share.
Alright, perfect ability.
I would say, it's been the strategy execution and the technological progress.
Which translates into stronger financial performance.
He has touched on volume pandemic another.
I know the emergency of various like Army Corral as.
As well as the global economic uncertainties and the situations.
These steel achieved all cost saves and the positive growth trend and the strong financial results during the first half of fiscal year 'twenty two.
We have been able to sustain these success due to our experience.
This strong execution capability of high quality services.
Our continuous improvement and the in depth cooperation among our major clients in banking wealth management E Commerce and automobile industries.
I saw the financial figures.
Vita Young youth.
He is custom you details later.
Now please allow me to talk about the highlights of our business and operations joining the CR rate.
This be at least at the NASDAQ market.
Yeah, Alex Yes has been able to achieve a year over year revenue growth streets of modern such a person.
Thanks to our solid profitability.
I can equal in the emulation capabilities.
As well as our ability to provide clients with high quality and efficient services.
Our existing clients still account for a large portion of our current business.
Threw off our competitiveness and it demonstrates that the I T. So there's usually provides a good read.
Place, though.
We attribute this so all the liabilities and the long term business relationship with SOG lives.
Well demo.
C O P S currency really plays on impulse Sandro.
Improving the performance of I T systems, and providing that once you file the scenarios how business to effectively increase our clients profitability and reduce operating costs.
Yeah, Hey, Phil that hopeful.
It's heavily issue Tyler resource supply ecosystem for all class through our professional I teed child it training programs.
The challenge creation program.
Which is called T C P.
I learned development program, which is called the T D P.
All of these factors aren't immediately led to the strategic partnership with collapsed.
The client trust and the results of many of these situations.
No.
I would like to discuss some key tests related to our core business.
First off all our blockchain solution company linked crypto.
Based in Hong Kong.
Great show, a high speed supporting or C class piece, you saw creation and Susan mentioned this.
It tastes also call me change.
Promoting now send you both token O S T platform.
Now the crypto as initially January chips revenue during the first half of fiscal year 2022 .
We are actively promoting <unk> with potential clients in Hong Kong.
Secondly.
Our joint venture company I'm S E T.
C. P is implementing the loan for employees Solutia.
It's H two in true custom cause customer acquisition. This is integration and the back office operation and management capabilities.
This paradox youll be market trades Tomorrow July is the Hong Kong and the South East Asia.
At the same time, we have began the research on developing the next generation of loan save some for banks and financial institutions. So that our clients have leverage that you will see some perpetual abuses integration.
You when you said accretion management intelligent liquidation and risk control.
Well as quickly.
It's launching through AEP ice.
Last but not the least.
Our children credit card company has significantly the west Dreamless PR rate.
<unk> a competitive gross performance.
Ill tragedy.
Call paradox of its R&D team.
At the end.
This trial to deliver a high caliber toward us.
<unk> collapsed chairs.
At present.
In discussion with several overseas, but it's about a potential partnership related chips, so our product.
Well, it's also worth to mention lights.
Since the digital or renminbi gain the traction in China.
Have a developer a turnkey solution in partnership with the leading back in China.
Integrated with Crs, yes expertise in banking finance E Commerce and mobile mobile developments.
Solutia.
We will enable banks the liard hesitance to enjoy plenty of intelligence functionalities.
Small contracts.
Online payments.
The <unk> settlement.
Supply chain management, and the marketing campaigns.
While providing safe reliable and flexible digital renminbi services.
We also run offs of digital Renminbi e-commerce platform to our clients promote the use of digital or it can be.
Let's talk about our southeast Asia business.
He continued to increase our investment and the busiest traces at least market.
Additionally, we started entering that tourism and the ideal Acacia industries.
Technological innovation will be the driving force.
Oh gross lease tool industries.
Yes, it's a real increase.
Profitability and the market share for class.
This cross industry investment you're also allow us to achieve cross selling the product.
Our superposition effects.
All of these achievements and the progress that I have shared highlight.
Competitive advantages of our business and the effectiveness of our strategies.
Instead, we will continue to drive that long term value of our company.
We are optimistic to achieve at least go shoot the synergy.
Our <unk> services and up for Das.
And through the service delivery capability and enhanced operating efficiency.
Thank you.
No.
I would like to turn the call or to our CFO retail you're off to discuss the first half of fiscal 2022 financial results.
Great.
Please go ahead.
Okay. Thank you Henry.
I'll now provide an update on our financial performance for the first off our fiscal year 2022 .
That number is provided in U S dollar terms and that all comparisons are made on the year over year basis.
In the first half of fiscal 'twenty to 'twenty two.
Our revenues increased by 17 6 million.
So I think probably 2% to 17, 5% 19. Some 58 pardon me the increase in revenue was mainly due to increased revenue from Ikea consulting services in particular.
Daniel from IP consulting services increased 10 basis points, 2% to 17 2 million from 57 pardon one meeting the increase was due to the increased demand from existing and new clients and our improved service delivery capability.
He ran.
Random mill, some customized solutions to other states, including 208 plus 1%.
Great quality, great meeting from one 1 million the increase was primarily due to our strengthened the relationship and expanded the business scope.
Existing client.
Revenue from other services included 200, and the 30th thick pardon, 7%, so they'll put a $7 million from railcar to meeting the increase was primarily due to the increased demand for other services, including consulting services.
Gross profit increased 27% to two 3 million from 85 million.
As for operating expenses.
Sales and marketing expenses include kind of stay at one 3% coupon as they move from one 8 million.
Due to the increased salary expenses.
We looked up behind to improve the company's capability set.
Delivery to meet client demand.
As a percentage of total revenue sales and marketing expenses because that two 3%.
Right Pardon me, 1%. The decrease was primarily due to the increase in operational efficiency as a result of economics of scale.
Research and development expenses decreased.
But he two plus 2% to $4 2 million from <unk> as a percentage of total revenue.
Research and development expenses decreased to five 5% from 10, 6%.
Take rate was primarily due to the optimization of our R&D stopped structure by allocating a number I'll stop to deliver customized solutions to meet the increased demand for the salaries as a result, the Delaware expenses must have paid two cuts.
General and other new J too expensive in Kuwait.
Eight plus 3% to nine 2 million from six 6 million as a percentage of total revenue.
General and administrative expenses increased to 12, 1% from 11, 4%.
The increase was primarily due to an increase of share based compensation, you'll stop were hired and a year over year increase of salary expenses.
Operating income increased by 54, 2% to seven pardon mistakes moving from fall 2019, operating margin was 10% compared to eight 4% in the play a parrot.
Total other expenses net of other income well, there are probably $2 million compared to their upon the wellbeing of the total other income.
Other expenses in the prayer payload.
Provision for income taxes increased by <unk> 8 million, two they'll probably $9 million from they'll come in one month.
Mainly due to a charity.
Consider it made a profit and you absolutely cowboy lost.
Net income upsetting one 2% to take on the family from $4 9 million.
Over the same period of last year.
After excluding the impact of noncash share based compensation expenses.
non-GAAP net income increased 39, 1%.
849 million from six 4 million.
After excluding the impact of Noncontrolling interests.
Net income attributable to see L. P. S. Incorporations shareholders would say pardon the spend you need all the Oklahoma State one basic and diluted earnings per share.
Compared to full pawn lending they'll penetrate basic and diluted earnings per share in the prior year period.
After excluding the impact of noncash share based compensation expenses non.
non-GAAP net income attributable to the L. P. S incorporation shareholders, what eight pardon the stable, meaning a nail Polish plus rate basic and diluted earnings per share. This is compared to non-GAAP net income attributable to see okay. Its incorporation shareholders Oh, hey.
One 4 million.
Upon the stream nine basic and diluted earnings per share in the prayer parrot.
As of December 31, 2021 they had cash and cash equivalent of 21 7 million.
Compared to 224 on the Stanley, meaning as of June 32801 at Boston, Boston, One 'twenty 'twenty. One we had total numbers of employees of 3600 and stick to Sterling.
Nine partners.
Nine 6% year over year.
In the first I O physical 2022 revenue per employee up by 88% to $27000 per person.
Net income per employee up by 19, 7% to $1 $8000 per person.
Looking forward for fiscal year 2022.
Padgett with total sales growth in the range of approximately 30%, 35% and non-GAAP net income gross.
Approximately 32% to 7% compared to fiscal year 2021 financial results.
This concludes our prepared remarks, operator, we are now ready for questions.
Of course, thank you.
I would like to ask a question. Please press star one on your telephone keypad, if youre using a speakerphone. Please pick up your handset to make sure. Your mute function is turned off so that your signal reaches our equipment.
It is star one if you would like to ask a question and we will pause just for a moment to allow everyone an opportunity for questions.
And as a reminder, this start one if you'd like to ask a question. Then we'll go ahead and take our first question from Tony do you.
Please go ahead.
Hello.
Congratulations on your strong financial performance.
I have two questions.
We'd like to further slow.
So first of all I.
It seems that business is growing overseas market as well.
Our strategy to keep the momentum.
The second.
What's the reason why you Oh Gee, you said, how do we increase year over year. Thank you.
Hi, This is listen let me take the first question was.
And we got to the growing universe of market explanation earlier.
We have achieved 15, 4% growth in our always see revenues for the first half of fiscal year 2022.
And we are further expanding our international PRASM and industrial you wished to new markets.
Continuing to invest in South East Asia region like in Singapore in a day.
Our goal for this year.
Yet of 'twenty to 'twenty, two is to attract more clients and create more push on this opportunity in the U S. So for the next question I would like to have our CFO Rita.
To answer that we took to let to you.
Okay. Thank you Wilson about that and the question regarding the increase in G&A expense.
We had a new stopped as graduated to further drive our business. The salary expense increased and also the share based compensation also increased during this period as well as the Oh, you started with pace they paid two hour stop.
I hope the answer to your question. Thank you.
Thank you.
And we'll go ahead and move on to our next question from Rebecca Chang. Please go ahead.
Hi. Thank you my question is how about in Europe .
So this is Dennis.
Yeah highlights here.
Your revenue in this segment increased four malls into things I want to send a change does it factor into our business segments.
Oh, you say what Ana thank you.
Thank you. This is Henry let me take the questions I see our.
Do engine strategy is our KOL strategy.
The other two Joe or fewer truck rolls.
Horizontally, we plan to achieve the top line growth by bringing in new clients and the shrew overseas expansion.
And what do you call. It we are expanding services and the business school.
For existing clients.
Our it consulting services and the customized.
Solutions business.
Our complementary Mitch.
Each view Brent H are there more opportunities.
Going forward.
Although lately is also they'll question. Thank you.
And with that that does conclude our question and answer session I would now like to hand, the call back over to Henry for any additional or closing remarks.
Thank you again for joining us on today's call.
And we appreciate your ongoing support.
We look forward to updating you on our progress in the lakes.
Please go ahead.
Good day, thank you.
And with that that does conclude today's call.
Thank you for your participation you may now disconnect.
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