Q4 2023 CSG Systems International Inc Earnings Call

Greg: Thank you for watching! Thank you for standing by. My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to CSG's Q4 and full year 2023 earnings call. All lines have been placed on mute to prevent any background noise.

Thank you for standing by my name is Greg and I will be your conference operator today at this time I would like to welcome everyone to CST as Q4 and full year 2023 earnings call.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad and if you'd like to withdraw your question Press Star one again.

Operator: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw your question, press star one again. In the interest of time, we kindly ask that you limit yourself to one question only. Thanks, and have a good day.

The interest of time, we kindly ask that you limit yourself to one question only thanks in advance.

John Ray: I would now like to turn the call over to John Ray, Treasurer and Head of Investor Relations. John, please go ahead. 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 in the investor relations section of our website. Please take a moment to locate these slides.

I would now like to turn the call over to John Ray Treasurer, and head of Investor Relations. John. Please go ahead.

Thank you operator, and thanks to everyone for joining us like last quarter, we will be working from our slide deck, which can be found on the investor Relations section of our website.

You just take a moment to locate these slides today's discussion will contain a number of forward looking statements. 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.

John Ray: Today's discussion will contain a number of forward-looking statements. 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. While 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 in light of new or future events. 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. 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 in our financial and operational decisions.

Our ability to successfully integrate and manage acquired businesses in order to achieve their expected strategic operating and financial goals.

While 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.

In light of new or future events in.

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.

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.

Brian Shepherd: 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 8. With me today on the phone are Brian Shepherd, Chief Executive Officer, and Hai Tran, Chief Financial Officer. With that, I'd like to now turn the call over to, Thank you, John. Hi, everyone.

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 Thanks, John Hi.

Brian Shepherd: We appreciate you joining us on the call as we begin on slide four. Team CSG finished a record-setting 2023 with a strong fourth quarter. We posted 7.3% year-over-year revenue growth in 2023, all coming from organic growth. Our performance this year was the best annual result in nearly two decades.

We appreciate you joining the call as we begin on slide four <unk> finished a record setting 2023 with a strong fourth quarter, we posted seven 3% year over year revenue growth in 2023, all coming from organic growth. Our performance. This year was the best annual result.

<unk> in nearly two decades, our full year non-GAAP adjusted operating margin was 17, 2%, which is a significant improvement over the 16, 6% we reported in 2022, proving our ability and our commitment to consistently expand cft's operating leverage.

Brian Shepherd: Our full-year non-GAAP-adjusted operating margin was 17.2%, which is a significant improvement over the 16.6% we reported in 2022, proving our ability and our commitment to consistently expand CSG's operating leverage with disciplined execution. Another highlight of the year was our strong 2023 free cash flow performance, especially during Q4. For the year, we generated $104 million in free cash flow, including over $74 million in Q4, our best quarterly free cash flow performance on record.

With disciplined execution.

Another highlight of the year was our strong 2023 free cash flow performance, especially during Q4 for the year, we generated $104 million in free cash flow, including over $74 million in Q4, our best quarterly free cash flow performance on record at the end of the.

Brian Shepherd: At the end of the day, our faster revenue growth is fueled by strong ongoing market demand for CSG's industry-leading SaaS products and good sales performance across all areas of our business. CSG's sales pipeline is large and healthy as we win and wow big new customers in a wide variety of faster growing industry verticals. Another important topic I want to touch on is our belief that diverse companies who care about sustainability perform better and consistently deliver better results. At CSG, we believe that good people and high-integrity companies can and should finish first. In December, we announced our official carbon commitment as we strive to be carbon neutral in both scope one and scope two emissions by 2035.

Day or faster revenue growth is fueled by strong ongoing market demand for <unk> industry, leading SaaS products and good sales performance across all areas of our business BSG sales pipeline is large and healthy as we women Wow big new customers in a wide variety of faster growth.

Industry verticals.

Another important topic I want to touch on is our belief that diverse companies, who care about sustainability performed better and consistently deliver better results at BSG. We believe the good people and high integrity companies can and should finish first in December we announced our official carbon <unk>.

But then as we strive to be carbon neutral in both scope, one and scope two emissions by 2035 in 2023, we issued our inaugural impact report, which showcases our initiatives around ESG diversity inclusion and global community impact and our increased disk.

Brian Shepherd: In 2023, we issued our inaugural impact report, which showcases our initiatives around ESG, diversity, inclusion, and global community. And our increased disclosures, especially with our annual SASB and TCFD reports, are moving the needle from an ESG rating agency perspective. In April, we received our second consecutive prime rating from ISS, which means that CSG is in the top 20% of its software peers when it comes to quality ESG disclosure. Additionally, we received an AA rating from MSCI, a step up from the BBB rating we received two years ago.

Closures, especially with our annual SaaS D and Tcf D reports are moving the needle from an ESG rating agency perspective in April we received our second consecutive prime rating from ISS, which means that <unk> is in the top 20% of its software peers when it.

Comes to quality ESG disclosure.

Additionally, we received a double a rating from MSCI a step up from the Triple B rating. We received two years ago and we recently ranked at the top 10% of our software peers. According to sustain analytics and top 25% of all publicly rated companies according to S&P.

Brian Shepherd: And we recently ranked the top 10% of our software peers according to Sustain Analytics and the top 25% of all publicly rated companies according to S&P's CSA ESG framework. As we look ahead, we will continue to focus on our corporate responsibility commitments as we believe our culture-first, people-first approach is a key differentiator for us. A talented and inspired CSG workforce, in turn, makes CSG more value-adding and easier to do business with than our competitors as we solve our customers' toughest business challenges with our mission-critical enterprise SaaS products. We look forward to sharing our continued progress in the quarters and years ahead on this important journey. With regard to share buybacks, we repurchased $117 million of stock during 2023.

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As we look ahead, we will continue to focus on our corporate responsibility commitments as we believe our culture first people first approach is a key differentiator for us a talented and inspired CFC workforce in turn Linemate CSC more value, adding and easier to do business with and our competitors as we solve our customers' <unk>.

<unk> business challenges with our mission critical enterprise SaaS products, we look forward to sharing our continued progress in the quarters and years ahead on this important journey.

With regards to share buybacks, we repurchased $117 million of stock. During 2023 looking forward. We will continue to opportunistically repurchase shares through the end of 2024 with the expectation that at a minimum we will buy back enough shares to offset employee stock compensation.

Brian Shepherd: Looking forward, we will continue to opportunistically repurchase shares through the end of 2024, with the expectation that, at a minimum, we will buy back enough shares to offset employee stock compensation, with the opportunity to buy back more than this when we believe it will create greater shareholder value. On dividends, we are pleased to announce that we will be increasing our dividend by 7% to $1.20 per year, paid in quarterly increments. This marks our 11th consecutive annual increase and underpins our dedication to a friendly shareholder return policy, and our 2024 guidance should prove that we see CSG's strong business momentum continuing into the new year. We expect organic revenue growth to be above the midpoint of our long-term 2% to 6% range with revenue of $1.2 billion to $1.24 billion this year. In addition, we foresee profitability as measured by our adjusted operating margin percentage remaining strong with a range of 17% to 17.4%.

With the opportunity to buyback more than des when we believe it will create greater shareholder value.

On dividends, we are pleased to announce that we will be increasing our dividend by 7% to $1 20 per year paid in quarterly increments. This marks our 11th consecutive annual increase and underpins our dedication to a friendly shareholder return policy.

And our 2024 guidance should prove that we see ESG strong business momentum continuing into the new year.

<unk> organic revenue growth to be above the midpoint of our long term, 2% to 6% range with revenue of $1 2 billion to $1 two $4 billion. This year.

Further we foresee profitability as measured by our adjusted operating margin percentage remained strong with a range of 17% to 17, 4% with highlights team Cst's dual commitment to both accelerate organic revenue growth in the mid single digit range while continuously.

Brian Shepherd: This highlights Team CSG's dual commitment to both accelerate organic revenue growth in the mid-single-digit range while continuously expanding our profitability and free cash flow generation. I will go into more details in our full year 2024 guidance outlook, but investors can be confident the CSG leadership team is laser focused on turning good revenue growth into strong profitability and then converting that good profitability into constantly improving free cash flow. Turning to slide five, I will reiterate the four strategic objectives that will help CSG create greater shareholder value and allow followers of our story to track our growth progress.

Spanning our profitability and free cash flow generation I will go into more details on our full year 2024 guidance outlook, but investors can be confident the <unk> leadership team is laser focused on turning good revenue growth into strong profitability and then converting that good profitability into <unk>.

Constantly improving free cash flow turning to slide five I'll reiterate the four strategic objectives that will help <unk> create greater shareholder value and allow followers of our story to track our progress as I just shared CST aspires to deliver long term organic revenue growth and a 2% to 6%.

Brian Shepherd: As I just shared, CSG aspires to deliver long-term organic revenue growth in the 2% to 6% range, striving to consistently be at or above the midpoint of this range. The midpoint of our 2024 revenue guidance implies a 4.3% year-over-year organic growth rate, with any disciplined M&A deals that we close, then accelerating our revenue growth even more. We aim to add operating scale and expand our operating leverage by growing revenue to $1.5 billion by year-end 2025, with the bottom line growing as fast or faster than top-line growth. This scale will come from a combination of good organic revenue and sales growth, combined with disciplined inorganic moves. Our third strategic imperative is to be the number one SAS provider of choice for global communications service providers by providing the most value-adding technology platforms and by helping our customers make more money in the digital world.

Range striving to consistently be at or above the midpoint of this range. The midpoint of our 2020 for revenue guidance implies a four 3% year over year organic growth rate with any disciplined M&A deals that we closed in accelerating our revenue growth even more.

We aimed at operating scale and expand our operating leverage by growing revenue to $1 5 billion.

By year end 2025, with bottom line growing as fast or faster than topline growth. This scale will come from a combination of good organic revenue and sales growth combined with disciplined inorganic moves our third strategic imperative is to be the number one SaaS provider of choice for global Communications.

Service providers by providing the most value, adding technology platforms and by helping our customers make more money in the digital world.

Brian Shepherd: And finally, we plan to diversify revenue even more as we win big and faster growth industry verticals like retail, government, financial services, healthcare, technology, and more. Moving to slide six, you can see that we delivered against all four objectives with our excellent results in 2023. On strategic revenue growth, we reported a record-setting $1.169 billion of revenue in 2023, resulting in 7.3% year-over-year growth, our best full-year result in nearly 20 years. On the right-hand side of slide 6, we believe that CSG's high recurring revenue SaaS business model and our strong, healthy balance sheet make us an attractive investor. By 2025, we aspire to gain scale in the markets where we compete and generate $1.5 billion in annual revenue, which implies that CSG will have added over $500 million in profitable recurring revenue from 2020 to 2025.

And finally, we plan to diversify revenue even more as we win big in faster growth industry verticals like retail government financial services health care technology and more <unk>.

Moving to slide six you can see that we delivered against all four objectives with our excellent results in 2023 on.

On strategic revenue growth, we reported a record setting one $1 $69 billion of revenue in 2023, resulting in seven 3% year over year growth. Our best full year result in nearly 20 years.

On the right hand side of slide six we believe the CSU is high recurring revenue SaaS business model and our strong healthy balance sheet make us an attractive investment by.

By 2025, we aspire to gain scale in the markets, where we compete and generate $1 5 billion in annual revenue, which implies that <unk> will have added over $500 million and profitable recurring revenue from 2020 to 2025.

Brian Shepherd: Over the medium to long term, we aspire to expand CSG's operating leverage and use our strong balance sheet to deliver non-gap EPS growth that meets or exceeds revenue growth. On this last point, I want to reinforce a key principle for the CSG Board of Directors and Management Team. Team CSG will add strategic scale with disciplined M&A that puts a premium on accelerating our organic growth, expanding our operating margins and cash generation, and creating greater shareholder value by paying the right price and extracting the expected M&A synergies inherent in the investment thesis for each acquisition that we close. Turning to slide seven, we have had good success in our goal to be the number one technology provider of choice for communication service providers globally.

Over the medium to long term, we aspire to expand Pfg's operating leverage and use our strong balance sheet delivered non-GAAP EPS growth that meets or exceeds revenue growth.

On this last point I want to reinforce the key principle for the CSC Board of directors and management team <unk> wide strategic scale with disciplined M&A that puts a premium on accelerating our organic growth expanding our operating margins and cash generation and creating greater shareholder value by paying the <unk>.

Price and extracting the expected M&A synergies inherent in the investment thesis for each acquisition that we close.

Turning to slide seven we had good success in our goal to be the number one technology provider of choice for communication service providers globally in the first half of 2023, we completed our conversion of 14 million customers from our competitors' platform of charter, we have long term contracts with both charter and Comcast.

Brian Shepherd: In the first half of 2023, we completed our conversion of 14 million customers from a competitor's platform at Charter. We have long-term contracts with both Charter and Comcast that run through Q1 2028 and year-end 2025, respectively. And as a reminder, CSG's relationship with Comcast and Charter is on a per-customer basis. This may seem like a minor nuance, but it's a very big distinction for

Our run through Q1, 2028, and year end 2025, respectively, and as a reminder, <unk> relationship with Comcast and charter is on a per customer basis. This may seem like a minor nuance, but it's a very big distinction for us we know there have been headlines over the last several weeks.

Brian Shepherd: We know there have been headlines over the last several weeks related to subscriber losses at several of our existing cable broadband customers. It's worth reiterating that we serve over 64 million combined subscribers at Comcast and Charter and nearly 80 million subscribers across all of North American cable broadband customers, so small changes in subscriber counts do not have a meaningful impact on our business results and growth. It should also be noted that CSG grew our combined revenue five percent year over year at our two largest customers in 2023. And even as our revenue grew nicely this year at these industry-leading customers, the revenue concentration from Comcast and Charter dropped to less than 40% of our total revenue for the first time in the last two decades.

Related to subscriber losses at several of our existing cable broadband customers. It's worth reiterating that we serve over 64 million combined subscribers at Comcast and charter and nearly 80 million subscribers across all of North American cable broadband customers just small chain.

<unk> and subscriber counts do not have a meaningful impact on our business results and growth. It should also be noted that CFT grew our combined revenue 5% year over year at our two largest customers in 2023.

And even as our revenue grew nicely this year at these industry leading customers.

The revenue concentration from Comcast and charter dropped less than 40% of our total revenue for the first time in the last two decades, cst's improving revenue diversification and faster revenue growth is a testament to our success in winning many big new logo sales deals in other parts of our business.

Brian Shepherd: CST's improving revenue diversification and faster revenue growth is a testament to our success in winning many big new logo sales deals in other parts of our business, continued expansion of our business with existing customers all around the world, and our success in diversifying into big, exciting, and faster growing industry verticals. On the new wind front, Team CSG was selected to digitally transform an existing cable broadband customer's BSS stack to simplify their business processes with our agile and cutting-edge solutions. As part of this win, we extended and expanded our 10-plus year relationship with this important customer. During 2023, we also announced a great new deal with ATN International, a leading provider of digital infrastructure and communication services. Team CSG will modernize their networks with our mediation and roaming settlement products. This will enable ATN to automate mediation and wholesale settlement workflows and access real-time performance data to better align resources and to more quickly react to changing business needs.

Continued expansion of our business with existing customers all around the world and our success in diversifying into big exciting and faster growth industry verticals.

On the new wins front <unk> was selected to digitally transform an existing cable broadband customers BSS stack to simplify their business processes with our agile and cutting edge solutions as part of this win we extended and expanded our 10 plus year relationship with this important customer.

During 2023, we also announced a great new deal with ATM International a leading provider of digital infrastructure and communication services teams DSG will modernize their networks with our mediation and roaming settlement products. This will enable ATM to automate mediation and wholesale settlement workflow.

<unk> and access real time performance data to better align resources and to more quickly react to changing business needs.

Brian Shepherd: Outside of North America, we continue to win more business in the wireless telecom market. In fact, over the last three years, our strategy of extending our cable, telecom, and wireless business globally is paying off big. Over that period, we have added 16 exciting new logo sales wins and expanded our business with an additional 35 existing customers. Specifically, in 2023, we expanded our engagement with one of the top telecom operators in Saudi Arabia. Team CSG was trusted to consolidate this customer's fragmented legacy BSS solution into a modern, unified platform.

Outside of North America, we continued to win more business in the wireless telecom market in fact over the last three years, our strategy of extending our cable telecom and wireless business globally is paying off big time over that period. We have added 16 exciting new logo sales wins and expanded our bid.

<unk> with an additional 35 existing customers.

Specifically in 2023, we expanded our engagement with one of the top telecom operators in Saudi Arabia, <unk> was trusted to consolidate this customer's fragmented legacy BSS solutions into a modern unified platform.

Brian Shepherd: Our solution will reduce this customer's BSS complexity, improve time to market with new product offers, and enhance the efficiency of their business operation. During the first quarter, we also expanded our relationship with a leading telecom operator in Latin America and the Caribbean. We are now helping this business with its digital customer engagement needs. Our solution will help this customer reduce costs and standardize their digital experience across the dozens of countries in which it operates. And in Q2 2023, we announced a fantastic new deal with PLDT, the Philippines' largest fully-integrated wireless operator. PLDT is expanding its two-decade partnership with CSG as it embraces the power of the cloud to bring its wireless business into the future and transform its customer experience, particularly for its enterprise units. Plus, this is the latest example of us serving customers in an environment of their choice. This one, in Amazon Web Services' cloud-based environment.

Our solution will reduce this customer's BSS complexity improve time to market with new product offers and enhance the efficiency of their business operations.

During the first quarter, we also expanded our relationship with a leading telecom operator in Latin America and the Caribbean. We are now helping this business with our digital customer engagement needs. Our solution will help this customer reduce costs and standardize their digital experience across the dozens of countries in which it operates.

And in Q2, 2023, we announced a fantastic new deal with <unk>, the Philippines largest fully integrated wireless operator.

<unk> is expanding its two decade partnership with PSG as it embraces the power of the cloud to bring its wireless business into the future and transform its customer experience, particularly for its enterprise unit.

This is the latest example of US serving customers in an environment of their choice. This one and Amazon Web services cloud based environment.

Brian Shepherd: Also in July, we announced the completion of our digital BSS transformation project with Airtel Africa, a leading telecommunications and mobile money service provider with close to 140 million wireless subscribers across 14 countries in Africa. With CSG's unified revenue management solution, Airtel Africa is primed to streamline processes across its business, minimize costs, and shorten time to market while delivering digital experiences that drive customer loyalty and sustainable business growth. In the fall, we won a great new logo with M1, one of the leading mobile carriers in Singapore.

Also in July we announced the completion of our digital BSS transformation project with Airtel Africa, a leading telecommunications and mobile money service provider with close to 140 million wireless subscribers across 14 countries in Africa with <unk> unified revenue management solution Airtel.

Africa is prime to streamline processes across its business minimize costs and shorten time to market, while delivering digital experiences that drive customer loyalty and sustainable business growth.

In the fall, we want a great new logo within one one of the leading mobile carriers and Singapore ESG was selected to modernize their data be BSS stack and importantly, this deal highlights the strength of <unk> solutions as we are replacing our main competitor and.

Brian Shepherd: CSG was selected to modernize their B2B BSS stack, and importantly, this deal highlights the strength of CSG's solutions as we are replacing our main competitor. And we have a strong sales pipeline in the global telecom market that will position CSG well to announce more exciting new logo sales wins in 2024. Turning to slide 8, since 2017, we have diversified our revenue coming from exciting new industry verticals from 7% of total 2017 revenue to 28% of our 2023 revenue, a fantastic accomplishment in a relatively short period of time. We are the partner of choice for big brands and higher growth industry verticals, where we help our customers digitize and monetize their customer experience and provide them with cutting-edge integrated payment solutions.

And we have strong sales pipeline and the global telecom market that will position <unk> well to announce more exciting new logo sales wins in 2024.

Turning to slide eight since 2017, we have diversified our revenue coming from exciting new industry verticals from 7% of total 2017 revenue to 28% of our 2023 revenue.

Fantastic accomplishment in a relatively short period of time.

We are the partner of choice for Big brands in higher growth industry verticals, where we help our customers digitize and monetize their customer experience and provide them with cutting edge integrated payment solutions and during 2023, both solutions delivered good double digit organic revenue growth and.

Brian Shepherd: And during 2023, both solutions delivered good double-digit organic revenue growth and continue to be game changers for both CSG and our customers. During the year, we won a major contract expansion with Safe Harbor Marinas, which is the largest marina management company in the United States. Specifically, Team CSG is supporting Safe Harbor Marinas with their digital operations, including new go-to-market offers. This is another example of how our digital customer experience suite of products is finding use cases across multiple industry verticals. Another nice win was with NRC Health, one of the nation's largest healthcare performance improvement firms, supporting more than 7,000 organizations. We are enabling NRC to execute its digital multi-channel communication strategy in a streamlined, effective, and scalable manner.

To be game changers for both ESG and our customers.

During the year, we won a good contract expansion with Safe Harbor, Marinas, which is the largest marine our management company in the United States, specifically <unk> is supporting Safe Harbor marinas with their digital operations, including New go to market offerings. This is another example of how our digital customer.

Suite of products is finding use cases across multiple industry verticals.

Another nice win was with NRC held one of the nation's largest healthcare performance improvement firms supporting more than 7000 organizations, we're enabling NRC to execute digital multichannel communication strategy, and a streamlined effective and scalable manner.

Brian Shepherd: We also want a good contract with a bundled utility service provider for municipal and private utilities to support various customer engagement initiatives. This deal expands our footprint in the utility industry. Furthermore, during the year, we significantly expanded our customer experience business with one of the world's leading technology firms. We are deploying our AI-powered digital CX solutions to provide their customers self-service capabilities via the voice channel in every country where this company operates.

We also won a good contract with a bundled utility service provider for municipal and private utilities to support very customer engagement initiatives. This deal expands our footprint in the utility industry.

Further during the year, we significantly expanded our customer experience business with one of the world's leading technology firms. We are deploying our AI powered digital CX solutions to provide their customer self service capabilities and the voice channel in every country, where this company operates this is an excellent example of how.

Brian Shepherd: This is an excellent example of how CSG's AI-driven digital CX fast platform helps big, exciting brands improve customer experience and save operating costs. And finally, in the fourth quarter, we won a fantastic new Ascended deal with one of the largest banks in APAC with business operations across multiple countries. This customer provides a variety of financial services, including retail, business, and institutional banking, funds management, insurance, and brokerage services.

<unk> AI driven digital CX SaaS platform helps big exciting brands improve customer experience and save operating cost.

And finally in the fourth quarter, we won a fantastic new ascend to deal with one of the largest banks in APAC with business operations across multiple countries. This customer provides a variety of financial services, including retail business and institutional banking funds management insurance and brokerage server.

Brian Shepherd: What is truly phenomenal about this deal is it marks the first time we've sold our Ascendant SAS monetization product to a large financial institution. Specifically, we will be transforming their fragmented billing and pricing systems into a unified solution powered by CSG's Ascendant product. CSG Ascendant will help minimize billing errors, mitigate revenue leakage, improve the customer and employee experience, and significantly decrease their time to market with new products and services as we digitally transform their BSS platform. In the payments market, we closed 2023 with record organic revenue growth in this part of our business with strong double-digit revenue growth, which is a testament to our industry-leading SAS integrated payments platform. We now provide award-winning payment solutions to 114,000 active merchants and ISV partners, which represents a 16,000 increase or a 16% year-over-year growth from the 98,000 active merchants we served at the end of 2022.

<unk> what is truly phenomenal about this deal as it marks the first time, we sold our ascendant SaaS monetization products to a large financial institution, specifically, we will be transforming their fragmented billing and pricing systems into a unified solution powered by <unk> products.

<unk> said that will help minimize billing errors mitigate revenue leakage and improve the customer and employee experience and significantly decreased their time to market with new products and services as we digitally transform their BSS platform.

In the payments market, we closed 2023 with record organic revenue growth in this part of our business with strong double digit revenue growth, which is a testament to our industry, leading SaaS integrated payments platform.

We now provide award winning payment solutions to 114000 active merchants and ISP partners, which represents a 16000 increase or 16% year over year growth from the 98000 active merchants. We served at the end of 2022, our solutions are critical to custom.

Brian Shepherd: Our solutions are critical to customers who need ACH, credit card, payment gateway, and payment processing capabilities, serving a wide range of recurring revenue industry verticals. We continue to see a big runway for growth for this business, and we believe we have a good chance to accelerate organic revenue growth even faster in 2024 and beyond. I will wrap up on slide nine before turning it over to Hai.

<unk>, who need ACTH credit card payment gateway and payment processing capabilities, serving a wide range of recurring revenue industry verticals.

We continue to see a big runway for growth for this business and we believe we have a good chance to accelerate organic revenue growth even faster in 2024 and beyond.

I will wrap up on slide nine before turning it over to high.

Brian Shepherd: Simply put, CSG delivered record-setting results in 2023. And we continue to win fantastic new customer logos, quarter-in, quarter-out. We continue to innovate with industry-leading AI-driven SaaS solutions that big brands all around the world are buying to solve some of their most pressing business challenges. We continue to diversify our business, with 28% of revenue coming from big, faster-growing industry verticals like health care, financial services, retail, tech, and government. And we continue to demonstrate our commitment to run our business more efficiently as we consistently improve non-gap adjusted operating margins and free cash flow generation. Thus, our message to our three key stakeholders is clear.

Simply put PFG delivered record setting results in 2023, we continue to win fantastic new customer logos quarter end quarter out we continue to innovate with industry, leading AI driven SaaS solutions that big brands all around the world are buying to solve some of their most pressing business challenges.

We continued to diversify our business with 28% of revenue coming from big faster growing industry verticals like healthcare financial services retail tackling government and we continue to demonstrate our commitment to run our business more efficiently as we consistently improved non-GAAP adjusted operating margins in <unk>.

Free cash flow generation, so our message to our three key stakeholders are clear to employees Dsg's best days and biggest breakthroughs are still ahead of US we will keep dreaming big and demanding even more from our collective global talent as we do whatever it takes to turn on giant dreams into reality.

Brian Shepherd: To employees, CSG's best days and biggest breakthroughs are still ahead of us. We will keep dreaming big and demanding even more from our collective global talent as we do whatever it takes to turn our giant dreams into reality. Customers, CSG is here for you. We are dedicated to being easier to do business with than any of our competitors while solving your toughest business and technology-related challenges. We thank you for your continued trust in us. To shareholders, CSG's transformation is just getting started.

Customers ESG is here for you we are dedicated to being easier to do business with in any of our competitors, while solving your toughest business and technology related challenges. We thank you for your continued trust in us to shareholders. Dsg's transformation is just getting started faster recurring revenue growth.

Brian Shepherd: Faster recurring revenue growth, improved operating leverage, more free cash flow generation, and exciting industry vertical diversification. But with this management team and our board of directors, we'll hold ourselves accountable too. And we will do it with the high integrity, focused execution, and good governance that you've always expected from CSG. With that, I will turn it over to... Thanks, Brian.

<unk> improved operating leverage more free cash flow generation, an exciting industry vertical diversification, but what this management team and our board of directors will hold ourselves accountable to and we will deal with the high integrity focused execution and good governance that you have always expected from <unk> with that.

I will turn it over to high.

Thanks, Brian Let's walk through 2023 financial results and then I'll wrap it up with some key conclusions.

Hai Tran: Let's walk through our 2023 financial results, and then I'll wrap it up with some key conclusions. Starting on slide 11, we generated $1.169 billion of revenue, which represents 7.3% year-over-year growth. For the year, the increase in revenue was primarily attributed to the continued growth of CSG's revenue management solutions, including the conversion of customer accounts onto CSG.

On slide 11, we generated $1 $169 million of revenue, which represents seven 8% year over year growth for the year. The increase in revenue was primarily attributed to the continued growth of CSP revenue management solutions, including the conversions of customer accounts on to CST.

Hai Tran: Strong year-over-year growth in our digital customer experience solution and increased payments volume. As we mentioned on our Q1 earnings call, some of the revenue uplift we recognized in Q1 was related to the timing of certain license-oriented deals moving from Q4 of 2022 into Q1 of 2023 and the growth we got in 2023 from converting certain subscribers off of a competitor at Charter. When excluding both of these items, our year-over-year revenue growth rate would have been towards the top end of our long-term organic revenue growth range of 2 to 6%. For example, our 2023 non-GAAP operating income was $186 million, or a non-GAAP adjusted operating margin of 17.2%, as compared to $169 million or 16.6% in the prior year. The growth in non-GAAP operating income and non-GAAP adjusted operating income margin percentage for the full year period was driven by higher revenue growth and improved profitability.

Solutions strong year over year growth in our digital customer experience solution and increased payments volumes as.

As we mentioned on our Q1 earnings call. Some of the revenue uplift. We recognized in Q1 was related to the timing of certain license oriented deal moving from Q4 of 2022 into Q1 of 2023 and the growth. We got in 2023 from converting certain subscribers off of a competitor at charter.

Yeah.

When excluding both of these items our year over year revenue growth rate would have been towards the top end of our long term organic revenue growth range of 2% to 6%.

Our 2023, non-GAAP operating income was $186 million.

Our non-GAAP adjusted operating margin of 17, 2% at.

As compared to $169 million or 16, 6% in the prior year.

The growth in non-GAAP operating income and non-GAAP adjusted operating income margin percentage for the full year period was driven by higher revenue growth and improved profitability.

Hai Tran: Moving on, our non-GAAP-adjusted EBITDA was $243 million for 2023, or 22.4% of revenue excluding transactions, as compared to $226 million or 22.3% in the prior year. Lastly, our 2023 non-GAAP EPS was $3.69, a 2.2% year-over-year increase as compared to $3.61 in the prior year. The increase in non-GAAP EPS is mainly due to higher operating income and, to a lesser degree, share repurchase, partially offset by higher interest rate expense and adverse foreign currency.

Moving on our <unk>.

non-GAAP adjusted EBITDA was $243 million for 2023, or 22, 4% of revenue excluding transaction fees.

As compared to $226 million or 22, 3% in the prior year.

Lastly, our 2023 non-GAAP EPS was $3 69.

Two 2% year over year increase as compared to $3 61 in the prior year.

The increase in non-GAAP EPS is mainly due to higher operating income and to a lesser degree share repurchases, partially offset by higher interest rate expense and adverse foreign currency movements.

Hai Tran: Turning to slide 12, I'll go through the balance sheet, our cash flow generation, and shareholder return. Our 2023 cash flow from operations was $132 million as compared to $64 million in the prior year. Additionally, we had non-GAAP free cash flow of $104 million in 2023, as compared to $27 million of free cash flow generated in 2021.

Turning to slide 12, I'll go through the balance sheet our cash.

Cash flow generation and shareholder returns.

Our 2023 cash flow from operations was $132 million as compared to $64 million in the prior year. Further we had non-GAAP free cash flow of $104 million in 2023, as compared to $27 million of free cash flow generated in 2022.

Hai Tran: The primary driver of this increased cash flow performance was favorable working capital. Specifically, in Q4, we generated $74 million of free cash flow, which represents our strongest quarterly free cash flow performance on record. The primary driver of this performance was positive working capital items, including increased intensity regarding management of our accounts receivable collection. I want to reiterate that this management team is committed to identifying opportunities for improvement, transparently owning up to them, and then rapidly driving enhanced performance. As we have previously mentioned, our non-GAP-free CASEL performance in 2022 was not up to our expectations, and we are starting to bear the fruit of the specific action that the CSG leadership team implemented to address those challenges. Similarly, when our profitability was below our expectations in the first half of 2022, again, CSG Management quickly implemented our Operating Margin Initiative in Q2 of 2022, which continues to benefit our shareholders with 2023 operating margins coming in strong at 17.2%.

Mary driver of this increased cash flow performance with favorable working capital changes.

Typically in Q4, we generated $74 million of free cash flow, which represents our strongest quarterly free cash flow performance on record.

The primary drivers of this performance with positive working capital items, including increased intensity regarding management of our accounts receivable collection.

I wanted to reiterate that this management team is committed to identifying opportunities for improvement transparently owning up to them and then rapidly driving enhanced performance.

As we have previously mentioned our non-GAAP free cash flow performance in 2022 was not up to our expectations and we are starting to bear the fruit of the specific action that the CSC leadership team implemented to address those challenges.

Similarly, when our profitability was below our expectations in the first half of 2022 again CSC management quickly implemented our operating margin initiatives in Q2 of 2022, which continues to benefit our shareholders with 2023 operating margin coming in strong at 17, 2%.

Hai Tran: Put simply, when we see ways to enhance our operating and financial performance, we will nimbly find and aggressively implement the needed improvements in order to create more shareholder value. Moving on, with respect to our balance sheet, we executed a very successful convertible debt deal in September. This deal delivered multiple benefits, including lowering our interest rates, freeing up our revolver for future M&A, and giving our balance sheet a better mix of fixed and floating rate gas. Plus, equity shareholders will experience no equity dilution until our share price reaches approximately $96.50. As a reminder, we raised $425 million in convertible debt with a 3.875% coupon and repaid $275 million on our revolving credit facility. Additionally, we ended the fourth quarter with $186 million of cash and cash equivalents.

Put simply when we see ways to enhance our operating and financial performance will nimbly Si and aggressively implement the needed improvement in order to create more shareholder value.

Moving on with respect to our balance sheet, we executed a very successful convertible debt deal in September.

This deal delivered multiple benefits, including lowering our interest rate, bringing up our revolver for future M&A and given your balance sheet, a better mix of fixed and floating rate debt.

Plus equity shareholders, who experienced no equity dilution until our share price reaches approximately $96 50.

As a reminder, we raised $425 million of convertible debt.

A three 875% coupon and repaid $275 million on our revolver.

Further we ended the fourth quarter with $186 million of cash and cash equivalents.

Hai Tran: That, along with our outstanding debt at December 31, 2023, results in $372 million of net cash, and our net leverage ratio fits that 1.5 times with just. Moving to the bottom right of the slide, we declared $34 million in dividends during 2020. In addition, we repurchased $117 million in stock during 2023 under our stock repurchase program.

That along with our outstanding debt at December 31, 2023, resulting in $372 million of net debt.

And our net debt leverage ratio sits at one five times adjusted EBITDA.

Moving to the bottom right of the slide we declared $34 million in dividend during 2023.

In addition, we repurchased $117 million in stock during 2023 under our stock repurchase program.

Hai Tran: Turning the page, I will lay out a 2024 guide. Starting with the top line, we expect our organic revenue before the impact of any acquisitions to range from $1.2 billion to $1.24 billion, and transaction fees to range from $98 million to $103 million. We are currently forecasting our first half 2024 revenue to make up approximately 48 to 49 percent of our full year revenue. Well, we expect 51 to 52 percent of our revenue to be generated in the second. As a reminder, our strong revenue and profitability in Q1 of 2023 was enhanced by highly profitable one-time licensing revenue which regenerated from a few of our global telecommunications. As such, we do not expect this revenue to recur in Q1 of 2024, which will temporarily distort our revenue and profitability comparisons on a year-over-year basis for the first time. We also expect our non-GAAP-adjusted operating margin percentage to range between 17 to 17.4%, which represents a meaningful increase from the 16.5 to 17% range from our original 2023 guide.

Turning the page, we lay out our 2020 for guidance.

Starting with the top line, we expect our organic revenue before the impact of any acquisition to range from $1 2 billion to $1 two 4 billion.

And transaction fees to range from $98 million to $103 million.

We are currently forecasting our first half 2020 for revenue to make up approximately 48% to 49% of our full year revenue.

While we expect 51% to 52% of our revenue to be generated in the second.

As a reminder, our strong revenue and profitability in Q1 of 2023 was enhanced by highly profitable one time licensing revenue, which we generated from a tier of our global telecommunications customers.

We do not expect this revenue to recur in Q1 of 2024, which was temporarily distort our revenue and profitability comparisons on a year over year basis for the first quarter.

We also expect our non-GAAP adjusted operating margin percentage to range between 17% to 17, 4%.

Which represents a meaningful increase from the 16, 5% to 17% range from our original 2023 guidance.

Hai Tran: We believe this non-GAAP adjusted operating margin guidance range demonstrates Team CSG's commitment to consistently expanding on our operating leverage with improved profitability. On the next metric, we anticipate our non-GAAP EPS to range between $3.85 to $4.15 based on a non-GAAP tax rate of approximately $29, and a share count of approximately 29 million shares for the. Moving on, non-gas-adjusted EBITDA And finally, we expect the range of non-GAAP-free cash flows to be $95 to $135 million, with a guidance-range midpoint of $115 million. Additionally, we expect capital expenditures to come in between $25 to $35 million.

We believe this non-GAAP adjusted operating margin guidance range demonstrates <unk> commitment to consistently expanding on our operating leverage with improved profitability.

On the next metric, we anticipate our non-GAAP EPS to range between $3 85 to $4 15 based on a non-GAAP tax rate of approximately 29% and a share count of approximately 29 million shares for the year.

Moving on non-GAAP adjusted EBITDA is expected to range between $245 million to $255 million.

And finally, we expect a range of non-GAAP free cash flow to be $95 million to $135 million with a guidance range midpoint of $115 million. Additionally.

Additionally, we expect capital expenditures to come in between $25 million to $35 million.

Hai Tran: Wrapping up, CSG will continue to relentlessly prioritize every investment we make and stay disciplined in the allocation of resources and the use of capital. Innovation, including how we leverage the transformative power of AI across the industry, and the adherence to a risk-reward framework with continuous learning are key cornerstones of how we manage. CSG is well-positioned with a strong sales pipeline and a high-quality recurring revenue customer. We remain committed to accelerating and diversifying our revenue growth, which may include closing and integrating disciplined value-adding acquisitions. We believe this approach, combined with our consistent capital distribution, will serve our shareholders well. With that, I'll turn it over to the operator to facilitate the questions and answers. Thank you. And at this time, I would like to remind everyone that in order to ask a question, press star and then the number one on your telephone keypad. Once again, press star one on your touchstone keypad.

Wrapping up CSC will continue to relentlessly prioritize every investment we make and stay disciplined in the allocation of resources and the use of capital.

Innovation, including how we leverage the transformative power of AI across ESG and the adherence to risk reward framework with continuous learning our key cornerstones of how we manage the business.

CSC is well positioned with a strong sales pipeline and our high quality recurring revenue customer base.

We remain committed to accelerating and diversifying our revenue growth, which may include closing and integrating disciplined value adding acquisitions.

This approach combined with our consistent capital distributions will serve our shareholders well.

That I will turn it over to the operator to facilitate the question and answer session.

Thank you and at this time I would like to remind everyone that in order to ask a question Press Star and then the number one on your telephone keypad. Once again star one on your Touchtone keypad and again in the interest of time, we kindly ask that you limit yourself to one question only thank you in advance and we'll pause just a moment to compile the <unk>.

Operator: And again, in the interest of time, we kindly ask that you limit yourself to one question only. Thank you in advance. And we'll pause just a moment to compile the Q&A roster. Okay, it looks like our first question comes from Maggie Nolan with William Blair. Maggie, please go ahead.

Q&A roster.

Okay.

Okay. It looks like our first question comes from the line of Maggie Nolan with William Blair. Maggie. Please go ahead.

Maggie Nolan: Hi Maggie, thank you. So you highlighted, and you have in the past as well, the significant vertical diversification that you've been able to achieve over the last five years or so. What is your confidence in the ability to further diversify on an organic basis as you think about your medium-term base case goals, or are acquisitions a really important part of further diversification from here? Yeah, Maggie. Hope you're doing well.

Hi, Thank you.

So you highlighted and you have in the past as well the significant vertical diversification that you've been able to achieve over the last five years or so.

What is your confidence in the ability to further diversify on an organic basis. As you think about your medium term base case goals or our acquisitions are really important part of further diversification from here.

Yes, Hi, Maggie I hope Youre doing well lovely question. We are highly confident that we can continue to diversify the revenue into new faster growing verticals organically.

Brian Shepherd: I love the question. We are highly confident that we can continue to diversify revenue into new faster growing verticals organically. I mean, we continue to report strong double-digit revenue growth, strong sales bookings, and good consistent new logo wins coming from both our AI-driven digital CX business and our North American payments business. And we see that continuing with everything that we do. I see in the business; the win with which we announced with a large financial service provider, one of the leaders in APAC, which is the first for our cloud-based Ascendant platform to be the digital monetization and the order price quote solution for that bank, is also a game changer and will also contribute nicely to organic growth.

We continue to report the strong double digit revenue growth the strong sales bookings that good consistent new logo wins coming from both our AI driven digital CX business, and our North American payments business, and we see that continuing with everything that we see in the.

Business.

When we announced with a large financial service provider one of the leaders in APAC, which is the first for our cloud based <unk> platform to be the digital monetization and the order price quote solution for that bank is also a game changer and will also contribute nicely to the organic growth and you should see that.

Brian Shepherd: And you should see that 28% continue to grow, even as the other parts of our business still grow nicely. They'll just grow faster in these other verticals. And to your point, we do think that there will continue to be disciplined, attractive, creative acquisitions that we can do both in the digital CX and the payment space in the coming quarters and years that should layer on additional growth on top of the strong organic growth we're seeing. That's really helpful, thank you.

At 28% continue to grow even as the other parts of our business still grow nicely they'll just go faster in these other verticals and to your point, we do think that there will continue to be disciplined attractive.

Accretive acquisitions that we can do both in the digital CX and the payment space.

In the coming quarters and years that should layer on additional growth on top of the strong organic growth we are seeing.

That's really helpful. Thank you.

And then.

Hai Tran: And then on the margin range that you gave for the year, the operating margin range you gave for the year, can you kind of talk through the puts and takes of what would get the company to the low end versus the high end, particularly in the context of some of the factors that you mentioned in your remarks about some of the non-recurring revenue in the first quarter and maybe think about what it would look like on a quarterly basis as you frame your comments, if you can Yeah, sure, Maggie. One, I think the guidance we gave, you know, hopefully it shows our confidence in continuing that progress towards growing both our revenue as well as expanding our margins over time. We're committed to delivering on those numbers. I think that when we think, though, about the low versus the high, and a lot of that has to do with mix.

On the margin range that you gave for the year. Its operating margin range you gave for the year.

Can you kind of talk through the puts and takes of what would get the company to the low end versus the high end, particularly in the context of some of the factors that you mentioned in your remarks about some of the nonrecurring revenue in the first quarter end.

Maybe think about what it would look like on a quarterly basis as you frame your comments if you can.

Yes, sure Maggie one I think we can.

Seagate hopefully it shows our confidence in continuing that that progress.

Progress towards growing both our revenue as well as expanding our margins over time.

We're committed to delivering on those numbers I think that when we think though about.

The low <unk> and a lot of that has to do with mix, it's something I've spoken to quite a bit in the past. It's the mix of revenue is going to drive effectively that margin profile.

Hai Tran: It's something I've spoken to quite a bit in the past. It's the mix of revenue that is going to drive that margin profile effectively. But in terms of our commitment to creating operating leverage, we've got a pretty disciplined and intentional plan to ensure that our expenses are going to grow at a rate that is less than our revenue. Maybe the only thing I would add is that you mentioned a little bit about quarterly spread. You will see, as you heard in Heidi's remarks, Maggie, a more traditional CSG-like spread, 48 to 49 percent in the first half, and then a little stronger, a little bit above, you know, 51, 52 in the second half.

In terms of our commitment to creating operating leverage we've got a pretty disciplined and intentional plan to ensure that our expenses are going to grow at a rate that is less than our revenue growth.

Maybe the only thing I would add you mentioned a little bit about quarterly spread you will see as you heard in highest remarks, Maggie you will see a more traditional CSD widespread 48% to 49% in the first half.

And then a little stronger a little bit above $51 52 in the second half therefore with the mix with the higher revenue growth you might see a little more profitability. Even in Q3 and Q4 is what you sometimes have seen with a more historical spreads, but we expect strong profitability for all four quarters.

Brian Shepherd: Therefore, with the mix, with the higher revenue growth, you might see a little more profitability, even in Q3 and Q4, which is what you sometimes have seen with the more historical spread, but we expect strong profitability for all four quarters. Got it. Thank you, Maggie. And our next question comes from Matthew Harrigan with Benchmark. Matthew, please go ahead.

Got it.

Thank you Maggie and our next question comes from Matthew Harrigan with benchmark Matthew. Please go ahead.

Matthew VanVliet: Well, thank you. Thanks for the encouraging outlook and information on all strategic initiatives. But, sort of, I guess, mundane, on Q1, you talked about, you know, the difficult comparisons, you know, licensing internationally and how that really has the anomaly of being very front loaded on last year's revenues and margin. Can you more precisely quantify how we should, how much that might dampen the year-over-year Q1 comparison effect?

Well. Thank you thanks for the encouraging outs.

Outlook and information on.

All Q2 initiatives.

I just mundane Q1, you talked about.

Difficult comparisons licensing inner.

Internationally, and how that really has the normal way of being very frontloaded on last year's revenues and margin can you more precisely quantify how we should.

How much of that might dampen year over year Q1 comparison effects.

Yes, Matt Thanks for the question.

Hai Tran: Yeah, Matt, thanks for the question. So last year, as we've highlighted throughout the year, we did benefit, you know, from a couple of licensing deals that are non-recurring in nature in Q1, and hence we had a very strong Q1 last year. But, you know, they were roughly about $10 million in revenue. And if you think about the margin impact, if we excluded the impact of those licenses in Q1 last year, our effective margin would have been in the mid-16s, around 16.5%. Okay, that's very helpful.

So last year as we as we've highlighted throughout the year, we did benefit.

From a couple of licensing deals that.

Our nonrecurring in nature in Q1, and hence we had a very strong Q1 last year.

They were roughly about $10 million.

Revenue and if you think about the margin impact if we excluded the impact of those licenses in Q1 last year, our effective margin would've been in the mid 16, 16, 5% or so.

Okay.

Hai Tran: Thank you. Thank you. Great, thanks Matt. And our next question comes from the line of Greg Burns with Sidotium Company. Greg, please go ahead. Afternoon. So when you think about it, fixed wireless penetration.

Very helpful. Thank you.

Thank you.

Great. Thanks, Matt.

And our next question comes from the line of Greg Burns with Sidoti <unk> Company. Greg. Please go ahead.

Good afternoon.

So when you when you think about.

Fixed wireless penetration I know.

Greg J. Burns: I know... You said it's not really that big of a concern right now, but I think so. You know, the story, at least as far as I understood with the cable operators, was that, you know, even though there's core cutting, broadband's growing, and net subs are growing, so that's good for CSG. So I'm just trying to understand why you don't consider maybe a competitive threat to their broadband businesses as maybe a risk, and are there other areas where you can diversify within the North American cable market beyond your um, revenue management solutions to continue to grow revenue even if subscribers are not growing anymore. Yeah. No, thanks, Greg. I hope you're doing well.

You said, it's not really that big of a concern right now but.

I think.

The story at least as far as I understood with the cable operators was that even though there's core cutting broadband is growing and net subs are growing so that's good for ESG. So I'm just trying to understand.

Why.

Consider maybe a competitive threat to their broadband businesses as maybe.

Our risk and is there are there areas, where you can diversify within the North American cable market beyond your traditional.

Revenue management solutions to continue to grow revenue, even if subscribers are not growing anymore.

Yes, no thanks, Greg hope you're doing well.

Brian Shepherd: You know, let me give maybe just a couple of data points on why we might believe that there is a fairly significant overreaction to some of this news in the market. Data point number one, even as there were some headwinds with some of our customers on broadband growth throughout 2023, we saw very good growth in overall revenue at the corporate level. We even saw our big two grow 5% year over year, and some of those headwinds were there in the first part and throughout 2023 would be point one. Point two is to remember that there is a tiered pricing structure in this. So, as we talked, we serve 64 million subscribers at Comcast and Charter, and almost 80 million across North American broadband.

Let me give maybe just a couple of data points on why.

We might believe that there is a fairly significant overreaction to some of this news in the market data point number one even as there has been some headwinds with some of our customers on the broadband growth throughout 2023, we saw very good growth from overall revenue at the corporate level, we even saw two.

Rose, 5% year over year and some of those headwinds were there in the first part and throughout 2023 would.

It would be 0.1 0.2 is to remember.

But there is a tiered pricing.

In there so as we talked we serve 64 million subscribers at Comcast and charter almost $80 million across North American broadband those incremental subs at the top of that are priced at a much lower price point, which is why you did some people ask why didn't we see even more pickup when we converted 14 million subscribers at charter therefore, even if.

Brian Shepherd: Those incremental subscribers at the top of that are priced at a much lower price point, which is why some people ask, why didn't we see even more pickup when we converted 14 million subscribers at Charter? Therefore, even if there is some impact on the customer, it tends to be a lot smaller than might be modeled or anticipated by some of those players. Third, we've done a nice job of just trying to relentlessly bring greater value to all of our big North American cable customers. We're mission critical. We've picked up a lot of landmass, and there is a sizable footprint in all of these customers. Even if they continue to face some headwinds in the coming quarters, we can win and grow in other areas. Just like we've done pretty consistently over the last several years. And then fourth, we tend to just believe we've seen these players before.

There is some impact on the customer it tends to be a lot smaller than might be modeled are anticipated by some of those players third we've done a nice job of just trying to relentlessly, bringing greater value to all of our big North American cable customers. We're mission critical we picked up a lot of landmass and there is.

Sizable footprints and all of these customers even if they continue to face some headwinds in the coming quarters, we can win and grow in other areas just like we've done pretty consistently over the last several years and then fourth we tend to just believe we've seen these players we've served them well for three plus decades, we tend not to underestimate.

Brian Shepherd: We've served them well for three plus decades. We tend not to underestimate the competitive response of industry leaders like Comcast, Charter, and others. And maybe the fifth point is that one of our fastest growing areas is in global telecom. We also serve multiple players in North America and around the world.

To meet the competitive response of industry leaders like Comcast charter and others and and maybe the fifth point is one of our fastest growing areas in global Telecom. So we also served multiple players in North America and around the world. So it doesn't mean that theres not some of those headwinds and storm clouds, but Mike do you source in 2002.

Brian Shepherd: So, it doesn't mean that there aren't some headwinds and storm clouds, but like you saw us in 2023, we grew through them extremely well at 7.3% growth. And the midpoint of our guidance, even in 2024, is 4.3%. So, we don't take it for granted. We go out and earn it every day. All right, thanks.

'twenty three we grew through it extremely well at seven 3% growth in the mid point of our guidance EBIT. In 2024 is four 3%. So we don't take it for granted we go out and earn it every day.

Alright, great. Thanks.

Greg J. Burns: Great. Thanks, Greg. And our next question comes from the line of George Notter with Jeffreys. George, please go ahead.

Great. Thanks, Greg.

And our next question comes from the line of George Notter with Jefferies. George. Please go ahead.

George C. Notter: Hi, thanks a lot, guys. I guess I was just curious about the progress you guys are making with new products. I was thinking a bit about the Bill Explainer product.

Hi, Thanks, a lot guys I.

I guess I was just curious about.

Yes. The progress you guys are making with new product side, we're thinking a bit about the bill explainer product.

George C. Notter: Obviously, AI is going into, you know, lots of products and across the marketplace. What can you tell us about, you know, anything you're seeing that's new or different there in the last three months and then, again, progress with Bill Explainer? Thanks. Yeah, no. Thanks so much for the question. Appreciate you joining us.

Obviously, AI is going into lots of products and across the marketplace. What can you tell us about anything youre seeing thats, new or different there in the last three months and then again progress with Philips later thanks.

Yes. Thanks, so much for the question I. Appreciate you joining yes, I mean, we try we have mission critical enterprise software not only do we got to keep the lights on and just be flawless in our execution, we got to constantly invest in innovation and so we have made a meaningful investment in AI.

Brian Shepherd: Yeah, I mean, we try. We have mission-critical enterprise software. Not only do we have to keep the lights on and just be flawless in our execution, but we have to constantly invest in innovation. And so we have made a meaningful investment in AI. The most important areas in our digital CX business, we announced and launched BillExplainer.ai. We see good traction both in cable and global telco. We've already sold and won a couple early deals, small, but still it shows the power of how you can actually bring value relatively quickly. This is a solution that can be deployed in a matter of weeks.

Important areas in our digital CX business, where we are.

We announced and launched the Bill Explainer Dot AI, we see good traction both in cable global Telco, we've already sold and won a couple early deals.

Mall, but still it shows the power of how you can actually bring value relatively quickly. This is a solution that can be deployed in a matter of weeks and so we also see applicability in other industry verticals more subscription economies, even outside of cable and telecom. So we like the building sales pipeline I would say.

Brian Shepherd: And so we also see applicability in other industry verticals, more subscription economies, even outside of cable and telecom. So we like building the sales pipeline. I'd say we're still in the early days in terms of where that is, but we're super excited about what's going on in that digital CX space. We're also leveraging AI in our payments business. Fraud is one of the biggest areas that most merchants focus on.

We are still in the early days in terms of where that is but we're super excited about what's going on in that digital CX space. We're also leveraging AI and our payments business.

<unk> is one of the biggest areas that most merchants focus on is what are the things, we invest a lot and to really reduce the fraud and risk profile speed onboarding of new merchants and helps so we're doing a lot around data and some new solutions with nano sites and micro sites to help merchants to make it easier to collect the payments okay.

Brian Shepherd: It's one of the things we invest a lot in to really reduce the fraud and risk profile, speed onboarding of new merchants, and help. So we're doing a lot around data and some new solutions with nano sites and micro sites to help merchants make it easier to collect the payments that they have. And then if you come all the way back to kind of our core monetization, BSS part of the business, working with our telecom media cable customers to leverage the data that is in their possession to be able to make it easier to predict what customers want, when they want an upgrade, downgrade service, cross sell, deal with promotion, roll off, reduce calls to the call center, like the bill explainer, great opportunities to just expand the value that we bring. We spend a little over 14% of our revenue on R and D. So innovation and co-creating with customers and testing that in the market are a big part of our business model. Thank you. Thanks, George. And our next question comes from the line of Shlomo Rosenbaum with Stifel. Shlomo, please go ahead.

And then if you come all the way back to kind of our core monetization BSS part of the business working with our telecom media cable customers to leverage the data that is in their possession to be able to make it easier to predict what customers want when they want upgrades.

Great Service cross sell deal with promotional roll offs reduced calls to the call center like to Bill Explainer, a great opportunities to just expand the value that we bring so.

What we're seeing on the innovation, we spend a little over 14% of our revenue on R&D, So innovation and co creating with customers and testing that in the market is a big part of our our business model.

Okay. Thank you.

Thanks very much.

And our next question comes from the line of Shlomo Rosenbaum with Stifel. Shlomo. Please go ahead.

Shlomo H. Rosenbaum: Hi, this is Adam speaking on behalf of Shlomo. Could you provide an update on what you're seeing on the M&A front? Are you seeing assets with valuations coming more in line with what you consider attractive now and just general commentary there? Yeah, no. Thanks so much, Adam. Hope you're well.

This is Adam on for Shlomo could you provide an update on what youre seeing on the M&A front producing assets with valuations coming more in line with what you've considered attractive now and just general commentary there.

Yes, no. Thanks, so much Adam hope, you're well we are seeing the market improve on that there's always going to be some degree of separation I think between buyers and sellers, but in general yes, much more in line with what we saw at the back half of 2022 definitely much better than what we saw in 2020.

Brian Shepherd: We are seeing the market improve on that. There's always going to be some degree of separation, I think, between buyers and sellers. But in general, yes, much more in line than what we saw in the back half of 2022, definitely much better than what we saw in 2023.

Three and we think that there are deals that can be done what we've kind of found though is you just with a company. Our size you got to constantly be working deal flow. We work with founders we work with partners. We work with maybe larger companies that we'd be looking at spin outs of smaller assets, maybe it's not core to them. So we kind of run that.

Brian Shepherd: And we think there are deals that can be done. What we've kind of found, though, is you just, with a company our size, you got to constantly be working on deal flow. We work with founders, we work with partners, we work with maybe larger companies that would be looking at spin-outs of smaller assets, maybe it's not core to them.

Gambit from small mid and even larger deal size constantly looking at how do we expand our portfolio capability with recurring revenue around CX payments and monetization scale for telecom cable or financial services, we tend to be pretty laser focused on how we can actually pay.

Brian Shepherd: So we kind of run the gamut from small, mid, and even larger deal sizes, constantly looking at how we can expand our portfolio capability with recurring revenue around CX payments and monetization scale or telecom cable or financial services. We tend to be pretty laser-focused on how we can actually pay an attractive price on a pre-synergy basis and do even better in terms of cost synergies and revenue post-acquisition. And so we like what we're seeing. Stay tuned for what we might be announcing in the coming quarters. Thank you. All right, thank you, Adam. And again, one more reminder, if you'd like to ask a question, it is star 1 on your telephone keypad, once again, star 1 on your touchtone phone. And it looks like our next question comes from the line of Nehal Chokshi with Northern Capital Markets. Nehal, please go ahead.

An attractive price on a pre synergy basis, and do even better in terms of cost synergies and revenue post acquisition and so we like what we're seeing stay tuned.

What we might be announcing in coming quarters.

Okay.

Alright, Thank you Adam.

And again, one more reminder, if you'd like to ask a question. It is star one on your telephone keypad once again star one on your Touchtone phone.

And it looks like our next question comes from the line of Kneehole, Chelsea with Northern capital markets.

Please go ahead.

Yeah, great. Thank you. Thank you for the question nice results, especially on the free cash flow.

Is that by any chance impacting your calendar 'twenty for free cash flow guidance.

Nehal Sushil Chokshi: Yeah, great. Thank you. Thank you for the question. Nice results, especially that free cash flow. Is that by any chance impacting your calendar 24 free cash flow guidance? No, I mean, as you saw in our guidance for 2024, it remains very strong, right? We increased our guidance with a midpoint of $115 million.

No I mean as you saw our guidance for.

'twenty 'twenty four remains very strong.

We.

We increased our guidance with a midpoint of $115 million. So it's nice sequential progress.

And the team has done, particularly well as I highlighted in my prepared remarks.

We just got after similar to how we got after profitability and will continue to go after opportunities to pursue.

Hai Tran: So it's nice sequential progress. And the team has done particularly well, as I highlight in my prepared remarks. We just got after it, just similar to how we got after profitability, and we'll continue to go after opportunities to improve our performance over time. Okay, great. My other quick question here is that, outside of the potential M&A, do you see it as potentially plausible to hit the $1.5 billion goal organically? I love the question,

Foremost at this time.

Okay great.

No. My other quick question here is that.

Outside of the potential M&A do you see it as potentially plausible to hit the $1 $5 billion goal organically.

I Love the question would love to have that be the case, that's not what we've talked about the reality is I think at this stage you've seen this year alone in 2023, CFT put up just shy of $80 million of organic incremental revenue.

Brian Shepherd: I would love to have that be the case, but that's not what we've talked about though. The reality is, I think at this stage, you know, this year alone in 2023, CSG put up just shy of 80 million of organic incremental revenue, most of which attracted our stock over a longer period of time. That's not what they would have seen from maybe CSG a few years ago.

Most of that attract our stock over a longer period of time, that's not what they would have seen from <unk>. A few years ago, we loved the organic growth we're committed towards its built into our executive compensation. So our money where our mouth is on this thing and we are going to consistently grow this thing mid single digit or better that said.

Brian Shepherd: We love organic growth. We're committed to it. It's built into our executive compensation. So we put our money where our mouth is on this thing. And we are going to consistently grow this thing mid single-digit or better. That said, would we, from a planning standpoint, plan to get to 1.5 billion organically? No.

Ed when we from a planning standpoint plan to get to $1 5 billion organic no that's where we would do smart disciplined acquisitions layering on.

Okay, great. Thank you.

Thank you.

And our next question comes from the line of Brett Knoblauch with Cantor Fitzgerald. Please go ahead.

Brian Shepherd: That's where we would do smart, disciplined acquisitions layering on. Great, thank you. And our next question comes from the line of Brett Knoblauch with Cantor Fitzgerald. Brett, please go ahead.

Alright, Thanks for taking my question congrats on the quarter guys.

Maybe to start what are.

Are you expecting from a growth standpoint from your two largest.

Brett Knoblauch: All right, next up is my question for the quarter, guys. Maybe to start, what are you expecting from a growth standpoint from your two largest customers for this year? You know, they grew very nicely in 2023. Is that something that you expect to continue? Or, you know, what is your current guidance for the full year from them?

Customers for this year.

They grew very nicely in 2023 is that something that you expect to continue.

What are you what is based on your current guidance for the full year from them.

Yes, we don't break out segments of our business other than to say, we are committed to the 2% to 6%. We're on record of saying across the full year, we would expect in a good performance to be midpoint or higher in terms of that at least 4% or better midpoint is at four 3% we.

Brian Shepherd: Yeah, we don't break out segments of our business other than to say, you know, we're committed to the 2 to 6%. And we're on record of saying across the full year, we would expect, in a good performance, to be midpoint or higher. In terms of that, at least 4% or better. The midpoint is at 4.3%. We expect CX and payments to be strong double-digit growth. We don't break out beyond that.

CX and payments to be strong double digit growth, we don't breakout beyond that that said do we think that there could be growth in all of our customers. Yes. That's what we plan that's what we drive the teams, but then will react and that's the portfolio effect of our business and why we talk so much also about constant industry diverse.

Brian Shepherd: That said, do we think that there could be growth in all of our customers? Yes, that's what we plan. That's what we drive the teams. But then we'll react.

Suffocation and revenue diversification is one of the exciting parts to our story.

But do we think there could be growth in our big too we think there could be let's see how it plays out.

Brian Shepherd: And that's the portfolio effect of our business and why we talk so much about constant industry diversification and revenue diversification as one of the exciting parts of our story. But do we think there could be growth in our big two? We think there could be. Let's see how it plays out.

Perfect. That's a good segue to my second question on breaking out segments.

With charter and Comcast continuously becoming a smaller percentage of the total and pain.

Payments continue to grow double digits.

Is there any plan for you guys to maybe give us a bit more color on the higher growth segments.

Brett Knoblauch: Perfect. And that's a good segue to my second question on breaking out segments. You know, with Charter and Comcast continuously becoming a smaller percentage of the total and payments continuing to grow double digits, is there any plan for you guys to maybe give us a bit more color on the higher growth segment? Yeah, I mean, I think it's something that we evaluate kind of constantly. I think that at some point in the future, when those businesses get to a certain scale, it makes sense for us to explore that opportunity to really break them out as separate segments. We're not quite there yet.

Yes, I mean, I think it's something that we evaluate.

Constantly I think it is at some point in the future when those businesses get to a certain scale. It makes sense for us to.

Explore that opportunity to really break them out as separate segments.

We're not quite there yet, but it is something that we constantly evaluate.

Perfect. Thanks really appreciate it.

Thanks, Brett.

And our next question comes from the line of Michael Berg with Wells Fargo. Michael. Please go ahead.

Hi, there. Thanks for taking my question I just wanted to go back to the subscriber question one more time looking at my numbers and assuming my percentages in math are correct. It looks like the broadband cable segment declined 4% year over year. After about five 1% in Q3, and then Comcast specifically was flat in Q3.

Hai Tran: But it is something that we constantly evaluate. Perfect. Thanks. I really appreciate it.

Brett Knoblauch: Thanks, Brett. And our next question comes from the line of Michael Berg with Wells Fargo. Michael, please go ahead.

Michael H. Berg: Hi David, thanks for taking my question. I just wanted to go back to the subscriber question one more time. Looking at my numbers and assuming my percentages in math are correct, it looks like the broadband cable segment declined 4% year over year after about flat 1% in Q3 and then Comcast specifically was flat in Q3 and slightly down in Q4. I guess given what you said earlier on the call and in the script, what can we think about as driving the outcomes there? Thank you. Yeah, I think I think there's a couple of things. Let's just check the data points.

And slightly down in Q4, I guess, given what you said earlier on the call in the script, what can we think about what's driving that.

The outcomes there. Thank you.

Yes, I think I think there's a couple of things, let's just check the data points. If you look at the combined two revenue from our big too it grew about 5% year over year.

Majority of that would have come from some of the subscriber conversions that we did so you neutralize that out you would have seen like you said tomcat, it kind of flattish give or take.

Charter up a little bit and so that would be a combination of the additional services. We would do some of the impacts we saw that are already building into some of the subscriber counts. So I think the main thing that we're kind of highlighting is a there is additional headroom to grow and win more landmass in these customers.

Brian Shepherd: If you look at the combined revenue from our big two, it grew about 5% year over year. A majority of that would have come from some of the subscriber conversions that we did. So you neutralize that out, and you would have seen, like you said, Comcast kind of flattish, give or take, Charter up a little bit.

Even if they continue to face some headwinds it doesn't have an outsized impact on <unk>, we've been able to grow through that nicely and we're laser focused on is how do we help them perform better and respond to some of those challenges. They may be facing they've got great homes past they've got great offers and we think with our digital <unk>.

Brian Shepherd: And so that'd be a combination of the additional services we would do, some of the impacts we saw that are already building into some of the subscriber counts. So I think the main thing that we're kind of highlighting is, A, there's additional headroom to grow and win more landmass in these customers. B, even if they continue to face some headwinds, it doesn't have an outsized impact on CSG.

<unk> our payments at our monetization there's a lot we can do to help them with some of the challenges and we'll see how they respond to some of their competitive dynamics in the market.

Brian Shepherd: And we've been able to grow through that nicely. And what we're focused on is how do we help them perform better and respond to some of those challenges they may be facing? They've got great homes to go into.

Okay.

Clarification on that that would be helpful.

Yes, I think the only thing I would highlight is what you said Brian that.

Brian Shepherd: They've got great offers, and we think with our digital CX, our payments, and our monetization, there's a lot we can do to help them with some of the challenges. And we'll see how they respond to some of their competitive dynamics in the market. Any others?

If you look at quarter to quarter. There is always can be some fluctuations because we do do some ancillary certainly do provide some ancillary services to both Comcast and charter and that's what's going to drive the fluctuations that you are seeing.

Hai Tran: Clarification on that would be helpful. Now, I think the only thing I'd highlight is what you said, Brian, that if you look at quarter to quarter, there's always going to be some fluctuations because we do provide some ancillary services to both Comcast and Charter, and that's what's going to drive the fluctuations that you're seeing. All right, thank you for the question. And our final question today comes from the line of Matt Harrigan with Benchmark. Matt, please go ahead.

Alright. Thank you for the question and our final question today comes from the line of Matt Harrigan with benchmark. Please go ahead.

Thank you Yuri.

You are a company that has a particularly good prism on global economic activity.

Humor, and obviously corporate planning, that's probably only enhanced.

What are you seeing especially in Europe, but also in the U S. Right now with all the geopolitical uncertainty how it's affecting the consumer and with AI do you see that you are.

Sensitivity the economic conditions. This is moderated or is it about the same or do you have any thoughts just on the broad genre. There. Thank you.

Matt VanVliet: Oh, thank you. Your company has a particularly good prism on global economic activity, you know, for consumers and obviously corporate planning, and that's probably only enhanced by AI. What are you seeing, especially in Europe but also in the US right now with all the geopolitical uncertainty, how is it affecting the consumer? And with AI, do you see that your sensitivity to economic conditions is moderated? Or is it about the same?

Yes.

I'll ask Bryan to comment a little bit about his thoughts on the AI side, but in terms of the broad economic trends that we're seeing.

I think that that had gone back and forth, but I think that there was obviously some concerns there is some anxiety around a recession on the horizon.

That has come and it's gone and it keeps coming back and cycles.

It hasn't really slowed down.

Our opportunities that we still see a very strong pipeline building.

Hai Tran: Or do you have any thoughts just on the broad genre? Thank you. Yeah, I mean, I'll ask Brian to comment a little bit about his thoughts on the AI side, but in terms of the broad economic trends that we're seeing, you know, I think that it's gone back and forth, right? I think that there were obviously some concerns or some anxiety around a recession on the horizon that had come, and it's gone, and it keeps coming back in cycles. It hasn't really slowed down our opportunities yet. We still see a very strong pipeline building. In fact, you know, a very robust pipeline is building for us, and those opportunities will, I think, continue to play out through the year.

In fact, a very robust pipeline.

That is building for us and those opportunities will I think continue to play itself out through the year.

With that said however, given some of the Amazon within.

On the global economy, one of the things we do see as a trend is the need and the hyper focus on <unk>. This is a consistent message across many of our customer base, regardless of the industry verticals that everybody is focused on how do we really differentiate ourselves from our competition by focusing on that customer experience.

<unk>.

Engaging partners like ourselves to help them think through those dynamics.

Hai Tran: With that said, however, given some of the dynamics within the global economy, one of the things we do see as a trend is the need for and the hyper-focus on CX. This is a consistent message across many of our customer base, regardless of the industry verticals, that everybody's focused on how do we really differentiate ourselves from our competition by focusing on that customer experience and engaging partners like ourselves to help them think through those dynamics. It is something that is a priority for many organizations. Yeah, maybe the only thing I would add to that, Matt, is that I think most companies saw some nervousness, and throughout 2023, I saw that. I haven't seen that get any worse. I haven't necessarily seen that get better. I think companies are just looking at whether there is a softer landing. Is there a harder landing?

Something that is a priority for many of the organizations who frankly.

Yes, maybe the only thing I would add to that Matt is.

Most companies saw.

Some nervousness in throughout 2023.

<unk> seen that I havent see that get worse I haven't necessarily seen that get better I think companies are just looking at is there a softer landing is there a hard landing due things go bump in the global political economic situations. So I think companies that we see are kind of preparing for both sides, what we keep hearing over and over.

We're again, what's most important one can you bring our solutions to help us drive revenue growth faster.

To help us help us serve our customers around what <unk> talked about that digital CX and a lower cost way and if we're going to make an investment in our business get better ring, the cash register either on revenue or cost savings and efficiency in the near term.

Brian Shepherd: Do things go bump in the global political and economic situation? So I think companies that we see are kind of preparing for both sides. What we keep hearing over and over again, what's most important? One, can you bring us solutions to help us drive revenue growth faster? Can you help us serve our customers around what I talked about, that digital CX in a lower cost way?

1234 quarters, and that's one of the things that we've been pleased about with our sales pipeline and the solutions. We have as we've talked before so far we're staying above the cut line because worried they are able to help them on revenue improved customer experience or take cost out of their business and as long as we keep doing that we think that's fueling a lot of this.

Brian Shepherd: And if we're going to make an investment in our business, it better ring the cash register, either on revenue or cost savings and efficiency in the near term, in one, two, three, four quarters. And that's one of the things that we've been pleased about with our sales pipeline and the solutions we have. As we've talked before, so far, we're staying above the cut line because we're either able to help them with revenue, improve customer experience, or take costs out of their business. And as long as we keep doing that, we think that's fueling a lot of this accelerated revenue growth. So that's, I'm not sure we have the best crystal ball on your question, but that's kind of what we're seeing.

Accelerated revenue growth so I'm.

I am not sure we have the best Crystal ball on your on your question, but that's kind of what we're seeing.

Great. Thanks, Brian Thanks Hock.

Alright, Thanks, Matt.

And thank you for all that had questions today.

I'd now like to turn the call back over to Brian Shepherd for closing remarks, Brian the floor is yours.

Thanks for joining everyone. We're excited about the record setting results in the rearview mirror, but 2023 is over now. This team is laser focus we got to deliver against midpoint to upper end of the guidance. We just put out we fully expect to do that but we got work to do in <unk> and his team is already one month into the year, we've got to get after it. So thanks for joining we are going to.

Brian Shepherd: Great. Thanks, Brian. Thanks, Huy. All right.

The momentum and the commitment of doing business the right way. It's ESG. Thank you all.

Brian Shepherd: Thanks, Matt. And thank you for all that had questions today. I would now like to turn the call back over to Brian Shepherd for closing remarks. Brian, the floor is yours. Thanks for joining everyone. We're excited about the record-setting results in the rearview mirror, but 2023 is over. Now this team is laser-focused. We've got to deliver against midpoint to upper end of the guidance we just put out. We fully expect to do that, but we've got work to do, and this team is already one month into the year. We've got to get after it. So, thanks for joining. We're going to continue the momentum and the commitment of doing business the right way at CSG. Thank you all. Thanks, Brian. And ladies and gentlemen, that concludes today's call. Thank you for joining and you may now, ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??

Thanks, Brian and ladies and gentlemen that concludes today's call. Thank you for joining and you may now disconnect.

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