Good day, and welcome to the CSG Systems International Fourth Quarter 2016 Earnings Announcement Conference Call. All participants are in a listen-only. A question-and-answer session will follow today's presentation and instructions will be provided at that time. At this time, I would like to turn the conference over to Liz Bauer, IR. Please go ahead Ma'am.

Thank you, Wendy and thanks to everyone for joining us. Today's discussion will contain a number of forward-looking statements. These will 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 convert the backlog of customer accounts onto our solutions in a timely manner. While these statements 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 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 available on 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 decision making. For more information regarding our use of non-GAAP financial measures we refer you to today's earnings release and the non-GAAP reconciliation tables located on our website, which will also be furnished to the SEC on Form 8-K. With me today on the phone are Bret Griess, Chief Executive Officer and Randy Wiese, our Chief Financial Officer. With that I'd now like to turn the call over to Bret.

Thank you, Liz and thank you all for joining us today. I'm pleased to report that we executed well in 2016 and are beginning to see the positive impact from many of the new initiatives that we have put in place. But first let's review our 2016 performance. Full year revenues of $761 million exceeded the top of our revenue guidance and non-GAAP earnings of $2.79 per share were in line with guidance. While we had an extremely strong year in particular on the bottom line, I'm most pleased that we grew our revenues after years of flat revenues. Entering 2017, we have more momentum and visibility in our recurring revenues than ever before. This visibility fuels our confidence in investing ahead of the curve to drive future accelerated revenue growth. Today I'd like to provide you with some highlights from our fourth quarter as well as provide you with my assessment as to how we have performed as a management team in creating long-term shareholder value. First Comcast converted another 1 million residential customers onto our ACP platform away from a competitor's legacy platform. In 2016 alone we've converted just under 3 million Comcast customer accounts ahead of our expectations going into the year. So far we've converted approximately 7 million customers in less than two and half years without any delays or disruptions in service. A fact that we continue to successfully convert their customers on to our platform without disruption of service or any hiccups is a testament to the unique skills that our employees and theirs bring to the table. No one does it better than us and it shows. We’re pleased that when it comes to Comcast residential customers, CSG is their partner of choice. As we move into 2017, we are optimistic that we…

Thank you Bret and welcome to all of you on the call today to discuss our financial results for the fourth quarter and our full year 2016 results as well as our outlook for 2017. We are pleased with our solid results for this year, the success in extending our global market share, and the progress we're making to accelerate our top line growth. Now onto the details, total revenues for the fourth quarter were $195 million, a decrease of 1% from the same period last year. Sequentially revenues were up 3% from the third quarter. Total revenues for the full year of 2016 were $761 million, an increase of 1% over last year and slightly above our full year expectations. Our cloud and related solutions revenue grew 5% over last year. This was driven largely by the migration of new customer accounts on to our cloud solutions and the increased revenues from our recurring managed services offerings which grew itself by over 60% from last year. This strength helped to offset our expected decrease in software and services revenues as we continue to transition this part of our business into a more predictable recurring revenue model. Moving on, we finished the year with strong operating results. Our fourth quarter non-GAAP operating income was $34 million with a margin of 17%. We finished the year with $164 million in non-GAAP operating income with the full year margin of 22%. Our lower margin percentage for the quarter was in line with our expectations and was driven by our planned increased investments aimed at our long-term business growth and was coupled with higher levels of employee incentive compensation earned in the quarter. GAAP operating income for the fourth quarter was $25 million our margin of 13%. GAAP operating income for the year…

[Operator Instructions]. And we will take our first question from Tom Roderick with Stifel. Please go ahead.

Hi Matt VanVliet on for Tom today. Thanks for taking my question. I guess first off on the cash flows, we talked about some impact from unexpected working capital timing, could you just maybe elaborate a little bit more on that and whether or not you think that that will sort of reverse in the next year and if so it would seem like the cash flow guidance might be a little light given the fact that you can make that up in the first quarter or so?

Yeah, good observation. The working capital items I was referring to were really around accounts receivable by far the largest piece. We had one client that would have typically paid by the end the year that paid us just a couple of days after and a couple other clients who have been paying on a very consistent basis also slipped that across at the end of the year. So your observations about our ability to outperform at a higher level in 2017 are well as a good observation. But we stayed relatively conservative so, if we have a good performance on those receivables we have a good chance to outperform our cash flow but we stayed conservative on our view.

And then in terms of the middle of P&L investments, Bret I think you talked about R&D investments were at least behind play in most of the year, is there a lot of catch up that you now have that's causing pretty substantial guide down in operating margins, I know we've talked about for a while here that you are going to invest in the business but I think the level to which you guys are guiding has taken us a little bit by surprise here. How much -- I guess how much of the R&D is catch up and how much additional maybe the sales and marketing side even relative to the 2016 levels are you expecting?

Yes, Matt there is a bit that is catch up from an outlay of it. We continue to believe that 18% to 20% is a healthy range to run this business. We plan to continue to do exactly what we say. R&D won't solve for the future on its own. So we're balancing some of those investments in R&D, our brand management, our solutioning, in our people so that our people going to market have a very good understanding on the ground with the customers solving their business problems with our solutions and it's incredibly exciting to see some of the very initial investments start to pay off and the traction start to come. So we will continue to talk to the 18% to 20% and then deliver in that 18% to 20% as we said.

And then looking at some of the international markets year-over-year both Europe and APAC had a pretty decent decline at least in the quarter, what can we maybe attribute that to and how should we think about those two markets moving into 2017?

You know, there's a great deal of uncertainty all over the planet as we move forward. Some of that decline has come from as Randy mentioned some of the software activity that's happening but what's exciting to see is our ability to transform many of those agreements into the managed services agreements to get the longer term revenue and the longer term relationships in place with our clients. So, there are those declines but it's exciting to see the business becoming healthier and more solid as we move forward through that process and the incredibly strong underlying business model allows us to still go through increasing our dividend at 7% and make those investments as we push forward.

Great, thank you.

[Operator Instructions].

Wendy I think we're good.

Yes, it does not look like we have any further questions at this time. So I’ll hand it back to you Liz.

Well I would step in and just take a moment here to say thank you to everybody for being on the call, to our employees, our shareholders, and of course our customers through that process who continued to support CSG in these incredibly dynamic times in our industry. It allowed us to have a hugely strong business model where we can invest in growth for the future and can continue to deliver back to our shareholders a great return and a solid 7% dividend increase for this year. So it is an exciting time at CSG to see the strategy start to play out in a positive traction. So thank you to everybody involved with that success and thank you for your time today.

This does conclude today's program. Thank you for your participation. You may disconnect at any time.