Good day everyone and welcome to the CSG Systems International First Quarter 2017 Earnings Announcement. All participants are in a listen-only mode. A question-and-answer session will follow today's presentation and instructions will be provided at that time. Today's conference is being recorded. At this time, I would like to turn the conference over to Liz Bauer in IR. Please go ahead.

Thank you, [Sherlon] [ph], and thank you 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 risk factors noted during the call, a comprehensive discussion of these 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 on the Investor Relations section of our Web-site. 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 on our Web-site, which will also be furnished to the SEC on Form 8-K. With me today on the phone are Bret Griess, our 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. I'm pleased to report that for the first quarter we executed according to plan, with strong revenue growth in our cloud and managed service offerings and a continued investment in our products, solutions, people, and go-to-market strategies. For the first quarter, we grew revenues 3% to $192 million, one of our strongest first quarters ever. In addition, we generated non-GAAP earnings per share of $0.62 per share. Our non-GAAP operating margin was 18% and is in line with our target range. And finally, our cash flows from operations were $30 million. Randy will walk you through more details regarding our financial performance later in the call. In February, I shared with you four key initiatives that we are focused on, all aimed at increasing shareholder value. These include; first, continuing to drive revenue growth, in particular through our cloud-based and managed services offerings; second, expanding our broadband and cable footprint globally and getting broader and deeper in our international clients' operations by helping them solve their business challenges; third, investing in our platforms and go-to-market strategies, like our next-generation Ascendon cloud-based solution, enabling operators to participate in the highly dynamic and growing digital economy with a highly cost-effective platform that allows them to launch and generate revenues from digital services quickly; and fourth, continuing our relentless focus on executing extremely well on behalf of our clients. Our proven reputation for doing what we say has served us and our clients extremely well in a highly competitive business environment. Let me share with you how we are doing on those initiatives. First, we continue to grow our relationship with our largest client, Comcast. We converted another 975,000 Comcast residential customers off of the competitor's legacy platform and onto our Advanced Convergent…

Thank you, Bret, and welcome to all of you on the call today to discuss our financial results for the first quarter as well as our outlook for the remainder of 2017. We are pleased with our solid start to the year and the progress we're making on our strategic initiatives. Now I'd like to walk you through our financial results in more detail. Total revenues for the first quarter were $192 million, an increase of 3% from the same period last year. Sequentially, revenues were down 1% from the fourth quarter, mainly due to our seasonally stronger software and services revenues we typically see at the end of the year. Our cloud and related solutions grew 6% over last year. This was driven largely by the conversion of new customer accounts onto our cloud solutions and the increased revenues from our recurring managed services offerings, which by itself doubled 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. Our first quarter non-GAAP operating income was $35 million, with a margin of 18%, which is in line with our expectations. GAAP operating income for the first quarter was $27 million, or a margin of 14%. Our non-GAAP adjusted EBITDA was $43 million for the first quarter, or 22% of our total revenues. Our non-GAAP EPS for the first quarter was $0.62, compared to last year's $0.77. Our non-GAAP effective income tax rate was 34% for the current quarter, slightly better than our previous expectations of 37%. This lower effective income tax rate provided approximately $0.03 of non-GAAP EPS benefit to the quarter. I will provide more color on this later in my comments. And finally, our…

[Operator Instructions] We'll have our first question from Tom Roderick with Stifel.

Matt Van Vliet on for Tom this afternoon. Thanks for taking my question and obviously a pretty good quarter here. I guess first question, digging in a little bit more, you talked about another expansion at Telstra. Could you just talk about maybe what you're doing now and how that has expanded 5x since you started with them, just a little bit more detail in terms of what you're doing there and how you're thinking you might be able to transfer that to other customers down the road?

Matt, I'll take a shot at that one. Telstra is a great customer, and when we first started working with them, they had some internal systems in the BSS areas that we operate that they had on multiple different platforms that they wanted to consolidate together for efficiencies. So we worked with them on that and we worked very closely with them. When I was in Australia not too long ago, it was great, because when you walk on the floor with them, it's really tough to tell the difference between a Telstra employee and a CSG employee because they are all heads down working on the same objective of improving their business through the operational integrity. And so the domain knowledge and the domain experience that we have from doing it for 35 years, combined with the relationships that we picked up in the Intec acquisition a couple of years ago, allows us to leverage that domain knowledge with the great relationships and software products that were there to take on more accountability and responsibility for their systems in a way that it improves their bottom line economically and it improves the overall service they could take to their end customers. So, we just continued to take on more international managed services business, and what's supposed to happen is that becomes a model. When we can show that and show the return on investment, then we can share that broader with some of the other customers that we mentioned there. And a lot of people can talk about the success they are going to have in the future, but these items are, they are in the rear-view mirror. We did it, it's over. And so, it creates a great platform to keep going not only there at Telstra but at other customers around the globe.

Great. And then looking at moving the Ascendon platform to AWS, can you talk about what are the biggest benefits maybe over the next 12 months from that, and then longer-term how does this affect both your ability to rapidly deploy at customers as well as impacting your overall cost basis down the road?

Absolutely. The cloud has been an underlying fundamental transformational activity. I used a lot of doublet words there. But it really changes the game because what we used to do is bring great value in software-as-a-service, managed service type activity, because we had such large investments in hardware, storage, processing, network, and that brought great benefit over time. But then what happened is, as it became a public cloud, we all see the great big ones that are out there in that space, if it's Amazon, if it's Microsoft, and they've just taken the same model we've used for 35 years and spread it around the globe on a much larger scale. So, when we can get the multi-tenancy and we can roll our applications into that, we can get a great price point on the services we deliver, but not only that, the ability to roll it out very fast. So whereas it used to be very challenging for us to put a data center in a foreign domicile and work through the data security issues, the data sovereignty issues, they have already done that on a global scale basis, and that's why we keep pushing that this is a game changer in the business model because we can drive materially lower cost per unit and we can roll it out in 90 days in our Ascendon platform, and we've got proof points of that. So, as I mentioned in the prepared comments, is that this isn't just taking old architecture and redoing them on new technology, that we see happening, or redoing business models if it's still going to be a professional service gig where we charge you a ton in the future. This is a game changer for the customers that we are deploying it for and we are getting some good traction with it.

All right. And then last one for me, can we just maybe get a little bit of an update on the Time Warner situation? Obviously, we've seen a couple of the 8-Ks with one month sort of renewals while you negotiate a longer-term deal. But can you just walk us through maybe what that process looks like and how the overall Charter contract is impacting that situation?

We have a great relationship with Charter, and if you recall, Time Warner was our very first customer 35 years ago. So we've got a lot of depth and domain knowledge in that area. When Charter did the acquisition, we worked very closely with them and worked with them daily on their systems and the processes we go through. Charter is very focused, they are an incredible operator, and they are very focused on that integration and doing the right things. And so, we've been working with them and are extending that contract on a month to month basis, which is way outside of our norm because of our long-term contracts and our important relationships. We would only do that in a situation where we have a committed relationship, which we have with that Charter relationship. And so, we are in close discussions with them on a day in and day out basis, and we hope to have that resolved in a longer-term fashion very soon. And hopefully, you should take that as a yet another sign of the value in the partnerships that we have, is when we get that done and in place, but we have extended and gone outside of our model to do a couple of one month extensions just because of how important the relationship with the client is.

All right, thank you. I think that's all I have right now.

We'll go next to Larry Berlin, First Analysis.

Two quick questions. First, on the new process you guys are doing the development of, how is that going and what's looking good this quarter?

I'm sorry, Larry, I misunderstood you. Thank you for the question, but was it around the new products did you say?

Yes, around the new products and the new development, so just how it's going this quarter and what's looking good?

It's going well from a product development and delivery. We're getting a much better understanding of how we can continue to accelerate the products into the marketplace. But we talk a lot about Ascendon and some of the pieces that are there, both from a digital BSS and also from an OTT, over the top type activity, as we mentioned in today's press release, around iFlix. That's a huge win for us and it's all based upon the net new products and the R&D that we've done, and those are seven and eight year development efforts that are positioning us well to win in next generation providers of those services. So we're feeling really good about the products. And then in addition to that, we still have folks that are moving on to legacy platforms that we are having good luck with. So, we see a combination of honoring our past and inspiring our future, and those R&D dollars are really starting to give us some traction in those areas from Ascendon onto our other components.

The other thing is, similar is, the Telstra reminds me, how anything new in other nations, Europe or Asia or so forth, or anything that's motivating the potential clients there to make them look at your products and possibly hiring you in the near future?

We still see activities in those spaces. We talked about Airtel Africa, also in India along those lines. And I just sat through the other day a portion of our more detailed pipeline review, and Brian Shepherd and the teams around the world are doing an incredible job of building that pipeline, and we see it as a very healthy pipeline and we're getting some of them across the finish line, and importantly, we are investing in our go-to-market and our brand, which is helping to build that pipeline and get the focus on where it should be, which is solving customer problems with those solutions.

Great. Thank you, guys.

We have no further questions in the queue. I'll turn the conference back over to Mr. Bret Griess for any additional or closing remarks.

Thank you very much and thank you to everyone who was on the call. Once again, I couldn't be more grateful and blessed for those employees that are on the call to make sure they understand, also customers and interested financial partners, as we go through this journey together. But we really like our position, we really like how the business is positioned, and we want to keep bringing you quarters of delivering to plan. So, thanks again and have a great quarter.

That does conclude today's conference. Thank you for your participation. You may now disconnect.