Gentlemen. Thank you for standing by and welcome to the CSG Systems International Inc. Fourth Quarter 2021 Earnings Call. All lines had been put on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. Thank you. John Rea, Head of Investor Relations. You may begin your conference.

Thank you, Operator, and thanks to everyone for joining us. Like last quarter, we will be working from a slide deck, which can be found on the Investor Relations section of our website. Please take a moment to locate these slides. Today's discussion will contain a number of forward-looking statements. 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 decision making. 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-K. 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 Brian.

Thanks, John. For those using our slides today, please join us on Slide 4. Over the past year, I've highlighted how will strive to win big in the market and consistently outperform by investing in our culture, investing in our talents, and investing in our future ready software platforms. These investments combined with our customer obsessed values, are elevating every part of CSG. Our Q4 and full-year results, prove that our strategy is working. 2021 was an exciting year for CSG, as we surpassed $1 billion in annual revenue for the first time ever. We achieved this milestone by growing revenue 5.6% year-over-year, ending the year with $1.046 billion in revenue. We also delivered our fastest organic revenue growth in over a decade. Our 2021 business highlights also included the exciting six-year contract renewal and significant expansion with our largest customer, Charter Communications. This deal is the largest deal in company history and make CSGX the BSS provider of choice for all 32 million Charter customers supporting residential and small to medium business for high-speed broadband video and voice. And this giant win proves that CSG has the right SaaS platforms, the right industry leadership, and the right talent to win meaningful market share away from our competitors. Further on the customer renewal front we announced an exciting renewal with DISH Networks, our third largest customer. The contract extends our relationship with DISH for four and a half more years with contractual guarantees. And it paves the way to celebrate our 30th anniversary as we help this innovative leader achieved greater success. So, what does all this contract renewals success and expansion mean? It means that these renewals become the springboard for CSG's continued organic revenue growth in 2022 and beyond. Additionally, when combined with our large healthy sales pipeline…

Thank you, Brian, for the kind introduction. Before I get into my flight, I wanted to take a moment to say how excited I am to join CSGS at this truly transformational time in the company's history. In passion about helping companies grow and that CSG is having all the critical ingredients for accelerating growth, including a robust strategy focused on being a purpose driven SaaS platform company, that helps the biggest and best brand monetize and engage their customers in digital world. A strong balance sheet coupled with long-term customer relationships, passionate leadership and an empowering culture. In fact, CSG guiding principles and mission resonate deeply with these new upcoming customers and employees at the center of everything we do, which will drive long-term and sustain value creation for all of our stakeholders. And now, let's review our financial performance and jump right into Slide 11. We generated $275 million of revenue and $258 million of non-GAAP adjusted revenue during the fourth quarter. These results represent 5.6% and 5.9% year-over-year growth respectively, which were both substantially driven by organic growth. For the full-year, both our revenue and non-GAAP adjusted revenue were up approximately 6% year-over-year. The year-over-year increase in revenue and non-GAAP adjusted revenue was driven primarily by the continued growth of our revenue management product platforms, where we serve many of the largest communication service providers in the world. In addition, we're seeing healthy growth in our customer engagement offerings, where we serve customers in large high growth industry vertical. While our revenue growth was primarily organic, inorganic growth through acquisitions is an important component of our overall growth strategy, focused on providing us access to and or increased penetration into multiple industry verticals where we can help our customers navigate and execute on their digital road map.…

Your first question comes from Maggie Nolan with William Blair. Your line is open.

Thank you for taking my questions. Hi, thanks for that color on what the revenue first half versus second half would look like. I'm wondering if there's anything qualitatively you can share with us about what margins will look like over the course of the year. And then any other puts and takes on margins going into 2022 that we should be thinking about outside of that one-time payment that you referenced?

Yes. I mean, I would suggest that margin would improve throughout the year as well. Maggie, once again, as I said, the part of the drivers of the spreading of the revenue. It's just a timing issue right that we ask discounts that are hitting us January one that everybody knows about, and then we had new business that takes some time for us to ramp up and contribute meaningfully over time. So, we do expect the margins in the back half of the year to be better than margins in the first half of the year.

That's great. Thank you. And then Brian, could you give a little bit more color on some of the overall sales pipeline across your solution areas? And specifically, within CX and payments would be helpful. Thank you.

No -- thanks, Maggie. Appreciate the questions. So yeah, across the board as we've been talking about the last several quarters, our pipeline has never been bigger. We've never had more mega deals, larger deals in the pipeline, we've never had more late-stage -- we have a six-stage sales pipeline. If kind of you look across our portfolio, we like what we see in terms of deals in the shape of that pipeline across all parts of our business, specifically in the digital engagement -- customer engagement space. Multi-vertical, we love the number of deals, we love to bigger brands we're working with So, these new verticals, and it's just a matter of continuing to execute on the sales. We announced that CSG Xponent launch around the journey orchestration, the journey-as-a-service capability that can really provide a predictive -- proactive experience, that's resonating a lot in this recap, and that a closed in the last couple of quarters really good deals with that solution, and gives us the ability to enter rinse and repeat and grow sell other brands and verticals. In the payment space, we've seen good steady progress on our sales bookings in payments with the PayFac payment gateway payment processing. Then sometimes you see a slight time period on which to activate and on board the transaction volumes. And we're seeing a lot of those deals that we've actually closed in prior quarters, then begin to activate that we made to come on. And that's why we've been growing increasingly optimistic about the return to double-digit. We liked what we saw in the fourth quarter and we continue to push to get to double-digit organic. But the other thing maybe just adds a little color on the payments. What we really like is also our ISV channel sales acceleration with partners. We do direct sales, but we also knew a lot with ISV and awards that are CSGS Q4 tape platforms have one against some of the biggest players to the industry best API, best payment gateway, merely as attractive and feeling to those ISV that could embed all of our solutions or parts of our solutions may do the selling for us and when we pick up the volume as they expand, so we do like what we're seeing a lot on those parts of the business.

Thank you, and congrats on the strong year.

Thank you very much, Maggie. We appreciate it.

Your next question comes from the line of Tom Roderick with Stifel. Your line is open.

Stan and thank you for taking my questions. And hi, I should say, welcome aboard on a nice first quarter here. Brian let me start with you because it's hard not -- it's too tempting not to hit the big slide there where you lay out a billion and a half base case goal for 25 and a 2 billion stretch goal so if you take base case, it's kind of like 13, 14% compounded growth and stretched goal maybe closer to 25%. I'd love to hear just the concepts around how much of that would be sort of driven by organic versus M&A. And then on the M&A side, how appealing is it to sort of look outside of the core telco markets into places like financial services, technology and particularly healthcare and life sciences that seemed to hold some appeal relative to where the customer engagement -- digital engagement is going, and some of the other things you can do on the payment side.

Thanks for the question, Tom. Love me questions, I hope you're doing well. So, on getting to the $1.5 billion, growing by 50% top-line, we still have the range of 2% to 6% organic, as you saw this year, we came in at the top end of the range. We aspire to continue to come in at midpoint to top into that range and continue to get better and better. We have made what we think are smart but disciplined investments in direct sales, in brand awareness, in lead generation and in channel partner sale in some of these higher growth areas like the digital customer engagement solution under the payments that Maggie was asking about. And we hold ourselves accountable to make sure that those investments deliver a return, as well as making sure that we have that leading SaaS platform capability that can continue to build that strong organic sale. And so, getting to the 13% or 14%, you're exactly right. Getting to the upper end of our target or even beating our organic sales target we use the sprays; we earned the right to grow. And we do that by delivering each and every quarter, but then what we constantly look for is not just buying calories is more growth. We actually look at where we can find additive SaaS, higher growth platforms that can be relevant for cable or Telcom customers, or they can be relevant for multi-vertical s that kind of have cross unit, cross vertical appeal around that. And that would get us the combination of those two, or where would actually get us to the $1.5 billion and we try to stay quite disciplined and yet really pushing the envelope in terms of the value we can create for our customers. They've been…

Yeah, that's -- Fantastic around. I mean, if I think about the goal to grow EPS faster than revenue, and conceptualize that with some of the acquisitions you've made, obviously, they've got to work well, right? They have to integrate well, and then the technical integrations have to pan out over time. Perhaps you talk about that in the context of Kitewheel and DGIT. I know it's a little bit early on both of those, but as you look at the Proofpoint’s customers that are leaning into the core platform and then adopting Kitewheel and perhaps DGIT or Forte on the payment side, what do those technical integration proof points look like? How much work have you had to do in the backend, and how does that scale go forward?

Yes. There are a lot in there. Let me go just maybe take it in a few different steps. So, one, we did not treat our business at CSG as a one-size fits all. So, we have faster growth earlier stage, multi-vertical, solutions, and we set very target strategic parameters around what enables us to invest feeble capital and what's a good, healthy return. And in the day, it all comes down to increase sales pipeline, increased sales win rate, growing our revenue at a much faster pace, we have units inside the CSG that could be strong, strong double-digit, approach in your rule of 40 and we want to continue to make sure that those units continue to perform quarter in quarter out. We never take it for granted it's proven by ourselves win rate and work the points they put on the board. I think the second point is we see our larger more mature areas in 2021 and we don't think that's an anomaly, can continue to grow at a much healthier organic revenue we may have. We also were those businesses that app scale. We can do a continued better job of driving operating leverage which is why we are able to get the renewal discounts we need to two of our customers and still expand EPS and operating margin in 2022 by gaining operating scale operating leverage that can then lead to accommodation of smart investments of these growth units. And some of what you talked about, as well as delivering a nice return to our shareholders in the terms of repurchase dividends, and then funding our strategic investments. On the assets, you talked about acquisition, Tom, or about investment in R&D. After we acquired Forte as a great example analogy for some of these other businesses, we did make significant investments in quality of their AWS cloud platform, we expanded the capability, we did auto provisioning, and we really are a lot of great -- thanks to our technology and ops teams in Forte, we also expanded the brand awareness in the sales and marketing, and effectively, we're using the same discipline playbook for Kitewheel or Digit to roll-out -- we just announced the CSG Xponent launch in Q4. We just announced this week a new launch of a product launch around the Digit solution for enterprise on the telco side, and we have made additional investments in R&D to be more value-adding to our customers, and try to show them the value to then lead to the sales win rate acceleration.

Fantastic. Thank you for the details. I'll jump back in queue. Appreciate it, Brian.

Thanks, Tom.

Your next question comes from the line of Greg Burns with Sidoti and Company. Your line is open.

Good afternoon. What percent of North American cable subscribers are currently on your BSS platform?

Great question. Hey, Greg, I hope you're doing well. I will follow up. I don't have the precise. I want to say it's the vast majority. I would've said it's approaching 70 to 80, maybe even higher, but we'll get you the exact percentage.

Okay. And then I guess obviously, large percent of the market already, but when we think about maybe that 25 or so remaining subscribers, has the conversation in any way change, has anyone come to you now that you've closed Charter, you've kind of prove that you could port over a significant number of customers pretty quickly and seamlessly. How's the -- has the conversations changed anyway and have you seen any opportunity to go after the rest of that business?

Yeah, I mean, nothing that I can comment on specifically, but I would just say even prior to the Charter We try to be active in all of the large customers in North America, but also not limited to North America in terms of value if we can deliver fantastic value to Comcast, Charter dish, and many of the other cable providers in North America and globally, we can do the same for them, what we've always found is that there needs to be a combination or there's something that's going on with the business, or maybe more functionality, they may not be pleased with their incumbent. They need to improve the speed and agility at which their platforms can support their business or they can bring more cost-effective best. So usually there is a trigger that causes a customer to stick their head up and say, now is the time to really look at that. And what we're doing in all of our sales calls in ASDIN is continuing to tell the story of what we think the value-add is, why it's a low-risk move. We've proven that with our successful conversions at the two margins, Comcast and Charter. So, lots of dialogue, nothing that I could comment on specifically beyond that at this stage.

Okay. And then we look at the revenue split between Charter and Comcast. I think Comcast so as more subscribers on your billing platform, but Charter has higher revenue. So what services is Charter consuming that Comcast didn't? Is there any opportunity to maybe up sell more into Comcast?

I mean, with all of our business objectives and sales objectives for the teams that run the accounts, the businesses they always have targets to expand and grow more in every one of our customers. We don't make its limited adjusters to by any stretch. But really what we've seen it at Charter with some of the stuff they have done there's some similarity, but there's certain areas where they just relied on us for more where some of our customers including Comcast, sometimes we want to build some of the edge systems themselves and want to do some of the integration themselves, and it really just depends on the strategy of that. Do I think there's head upside in both accounts as big as those -- and successful as those two big customers are? There's always a ton of headroom and we just got to work it day in, day out to try to bring innovative ideas, show them the value of what they could do by even turning over more of their business to CSG and what we're doing. And that's always a focus in every one of our customers all around the world.

Okay. Maybe to that point, we are looking at the really strong growth in Carter with Charter year-over-year. Whereas that growth coming from? Is that from like broadband subscriber growth there or is it from incremental services? Can you just maybe touch on that a little bit?

Yes. It's from all of the above. So obviously the nice broadband benefited us in a significant way and because we price on a per subscriber basis, regardless if that number of services are rich services vacate, we've been benefiting from that. We've also been benefiting as we just bring them more value, bringing innovative ideas instead of doing it in-house or using someone else provide some of those solutions. They turned to CSG if sort to be more small product sales, it can be more services, it can be customizing things that we do for them that build within to our SaaS platform, it's all of the above.

Okay. Great thank you.

Thanks so much, Greg.

There are no further questions at this time. I'll turn the call back over to Brian Shepherd for closing remarks.

Well, I would just say thank you for the time and joining us on the call today. Hopefully, it's clear -- we have a clear focus in our vision, we're excited by what's going on in the business. We thank our global leadership team and our global employees. We expect to, every quarter, deliver better and better results. We know that's what our shareholders are looking for, and we're going to hold ourselves accountable to do that. So, look forward to talking to you in the quarters ahead. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.