CSG Systems International Inc (CSGS) 2014 Q4 法說會逐字稿

Good day, and welcome to the CSG Systems fourth-quarter and year-end 2014 earnings announcement conference call.

(Operator Instructions)

At this time, I would like to turn the conference over to Liz Bauer. Please go ahead.

Thank you, Matt, 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 platform 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 revisions 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 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, and 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 Peter Kalan, our Chief Executive Officer, and Randy Wiese, our Chief Financial Officer. With that, I'd like now to now turn the call over to Peter.

Thank you, Liz, and thanks to everyone for joining us today. For the fourth quarter, we reported total revenues of $194 million and non-GAAP earnings per share of $0.61. For the full-year 2014, we reported total revenues of $751 million and non-GAAP earnings per share of $2.12.

While our results are within the range of guidance that we provided, we did not see the typical increased spend in the fourth quarter that we've historically experience from our clients, and our results fell slightly short of our own internal expectations. For the year, the strength in our processing revenues offset the weakness in spending that we saw from our software clients. Year-over-year revenues from our APAC region grew, our EMEA region was basically flat, and our Americas region performed well, thanks to the increase in spending by our cable, satellite, and content clients.

Many of the accomplishments that we achieved over the past year don't reflect in our 2014 results. And instead, will begin to have a meaningful impact on our financial results in the latter part of 2015 and in future years.

For example, as a result of Comcast's decision to standardize their retail customer accounts onto CSG, we have the opportunity to convert the largest number of new customers onto our solution, since I joined of the Company back in 1997. Building on that, we successfully migrated the first 20% or 2 million Comcast customers off of a competitor's platform, and onto our solution.

This is important not just from a 2015 revenue perspective, but in demonstrating to Comcast that our combined teams are very good at doing conversions. As a result, we are very confident that we will be successful converting the remaining 8 million Comcast customers from a competitor's platform. And we also believe that when Comcast's planned acquisition of Time Warner is approved, that Comcast will standardize the other 5 million Time Warner customers that are on a competitor's systems to the CSG platform over the next several years.

These conversions demonstrate that CSG is the most trusted and dependable partner in the market. We had the broadest revenue content and customer interaction management solutions in the industry, and our clients are using them to monetize new digital services ranging from video to e-books, to games, to home security and more.

We've positioned ourselves as the go-to provider for any company looking to monetize these new services, and we are in the early stages of seeing the revenue benefits from these offerings. We believe that the real estate and the client relationships that we have as a result of our first-mover advantage will help us accelerate our revenue growth in future years.

We have long-term relationships with several of the largest pay-TV providers in the world. With Comcast, Time Warner, and DISH. Many of these companies are at the forefront of innovating new ways for consumers to watch TV at home, and on the go. They are helping turn every device into a TV screen, and any location and avenue for delivering their feature-rich services. These long-term contracts provide us with tremendous visibility entering every year, and enable us to manage our operations in a highly efficient manner.

Further, we believe that over the next five years, as a result of our leadership position in video and content, and our continued investment in our solutions, that service providers around the world will turn to CSG to help them monetize their video and digital services. Over time, as we've done so well with our clients in North America, we believe that the value that we bring allows us to get broader and deeper in our clients' operations, resulting in us becoming a most trusted advisor.

Next, we are in the early stages of the evolving our software clients into longer-term, more recurring relationships. In fact, we've secured managed services relationships with two tier 1 operators, MTN South Africa and Tessera, and we have a strong pipeline to build off of, as we march towards our goal of generating $50 million to $100 million in recurring revenues from our managed services expansion in the next several years.

As we enter 2015, we've refocused our efforts in the international markets to those areas where we have the best opportunity to win with our expertise. And as part of this, we've reduced some of our efforts and expenses, and believe that we will see improved financial performance coming from this. And finally, we continue to generate lots of cash.

And with a significant amount of our revenues visible for the next several years, as a result of our long-term contracts with our clients, we have good visibility into our future cash generation. And as a result, we will be implementing several actions to continue to derive long-term shareholder value. For 2015, we are increasing our dividend by 11%, resulting in a full-year dividend of $0.70 per share, for a total dividend payout of $23 million in 2015.

We plan to repurchase a total of $50 million of stock each year over the next three years, for a total of $150 million of stock repurchased. We expect to enter into an accelerated share repurchase program in the next few weeks, to buy back the first $50 million worth of stock this year. And through these actions, we will be increasing our capital allocation to shareholders, while at the same time, we've improved the stability of our future capital needs through the restructuring of our credit facility.

As you have heard from many companies this earnings season, the market that we operate in is very challenging. But this is nothing new. We've said that, for the past several years, that communication providers are continuing to drive cost out of their existing operations, and reallocate their resources, both personnel and budgets, over to new revenue-generating opportunities.

They're maintaining their existing platforms longer, and consolidating their systems, to drive increased standardization and consistency of experience across their footprint. They are not looking for large transformations of their back office systems; rather they're looking for a way to preserve their existing systems and layer on top adjunct solutions that enable them to roll out new services.

They're experimenting with new ways to engage the customer with their products and services, while at the same time looking to monetize the exploding video and data traffic that's going across our networks. And they're doing this while new competitors are innovating new ways to provide customers with content on demand, on the go, whether on your phone or tablet, and any way you may want to pay for it. At CSG, we've been working side-by-side with our clients, listening to their challenges, brainstorming with them on solutions to address those challenges, and investing in a product vision that can help them evolve and compete in this fast-moving ever-changing environment.

We are quite excited to highlight our product vision at Mobile World Congress at the end of this month. Our modular solution, which integrates our Content Direct solution into our overall BSS stack, enables our clients to understand their customers' profile references an entitlement, while providing them with an e-wallet mechanism that enables customers to have multiple avenues to pay for their services.

In addition, the platform enabled service providers to generate new revenues by doing everything from selling digital services over an IP network, to monetizing their network with services like a Wi-Fi day pass. Our modular approach enables operators to be successful without a wholesale replacement of their existing platform. It's an evolutionary transformation, and has proven successful with companies like Comcast, ESPN, Sony Pictures, WE, and Cineplex.

So when we look at the business landscape, including the whole host of challenges and opportunities that it presents, as well as what we've done to position ourselves to be successful in this dynamic environment, we ask what does this mean for shareholders? First, we're growing our recurring revenues through market share wins in the North American cable market, and through our early successes on our international managed services initiative, and we will continue to do so.

Second, we're providing the next generation solutions our clients need to compete effectively, by monetizing their video and digital service offerings in new ways. Third, will expand our margins through the scale of our processing business, while also reducing or realigning our investment in areas which have been underperforming. And through all this, we will continue to have a strong balance sheet with strong cash flows, which allows us the flexibility to return clash close to investors while continuing to invest in our business.

We believe that when you grow your revenues, expand your margins, and drive strong cash flows, you have many options to create long-term shareholder value, and we feel that we're in a strong position to do so, and that 2015 is an inflection point, building on the client successes of 2014. With that, I'd like to thank our employees who continue to live our corporate values every day, and help make us more value to our clients through their hard work and dedication. Now, I'm going to turn it over to Randy to walk through our fourth-quarter and full-year results 2014, as well as provide you with the financial guidance for 2015.

Thank you, Peter, and welcome to all of you on the call today to discuss our financial results for the fourth quarter and full year of 2014, as well as our outlook for 2015. We are pleased with the strides we've made over the past year to position our company for future growth, and look forward to the opportunities we have built upon these successes, and further enhance shareholder value in the coming year.

Now, I'd like to walk you through the financial results in more detail. Total revenues for the fourth quarter were $194 million, down slightly from the same period last year, and up 5% sequentially between quarters. Revenues for 2014 were $751 million, up 1% from the prior year.

These annual results reflect the success we had in growing our recurring processing revenues, which grew about 5% for 2014. This growth reflects the strength of our North American cable business, and the early successes around our international managed services offering. This strength helped us offset some of the challenges we've experienced this year, and our software and services revenues. Breaking down the components of revenues further, for the full-year 2014, we generated 85% of our revenues from the Americas region, 10% of our revenues from the EMEA region, and 5% of revenues from the APAC region.

Moving on, our non-GAAP operating income for the fourth quarter was $32 million, with a margin of approximately 17%, and was $122 million for the full year, with a margin of just over 16%. Which is slightly below our expectations, due to our lower level of revenue performance for the year. GAAP operating income for the quarter was $19 million, and was $76 million for the full year, both of which reflect a margin of 10%. For the fourth quarter, our non-GAAP adjusted EBITDA was $40 million or 21% of revenues, and $152 million for the full year, or 20% of revenues.

Our non-GAAP effective income tax rate was 34% for the quarter, which is at the quarterly rate necessary to arrive at our full-year rate of 37%, both of which are better than our previous expectations. Non-GAAP EPS for the fourth quarter was $0.61, which compares to $0.63 for the same period last year. Approximately $0.05 of our non-GAAP EPS for the quarter can be attributed to the lower-than-expected tax rate that I just mentioned.

Non-GAAP EPS for the full year was $2.12, which compares to $2.20 last year. GAAP EPS for the fourth quarter was $0.38 and $1.10 for the year.

And now onto cash flows and the balance sheet. Overall, we ended the year with $202 million of cash and short-term investments. We had a total of $270 million in par value debt on our balance sheet, a reduction of $15 million from the prior year-end total.

We had cash flows of $48 million for the fourth quarter, bringing the full-year total to $84 million This full-year amount is lower than last year, and below our normal level of historical annual cash flows.

This is largely due to the difference in various income tax benefits between years, and the negative impact of some timing differences related to our working capital we experienced this year. These factors generally even out over a longer period of time, and we therefore remain very confident in our ability to generate strong cash flows from operations, driven by our long-term recurring revenues contracts, and the leverage in our business model.

In 2014, we spent approximately $26 million on capital expenditures, resulting in $58 million in free cash flow for the year. We continued to use our strong cash position to return capital to shareholders. During the fourth quarter, we repurchased 541,000 shares of common stock, for a total of $14 million, bringing the full-year repurchases to 733,000 shares for $19 million. Additionally, we paid dividends of $21 million in 2014.

As Peter mentioned earlier, we have an extremely strong business, with good visibility into our revenues and cash flows, and we are making great progress on executing on our strategies. Because of the confidence we have in our business and our commitment to return value to our shareholders, today we announced our intent to increase our distribution of capital to shareholders of the next three years. We also announced changes we made to our credit agreement, to improve our capital structure.

I will now walk you through these announcements in more detail. First, our Board approved an 11% increase in our annual cash dividend, going from our current level of $0.63 per share to $0.70 per share. At this level, we would expect to pay dividends of around $23 million for 2015.

We chose to increase the dividend at more than twice the level that we did last year, because of the visibility, strength, and confidence that we have in our business. Going forward, we would expect future dividend increases to be more consistent with our policy of growing dividends in line with our cash flow growth.

Second, we intend to buy back $150 million of our shares over the next three years, which represents a little less than 20% of the current value of our outstanding shares, and represents repurchases at a much greater amount than we have done in the more recent years. We intend to repurchase the first $50 million of shares for 2015 through the use of an accelerated stock repurchase plan, also known as an ASR plan, which we expect to execute within the next few weeks. The use of an ASR will immediately offset the dilution we've been carrying for some time related to our convertible debt, and it also allows us to get ahead of the dilution we anticipate from the full amount of this approximate 3 million warrants we expect to be earned by Comcast, as we migrate their customer accounts onto our platform from competitors over the next three years.

And third, we amended our current credit agreement to extend the term of the agreement into early 2020, and upsize the revolving facility from $100 million to $200 million going forward. This provides us with additional capital capacity, and greater flexibility to manage our capital structure over the next five years, including options to settle our convertible debt that matures in early 2017. This allows us to execute on our plan to distribute a greater amount of capital back to shareholders, while still allowing us adequate capital to be opportunistic towards acquisitions and other investments that we may choose to pursue over the next five years.

With these events in mind, let's move it now to the 2015 guidance. Before I provide our 2015 guidance, I want to walk you through several factors that we took into consideration when setting guidance. As Peter mentioned, many of our 2014 successes, and recent investments we have made, have us well-positioned heading into 2015.

We have already migrated 2 million Comcast accounts on to our platform, which is ahead of our previous expectation of early 2015. We also anticipate migrating another 2 million to 4 million customer accounts to our platform in the latter part of 2015. In addition, we are also gaining further traction and growth on our international managed services offering, with tier 1 operators and continue to have success in rolling out our next generation solutions, to enable companies to evolve and compete effectively, by monetizing new digital services offerings.

We expect these items to provide 2015 revenue opportunities for us and more importantly, position us for strong growth in future years. We are, however, facing some headwinds in 2015, that will have an near-term negative impact to our business.

First, as we discussed throughout 2014, we will need to absorb the impact related to the Time Warner and Comcast merger when our existing Time Warner business comes under the more favorable volume pricing Comcast currently enjoys, as a much larger client. While we are excited about the long-term opportunities from this merger, it causes some near-term top and bottom-line challenges for 2015.

And second, although we conduct a very large percentage of our business in US dollars, the significance of the currency movements in latter part of 2014 are expected to result in some top line revenue pressure for us in 2015. We estimate the total revenue headwinds from these two items to be close to $20 million for 2015.

With that background, let me provide you with our financial guidance for 2015. For 2015, we expect revenues to be $750 million to $770 million. We expect our non-GAAP operating margin to be approximately 16.5% for 2015.

We expect that the benefits from additional customer accounts being migrated to our platform, the progress of our relationship and deliverables with our larger managed services clients, and our proven reputation for good cost management will allow us to offset the headwinds I mentioned earlier, and essentially allow us to maintain margin levels for the year. We expect our full-year 2015 non-GAAP effective income tax rate to be consistent with that of 2014's rate of 37%. Also, we expect the benefit of our planned share repurchases to reduce our diluted share count by close to 1.5 million to 2 million shares.

Moving on, our 2015 non-GAAP EPS gains range is $2.20 to $2.30. This represents 4% to 8% growth over our 2014 performance. When you combine that with our solid dividend yield, we believe this provides an attractive return for investors in 2015.

We expect non-GAAP adjusted EBITDA to be within the range of $154 million to $158 million, or 21% of our expected total revenues. We expect cash flows from operations to fall within the range of $100 million to $115 million for the year. We also expect our capital expenditures to be around $30 million.

Overall, we are quite pleased with the steps that we've taken over the past year to strengthen the foundation of our business. We look forward to building upon this success through continued execution, upon our strategies to expand our market-leading position in the video and content delivery market. Grow our international managed services business, and enhance shareholder value through our increased share buyback and increased dividend.

We look forward to sharing our continued successes over the coming year. And with that, I'll turn the call over to the moderator for questions.

(Operator Instructions)

Howard Smith with First Analysis. Please go ahead.

Yes, good afternoon. A couple questions. One, in your prepared remarks, you talked about confidence that Time Warner, if acquired, that Comcast would take the Time Warner subs that are on a competitive system and bring them on yours, and it was a little more definitive in how you discussed it. Maybe I'm reading too much into it, but was there something in the conversion of the first 2 million, or something that has transpired in the last few months that gives you a boost in confidence in your ability to get those subs from your competitor?

I don't think there's been any specific change or any specific messaging that was intended in that. Though, Howard, when we look at the success that we jointly had with Comcast and the benefits that they are getting from this by standardizing, and the benefits that they are getting from the capabilities of our system, we just have a very strong belief that they will want to continue that standardization across all of their markets, and that is all the signaling, as well, as what we've heard from them of what their intent is.

Now the deal has to close. The priorities of what would have to be done subsequent to that needs to be addressed and scheduled. But the business benefits are pretty compelling.

Okay. And I know transferring them over is not easy, so getting the first 2 million done is a cause for celebration.

Yes, thank you for that.

In terms, just as you say, that deal has to close, et cetera. When you think about your guidance, and you've been very transparent on the expected impacts, are you assuming a specific date of the lower contribution in that, and what's in that assumption in your guidance?

Yes, let me give you some color on that. Howard, I mentioned in my comments about $20 million of headwinds for the year. Think of about 60% of that tied to the Time Warner Comcast repricing, probably the best way to look at it. Which is a very consistent --

It basically assumes that April 1 close.

April to March close time, correct.

And then lastly, if there's any update on Charter, I think you have a contract with them, which is maybe a little bit past due, which is not unusual, and if there is anything in your guidance assumed in regards to that, or not?

Well let's take this in two pieces. Let me just give an update of where we are in the progress with Charter. We are in the negotiations with Charter for a long-term extension of their agreement with us. And as you know, Howard, we've been a long-time provider to Charter and we have consolidated all of Charter's subscribers onto our platform. I forgot what, several years ago. I won't try to remember the specificity of that.

And we have very strong confidence that we should be -- or we will be a long-term provider for Charter and we are excited about it, because they are, we believe there are a Company is looking to gain scale is the market as evidenced by what they are doing with Comcast. The specifics of what's in guidance or at least the directional, Randy, I'll let you take.

We've been having discussions with Charter and made a lot of great progress, so we have a good idea of the impact and the timing, and it is built into our guidance for the year, Howard.

Perfect. Thank you so much.

(Operator Instructions)

Tom Roderick with Stifel.

Let me follow-up on Howard's last question, and maybe his point about Comcast and the 2 million subs that converted in the quarter. I'd just love to hear a little bit more anecdotal data, or what you can share about it, with respect to what some of the challenges were in moving those 2 million subs, how difficult that proved to be, how you think that maybe impacts the timing of the remainder of the subs? I mean, obviously the warrants are structured out over multiple years, but the speed at which you knocked down the first 2 million is a pretty good sign. So would love to hear in your own words how that played out, and how you think that impacts the timing of the future?

Well, I think, Tom, first that the success that we had should build confidence further confidence in Comcast or with Comcast in CSG. Which they had strong confidence to begin with by signing the deal they did with us last July. I'm always treading on very dangerous waters when I say how well we do these things, which we do them well, but the effort behind the scenes by our teams and the Comcast teams are significant, because this is every customer service rep, every technician, every end customer account goes through some form of change. And to be able to do that, and do that without disrupting operations is the number one thing that we always strive to do with our clients and we been successful with what we been able to do with that, on making sure the systems are up and running, they are accurate, and that they can service those customers when the conversion date comes and goes.

I think the real success is us leveraging our knowledge of the platform, and us leveraging our domain expertise. And building that with a very committed team from Comcast, because there are challenges that come up, there is a lengthy process that has to be done, a lot of steps, and how the teams respond to those, facing those challenges and come out of them, to make sure that the project is successful, is really probably the greatest testament of what we do as a Company. And I can tell you from what I've seen, the success of these conversions was recognized up and down the towers of Comcast. And I think that's probably the biggest thing that tells me that they are not going to hesitate when they get ready, to bring those rest of those subscribers to us.

And Peter, just a follow-up on that, obviously there's a lot of additional stuff that you can sell to Comcast and other customers, but it would seem like the Content Direct product would certainly be right at the top of that list. Any feedback from them? They obviously use it already, but any feedback from them with respect to accelerating their adoption and usage of that product, or extending it into other territories or regions? How do you think about that opportunity?

Well, I think when we talk about extending, it is across their footprint for the services that we support today. Whether it's CSG University or their extended sell through of movies versus renting movies, we're part of that full platform, that's supporting that, and that's not just across the CSG markets that we've historically supported.

I'm always hesitant to talk about where there's efforts are going on, because there's competitive things that they are trying to do in this evolving digital world to make sure they have products coming forward. But the platform is an important part of supporting how they go forward, and we think that, with what we see going on in the rest of the market, whether it's what you see from ESPN or HBO and others, that providers like Comcast will have to accelerate what they do. How fast they accelerate, they got a lot going on with Time Warner and conversions and everything else, but I will tell you I like being with one of the big guys who's a leader because I think they will end up accelerating when they are ready.

Great. Randy, let me throw this question at you, just in terms of the moves from a capital allocation standpoint. You upped the dividend, and maybe more interesting, you took a pretty big swing in terms of the share buyback. Any thoughts behind the timing of that share buyback? It looks like you are going to be very aggressive in the marketplace, with an accelerated share repurchase. What was the thinking behind why now, why at this price? Is anything you can share there?

Yes, I think in both my comments and Peter's comments, we really have a lot of confidence in the business. We've locked up Comcast with a long-term contract. We're making great progress in a lot of our strategies, whether it be managed services or Content Direct. We feel very comfortable and confident where the business is, and we thought it was a very good idea to make that commitment to return the capital back to shareholders. We have a very strong balance sheet, expect to continue to generate lots of cash, and did a great job of refinancing our debt. So I think we're well-positioned to give that capital back to our shareholders.

And, Tom, I would just add to Randy's comments. We believe we have a business that organically could generate results, building off of Randy's comments. And that does not need a lot of capital to make that happen.

That's a good point.

Great. And Randy, just so I'm clear, can you go back through your FY15 guidance and remind us what share count you're anticipating, so we understand what the impact of that buyback is in your guided non-GAAP EPS number?

Yes, Tom, I think we did about 33.7 million of shares this year and that's right about 32 million for 2015 is in my guidance, so it's about 1.7 million shares coming off.

Thank you. I will jump back in the queue. Thank you, nice job.

(Operator Instructions)

Mark Sue with RBC Capital Markets.

This is Spencer Green for Mark Sue. You guys have successfully converted 2 million of the Comcast accounts to your system. Can you give us an idea or help remind us how we should think about the timing with regards to the migration cost? Should we assume that all the costs are baked in and now that these 2 millions have moved, do they play out over a longer period of time?

No, the costs play out relative to the migriation --

So the migration costs occur as part of the overall migration onto the platform, and typically those also get capitalized and are put onto the balance sheet, and then amortized over the life of the contract, so you don't see a big spike for those efforts. And, therefore, and there's really no what I would call ramp-up type cost. Our platform is established, it's up and running, it's highly leveragable. So as these come on, they come on at a very profitable rate from day one all the way through the contracts, so there's no big ramp-up period from a cost perspective.

And briefly just a bigger picture question, you have laid out some of the opportunities for Comcast, and then you also laid out an interesting opportunity in managed services, and you mentioned I believe about a $50 million to $100 million opportunity over the next couple of years. And just hoping you might help us quantify what kind of growth rate you are seeing in that market, and kind of what could accelerate them or decelerate them, based on trends in the marketplace?

Sure. Spencer, well I think there are several trends that are driving folks to look at managed services, and that's everything from how do they rationalize products. How do they drive cost out of their operations? How do they add adjunct solutions to their existing systems, so that they can meet the future needs of digital services, or new ways of monetizing networks? All those things that you may have heard on my previous comments, I think are the market factors driving it.

For us, we've talked about over a five year period that we thought we could get to $50 million to $100 million worth of annual recurring revenues of managed services. We're first focused on leveraging into our existing clients around the globe, and converting those software models to managed services. And we've had very good success in the first year.

We've got several tier 1 clients and some tier 2 clients that we've announced, and probably most exciting for us, Spencer, is that some of these same clients early on into the relationship have already come back and given us opportunities to, what I'll say is bid or work with them to say how do we expand this into other parts of their business. And that is the type of things that we will accelerate what we do. But we are still looking at, we are really effectively in year one of a five-year plan and we are still think that over the next three to four years is what going to get us to the $50 million to $100 million, but we like the opportunities we are seeing and how our pipelines are growing.

Great. Very helpful. Thank you very much.

(Operator Instructions)

Tom Roderick with Stifel. Please go ahead.

One last follow-up for you guys. The managed services business, you guys had a couple big wins last year. The commentary was generally, general to software that there was some challenges and budget challenges and things like that, but as you look at that managed services business, would love to hear about what you think about the pipeline of opportunities that you have, what the challenges are in closing that?

It seems like a number of your competitors are going after that same sort of managed services business. So what are you seeing in the marketplace that could inhibit further growth there or inhibit further wins like you had with MTN and Telstra?

Well, I think, Tom some of the interesting things that we're doing to so make sure we stay out of this what I call this kind of the fray that may be happening in certain markets is we're focused on some customers we already know, who are using our product, and who've acknowledge that they want help. And so we don't have to compete against, what I will say is the other BSS vendors, what we have to do is compete against some of the people who don't have specialization in the platform like we have. So we may never be able to compete against a large SI or large Indian outsourcer, who really just brings very low-cost body or human capital costs.

What we bring is specialization that we've proven with these clients that we have worked with that brings value to them, because we know the product. And then it helps them think about how they run their operations better. And those are the type things that have driven MTN to engage with us, and Telstra, and again as I commented to Spencer, was to have these clients say, you've done so well here, here is some other areas where you could help me take and streamline my operations and take cost out, and use your platform really as the recipient of the operations.

And so that coupled with some other clients that we are chasing, and there are new opportunities where we pitch when it's a new client, the opportunity for us to operate it. But it is our expertise around our product that keeps it out of a traditional competitive environment, as well as going back to our existing clients.

Got it, perfect. Thank you.

And at this time we have no further questions in the queue. I'll turn things back over to our host for any additional or closing remarks.

Sure, thanks Matt. And for all those who have joined us on the call, I want to thank you for investing your time today with us. We are very excited about the business, we are excited about we have accomplished in 2014, and how it leads us to 2015 and 2016 and beyond. And we think that shows in our confidence in our capital plan that we presented, and that we are activating. So we look forward to continued success. It's really interesting market we serve, and we look forward to sharing our successes with you.

Again this does conclude today's conference call. Thank you for your participation.