CSG Systems International, Inc. (NASDAQ:CSGS) Q4 2023 Earnings Call Transcript

CSG Systems International, Inc. (NASDAQ:CSGS) Q4 2023 Earnings Call Transcript February 7, 2024

CSG Systems International, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: 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. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the call over to John Rea, Treasurer and Head of Investor Relations. John, please go ahead.

John Rea: 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.

Brian Shepherd: Thanks, John. Hi, everyone. We appreciate you joining the call as we begin on Slide 4. 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. 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.

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 growth 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 1 and Scope 2 emissions by 2035. In 2023, we issued our inaugural Impact Report, which showcases our initiatives around ESG, diversity, inclusion and global community impact.

In 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 a AA rating from MSCI, a step-up from the BBB rating we received two years ago. And we recently ranked in the top 10% of our software peers according to Sustainalytics and 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 then 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 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 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. Further, we foresee profitability as measured by our adjusted operating margin percentage remaining strong with a range of 17% to 17.4%. 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 on our full year 2024 guidance outlook, but investors can be confident that 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 5, I will reiterate the four strategic objectives that will help CSG create greater shareholder value and allow followers of our story to track our progress. 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 closed 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 bottom line growing as faster, 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 SaaS provider of choice for global communication service providers by providing the most value adding technology platforms and by helping our customers make more money in the digital world. And finally, we plan to diversify revenue even more as we win big in faster growth industry verticals like retail, government, financial services, healthcare, technology and more. Moving to Slide 6 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 the CSG’s high recurring revenue SaaS business model and our strong, healthy balance sheet make us an attractive investment.

By 2025, we aspire to gain scales 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. Over the medium- to long-term, we aspire to expand CSG’s operating leverage and use our strong balance sheet to deliver non-GAAP EPS growth that meets or exceeds revenue growth. On this last point, I want to reinforce the 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 7, 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 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 us. 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 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 to less than 40% of our total revenue for the first time in the last two decades. CSG’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 growth industry verticals. On the new wins front, Team CSG 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 ten 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. 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 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. 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 their 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 unit. 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. 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. CSG was selected to modernize their B2B BSS stack and importantly, this deal highlights the strength of CSG solutions as we are replacing our main competitor. And we have 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 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 good 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 offerings. 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 digital multi-channel communication strategy in a streamlined, effective, and scalable manner.

We also won 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. 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 in the voice channel in every country where this company operates. This is an excellent example of how CSG’s AI driven digital CX SaaS 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. What is truly phenomenal about this deal is that marks the first time we’ve sold our Ascendon SaaS 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 Ascendon product. CSG Ascendon 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 SaaS 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. 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 our organic revenue growth even faster in 2024 and beyond. I will wrap up on Slide 9 before turning it over to Hai. Simply put, CSG delivered record setting results in 2023. 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 healthcare, financial services, retail, tech and government. And we continue to demonstrate our commitment to run our business more efficiently as we consistently improve non-GAAP adjusted operating margins and free cash flow generation. So our message to our three key stakeholders are clear 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.

To 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, faster recurring revenue growth, improved operating leverage, more free cash flow generation and exciting industry vertical diversification are what this management team and our board of directors will hold ourselves accountable to, and we will do it with the high integrity, focused execution and good governance that you have always expected from CSG. With that, I will turn it over to Hai.

Hai Tran: Thanks, Brian. 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 conversions of customer accounts onto CSG solutions, strong year-over-year growth in our digital customer experience solutions, and increased payments volumes. 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 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%. Our 2023 non-GAAP operating income was $186 million or 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. Moving on, our 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, 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 repurchases, partially offset by higher interest rate expense and adverse foreign currency movements. Turning to Slide 12, I’ll go through the balance sheet, our 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. The primary driver of this increased cash flow performance was favorable working capital changes. 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 with 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-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 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 initiatives in Q2 of 2022, which continues to benefit our shareholders with 2023 operating margin coming in strong at 17.2%.

Put simply, when we see ways to enhance our operating and financial performance, we will nimbly find 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, freeing up our revolver for future M&A and giving our balance sheet a better mix of fixed and floating rate debt, plus equity shareholders who will experience no equity dilution until our share price reaches approximately $96.50. As a reminder, we raised $425 million of convertible debt with a 3.875% coupon and repaid $275 million on our revolver. Further, we ended the fourth quarter with $186 million of cash and cash equivalents.

That, along with our outstanding debt at December 31, 2023, results in $372 million of net debt and our net debt leverage ratio sits at 1.5 times adjusted EBITDA. Moving to the bottom right of the slide, we declared $34 million in dividends during 2023. In addition, we repurchased $117 million in stock during 2023 under our stock repurchase program. Turning the page, I would lay out our 2024 guidance. Starting with the top line, we expect our organic revenue before the impact of any acquisition to range from $1.2 billion to $1.24 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% of our full year revenue. While we expect 51% to 52% of our revenue to be generated in the second half.

As a reminder, our strong revenue and profitability in Q1 of 2023 was enhanced by highly profitable onetime licensing revenue, which we generated from a few of our global telecommunications customers. 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 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. We believe this non-GAAP adjusted operating margin guidance range demonstrates Team CSG 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 the range of non-GAAP free cash flow to be $95 million to $135 million with a guidance range midpoint of $115 million. Additionally, we expect capital expenditures to come in between $25 million to $35 million. 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 issue and the adherence to a risk reward framework with continuous learning are key cornerstones of how we manage the business.

CSG is well positioned with a strong sales pipeline and a 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. 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 question-and-answer session.

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Q&A Session

Operator: Thank you. [Operator Instructions] Okay. It looks like our first question comes from the line of Maggie Nolan with William Blair. Maggie, please go ahead.

Maggie Nolan: 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 are acquisitions a really important part of further diversification from here?

Brian Shepherd: Yes. Hi Maggie. Hope you’re doing well. I love the question. We are highly confident that we can continue to diversify the revenue into new faster-growing verticals organically. I mean we continue to report the strong double-digit revenue growth, the strong sales bookings, the 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. The win that we announced with a large financial service provider, one of the leaders in APAC, which is the first for our cloud-based Ascendon 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 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, 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’re seeing.

Maggie Nolan: That’s really helpful. Thank you. And then on the margin range that you gave for the year, it’s 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, Hai mentioned in your remarks about some of the nonrecurring 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.

Hai Tran: Yes. Sure, Maggie. One, I think we, the guidance we gave, 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 high end [ph] 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. 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 growth.

Brian Shepherd: Maybe the only thing I would add, you mentioned a little bit about quarterly spread. You will see, as you heard in Hai’s remarks, Maggie, you’ll see a more traditional CSG like spread, 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 spread, but we expect strong profitability for all four quarters.

Maggie Nolan: Got it. Thank you.

Operator: Thank you, Maggie. And our next question comes from Matthew Harrigan with Benchmark. Matthew, please go ahead.

Matthew Harrigan: Thank you. Thanks for the encouraging outlook and information on – all strategic initiatives. But sort of, I guess, mundane, on Q1, you talked about the difficult comparisons, 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? Thanks.

Hai Tran: Yes, Matt, thanks for the question. So last year, as we’ve highlighted throughout the year, we did benefit 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 its – they were roughly about $10 million of 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 16%, around 16.5% or so.

Matthew Harrigan: Okay, that’s very helpful. Thank you.

Hai Tran: Thank you.

Operator: Great. Thanks, Matt. Our next question comes from the line of Greg Burns with Sidoti & Company. Greg, please go ahead.

Greg Burns: Good afternoon. So when you think about fixed wireless penetration, I know 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 was core cutting, broadband is 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 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?

Brian Shepherd: Yes. Now, thanks, Greg. Hope you’re doing well. 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 the 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 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. And point two is to remember that there is a tiered pricing in this. 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 didn’t – 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 picked up a lot of land mass, 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, 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 one of our fastest-growing areas is in global telecom. So we also serve multiple players in North America and around the world. So it doesn’t mean that there is not some of those headwinds in storm clouds. But like you saw us in 2023, we grew through it 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.

Greg Burns: All right. Great. Thanks.

Operator: Great.

Brian Shepherd: Thanks, Greg.

Operator: Thanks, Greg. And our next question comes from the line of George Notter with Jefferies. George, please go ahead.

George 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. Obviously, AI is going into lots of products and across the marketplace. What can you tell us about anything you’re seeing that’s new or different there in the last three months? And then, again, progress with Bill Explainer. Thanks.