Bottomline Technologies (de), Inc. (NASDAQ:EPAY) Q2 2015 Earnings Conference Call - Final Transcript

Jan 29, 2015 • 05:00 pm ET

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Bottomline Technologies (de), Inc. (NASDAQ:EPAY) Q2 2015 Earnings Conference Call - Final Transcript

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Presentation
Operator
operator

Ladies and gentlemen, thank you for standing by and welcome to the Bottomline Technologies Second Quarter 2015 Earnings Conference Call. (Forward Looking and Cautionary Statements) During this call, Bottomline's financial results are presented on a non-GAAP basis. These non-GAAP results include, among others, gross margins, operating income, EBITDA, net income and earnings per share. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures is available in the Investor Resources section of Bottomline's website, www.bottomline.com.

Bottomline will be providing forward-looking guidance on the call. A summary of the guidance provided during the call is available from the company upon request.

I would now like to turn the conference over to our host, Mr. Rob Eberle. Please go ahead.

Executive
Rob Eberle

Good afternoon. Thank you for your interest in Bottomline Technologies, and welcome to the second quarter fiscal 2015 earnings call. I am delighted to report on what was a great quarter for Bottomline Technologies. I am joined by Kevin Donovan, our Chief Financial Officer, who will provide a detailed review of the quarter's financial results, our guidance going forward, and then both of us will be available for questions following Kevin's remarks. Results for the second were outstanding. Financial performance underscores our ability to execute and confirms our strategic plan.

The outlook for our business has never been better. We are committed to building a large subscription and transaction business with expanding profit margins. We are committed to driving shareholder return and we are confident our plan will do so. My commentary in this call will be more detailed than the past and in an effort to give investor a better understanding of several key aspects of our business. Some aspects of our strategy and opportunity were not conveyed as well as they may have on our last call. As a result, there is a significant difference between our true market opportunity business model strength and current and future financial results and investor perception of those same factors.

I take responsibility for that and with today's call hope to answer the key questions and clear up the misconception of about Bottomline's business results, trajectory and future. In addition to the Q2 results

Executive
Rob Eberle

I will cover strategic market investments, particularly the total available market opportunity and benefits to be derived, the milestones by which we will measure those investments and our view of the forward revenue opportunity. I will cover our recent Intellinx acquisition, how the technology fits our markets, the purchase price; our transition of the revenue model, our expected future revenue growth and the key milestones. Finally, I will cover profit margin growth, particularly the duration of our investments and the time-frame within which we will see expanding operating margins. Turning first to the financial results for the second quarter, the key results for the quarter were as I indicated at the opening, outstanding.

Subscription and transaction revenues grew 23% and are now $170 million on an annualized basis. Our focus is on growing a valuable subscription and