Bottomline Technologies (de), Inc. (NASDAQ:EPAY) Q3 2018 Earnings Conference Call - Preliminary Transcript

May 03, 2018 • 05:00 pm ET


Bottomline Technologies (de), Inc. (NASDAQ:EPAY) Q3 2018 Earnings Conference Call - Preliminary Transcript


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Ladies and gentlemen, thank you for standing by and welcome to the Bottomline Technologies Third Quarter 2018 Earnings Conference Call.

Statements made on today's call will include forward-looking statements about Bottomline's future expectations, plans and prospects. All such forward-looking statements are subject to risks and uncertainties. Please refer to the cautionary language in today's earnings release and Bottomline's most recent periodic reports filed with the SEC for a discussion of the risks and uncertainties that could cause the company's actual results to be materially different from those contemplated in these forward-looking statements. Bottomline does not assume any obligation to update any forward-looking statements.

During this call, Bottomline's financial results are presented on a non-GAAP basis. These non-GAAP results include, among others, constant currency growth rates, 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, 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 turn the conference over to our host, Mr. Rob Eberle. Please go ahead.

Robert A. Eberle

Good afternoon. Thank you for your interest in Bottomline Technologies and welcome to the third quarter fiscal 2018 earnings call. I'm delighted to report on what was an excellent quarter for Bottomline. I'm here with Rick Booth, our Chief Financial Officer. Rick will provide a detailed review of the quarter's financials and our guidance. And as always, both Rick and I will be available for questions following his remarks.

The third quarter was an excellent quarter. I'm delighted with the financial results we're reporting. 21% subs and trans revenue growth, $23 million EBITDA, strong bookings, and we're tracking the $90 million EBITDA for FY 2018.

I'm even more excited about the future prospects for the business. Our market opportunity, product set and business model are all aligned. We're winning new business and the lifetime customer value of the new customers we're bringing on is significant, ensuring growth for years to come.

For a year ago, we committed FY 2019 targets of $300 million in subs and trans revenue and $100 million EBITDA. At the time, those targets may have seemed aggressive, but we had a high confidence we'd achieve them. In the fourth quarter since we have consistently executed exactly as we said we would. The results for Q3 in the first nine months of FY 2018 show on track to meet or exceed our $300 million and $100 million FY 2019 targets.

I'm going to focus my remarks today on three important topics: Our market opportunity, which is large; our product set and why we are consistently winning; and our business model, which produces long, more profitable and growing revenue streams.

Before doing so, let me touch briefly on the financial highlights of the quarter. Subscription and transaction revenues grew 21% in the third quarter. Subscription and transaction