Park City Group Inc. (NASDAQ:PCYG) Q4 2020 Earnings Conference Call - Final Transcript

Greetings and welcome to the Park City Group Fiscal Fourth Quarter and Full Year 2020 Earnings Call. At this time, all participants are in a listen-only mode. The question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Rob Fink with FNK IR. Mr. Fink, you may begin.

Thank you, operator, and good afternoon everyone. Thank you for joining us today for Park City Group's fiscal fourth quarter and full year 2020 earnings conference call. Hosting the call today are Randy Fields, Park City Group's CEO and Chairman; and John Merrill, Park City Group's CFO. Before we begin, I would like to remind everyone that this call could contain forward-looking statements about Park City Group within the meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are statements that are not subject to historical facts. Such forward-looking statements are based on current beliefs and expectations. Park City Group management are subject to risks and uncertainties, which could cause actual results to differ from those forward-looking statement. Such risks are fully discussed in the company's filings with the Security and Exchange Commission. The information set forth herein should be considered in light of such risks.

Park City Group does not assume any obligation to update information contained in this conference call. Shortly after the market closed today, the company issued a press release over-viewing the financial results that will be discussed on today's conference call. Investors can visit the Investor Relations section of the company's website at parkcitygroup.com to access this press release.

With all that said, I now like to turn the call over to John Merrill. John, the call is yours.

Thanks, Rob and good afternoon everyone. Today we report financial results for the fourth fiscal quarter and full-year fiscal 2020 ending on June 30. Jumping right in, the annual results reflect recurring revenue for our software business grew 13%; recurring revenue for the software business is 98%. Marketplace revenue grew 62%. We grew Tier 2 customers 75% from 60 in 2019 to 105 in 2020. Cash from operations was 4.2 million. We have the strongest balance sheet in the company's history and recognize continued profitability. I am pleased with what we are able to achieve given the circumstances.

For the full year, total topline revenue was down 5% due to our planned transition, a one-time software revenue in favor of SaaS or recurring revenue. This was part of our stated strategy. However, as you will see in the fourth quarter, we delivered top and bottom line growth while simultaneously strengthening our balance sheet and generating increasing free cash flow despite significant uncertainty and challenges given the COVID environment.

Before we get into the numbers, I believe it is important to reiterate that we have three legs of the stool or products told in two different ways. First, we have a Software as a Service business or SaaS, which includes our compliance and