Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the CSG Systems International, Inc. Third Quarter 2022 Earnings Conference Call. I would now like to turn the conference over to John Rea, Head of Investor Relations. Please go ahead.

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.

Thanks, John. Hi, everyone. We appreciate you joining the call today as we get started on Slide 4. We are extremely proud to share that Team CSG delivered excellent results in Q3. Revenue grew 3.8% year-over-year and 4.2% sequentially quarter-over-quarter due to solid organic revenue growth. Our success is driven by strong market demand for CSG's industry-leading SaaS products and impressive sales results. We continue to attract significant new customers across various faster-growth industry verticals. Annual contract value sales bookings increased over 10% year-over-year in both Q3 and year to date. These sales wins signal CSG's potential for ongoing revenue growth in Q4 and a strong start to 2023. Even more exciting for investors is the speed and discipline we showed in Q2 and early Q3 to navigate some challenges we faced earlier this year. The strategic actions we took to prioritize every dollar for revenue growth and customer commitments resulted in one of the most profitable quarters in recent memory with an 18.3% non-GAAP adjusted operating margin, well above our revised guidance range of 16.2% to 16.7%. In fact, our non-GAAP adjusted operating margin for the first 9 months of 2022 reached 16.6% year to date, which is nearly at the high end of our revised guidance range for profitability. If anyone doubted CSG's ability to adapt and thrive in today's tough economic climate, we believe Q3 should alleviate those concerns. CSG is performing exceptionally well, and the most exciting part of our story is that we are just getting started. We fully expect our strongest top and bottom line growth is still ahead as we continue the transformation of CSG. With this positive momentum, we are pleased to reaffirm our 2022 revenue, profitability, and EPS guidance targets set at our last earnings call. As Hai will discuss shortly, we anticipate full year 2022 financial results to meet or exceed the top end on several key metrics. We expect fiscal year 2022 revenue to reach near the midpoint of our original guidance for the year, which would be a commendable result in today's challenging economic environment. We aim to deliver at or above the top end of our revised guidance ranges on non-GAAP adjusted operating margin and non-GAAP EPS, thanks to the decisive actions we took to adjust our cost structure, along with the continued impact of our 2022 share repurchases. We expect robust CSG-like free cash flow in Q4, ranging from $45 million to $60 million, which should boost confidence that CSG will remain focused on strong cash generation and healthy revenue growth. I will provide more details on our 2022 cash flow shortly. I want to thank every CSG team member for bringing more joy, inclusion, and impact to your work every day. Your energy and efforts contributed to fantastic Q3 results for our customers and for CSG. We will continue investing in our people, products, and customers to grow faster and impress leading brands worldwide. As we do this, we will also seek a higher and more disciplined return on every dollar we invest. This approach is what will enable CSG to enhance our operating leverage and accelerate our profitable revenue growth. During the quarter, we celebrated several exciting customer wins. As anticipated, by the end of Q3, we have migrated about 75% of the Charter subscribers from a competitor's billing system, with the remaining migrations expected to complete in the next 6 months. In South Africa, we expanded our presence by securing a valuable digital transformation initiative with a leading telecom operator, displacing an incumbent competitor. In new industry verticals, we won substantially more business with one of the top 3 pharmacy retailers in the U.S. to enhance their digital customer engagement. Moving to Slide 5, I will reiterate four strategic objectives that will help CSG create more shareholder value and allow followers of our story to track our progress. CSG aims to achieve long-term organic revenue growth in the 2% to 6% range, consistently targeting the midpoint of this range, along with highly disciplined and strategic inorganic growth. We aim to increase operating scale and expand our operating leverage by growing both top and bottom lines by over 50% to $1.5 billion in revenue by year-end 2025. We strive to become the top SaaS provider of choice for global communication service providers by offering the most valuable technology platforms and being easier to work with than our competitors. Lastly, we plan to diversify revenue further as we expand in larger, faster-growth industry verticals through increased direct sales and channel partner success in retail, government, financial services, healthcare, technology, and beyond. Moving to Slide 6, you can see that we have performed well in the first 9 months against all four objectives. On strategic revenue growth, we reported $800 million in total year-to-date revenue through the first 9 months of the year, resulting in 4.2% quarter-over-quarter growth. On the right side of Slide 6, we believe that CSG's high recurring revenue SaaS business model and our strong, healthy balance sheet make us an attractive option amid macroeconomic uncertainty. By 2025, we aim to gain scale in our competitive markets and generate over $1.5 billion in annual revenue, implying that CSG will add more than $500 million in profitable recurring revenue by 2025. We aspire to enhance CSG's operating leverage and leverage our strong balance sheet to deliver non-GAAP EPS growth that meets or exceeds revenue growth, just as we did in Q3 and for the full year-to-date 2022, even with the margin pressures we faced in the first half of the year. A key principle for the CSG Board of Directors and management team is that our focus is on creating shareholder value and growing profitable revenue, not on building empires or unnecessary additions. We will maintain a disciplined mindset and demand high returns on invested capital as we explore various strategic options to create more value. Turning to Slide 7, we had notable successes in Q3 in our goal to be the leading technology provider for communication service providers worldwide, and our continued achievements with both North American and global CSPs demonstrate that we are executing effectively against this strategic priority. In Q3, CSG experienced 5% sequential quarter-over-quarter revenue growth combined with our two largest North American cable broadband customers, partly due to ongoing subscriber migrations and additional spending on related services, and we secured more business in the global telecom market. At the start of Q3, we inked a significant deal with a leading telecom operator in Latin America and the Caribbean. This agreement underscores the strength of our comprehensive offering for global CSPs. It includes our leading revenue management solution, CSG Encompass product catalog, and our CSG Xponent customer engagement offering. This is a prime example of how we are supporting the world's largest telecom operators in addressing their backend revenue management needs while enhancing front-end customer engagement to deliver exceptional digital experiences. In South Africa, we expanded our business by winning a major new digital transformation deal with a leading wireless operator, effectively displacing a competitor to become this operator's chosen provider for wholesale charging and monetization. During the quarter, we launched CSG Xponent Ignite, featuring over 100 prepackaged customer experience journey templates, connectors, and reports to enhance outcomes for communication service providers, financial services, retail, healthcare, and life sciences. This leading SaaS platform results in quantifiably improved business outcomes, enhancing customer conversion, engagement, and loyalty across digital channels. What does this mean for brands in various industry verticals? Affordable entry points, rapid launches in 90 days or less, transformation of customer data into actionable insights, and quicker returns on investment. Our investment in this innovative digital customer engagement SaaS platform continues to yield strong sales in diverse industries. We secured a key win for our Xponent suite of products with a major pay-TV company. In today's streaming landscape, where competition is fierce, CSG is offering fresh strategies to engage, retain, and grow customers. Our customer journey orchestration tool will help this client enhance their already award-winning customer satisfaction in various scenarios, including how consumers experience promotions. Transitioning to Slide 8, since 2017, CSG has seen revenue from exciting new industry verticals rise from 7% of total CSG revenue to 25% in Q3 2022. Becoming the partner of choice for major brands in higher-growth sectors, where we assist them in digitizing and modernizing their customer engagement and integrated payments, remains a game changer for CSG and our clients. Last year, we secured and later expanded deals with two of the largest pharmacy chains in the U.S. and one of the largest global retailers, who selected CSG software to enhance their retail and clinical customer engagements. Our solution is increasingly critical to all three of these large clients, given the unprecedented number of inbound requests healthcare providers, retail pharmacies, and government agencies are handling concerning vaccinations, appointments, and prescriptions. I'm pleased to announce that in Q3, we secured a significant expansion of our partnership with one of the top 3 U.S. pharmacy chains. Specifically, our CSG Xponent suite will power crucial engagement programs for this brand, including for their storefronts and loyalty rewards initiatives. Additionally, our solution will provide customer engagement intelligence, enabling this retailer to gain valuable insights into individual consumer experiences. Two other excellent digital customer engagement wins from this quarter occurred in the healthcare sector. Exact Sciences, a company focused on early-stage cancer detection, enlisted us to help digitize their customer experience and implement our customer journey orchestration tool, which allows them to offer a more tailored patient experience. We also celebrated a significant victory with eClinicalWorks, a cloud-based healthcare software firm dedicated to improving healthcare outcomes. eClinicalWorks is utilizing our solutions to enhance patient engagement while digitizing and creating new customer journeys. In the payments sector, our growth is a testament to our industry-leading SaaS integrated payments platform. CSG Forte supplies award-winning payment solutions to nearly 95,000 active merchants and ISV partners requiring ACH, credit, payment gateway, and payment processing services spanning a wide range of recurring revenue industries. As a leader in ACH processing, we continue to scale by onboarding ISV partners in fast-growing sectors like property management. Looking ahead, we have developed an exciting sales pipeline in our payments segment, which we believe will sustain solid double-digit organic revenue growth. Before concluding, let me provide insight into our aspirations for 2023 ahead of our detailed financial guidance announcement in February. With strong sales bookings and customer retention results, we expect organic revenue growth next year to surpass our 2022 performance, aiming for the midpoint of our 2% to 6% organic revenue growth goals. We anticipate that our non-GAAP adjusted operating margin performance will continue into next year, and we foresee good cash flow building on our Q4 results. Specifically, we also plan to cut our CapEx spending in 2023 by over $10 million from the approximately $35 million we plan to invest this year to ensure CSG's cash flow remains robust and healthy. To conclude on Slide 9, I hope you can see why Team CSG is so enthusiastic about our outlook. We will do whatever it takes to convert today's challenges into tomorrow's breakthrough results. We are attracting, retaining, and nurturing the best and most diverse talent in the industry. We are thinking bigger every day. We are transforming the industries we serve. Our strong sales win rate confirms that the market desires more of what CSG has to offer. Our optimism is not based on wishful thinking; it is supported by a relentless dedication to consistently excel. If any aspect of our business falls short of our high expectations, you will witness CSG's accountability, resilience, agility, and operational intensity mobilizing, just as we did in Q3 to significantly enhance our non-GAAP adjusted operating margin to 18.3% and achieve non-GAAP EPS growth of 20.5% year-over-year. While we are thrilled by these impressive results, we firmly believe that our employees, customers, and investors have only begun to experience the rewards of the value we will create in the upcoming quarters and years. So please stay tuned to CSG because you haven't seen anything yet. And with that, I'll turn it over to Hai to provide more detail on Q3 and year-to-date 2022 results.

Thanks, Brian. Let's walk through our third quarter and year-to-date financial results, and then I'll wrap it up with some key conclusions. Starting on Slide 11, we generated $273 million of revenue and $255 million of non-GAAP adjusted revenue during Q3. These results represent 3.8% and 3.3% year-over-year growth, respectively. For Q3, our increase in revenue and non-GAAP adjusted revenue was mainly attributed to the continued growth of our revenue management solution as approximately 3/4 of the increase was attributed to organic growth. This growth was in the face of 3% to 5% discount headwinds for 2 of our 3 largest customers. Our Q3 non-GAAP operating income was $47 million, or 18.3% of non-GAAP adjusted revenue, as compared to $42 million, or 16.8%, in the same prior year period. The increases in non-GAAP operating income and non-GAAP operating income margin can be mainly attributed to higher revenue along with the timely operating margin improvement initiative we took in Q2 and the beginning of Q3. Specifically, we have seen margin benefits from our decision to dissolve our controlling interest in MobileCard, a Latin American business that was focused on creating solutions for the underbanked in the region; a continued streamlining of our office space footprint; a rationalization of our headcount and hiring practices; and the strengthening of the U.S. dollar to most international currencies. We now expect full year non-GAAP adjusted operating margin to be at or above the high end of our previous guidance of 16.2% to 16.7%. This does imply that our Q4 non-GAAP adjusted operating margin will be down sequentially, primarily due to an increase in employee bonus related compensation due to our improved profitability performance in the second half of 2022. Moving on, our non-GAAP adjusted EBITDA was $60 million for Q3, or 23.5% of non-GAAP adjusted revenue, as compared to $56 million or 22.8% in the same prior year period. Lastly, our Q3 non-GAAP EPS was $1.06, a 20.5% year-over-year increase as compared to $0.88 in the prior year period. In addition to this result being positively impacted by our increased profitability in Q3, it also benefited from our share repurchase activity over the last 12 months. Turning to Slide 12. I'll go through the balance sheet, our cash flow generation, and shareholder return. Our Q3 2022 cash flows from operations was $23 million as compared to cash flows from operations of $46 million in the prior year period. Further, we had non-GAAP free cash flow of $11 million in Q3 2022 as compared to $39 million of free cash flows generated in Q3 2021. On a year-to-date basis, we saw free cash outflows of $22 million in 2022 as compared to free cash inflows of $66 million in the prior year period. The main drivers of the year-to-date year-over-year variance of free cash flows are related to certain items, which we believe are primarily timing related over the near to medium term. The drivers of these changes include: unfavorable changes in working capital, resulting primarily from the accrual of our 2022 annual employee bonuses, which are significantly lower than in the previous year and the timing of payment of employee wages; higher tax obligation, of which the primary negative impact was from Section 174 of the 2017 Tax Cuts and Jobs Act, which deals with the amortization of R&D spending beginning in 2022. As a result of this, we will not get the previously anticipated amount of tax deduction benefit related to our R&D investment in 2022. We had previously expected this legislation to be repealed, but because the legislation is not repealed, we now anticipate higher cash taxes going forward. However, over a 5-year period, we believe this tax change will be neutral to our free cash flow generation. Slightly elongated cash conversion cycles from a couple of our recently signed large global telecom new logo wins that will result in good long-term profitable revenue as we continue to gain market share from competitors. And the negative cash impact of our operating margin improvement plan that we initiated in Q2 that included increased restructuring charges, continued streamlining of our office space footprint, headcount reduction, and enhanced scrutiny regarding new hires. The cash flows generated from operations before changes in working capital in Q3 of 2022 were $36 million compared to $42 million in Q3 of 2021. Similarly, on a year-to-date basis, cash flows generated from operations before changes in working capital were $122 million as compared to $134 million in the prior year period. Importantly, absent the aforementioned impact from Section 174, we would have shown positive growth in cash flows from operations before changes in working capital during the first 9 months of 2022 on a year-over-year basis. Moving on, we ended the third quarter with $147 million of cash and short-term investments. That, along with our outstanding debt at September 30, 2022, results in $285 million of net debt, and our net debt leverage ratio sits at 1.2x. Moving to the bottom right of the slide, we declared $25 million in dividends during the first 9 months of 2022. In addition, we repurchased $66 million of common stock under our stock repurchase program. In total, we returned $91 million to our shareholders through the first 9 months of this year. On the right-hand side of Slide 13, you can see our latest 2022 guidance outlook. We are pleased to reiterate our 2022 revenue, profitability, and EPS targets. Additionally, we now expect to come in close to the midpoint of our original 2022 revenue guidance and to come in at or above the high end of our adjusted operating margin and non-GAAP EPS range. As Brian alluded to earlier, we are also revising our 2022 free cash flow expectations. While we expect to deliver strong CSG-like Q4 free cash flow in the range of $45 million to $60 million, which is similar to our Q4 2021 free cash flow result of $48 million, the full year 2022 cash flow is expected to be between $25 million and $40 million for the full year due to some operating optimization actions and factors impacting timing. The reduction from our previous guidance are primarily driven by the aforementioned slightly elongated cash conversion cycle from a couple of our recently signed large global telecom new logo wins, increased restructuring and severance costs related to our operating margin improvement initiatives, and increased cash spend related to certain business inventory in a tight supply chain environment and other timing-related items. With respect to 2023 free cash flow, this is a major focus for the CSG leadership team, and we expect significant improvement over our 2022 results, primarily due to the cash collections from the aforementioned timing headwind. Additionally, we will see an approximately $10 million reduction in CapEx spend next year as our 2022 spend was elevated due to modernization investments to drive improved efficiencies and forward buying of IT-related equipment. Also, with respect to 2023 free cash flow, please keep in mind that we do have a few headwinds, including the continued impact from Section 124 and cash outflows related to restructuring charges incurred in 2022, stemming from our operating margin improvement plan. As we look to the long term, the cash generation of the business has not changed, but we will experience some transitory cash flow drag over the near- to mid-term as the business digests the temporary impact of the change in tax treatment from Section 174, working capital timing, and the impact of the restructuring charges to ensure increased operating leverage over time. Going forward, the current challenging inflationary environment means we must relentlessly prioritize every investment we make, and be disciplined in the allocation of resources, including those around our new business ventures. Innovation and adherence to a risk/reward framework with continuous learning are 2 cornerstones of how we run the business. We remain devoted to a disciplined approach to managing our capital. In closing, our business is well positioned with a strong sales pipeline, robust sales bookings momentum, and extremely high-quality customer base and a very high percentage of committed revenue. We remain committed to accelerating our revenue growth and diversifying our industry vertical revenue, which may include closing and integrating disciplined, value-added acquisitions. Additionally, we are pleased with the results of our operating margin improvement initiatives to date, and we'll continue to be very careful stewards of our capital, especially in this uncertain environment. We believe this approach, combined with our consistent capital distribution in the form of both dividends and share buybacks, will serve our shareholders well. With that, I'll turn it over to the operator to facilitate the question-and-answer session.

The first question will come from the line of Matt Stotler with William Blair.

Maybe just first on profitability. It's good to see the results in the quarter and helpful commentary on how you're thinking about some of those dynamics you talked about last quarter. There's a couple other things you talked about last quarter that I'd love to get an update on as well. One would be the upfront staffing of deals, some of these large deals that you talked about in terms of where you're at in terms of the staffing process and how those heads are ramping to productivity? And then number 2 would just be the synergies from recent acquisitions. Would love to get an update there and how those are expected to realize the model going forward.

So on the staffing, first, these big projects gaining market share, big, complicated deployments, we are ramping up our staffing. We've been adding hundreds of technical staff all around the world. We like where the projects are going. As Hai commented on, we still see some inflationary pressure around that, which is why we're proud of the margin on how we were able to offset some of the inflationary wages. We continue to ramp. We continue to deliver the programs. And this is one of the real strengths of CSG where we differentiate from competitors, and we just got to keep going with the big successes we're having. Specifically on the integration, both culturally and from a financial standpoint on the acquisitions, we love what we're seeing on these. We've acquired good assets over the last 12 to 15 months. And you've seen us launch exciting new products in the market that's enabled us to both accelerate sales and revenue growth, but also that contributes to the profitability. And so we launched CSG Xponent. After we acquired Kitewheel, we launched CSG Encompass, an award-winning API-driven solution for global telecom with configure, price, quote, order management. We're seeing good market traction in sales, and we like what we're seeing. These are good gross margin businesses that also contribute to our healthy 18.3%. So integrations, these are part of CSG. They're CSG teams globally. They're fully integrated. And we like what we're seeing, and we just got to keep driving more sales wins.

Great. That's very helpful. And then maybe just one more from me. It was helpful the initial guidance, the outlook that you gave for 2023. Obviously, you guys have done a lot of work to establish a great renewal base and some of your largest customer contracts over the past couple of years. Would love to maybe get your thoughts, obviously, it's still early, but in terms of the new customer pipeline specific to new verticals, how is that layering into your expectations for growth going forward in the context of the macro uncertainty that we're seeing? Are you seeing any changing in spending behavior, prioritization, or timing when it comes to some of those new vertical customers?

Yes. This is probably one of the things that excites us the most in terms of what we're seeing in the business, both from market, market demand, and our sales pipeline and sales performance. We're planning as if there's going to continue to be storm clouds for the next year, but we actually see some of the best sales growth. We see some of the best revenue growth that we've seen in a long time, probably ever, in our business across all aspects. So on the global telecom space, on both the consumer side of wireless and enterprise, we see big growth in the market, and we like the pipeline, we like the sales win rate, we like the market share gains. We know there's challenges out there in the market, but we're not seeing that materialize in any dampening on our demand. If anything, we're just seeing accelerated growth. Same is also true in the new industry verticals. So when we talk about the CSG Xponent Ignite launch in the market, this is a customized solution for really starting out with 4 industry verticals, communication service providers, financial services, retail, healthcare life science, we're seeing fantastic market receptivity to our new market launch, and we're seeing just fantastic wins like the couple we announced in the life sciences space and like we announced with the big expansion of one of the top 3 U.S. pharmacy retailers. And that's largely up until now, we've been focused on proving this growth and market and sales success in North America. Now you're going to see us really start through channel sales and some targeted direct sales expanding globally because we just see the market demand for these solutions. So we are continuing to focus on driving that percentage of our revenue that comes from higher growth industry verticals. 25%, this quarter was a little over 26%, almost 27% last quarter. We expect that to continue as we diversify our revenue and win more exciting deals in these new verticals.

Your next question will come from the line of Greg Burns with Sidoti & Company.

Can you provide details on the sequential increase in revenue at Charter, specifically how much of that came from new subscribers compared to any additional services? Also, what insights do you have on the services that Comcast and Charter are introducing?

Greg, one thing I want to clarify. The 5% sequential growth was combined for both Charter and Comcast when you combine the revenue of both from last quarter to this quarter. And I would say a good portion of that was driven by some of the subscriber migrations and the expansion we did there. But we also saw a nice pickup in ancillary products and services and demand. So it really came from a combination, and we're excited about both.

Okay. And then the annual contract value, the bookings that you referenced, how long does it typically take for that to convert into revenue for some of those projects to scale up?

Yes. It really depends on which parts of our business it comes from. There are some that can activate the revenue within one to two months. There's others that then would go on a percentage of completion if the project is scheduled to be deployed over 12 to 18 months, then you would actually see revenue being spread either on the percentage of the completion, or if it's a SaaS deal, it would actually be spread over the length of that contract term on what it is. So it really varies. But one thing that we've had good success on is timely activation of new revenue and having high quality of our sales bookings actually convert dollar for dollar into actual revenue that drives the business. So it just varies. There's not really a better answer. Hai, is there anything else you'd add around that?

No. That's absolutely right. It will just vary depending on the solution and how we deploy those solutions by customer.

Okay. And then with the telecom win where you were displacing an incumbent, can you just talk about maybe the factors that enabled you to win that deal? What differentiated you and why you feel that you won that deal?

Sure. I think it's the same trends we've been talking about for the last several quarters. What we see in the global telecom market is, one, they've been under some pressure to recoup their investment in 5G. They've also been under some pricing and margin pressure, so they need to expand margin and offer an improved customer experience. And so what we see a lot of global telecom operators wanting to do, simplify their business process, move to a less customized platform, and move to a lower cost, more cost-effective platform that CSG offers, lowers costs, improves customer experience, high-quality conversions that makes their platform and their business more agile, and we're seeing a lot of global telecoms say, now is the time to switch. And we see that both on the consumer side of the business where CSG has a lot of strength, but we also see it on one of their fastest growing, more profitable segments in enterprise, which has been an area that CSG just excels at over the last 10 or 15 years. So it's really those drivers that we see driving it. And it's a way for them to respond to what their consumers and markets are demanding. And the more we win, the more we successfully deploy, the more they become our best sales references, that helps us win more. This is one of the areas that our market share gains we're most excited about across the business, along with our North American cable and these new industry verticals on digital customer experience.

Okay. So it sounds like, is there more RFP activity happening now? Are you noticing a greater willingness among telecom operators to issue an RFP and seek new solutions?

Yes. That's exactly right, Greg. I've been in the industry for two decades. I haven't seen a higher level of activity in my almost two decades in this industry in terms of telecom operators wanting to launch new business, revisit platform decisions, and being willing to change out their platforms. And it's coming from what's going on in the market. They need to accelerate revenue growth. They need to simplify their business. They need to take cost out. They need to recoup investment with their 5G charging and 5G investments in their network. And the market is extremely attractive, and we love what we're seeing in the market. With this, what do we have to do? We have to consistently win more and more of these big deals. We have to deliver extremely well and bring them the value that they're counting on. And then as we do that, we think this is something that will continue in the market in the coming quarters and years. We love what we're seeing on the demand side, notwithstanding some of the macroeconomic challenges that we all know are real. If anything, possibly some of those macroeconomic challenges are actually increasing demand for us exactly because of the value proposition we can bring them.

Okay. Just to clarify, are you saying that this goes beyond what you previously referred to as converting customers to managed service deals? Is this more about expansion rather than just switching to a different model for these customers?

Yes. This is us, CSG, winning market share. It's exactly right. CSG winning market share, helping large global telecom operators digitize their business, improve customer experience, and switch platforms from a competitor's incumbent platform to ours. And in many cases, it's not just replacing the monetization engine, it's actually selling other solutions around it. So, for example, the big win in the Caribbean and Latin America is, it was deploying our monetization solutions. It was also deploying CSG Encompass product catalog. It was also deploying CSG Xponent to improve the digital customer experience. So one of the things Hai has been talking about how we get operating leverage is doing a better job of cross-selling and up-selling inside of both new customers, selling them more of our full stack offer as well as cross-selling and up-selling inside the existing base. It's all of the above.

Our next question comes from the line of Matthew Harrigan with Benchmark.

You just alluded to gaining share in some rapidly growing TAMs like customer engagement and various verticals. But I'm curious how you see this environment affecting your competitors, whether it be some companies that are overextended, they're smaller, they don't have your balance sheet or some businesses that are more or less sidecars of larger companies that people might be tempted to rationalize in this environment. It feels like this environment is probably working in your favor, both organically and inorganically, if you can execute the way that you aspire to.

Matt, thank you for joining us and for your questions. From an organic perspective, we believe the market is working in our favor. Typically, when companies seek to reduce their operating expenses, it often leads them to consolidate their spending with fewer vendors. Our proven track record with mission-critical software means that even if companies are tightening their budgets, they are likely to cut back on competitors and focus their spending on those who provide the best value. This trend benefits us. Additionally, enhancing the digital customer experience has become essential for brands aiming to boost customer engagement and net promoter scores while reducing costs. With a reliable SaaS platform like CSG, we're well-positioned to help companies lower costs, enhance customer experience, and improve cross-selling and retention. This shift towards digital engagement works to our advantage on the organic growth side, and we are optimistic about demand levels for next year, expecting growth to exceed what we achieved in 2022. On the inorganic side, the situation is somewhat mixed. We believe our strong balance sheet provides us the flexibility to act quickly when a favorable acquisition opportunity arises, allowing us to integrate potential targets effectively. However, if we find the pricing unattractive, we can afford to wait, which may put pressure on companies that are less financially stable, especially as higher interest rates affect them over time. The mixed aspect comes from buyers considering the potential risks over the next few quarters and remaining disciplined, which aligns with our approach. We still see attractive options among sellers who may not be able to receive the same valuations as a year ago, creating a contrast between disciplined buyers and sellers eager to make deals. We believe time is on our side, and we intend to remain disciplined while being ready to act when an acquisition opportunity aligns with our goals.

And how much are you seeing from the inverse dollar play effect? Because I know you've got a number of software engineers and other people in some markets like India and you're probably even while you're directly benefiting a little bit from the strength in the dollar when you look at things from that perspective.

Yes. I think that the strengthening dollar, generally speaking, hurts our top line because it's a headwind for us. We still have roughly 15% of our revenue now comes outside the U.S. But you're right, we have made some broad-based investments in technical resources outside the U.S. that we did benefit from that. I think we called that out in our prepared remarks. But that is something we're continuing to monitor. It is a lever for us to drive efficiencies over time regardless of what currency does.

We have no further questions at this time. I'll turn the conference back over to management for any closing remarks.

Thanks so much. Thanks for joining the call today. Hopefully, you can tell we're excited about the focus. We're laser-focused, faster growth, more discipline, driving better and better non-GAAP adjusted operating margins, delivering on strong cash flow in Q4, and building momentum so the 2023 is even better, faster growth, and better results across the board than what we're going to deliver when we finish a strong 2022. Thank you for joining us tonight.

Ladies and gentlemen, that concludes today's meeting. Thank you all for joining. You may now disconnect.