The Ultimate Software Group, Inc. Q2 2009 Earnings Call Transcript

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2009-07-28 19:54:11.0

Tags: Ultimate Software, Call Transcript, Earnings, Services Revenue, Operational Accounting, Team Management, Personal Finance, Financial Accounting, Finance, Management, Seeking Alpha

Question-and-Answer Session

Operator

(Operator instructions) And we will go first to Richard Baldry with Canaccord Adams.

Richard BaldryCanaccord Adams

Thanks. As a strong cash generating quarter and we saw the buyback was ultimately touched, could you talk a little bit about your thoughts on that side of the table, and then maybe qualitatively talk about where you feel your team is in sales in relation to the quarters at this point in the year? Thanks.

Mitchell Dauerman

Rich I mean cash flow, we had stronger and been better than expected earnings for the quarter. On second, we had better cash projections, good quality AR that is remaining, and the third is on the capital expenditure side, we then were been able to manage to keep our customers happy to do the right things and we have spent less in CapEx.

Scott Scherr

Both teams are doing well and they expect we are going to achieve our goals this year and as I mentioned in my prepared remarks, we there position for 2010.

Richard BaldryCanaccord Adams

On the cash flow side, could you talk about that in relation to the possibility of going back into an active buyback mode? Thanks.

Mitchell Dauerman

Yes, we had an active buy back program. We intend to be active by this company.

Richard BaldryCanaccord Adams

Thanks.

Operator

And we will go next to Michael Nemeroff with Wedbush.

Michael NemeroffWedbush Morgan Securities

Hi guess thanks for taking my questions. Just on the services revenue, obvious it was under pressure this quarter, how much of the services revenue are discretionary as you mentioned and how much of it is necessary for implementations. I guess what I'm trying to get at is, should we see the slowdown in services revenue as an issue with the slowdown in ARR or bookings because mu understanding is all the services revenue is implementation related? And then I have a follow-up.

Mitchell Dauerman

Yes Mike. I don't have the exact percentages, but services revenues consist of implementation, which are both to new customers, which we mentioned before. You know our customers share how much of the implementation. They are going to do we are going to do, so there is a little bit of discretionary there as to how much they want to contribute to the process and stay on track. There is also training, services and then there is a back to the implementation, there are additional services that our customers buy. You know to write more reports to do more inter-phases to do other things.

 

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