RealPage Inc Q4 2019 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Daniel Robert Bergstrom - RBC Capital Markets, Research Division - Analyst : It's Dan Bergstrom for Matt Hedberg here. See the initial organic growth rate outlook for 2020 is impressive, I think 10% to 12%, 100 to 300 basis point acceleration, as you mentioned. Could you just highlight a couple of things here that have changed over the last several quarters that really have you in a better position to execute on that 10% to 12% growth rate here versus previously?

Question: Daniel Robert Bergstrom - RBC Capital Markets, Research Division - Analyst : That's great, Steve. And maybe more specifically on one of those potential organic drivers. In the prepared remarks, you talked about Buildium traditionally purchasing outside value-added services. I think those would be things such as payment, screening, things like that. I'm assuming those haven't contributed much from a financial perspective. And it sounds like you're expecting more profitability with the attach of RealPage value-added services. Is there any way to get a sense of the potential magnitude of that opportunity? Is there a way to measure it as potential ARPU uplift per unit or building or something like that?

Question: Ryan John Tomasello - Keefe, Bruyette, & Woods, Inc., Research Division - Analyst : I was wondering if you can talk about how you expect the organic revenue growth and margin performance to ramp throughout the year and perhaps what the 1Q guidance suggests for organic growth, if you didn't already give that in your prepared remarks, considering we're already close -- about to close out the first quarter here. And perhaps you can give us some real-time insight on how the reacceleration is performing and how Buildium is performing in the early stages so far.

Question: Ryan John Tomasello - Keefe, Bruyette, & Woods, Inc., Research Division - Analyst : Got it. That's helpful. And I was wondering if you can provide us with an update on AI Screening. I know you've provided some color in your prepared remarks. From my understanding, this is one of the first large new product launches where you took the free trial type of approach with a push-button, self-configured product. So I was wondering if you can say how many units are actually paying for that tool today. And what kind of take rate that represents of the 1.7 million units that you mentioned opted into the product so far? And is this free trial method something that you plan to utilize more going forward to encourage adoption of new products?

Question: Ryan John Tomasello - Keefe, Bruyette, & Woods, Inc., Research Division - Analyst : Great. And then just if I can squeeze one last one in, a large competitor that -- a large competitor that was just alluded to earlier also recently launched a suite of digital tools for owners at the low end of the rental market, primarily screening and online leasing and payments. I think it seems the focus of that push is actually even at a lower point than Buildium initially. But Steve and Tom, I was wondering if you had any thoughts around that and if you think that this might, in some way, increase the competitive pressure on Buildium's cross-selling strategy?

Question: Jackson Edmund Ader - JPMorgan Chase & Co, Research Division - Analyst : This is Jackson Ader on for Sterling tonight. Our question -- our first question, I should say, Steve, you mentioned a couple of times about the SMB market allow -- being large enough to where it's going to allow multiple winners. So if you think about maybe that 15 million unit total addressable market, how much of that do you perceive to be greenfield where you can basically go up against no incumbent or very little competition?

Question: Jackson Edmund Ader - JPMorgan Chase & Co, Research Division - Analyst : Okay. Okay. And then a quick follow-up. I guess sticking with the HOA market and ClickPay, any material overlap there that we should be aware of in that space?

Question: Jackson Edmund Ader - JPMorgan Chase & Co, Research Division - Analyst : Yes.

Question: Stephen Hardy Sheldon - William Blair & Company L.L.C., Research Division - Analyst : Congrats on the results and momentum. First, I wanted to ask about progress integrating different products like ClickPay, SimpleBills, AI Screening into Buildium. How complicated is that integration? How long do you foresee that taking, where you could start to see, I guess, strong uptick in attach rates for those products within Buildium's existing unit base?

Question: Stephen Hardy Sheldon - William Blair & Company L.L.C., Research Division - Analyst : Got it. That's great. And then you clearly talked about taking Buildium more upmarket relative to their current average unit count by client. I guess do you also envision taking that down market as well at some point to go after an even bigger unit opportunity there? I know that there'd likely

Question: Stephen Hardy Sheldon - William Blair & Company L.L.C., Research Division - Analyst : Makes sense. And one last one, if I could. Good to hear that Buildium turned profitable. Any rough ballpark on what you've included for adjusted EBITDA for Buildium in 2020?