Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : CheckFree (CKFR) -- Ignore unavailable to you. Want to Upgrade?

To: Benny Baga who wrote (1990)	2/25/1998 10:53:00 PM
From: kolo55	Read Replies (3) \| Respond to of 8545

My notes from BARS. Disclaimer: These are my observations and notes, and don't necessarily reflect anyone's opinion but my own. The COO and CFO, Pete and Jim made the presentation. They started right off by referring to Mr. Craft's downgrade. Although they respect his opinion, and honor his right to be independent, they said that his report contained a lot of information that was just wrong. And they said they would attempt to correct this incorrect info particularly in the breakout session following the presentation. The presentation pretty much revealed what most people on this thread already know. We got to see a snazzy video describing CheckFree's services. Then they went through some historical subscriber and transaction growth numbers. They defined the market for bill payment using 63B checks per year at 20 cents per check as $10B in annual costs that could be reduced substantially by electronic payments. They said they will have Genesis complete by mid-year, and have the capacity to handle 15M accounts (subscribers?), about 30% of the accounts in the US. They went through the whole line-up of banks they are working with. Unfortunately, I think they confused some folks with the 5Bs discussion, and a lot in the audience(IMO) didn't understand the lingo right away and the differences between Bill Pay and Bill Presentation. But they eventually went through their work with billers to get Bill Presentation going and underway. A lot of people in the audience were kind of thinking "What will happen to CheckFree when Microsoft FDC starts giving the service away?" I mention this to give you the mind-set of some people. They seem to be implying that MS-FDC can simply dominate this business like other businesses in the past. Jim went through the recent financials, and showed Electronic Commerce revenues were growing 50% a year. He also showed how revenues grew musch faster than costs, leading to better margins, and reducing the losses. He clearly demonstrated the leverage inherent in this business as revenues ramp. He even through up slide showing $490M in annual revenues for FY2000(I think... the slide wasn't up long, but he was 'very comfortable' with this number, ) and the impact of whether 10% or 15% of the total market become subscribers, and the numbers were pretty nice with 600M and almost 800M if I remember correctly. In the break-out, he talked about MSFDC model for bill presentation and said "it wasn't free", they were charging the billers about the 'cost of postage' for each bill. He said the idea of a central MSFDC post office wasn't good; billers don't like it because they can't control the content well enough going to their customer eyes. Also they have to code everything on the bill into MS proprietary code. He said the the CheckFree 3rd gen product due out in early calendar 99 will move the bill pay and bill presentation to the FI (bank and other financial institution) sites. Subscribers will go to their bank site, open their account, see unpaid bills, then if they want details, there will be a link for them directly to the biller site. The biller will be responsible for maintaining and updating this site and providing customer service on the bill (questions etc). Over the next several months, expect to hear of "lots of banks and billers" starting with CheckFree. Bottom line, "CheckFree will grow 35% per year for next 5 years, and will have 20% operating margins at the end of that time." Of course, I got the impression that they expect to do better than that. Paul