CSG Systems International Reports Third Quarter 2025 Results

DENVER--( BUSINESS WIRE)-- CSG ® (NASDAQ: CSGS) today reported results for the quarter ended September 30, 2025.

Financial Results:

Third quarter 2025 financial results:

Shareholder Returns:

Financial Overview (unaudited)

(in thousands, except per share amounts and percentages):

Quarter Ended September 30,

Nine Months Ended September 30,

2025

2024

Percent

Changed

2025

2024

Percent Changed

GAAP Results:

Revenue

303,615

295,143

2.9

900,196

880,596

2.2

Operating Income

30,459

31,822

(4.3

89,699

89,039

0.7

Operating Margin Percentage

10.0

10.8

10.0

10.1

EPS

0.73

0.67

9.0

1.74

1.83

(4.9

Cash Flows from Operating Activities

47,943

39,459

21.5

96,738

53,213

81.8

Non-GAAP Results:

Operating Income

54,496

50,076

8.8

160,443

141,085

13.7

Adjusted Operating Margin Percentage

19.5

18.4

19.5

17.4

EPS

1.31

1.06

23.6

3.61

3.08

17.2

Adjusted EBITDA

68,975

63,901

7.9

201,292

182,050

10.6

Adjusted Free Cash Flow

43,941

32,004

37.3

90,584

36,685

146.9

For additional information and reconciliations regarding CSG’s use of non-GAAP financial measures, please refer to the attached Exhibit 2 and the Investor Relations section of CSG’s website at csgi.com.

Results of Operations

GAAP Results: Total revenue for the third quarter of 2025 was $303.6 million, a 2.9% increase when compared to revenue of $295.1 million for the third quarter of 2024. The increase in revenue can be mainly attributed to the continued growth of CSG’s SaaS and related solutions.

GAAP operating income for the third quarter of 2025 was $30.5 million, or 10.0% of total revenue, compared to $31.8 million, or 10.8% of total revenue, for the third quarter of 2024.

GAAP EPS for the third quarter of 2025 was $0.73, compared to $0.67 for the third quarter of 2024, with the increase mainly attributed to foreign currency movements.

Non-GAAP Results: Non-GAAP operating income for the third quarter of 2025 was $54.5 million, or a non-GAAP adjusted operating margin of 19.5%, compared to $50.1 million, or a non-GAAP adjusted operating margin of 18.4% for the third quarter of 2024. The increase in non-GAAP operating margin can be mainly attributed to the cost efficiency actions discussed above.

Non-GAAP EPS for the third quarter of 2025 was $1.31, compared to $1.06 for the third quarter of 2024. The increase in non-GAAP EPS is mainly due the higher non-GAAP operating income, discussed above, and foreign currency movements.

Balance Sheet and Cash Flows

Cash and cash equivalents as of September 30, 2025 were $158.4 million compared to $145.9 million as of June 30, 2025 and $161.8 million as of December 31, 2024. CSG had net cash flows provided by operations for the third quarters ended September 30, 2025 and 2024 of $47.9 million and $39.5 million, respectively, and had non-GAAP adjusted free cash flow of $43.9 million and $32.0 million, respectively.

Additional Information

For information about CSG, please visit CSG’s website at csgi.com. Additional information can be found in the Investor Relations section of the website.

About CSG

CSG empowers companies to build unforgettable experiences, making it easier for people and businesses to connect with, use and pay for the services they value most. Our customer experience, billing and payments solutions help companies of any size make money and make a difference. With our SaaS solutions, company leaders can take control of their future and tap into guidance along the way from our fiercely committed and forward-thinking CSGers around the world.

Want to be future-ready and a change-maker like the global brands that trust CSG? Visit csgi.com to learn more.

Forward-Looking Statements

This news release contains forward-looking statements as defined under the Securities Act of 1933, as amended, that are based on assumptions about a number of important factors and involve risks and uncertainties that could cause actual results to differ materially from what appears in this news release. Some of these key factors include, but are not limited to the following items:

This list is not exhaustive, and readers are encouraged to review the additional risks and important factors described in CSG’s reports on Forms 10-K and 10-Q and other filings made with the SEC.

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS-UNAUDITED

(in thousands)

September 30,

2025

December 31,

2024

ASSETS

Current assets:

Cash and cash equivalents

158,385

161,789

Settlement and merchant reserve assets

301,545

343,235

Trade accounts receivable:

Billed, net of allowance of $4,331 and $3,041

268,024

266,903

Unbilled

86,064

80,173

Income taxes receivable

6,930

2,600

Other current assets

41,939

46,182

Total current assets

862,887

900,882

Non-current assets:

Property and equipment, net of depreciation of $143,445 and $133,514

45,292

56,595

Operating lease right-of-use assets

17,353

24,166

Software, net of amortization of $166,726 and $154,648

22,897

19,927

Goodwill

323,909

316,041

Acquired customer contracts, net of amortization of $145,489 and $133,279

31,291

39,377

Customer contract costs, net of amortization of $53,643 and $44,587

69,877

60,809

Deferred income taxes

83,700

73,295

Other assets

16,313

9,595

Total non-current assets

610,632

599,805

Total assets

1,473,519

1,500,687

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Current portion of long-term debt

7,500

Operating lease liabilities

5,982

11,067

Customer deposits

44,158

41,448

Trade accounts payable

42,466

36,370

Accrued employee compensation

66,414

67,944

Settlement and merchant reserve liabilities

298,419

341,924

Deferred revenue

60,184

54,424

Income taxes payable

566

7,802

Other current liabilities

56,746

46,730

Total current liabilities

574,935

615,209

Non-current liabilities:

Long-term debt, net of unamortized discounts of $11,394 and $12,128

538,606

530,997

Operating lease liabilities

21,713

25,020

Deferred revenue

26,925

26,469

Income taxes payable

2,331

2,732

Deferred income taxes

Other non-current liabilities

19,444

17,597

Total non-current liabilities

609,088

602,909

Total liabilities

1,184,023

1,218,118

Stockholders' equity:

Preferred stock, par value $.01 per share; 10,000 shares authorized; zero shares issued and outstanding

Common stock, par value $.01 per share; 100,000 shares authorized; 28,608 and 28,854 shares outstanding

722

718

Additional paid-in capital

532,082

518,215

Treasury stock, at cost; 42,286 and 41,583 shares

(1,238,633

)

(1,194,224

)

Accumulated other comprehensive income (loss):

Cumulative foreign currency translation adjustments

(45,975

)

(62,290

)

Accumulated earnings

1,041,300

1,020,150

Total stockholders' equity

289,496

282,569

Total liabilities and stockholders' equity

1,473,519

1,500,687

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME-UNAUDITED

(in thousands, except per share amounts)

Quarter Ended

Nine Months Ended

September 30,

2025

September 30,

2024

September 30,

2025

September 30,

2024

Revenue

303,615

295,143

900,196

880,596

Cost of revenue (exclusive of depreciation, shown separately below)

157,534

149,487

462,172

460,266

Other operating expenses:

Research and development

40,300

41,665

121,619

116,171

Selling, general and administrative

65,430

63,913

195,260

186,794

Depreciation

4,301

5,313

13,899

16,286

Restructuring and reorganization charges

5,591

2,943

17,547

12,040

Total operating expenses

273,156

263,321

810,497

791,557

Operating income

30,459

31,822

89,699

89,039

Other income (expense):

Interest expense

(7,367

)

(7,778

)

(21,964

)

(22,982

)

Interest income

1,284

1,922

4,266

6,641

Loss on debt extinguishment

(453

)

Other, net

1,964

(2,187

)

(3,787

)

(1,455

)

Total other

(4,119

)

(8,043

)

(21,938

)

(17,796

)

Income before income taxes

26,340

23,779

67,761

71,243

Income tax provision

(5,857

)

(4,691

)

(18,881

)

(18,859

)

Net income

20,483

19,088

48,880

52,384

Weighted-average shares outstanding:

Basic

27,627

28,362

27,762

28,475

Diluted

27,970

28,468

28,123

28,621

Earnings per common share:

Basic

0.74

0.67

1.76

1.84

Diluted

0.73

0.67

1.74

1.83

Nine Months Ended

September 30,

2025

September 30,

2024

Cash flows from operating activities:

Net income

48,880

52,384

Adjustments to reconcile net income to net cash provided by operating activities-

Depreciation

14,533

16,724

Amortization

39,874

37,467

Loss on debt extinguishment

453

Asset impairments

Loss on unrealized foreign currency transactions, net

547

225

Deferred income taxes

(9,093

)

(189

)

Stock-based compensation

25,654

25,023

Subtotal

120,942

131,634

Changes in operating assets and liabilities, net of acquired amounts:

Trade accounts receivable, net

(9,132

)

(7,873

)

Other current and non-current assets and liabilities

(14,001

)

(12,771

)

Income taxes payable/receivable

(11,946

)

(16,194

)

Trade accounts payable and accrued liabilities

7,639

(48,658

)

Deferred revenue

3,236

7,075

Net cash provided by operating activities

96,738

53,213

Cash flows from investing activities:

Purchases of software, property, and equipment

(11,154

)

(16,528

)

Receipts from sale of software, property, and equipment

327

Business combinations, net of cash and settlement assets acquired of zero and $46,432

17,293

Net cash provided by (used in) investing activities

(10,827

)

765

Cash flows from financing activities:

Proceeds from issuance of common stock

2,245

2,416

Payments of cash dividends

(27,415

)

(26,598

)

Repurchases of common stock

(58,525

)

(42,439

)

Deferred acquisition payments

(314

)

(2,488

)

Proceeds from long-term debt

150,625

15,000

Payments on long-term debt

(151,250

)

(20,625

)

Payments of debt financing costs

(2,258

)

Payments on financing obligations

(5,513

)

(2,191

)

Settlement and merchant reserve activity

(43,671

)

(79,606

)

Net cash used in financing activities

(136,076

)

(156,531

)

Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash

5,113

(337

)

Net decrease in cash, cash equivalents, and restricted cash

(45,052

)

(102,890

)

Cash, cash equivalents, and restricted cash, beginning of period

506,763

463,876

Cash, cash equivalents, and restricted cash, end of period

461,711

360,986

Supplemental disclosures of cash flow information:

Cash paid during the period for-

Interest

23,243

24,592

Income taxes

39,998

35,292

Non-cash investing and financing activities-

Software, property, and equipment included in current and non-current liabilities

11,868

9,830

Reconciliation of cash, cash equivalents, and restricted cash:

Cash and cash equivalents

158,385

118,444

Settlement and merchant reserve assets

301,545

240,755

Restricted cash included in current and non-current assets

1,781

1,787

Total cash, cash equivalents, and restricted cash

461,711

360,986

EXHIBIT 1

CSG SYSTEMS INTERNATIONAL, INC.

SUPPLEMENTAL REVENUE ANALYSIS

Revenue by Significant Customers: 10% or more of Revenue

Quarter Ended

September 30, 2025

June 30, 2025

September 30, 2024

Amount

% of Revenue

Amount

% of Revenue

Amount

% of Revenue

Charter

58,859

57,667

59,070

Comcast

53,204

51,415

58,688

Revenue by Vertical

Quarter Ended

September 30,

2025

June 30,

2025

September 30,

2024

Broadband/Cable/Satellite

Telecommunications

All other

Total revenue

100

Revenue by Geography

Quarter Ended

September 30,

2025

June 30,

2025

September 30,

2024

Americas

Europe, Middle East and Africa

Asia Pacific

Total revenue

100

EXHIBIT 2

CSG SYSTEMS INTERNATIONAL, INC.

DISCLOSURES FOR NON-GAAP FINANCIAL MEASURES

Use of Non-GAAP Financial Measures and Limitations

To supplement its condensed consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), CSG uses non-GAAP operating income, non-GAAP adjusted operating margin percentage, non-GAAP EPS, non-GAAP adjusted EBITDA, and non-GAAP adjusted free cash flow. CSG believes that these non-GAAP financial measures, when reviewed in conjunction with its GAAP financial measures, provide investors with greater transparency to the information used by CSG’s management in its financial and operational decision making. CSG uses these non-GAAP financial measures for the following purposes:

These non-GAAP financial measures are provided with the intent of providing investors with the following information:

Non-GAAP financial measures are not measures of performance under GAAP, and therefore should not be considered in isolation or as a substitute for GAAP financial information. Limitations with the use of non-GAAP financial measures include the following items:

CSG compensates for these limitations by relying primarily on its GAAP results and using non-GAAP financial measures as a supplement only. Additionally, CSG provides specific information regarding the treatment of GAAP amounts considered in preparing the non-GAAP financial measures and reconciles each non-GAAP financial measure to the most directly comparable GAAP measure.

Non-GAAP Financial Measures: Basis of Presentation

The table below outlines the exclusions from CSG’s non-GAAP financial measures:

Non-GAAP Exclusions

Operating Income

Adjusted Operating

Margin Percentage

EPS

Transaction fees

—

Restructuring and reorganization charges

Executive transition costs

Acquisition-related expenses:

Amortization of acquired intangible assets

Earn-out compensation

Transaction-related costs

Stock-based compensation

Gain (loss) on debt extinguishment/conversion

—

Gain (loss) on acquisitions or dispositions

—

Unusual income tax matters

—

CSG believes that excluding certain items in calculating its non-GAAP financial measures provides meaningful supplemental information regarding CSG’s performance and these items are excluded for the following reasons:

CSG also reports non-GAAP adjusted EBITDA and non-GAAP adjusted free cash flow. Management believes non-GAAP adjusted EBITDA is a useful measure to investors in evaluating CSG’s operating performance, debt servicing capabilities, and enterprise valuation. CSG defines non-GAAP adjusted EBITDA as income before interest, income taxes, depreciation, amortization, stock-based compensation, foreign currency transaction adjustments, acquisition-related expenses, and unusual items, such as restructuring and reorganization charges, executive transition costs, gains and losses related to the extinguishment of debt, and gains and losses on acquisitions or dispositions, as discussed above. Additionally, management uses non-GAAP adjusted free cash flow, among other measures, to assess its financial performance and cash generating capabilities, and believes that it is useful to investors because it shows CSG’s cash available to service debt, make strategic acquisitions and investments, repurchase its common stock, pay cash dividends, and fund ongoing operations. CSG defines non-GAAP adjusted free cash flow as net cash flows from operating activities before earn-out compensation payments related to acquisitions less the purchases of software, property, and equipment.

Non-GAAP Financial Measures

Non-GAAP Operating Income and Non-GAAP Adjusted Operating Margin Percentage:

The reconciliation of GAAP operating income to non-GAAP operating income, and calculation of CSG’s non-GAAP adjusted operating margin percentage, for the indicated periods are as follows (in thousands, except percentages):

Quarter Ended

September 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

Non-GAAP Operating Income

GAAP operating income

30,459

31,822

89,699

89,039

Restructuring and reorganization charges (1)

5,591

2,943

17,547

12,040

Executive transition costs

352

Acquisition-related expenses:

Amortization of acquired intangible assets

3,474

3,929

10,385

10,174

Earn-out compensation

2,954

2,591

13,320

3,416

Transaction-related costs

3,200

243

Stock-based compensation (1)

8,818

8,759

26,292

25,821

Non-GAAP operating income

54,496

50,076

160,443

141,085

Non-GAAP Adjusted Operating Margin Percentage

Revenue

303,615

295,143

900,196

880,596

Less: Transaction fees (2)

(24,333

)

(22,524

)

(78,100

)

(71,793

)

Revenue less transaction fees

279,282

272,619

822,096

808,803

Non-GAAP adjusted operating margin percentage

19.5

18.4

19.5

17.4

(1)

Restructuring and reorganization charges include stock-based compensation, which is not included in the stock-based compensation line in the tables above and following, and depreciation, which has not been recorded to the depreciation line item on CSG’s Income Statement.

(2)

Transaction fees are primarily comprised of fees paid to third-party payment processors and financial institutions and interchange fees under CSG’s payment services contracts. Transaction fees are included in revenue in CSG's Income Statement (and not netted against revenue) because CSG maintains control and acts as principal over the integrated service provided under its payment services customer contracts. However, CSG excludes expense associated with transaction fees from the numerator and denominator in calculating its non-GAAP adjusted operating margin percentage in order to provide comparability with historical and future periods and with its peer group and competitors.

Non-GAAP EPS:

The reconciliations of GAAP EPS to non-GAAP EPS for the indicated periods are as follows (in thousands, except per share amounts):

Quarter Ended

September 30, 2025

September 30, 2024

Amounts

EPS (4)

Amounts

EPS (4)

GAAP net income

20,483

0.73

19,088

0.67

GAAP income tax provision (3)

5,857

4,691

GAAP income before income taxes

26,340

23,779

Restructuring and reorganization charges (1)

5,591

2,943

Acquisition-related costs:

Amortization of acquired intangible assets

3,474

3,929

Earn-out compensation

2,954

2,591

Transaction-related costs

3,200

Stock-based compensation (1)

8,818

8,759

Non-GAAP income before income taxes

50,377

42,033

Non-GAAP income tax provision (3)

(13,602

)

(11,979

)

Non-GAAP net income

36,775

1.31

30,054

1.06

Nine Months Ended

September 30, 2025

September 30, 2024

Amounts

EPS (4)

Amounts

EPS (4)

GAAP net income

48,880

1.74

52,384

1.83

GAAP income tax provision (3)

18,881

18,859

GAAP income before income taxes

67,761

71,243

Restructuring and reorganization charges (1)

17,547

12,040

Executive transition costs

352

Acquisition-related expenses:

Amortization of acquired intangible assets

10,385

10,174

Earn-out compensation

13,320

3,416

Transaction-related costs

3,200

243

Stock-based compensation (1)

26,292

25,821

Loss on extinguishment of debt

453

Non-GAAP income before income taxes

138,958

123,289

Non-GAAP income tax provision (3)

(37,519

)

(35,137

)

Non-GAAP net income

101,439

3.61

88,152

3.08

(3)

The GAAP effective income tax rates for the third quarters of 2025 and 2024 were approximately 22% and 20%, respectively, and for the nine months ended September 30, 2025 and 2024 were approximately 28% and 26%, respectively. The GAAP effective tax rate increases are due primarily to certain one-time benefits recognized in the third quarter of 2024 and the earn-out compensation, for which a valuation allowance has been established for income tax purposes.

The non-GAAP effective income tax rates for the third quarter and nine months ended September 30, 2025 were 27% in each period and for the third quarter and nine months ended September 30, 2024 were 28.5% in each period.

(4)

The outstanding diluted shares for the third quarter and nine months ended September 30, 2025 were 28.0 million and 28.1 million, respectively, and for the third quarter and nine months ended September 30, 2024 were 28.5 million and 28.6 million, respectively.

Non-GAAP Adjusted EBITDA:

CSG’s calculation of non-GAAP adjusted EBITDA and the reconciliation of CSG’s non-GAAP adjusted EBITDA measure to GAAP net income is provided below for the indicated periods (in thousands, except percentages):

Quarter Ended

Nine Months Ended

September 30,

2025

2024

2025

2024

GAAP net income

20,483

19,088

48,880

52,384

GAAP income tax provision

5,857

4,691

18,881

18,859

Interest expense (5)

7,367

7,778

21,964

22,982

Loss on debt extinguishment

453

Interest income and other, net

(3,248

)

265

(479

)

(5,186

)

GAAP operating income

30,459

31,822

89,699

89,039

Restructuring and reorganization charges (1)

5,591

2,943

17,547

12,040

Executive transition costs

352

Acquisition-related expenses:

Amortization of acquired intangible assets (6)

3,474

3,929

10,385

10,174

Earn-out compensation

2,954

2,591

13,320

3,416

Transaction-related costs

3,200

243

Stock-based compensation (1)

8,818

8,759

26,292

25,821

Amortization of other intangible assets (6)

4,301

3,139

11,628

8,584

Amortization of customer contract costs (6)

5,877

5,373

15,322

16,095

Depreciation (1)

4,301

5,313

13,899

16,286

Non-GAAP adjusted EBITDA

68,975

63,901

201,292

182,050

Non-GAAP adjusted EBITDA as a percentage of revenue less transaction fees (2)

24.7

23.4

24.5

22.5

(5)

Interest expense includes amortization of deferred financing costs as provided in Note 6 below.

(6)

Amortization on the statement of cash flows is made up of the following items for the indicated periods (in thousands):

Quarter Ended

Nine Months Ended

September 30,

2025

2024

2025

2024

Amortization of acquired intangible assets

3,474

3,929

10,385

10,174

Amortization of other intangible assets

4,301

3,139

11,628

8,584

Amortization of customer contract costs

5,877

5,373

15,322

16,095

Amortization of deferred financing costs

839

879

2,539

2,614

Total amortization

14,491

13,320

39,874

37,467

Non-GAAP Adjusted Free Cash Flow:

CSG’s calculation of non-GAAP adjusted free cash flow and the reconciliation of CSG’s non-GAAP adjusted free cash flow measure to cash flows from operating activities are provided below for the indicated periods (in thousands):

Quarter Ended

Nine Months Ended

September 30,

2025

2024

2025

2024

Cash flows from operating activities

47,943

39,459

96,738

53,213

Earn-out compensation payments

5,000

Purchases of software, property, and equipment

(4,002

)

(7,455

)

(11,154

)

(16,528

)

Non-GAAP adjusted free cash flow

43,941

32,004

90,584

36,685