Revenue Performance - As of September 30, 2025, the total revenue was $303.6 million, a 2.5% increase from $295.1 million in the same quarter of 2024[20] - Revenue from SaaS and related solutions for the quarter ended September 30, 2025, was $275.0 million, up from $263.7 million in Q3 2024, representing a growth of 4.9%[20] - Revenue for the quarter ended September 30, 2025, was $303.615 million, a 2.5% increase from $295.143 million in the same quarter of 2024[39] - The Americas accounted for 85% of total revenue in Q3 2025, down from 88% in Q3 2024[20] - The Broadband/Cable/Satellite vertical contributed 51% of total revenue in Q3 2025, consistent with the same period in 2024[22] Financial Position - Cash and cash equivalents as of September 30, 2025, included $15.2 million held in institutional money market funds[30] - The company had $1.8 million in restricted cash as of September 30, 2025, compared to $1.7 million at the end of 2024[25] - The carrying value of the 2023 Convertible Notes was $425.0 million, with a fair value of $472.6 million as of September 30, 2025[31] - Long-term debt as of September 30, 2025, was $538.606 million, slightly up from $530.997 million at the end of 2024[43] - The company has a $600 million revolving loan facility under the 2025 Credit Agreement, with $125 million drawn as of September 30, 2025[43] - As of September 30, 2025, cash and cash equivalents were $158.4 million, down from $161.8 million as of December 31, 2024[177] Expenses and Profitability - Total cost of revenue for the quarter was $155.717 million, up from $147.843 million year-over-year, resulting in a gross profit of $147.898 million[39] - Research and development expenses for the quarter were $39.631 million, a decrease of 2.1% compared to $40.498 million in the prior year[39] - Segment net income for the quarter was $20.483 million, compared to $19.088 million in the same quarter of 2024, reflecting a 7.3% increase[39] - Total amortization expense for other intangible assets for the nine months ended September 30, 2025, was $20.1 million, compared to $18.8 million in the same period of 2024[41] - The estimated total amortization expense for the fiscal year 2025 is projected to be $26.9 million[41] Acquisitions and Restructuring - The company acquired iCheckGateway.com, LLC for $17.6 million in cash on June 3, 2024, with potential future earn-out payments of up to $15.0 million tied to performance-based goals[58][59] - The company recorded restructuring and reorganization charges of $17.5 million for the nine months ended September 30, 2025, compared to $12.0 million for the same period in 2024, reflecting a significant increase in restructuring activities[62] - The company reduced its global workforce by approximately 270 employees, incurring $11.9 million in charges related to involuntary terminations as part of cost efficiency actions[64] Shareholder Returns - The company repurchased approximately 703,000 shares of common stock for $44.2 million during the nine months ended September 30, 2025, at a weighted-average price of $62.92 per share[77] - The total remaining value of shares available for repurchase under the Stock Repurchase Program was $93.7 million as of September 30, 2025[78] - The quarterly cash dividend approved in Q3 2025 was $0.32 per share, totaling $9.1 million, compared to $0.30 per share and $8.8 million in Q3 2024[80] - Total dividends declared for the nine months ended September 30, 2025, were $27.7 million, up from $26.4 million in the same period of 2024[80] Other Financial Metrics - Goodwill increased to $323.909 million as of September 30, 2025, from $316.041 million at the beginning of the year, due to foreign currency exchange rate changes[40] - Total other intangible assets amounted to $366.403 million as of September 30, 2025, with a net carrying value of $54.188 million after accumulated amortization[40] - The company has accrued $10.3 million related to future earn-out payments from the acquisition of DGIT Systems Pty Ltd, with an earn-out period extending through December 31, 2026[61] - As of September 30, 2025, the company had performance guarantees totaling $3.9 million, including $0.2 million in standby letters of credit[68] - The company had $1.8 million of restricted assets used to collateralize guarantees as of September 30, 2025[67] Strategic Developments - The One Big Beautiful Bill Act ("OBBBA") enacted on July 4, 2025, is not expected to materially affect the company's effective tax rate[32] - The company extended its agreement with Ensono, Inc. for outsourced computing services through December 31, 2032, and accelerated the mainframe hardware refresh expected to be completed in Q1 2026[66] - A merger agreement was entered into with NEC Corporation, with CSG continuing as a wholly owned subsidiary of NEC[84] - Each share of CSG common stock will be converted into $80.70 in cash upon the effective time of the merger[85] Currency Exposure - Approximately 88% of the company's revenue was generated in U.S. dollars during the nine months ended September 30, 2025[181]

Group 1: Earnings Performance - CSG Systems reported quarterly earnings of $1.31 per share, exceeding the Zacks Consensus Estimate of $1.11 per share, and up from $1.06 per share a year ago [1] - The earnings surprise for the quarter was +18.02%, following a previous surprise of +11.54% when earnings were $1.16 per share against an expectation of $1.04 [2] - Over the last four quarters, CSG Systems has consistently surpassed consensus EPS estimates [2] Group 2: Revenue Performance - The company posted revenues of $279.28 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.93% and up from $272.62 million year-over-year [3] - CSG Systems has also topped consensus revenue estimates in each of the last four quarters [3] Group 3: Stock Performance and Outlook - CSG Systems shares have increased approximately 52.9% since the beginning of the year, significantly outperforming the S&P 500's gain of 15.1% [4] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [4][5] - The current consensus EPS estimate for the upcoming quarter is $1.33 on revenues of $298.61 million, and for the current fiscal year, it is $4.72 on revenues of $1.12 billion [8] Group 4: Industry Context - The Computer - Services industry, to which CSG Systems belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, indicating potential challenges ahead [9] - The performance of CSG Systems may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [9]

Financial Performance - Total revenue for Q3 2025 was $303.6 million, a 2.9% increase from $295.1 million in Q3 2024[5] - GAAP operating income was $30.5 million, with an operating margin of 10.0%, compared to $31.8 million and 10.8% in Q3 2024[6] - Non-GAAP operating income reached $54.5 million, reflecting an adjusted operating margin of 19.5%, up from 18.4% in Q3 2024[7] - GAAP EPS for Q3 2025 was $0.73, an increase of 9.0% from $0.67 in Q3 2024, while non-GAAP EPS was $1.31, up 23.6% from $1.06[4] - Operating income for the nine months ended September 30, 2025, was $89.7 million, slightly up from $89.0 million in the same period of 2024[17] - Net income for the nine months ended September 30, 2025, was $48.9 million, down 6.4% from $52.4 million in 2024[18] - CSG's GAAP net income for Q3 2025 was $20,483,000, compared to $19,088,000 in Q3 2024, reflecting a year-over-year increase of approximately 7.3%[34] - Non-GAAP net income for Q3 2025 was $36,775,000, with an EPS of $1.31, up from $30,054,000 and $1.06 in Q3 2024[32] Cash Flow and Liquidity - Cash flows from operations were $47.9 million, with non-GAAP adjusted free cash flow of $43.9 million, a 37.3% increase from $32.0 million in Q3 2024[9] - Cash provided by operating activities for the nine months ended September 30, 2025, was $96.7 million, significantly higher than $53.2 million in 2024[18] - Total cash, cash equivalents, and restricted cash at the end of Q3 2025 was $461.7 million, compared to $361.0 million at the end of Q3 2024[18] - Cash flows from operating activities for Q3 2025 were $47,943,000, an increase from $39,459,000 in Q3 2024, marking a growth of approximately 21.5%[36] - Non-GAAP adjusted free cash flow for the nine months ended September 30, 2025, was $90,584,000, compared to $36,685,000 for the same period in 2024, showing significant growth[36] Expenses and Costs - Research and development expenses for Q3 2025 were $40.3 million, a decrease of 3.3% from $41.7 million in Q3 2024[17] - CSG's total operating expenses for the nine months ended September 30, 2025, were $810.5 million, an increase from $791.6 million in 2024[17] - Total amortization expenses for Q3 2025 amounted to $14,491,000, slightly higher than $13,320,000 in Q3 2024[35] - The company incurred restructuring and reorganization charges of $5,591,000 in Q3 2025, compared to $2,943,000 in Q3 2024, indicating increased costs related to restructuring efforts[34] - Interest expense for Q3 2025 was $7,367,000, down from $7,778,000 in Q3 2024, reflecting a decrease of approximately 5.3%[34] Shareholder Returns - CSG declared a quarterly cash dividend of $0.32 per share, totaling approximately $9 million[4] - The company repurchased approximately 275,000 shares for about $18 million during Q3 2025[4] Mergers and Acquisitions - CSG is in the process of a merger agreement with NEC Corporation, which may impact future operations and financial results[14] - CSG's acquisition-related expenses included $3,200,000 in transaction-related costs for Q3 2025, compared to $32,000 in Q3 2024, highlighting increased acquisition activity[30] - CSG's acquisition-related expenses included $3,474,000 for amortization of acquired intangible assets in Q3 2025, compared to $3,929,000 in Q3 2024[35] Customer Revenue - CSG's revenue from significant customers included Charter at $58.9 million (19% of revenue) and Comcast at $53.2 million (18% of revenue) for Q3 2025[20] - The Americas accounted for 85% of total revenue in Q3 2025, down from 88% in Q3 2024[22] Taxation - The effective non-GAAP income tax rate for Q3 2025 was 27%, consistent with the nine-month period, compared to 28.5% in the same periods of 2024[33] Operational Efficiency - Non-GAAP adjusted EBITDA for Q3 2025 reached $68,975,000, up from $63,901,000 in Q3 2024, representing an increase of about 3.4%[34] - Non-GAAP adjusted EBITDA as a percentage of revenue was 24.7% for Q3 2025, compared to 23.4% in Q3 2024, indicating improved operational efficiency[34] - Non-GAAP adjusted operating margin percentage improved to 19.5% in Q3 2025, compared to 18.4% in Q3 2024[30]

Core Insights - NEC Corporation has agreed to acquire CSG Systems International for US$80.70 per share, totaling an enterprise value of approximately US$2.9 billion, including debt [1][2] Group 1: Transaction Details - The acquisition price represents a 17.38% premium over CSG's closing share price of US$68.75 on October 28 and a 23.07% premium to the 30-day volume-weighted average price [2] - The transaction is expected to close during the 2026 calendar year [4] Group 2: Strategic Objectives - The acquisition aims to enhance NEC's position in next-generation digital solutions and accelerate innovation in artificial intelligence and cloud-based technologies across various industries [2] - The integration will combine NEC's software and digital transformation capabilities with CSG's software-as-a-service (SaaS) portfolio and global customer base [3] Group 3: Complementary Strengths - CSG's SaaS products and established presence in sectors such as communications, media, financial services, healthcare, retail, and logistics will complement NEC's existing operations and its subsidiary, Netcracker Technology [3] - Netcracker specializes in Business Support Systems (BSS) and Operational Support Systems (OSS), aligning closely with CSG's expertise [4]

Core Insights - CSG Systems (CSGS) shares increased by 14.4% to close at $78.68, supported by high trading volume, compared to a 6.8% gain over the past four weeks [1] - The company is experiencing increased profitability due to shifts in SaaS mix, operational efficiencies, and strategic expansions into new industry verticals [1] Earnings Expectations - CSG Systems is projected to report quarterly earnings of $1.11 per share, reflecting a year-over-year increase of 4.7% [2] - Expected revenues for the upcoming quarter are $276.71 million, which is a 1.5% increase from the same quarter last year [2] Earnings Estimate Revisions - The consensus EPS estimate for CSG Systems has been revised 0.6% higher in the last 30 days, indicating a positive trend that typically correlates with stock price appreciation [4] - Trends in earnings estimate revisions are strongly linked to near-term stock price movements, suggesting potential for further strength in CSGS [3][4] Industry Context - CSG Systems is part of the Zacks Computer - Services industry, where CGI Group (GIB) has seen a 2.5% decline in its stock price, closing at $85.95, with a return of -1.1% over the past month [4] - CGI's consensus EPS estimate has increased by 0.9% to $1.53, representing an 8.5% year-over-year change [5]

Group 1 - CSG Systems International, Inc. has corrected its address in the Forward-Looking Statements section of a release issued on October 29, 2025, changing it from 129 Inverness Dr W to 169 Inverness Dr W [1] - The company announced the cancellation of its upcoming Q3 2025 earnings presentation due to the announcement of the NEC acquisition [1] - The earnings results call was originally scheduled for Wednesday but will no longer take place [1]

Core Viewpoint - CSG Systems International, Inc. is facing scrutiny regarding its proposed sale to NEC Corporation, which has led to a downgrade in its stock rating and an investigation into the fairness of the transaction for shareholders [2][3][6] Company Overview - CSG Systems International, Inc. provides business support solutions primarily for the communications industry, including services like billing, customer care, and revenue management [1] Stock Performance - CSGS's stock has increased by 14.44%, with a change of $9.93, reaching a high of $79.20, marking its highest price over the past year [4] - The stock's market capitalization is approximately $2.26 billion, with a trading volume of 2,669,233 shares [4] - Over the past year, the stock has experienced a low of $46.17, indicating significant growth [4] Rating Downgrade - On October 29, 2025, RBC Capital downgraded CSGS from an "Outperform" rating to a "Sector Perform" rating, reflecting a more cautious outlook influenced by the ongoing investigation into its proposed sale [2][6] Investigation into Sale - Class Action Attorney Juan Monteverde is investigating the fairness of CSGS's proposed sale to NEC Corporation, where shareholders are set to receive $80.70 in cash per share [3][5] - The investigation aims to determine if the transaction is in the best interest of the shareholders, given the current stock price of $78.68 [5]

Core Viewpoint - Monteverde & Associates PC is investigating the proposed sale of CSG Systems International, Inc. to NEC Corporation, where CSG shareholders are set to receive $80.70 in cash per share, raising questions about the fairness of the deal [1]. Group 1: Company Overview - Monteverde & Associates PC is recognized as a Top 50 Firm in the 2024 ISS Securities Class Action Services Report and has a successful track record in recovering millions for shareholders [1]. - The firm is headquartered in the Empire State Building, New York City, and specializes in class action securities litigation [2]. Group 2: Investigation Details - The investigation focuses on the sale of CSG Systems International, Inc. to NEC Corporation, with the proposed transaction offering CSG shareholders $80.70 per share [1]. - The firm invites shareholders with concerns or seeking additional information to contact them for free [2].

Core Points - CSG (NASDAQ: CSGS) is under investigation by the Ademi Firm for potential breaches of fiduciary duty and other legal violations related to its transaction with NEC Corporation [1][3] - The transaction involves CSG shareholders receiving $80.70 per share in cash, valuing the deal at approximately $2.9 billion, including debt [2] - The transaction agreement restricts competing offers for CSG by imposing significant penalties if a competing bid is accepted, raising concerns about the CSG board's fulfillment of fiduciary duties to shareholders [3]

Group 1 - CSG Systems International (CSGS) has agreed to be sold for $80.70 per share in cash to NEC Corporation [2] - Wohl & Fruchter LLP is investigating the fairness of the sale, focusing on whether the CSGS Board of Directors acted in the best interests of shareholders [3] - The investigation will assess if the agreed price is fair and if all material information regarding the transaction has been disclosed, including potential conflicts of interest [3] Group 2 - Wohl & Fruchter LLP has a history of representing investors in litigation related to corporate misconduct and has recovered hundreds of millions of dollars for investors [3]