Core Insights - WidePoint Corporation (WYY) and CSG Systems International, Inc. (CSGS) are both benefiting from digital transformation trends impacting enterprise and government IT priorities [1] - WidePoint focuses on federal IT contracts and cybersecurity, while CSG Systems is transitioning to a diversified SaaS platform with a presence in fintech and healthcare [2][8] Group 1: WidePoint Corporation - WidePoint is a government IT solutions provider specializing in mobile telecom lifecycle management and secure identity management, serving critical federal agencies [4] - The company achieved FedRAMP authorization for its Intelligent Technology Management System (ITMS), enhancing visibility among federal agencies [5] - WidePoint has secured three task orders under Spiral 4 and anticipates increased awards as Spiral 3 concludes, while investing in a Device-as-a-Service (DaaS) model and smart city initiatives [6] - Revenue growth for WidePoint is inconsistent due to the nature of government contracts and procurement delays, with recent accounting adjustments raising concerns [7][24] Group 2: CSG Systems International, Inc. - CSG Systems has evolved from a telecom billing provider to a diversified SaaS operator, generating over one-third of its revenue from fast-growing sectors like financial services and healthcare [8] - The company is focused on a capital-light model, reducing working capital needs and pursuing high-margin acquisitions to enhance its SaaS platform [9] - CSG Systems aims for a long-term operating margin of 18-20%, supported by a growing base of recurring, high-margin SaaS revenues [9] - CSG Systems returned $32 million to shareholders in Q1 2025 and plans to return over $100 million in 2025, showcasing strong cash generation and shareholder-friendly practices [11] Group 3: Financial Performance and Valuation - The Zacks Consensus Estimate for WidePoint suggests a 10.5% increase in sales and a 33.3% increase in EPS for 2025, with earnings estimates remaining unchanged [13] - CSG Systems is projected to see a 6% increase in sales and a 1.1% increase in EPS for 2025, with earnings estimates rising by 1.7% in the past 60 days [17] - WidePoint's stock has declined 5.7% over the past year, underperforming the industry and S&P 500, while CSG Systems shares have gained 55.5% [20] - WidePoint trades at a forward P/S ratio of 0.20X, significantly below the industry average of 1.77X, while CSG Systems has a forward P/S ratio of 1.56X [22] Group 4: Investment Outlook - WidePoint's niche in federal IT services and FedRAMP certification provide growth opportunities, but its smaller scale and revenue volatility may deter investors [24] - CSG Systems offers a more diversified SaaS model with disciplined capital allocation and high-margin recurring revenue, positioning it as a stronger investment choice [25][26]

Revenue and Growth - As of March 31, 2025, the total revenue was $299.5 million, a slight increase from $295.1 million in the same quarter of 2024, representing a year-over-year growth of approximately 1.1%[20] - Revenue from SaaS and related solutions was $269.9 million for the quarter ended March 31, 2025, compared to $261.7 million in the prior year, indicating a growth of about 3.4%[20] - The Americas accounted for 87% of total revenue in Q1 2025, slightly up from 86% in Q1 2024[20] - Approximately 89% of the company's revenue was generated in U.S. dollars during the first quarter of 2025, with expectations to maintain a high percentage in the foreseeable future[151] Financial Position - The company has approximately $1.8 billion in remaining performance obligations, with over 70% expected to be recognized by the end of 2027[18] - The company reported total settlement assets of $263.5 million and total liabilities of $271.8 million as of March 31, 2025[26] - As of March 31, 2025, the total carrying amount of goodwill increased to $319.371 million from $316.041 million, reflecting a $3.330 million impact from foreign currency exchange rates[33] - As of March 31, 2025, the total long-term debt was $537.554 million, slightly up from $530.997 million as of December 31, 2024[36] - Long-term debt as of March 31, 2025, included $125.6 million in revolver borrowings and $425.0 million in convertible notes[147] Expenses and Income - Segment net income for the quarter ended March 31, 2025, was $16.1 million, down from $19.5 million in the prior year, reflecting a decrease of approximately 17.9%[32] - Research and development expenses for the quarter were $39.8 million, an increase from $36.1 million in the same quarter of 2024, representing a growth of about 7.5%[32] - The total amortization expense for other intangible assets in Q1 2025 was $6.6 million, compared to $5.4 million in Q1 2024, indicating a year-over-year increase of approximately 22.2%[33] - Stock-based compensation expense for Q1 2025 was $8.4 million, compared to $7.7 million in Q1 2024[76] Cash Management - As of March 31, 2025, cash and cash equivalents were $136.0 million, down from $161.8 million at the end of 2024[146] - The company held $274.2 million in cash collected on behalf of merchants, down from $343.2 million as of December 31, 2024, indicating significant fluctuations in cash reserves[148] - Cash held on behalf of merchants is maintained in accounts equal to at least 100% of the aggregate amount owed to them, reflecting a strong liquidity position[148] - Settlement assets are swept into overnight money market accounts daily, indicating active cash management practices[148] Debt and Financing - The company entered into a $600 million 2025 Credit Agreement in March 2025, which includes a $600 million revolving loan facility due in March 2030[36] - The company withdrew $140.6 million from the 2025 Revolver to repay existing debts and cover fees, leaving $474.1 million available under the 2025 Revolver as of March 31, 2025[42] - The fair value of the 2023 Convertible Notes was estimated at $460.1 million as of March 31, 2025, compared to a carrying value of $425 million[27] - The 2023 Convertible Notes have an initial conversion rate of 14.0753 shares per $1,000 principal amount, equating to a conversion price of $71.05 per share[45] 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 million based on performance[51][52] - The acquisition of DGIT Systems Pty Ltd was completed for approximately $16 million, with a final deferred payment of $0.3 million made in Q1 2025[53] - As of March 31, 2025, the company accrued $1.3 million related to potential future earn-out payments from the DGIT acquisition[54] - Restructuring and reorganization charges for Q1 2025 totaled $7.4 million, compared to $2.0 million in Q1 2024[55] - The company reduced its global workforce by approximately 125 employees, incurring $6.6 million in restructuring charges related to involuntary terminations[57] - The closure of the Crawfordville, Florida design and delivery center is expected to eliminate approximately 100 employees and incur total costs of around $5 million, primarily in 2025[57] Accounting and Reporting - The company is evaluating the impact of new accounting standards issued by FASB, which may affect future disclosures but are not expected to materially impact financial statements[28][29] - The company does not carry convertible debt at fair value but provides fair value estimates for disclosure, highlighting transparency in financial reporting[149] - Fluctuations in interest rates and stock price volatility impact the fair value of the company's convertible debt, indicating market sensitivity[149] Foreign Currency Exposure - The company is exposed to foreign currency exchange risk due to operations in multiple currencies, including the British Pound, Euro, and Australian Dollar[150] - The company attempts to maximize natural hedges by incurring expenses in the same currency as revenue, although mismatches can occur[150] - A hypothetical adverse change of 10% in exchange rates as of March 31, 2025, would not have had a material impact on the company's results of operations[151]

Core Viewpoint - CSG Systems (CSGS) reported quarterly earnings of $1.14 per share, exceeding the Zacks Consensus Estimate of $1 per share, and showing an increase from $1.01 per share a year ago [1] Financial Performance - The quarterly earnings surprise was 14%, with a previous quarter surprise of 36.36% when actual earnings were $1.65 compared to an expected $1.21 [2] - CSG Systems generated revenues of $271.55 million for the quarter, surpassing the Zacks Consensus Estimate by 0.25%, and showing a slight increase from $270.07 million year-over-year [3] Stock Performance - CSG Systems shares have increased approximately 18.3% since the beginning of the year, contrasting with a decline of 4.7% in the S&P 500 [4] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $1.08 for the upcoming quarter and $4.69 for the current fiscal year, with revenues expected to be $274.03 million and $1.12 billion respectively [5][8] - The estimate revisions trend for CSG Systems is currently mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [7] Industry Context - The Computer - Services industry, to which CSG Systems belongs, is currently ranked in the top 22% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9]

Financial Data and Key Metrics Changes - CSG generated $299 million in revenue for Q1 2025, a slight increase from $295 million in the same period last year, marking the highest first-quarter revenue in the company's history [22] - Non-GAAP operating income for Q1 2025 was $51 million, resulting in a non-GAAP adjusted operating margin of 19%, compared to $45 million and 16.6% in Q1 2024 [23] - Non-GAAP adjusted EBITDA was $64 million, or 23.7% of revenue, up from $58 million or 21.5% in the prior year [23] - Non-GAAP EPS increased by 13% to $1.14 from $1.01 in the prior year [24] - Non-GAAP adjusted free cash flow was $7 million, a significant improvement from a negative $34 million in Q1 2024, representing the strongest Q1 performance in seven years [25] Business Line Data and Key Metrics Changes - CSG's revenue diversification improved, with 33% of Q1 revenue coming from faster-growing industry verticals outside of cable and telecom, up from 30% in the same quarter last year [8] - The company reported a 13% year-over-year growth in its payments merchant base, reaching 135,000 merchants in Q1 [16] Market Data and Key Metrics Changes - CSG's top two customers, Charter and Comcast, represented 37% of total Q1 revenue, down from 49% in 2017, indicating improved revenue concentration [8] - The annual revenue from Charter and Comcast grew by approximately $76 million from 2017 to 2024, reflecting a 2.6% compound annual growth rate [8] Company Strategy and Development Direction - CSG aims for 2% to 6% organic revenue growth and to diversify revenue from faster-growing verticals to over 35% of total revenue by 2026 [10] - The company is committed to expanding non-GAAP adjusted operating margins to a long-term range of 18% to 20% [10] - CSG plans to return over $100 million in share repurchases and dividends combined in 2025, having already returned $32 million in Q1 [11] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing global macroeconomic uncertainty but expressed confidence in the company's ability to navigate challenges and continue growth [33] - The company is focused on becoming a more asset-light SaaS provider, aiming for greater profitability and cash flow generation [17] - Management highlighted a strong sales pipeline and ongoing demand for solutions, with expectations for continued revenue growth [27][76] Other Important Information - CSG's balance sheet remains strong, with $136 million in cash and cash equivalents and a net debt leverage ratio of 1.6 times adjusted EBITDA [26] - The company has entered a new five-year revolving credit facility, consolidating its term loan and revolver into a $600 million facility [26] Q&A Session Summary Question: Insights on customer feedback towards the end of the quarter - Management noted that there was nothing unique in Q1 or the first month of the new quarter, but global macroeconomic uncertainty continues to affect customer decision-making [33][34] Question: Discussion on margin optimization - Management emphasized the importance of operational discipline and continuous improvement in processes to enhance margins, alongside a shift towards higher-margin SaaS solutions [37][40] Question: Revenue trends for Charter and Comcast - Management explained that fluctuations in revenue from these customers are normal and attributed to various factors, including contract terms and new solutions [43][45] Question: M&A strategy and ideal candidates - Management expressed a disciplined approach to M&A, focusing on acquiring companies that enhance CSG's capabilities in integrated solutions and recurring revenue [51][53] Question: Dynamics in the telco vertical - Management indicated that the challenges faced are part of a broader transformation in the global telco market, with a focus on SaaS solutions and cost reduction [66][68]

CSG Systems International (CSGS) Q1 2025 Earnings Call May 07, 2025 05:00 PM ET Speaker0 Ladies and gentlemen, thank you for standing by. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to CSG's First Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. And I would now like to turn the conference ...

CSG Q1 2025 Earnings Presentation Brian Shepherd CEO & President Hai Tran CFO Safe Harbor Forward-Looking Statements + Disclaimers This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," ...

EXHIBIT 99.1 PRESS RELEASE CSG SYSTEMS INTERNATIONAL REPORTS FIRST QUARTER 2025 RESULTS DENVER--(May 7, 2025) — CSG (NASDAQ: CSGS) today reported results for the quarter ended March 31, 2025. Raising 2025 Non-GAAP Profitability and EPS Guidance Targets; Reiterating All Others Strong Cash Flow from Operations; Highest First Quarter Non-GAAP Adjusted Free Cash Flow Since 2018 Record High Revenue Diversification with 33% of Revenue Coming from Industry Verticals Outside of CSPs Exciting Customer Wins and Contr ...

Investors interested in Computer and Technology stocks should always be looking to find the best-performing companies in the group. Is CSG Systems (CSGS) one of those stocks right now? Let's take a closer look at the stock's year-to-date performance to find out.CSG Systems is one of 611 companies in the Computer and Technology group. The Computer and Technology group currently sits at #6 within the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring t ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____ Commission File Number 0-27512 CSG SYSTEMS INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Delaware 47-0783182 (State or ...

CSG Q4 & Full Year 2024 Earnings Presentation Brian Shepherd CEO & President Hai Tran CFO Safe Harbor Forward-Looking Statements + Disclaimers This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will ...