CSG Systems International(US:CSGS)2025-05-08 15:34Revenue 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]