CSG Systems International(CSGS) - 2025 Q3 - Quarterly Results

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]