CSG Systems International(US:CSGS)2025-11-06 19:42Revenue 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]