CSG Systems International Reports Third Quarter 2025 Results

CSG^® (NASDAQ: CSGS) today reported results for the quarter ended September 30, 2025.

Financial Results:

Third quarter 2025 financial results:

• Total revenue was $303.6 million.
• GAAP operating income was $30.5 million, or an operating margin of 10.0%, and non-GAAP operating income was $54.5 million, or a non-GAAP adjusted operating margin of 19.5%.
• GAAP earnings per diluted share (EPS) was $0.73 and non-GAAP EPS was $1.31.
• Cash flows from operations were $47.9 million, with non-GAAP adjusted free cash flow of $43.9 million.

Shareholder Returns:

• CSG declared its quarterly cash dividend of $0.32 per share of common stock, or a total of approximately $9 million, to shareholders.
• During the third quarter of 2025, CSG repurchased a total of approximately 275,000 shares of its stock for approximately $18 million.

Financial Overview (unaudited) (in thousands, except per share amounts and percentages):
		Quarter Ended September 30,												Nine Months Ended September 30,
		2025				2024				Percent Changed				2025				2024				Percent Changed
GAAP Results:
Revenue		$	303,615			$	295,143				2.9	%		$	900,196			$	880,596				2.2	%
Operating Income			30,459				31,822				(4.3	%)			89,699				89,039				0.7	%
Operating Margin Percentage			10.0	%			10.8	%							10.0	%			10.1	%
EPS		$	0.73			$	0.67				9.0	%		$	1.74			$	1.83				(4.9	%)
Cash Flows from Operating Activities			47,943				39,459				21.5	%			96,738				53,213				81.8	%
Non-GAAP Results:
Operating Income		$	54,496			$	50,076				8.8	%		$	160,443			$	141,085				13.7	%
Adjusted Operating Margin Percentage			19.5	%			18.4	%							19.5	%			17.4	%
EPS		$	1.31			$	1.06				23.6	%		$	3.61			$	3.08				17.2	%
Adjusted EBITDA			68,975				63,901				7.9	%			201,292				182,050				10.6	%
Adjusted Free Cash Flow			43,941				32,004				37.3	%			90,584				36,685				146.9	%

For additional information and reconciliations regarding CSG’s use of non-GAAP financial measures, please refer to the attached Exhibit 2 and the Investor Relations section of CSG’s website at csgi.com.

Results of Operations

GAAP Results: Total revenue for the third quarter of 2025 was $303.6 million, a 2.9% increase when compared to revenue of $295.1 million for the third quarter of 2024. The increase in revenue can be mainly attributed to the continued growth of CSG’s SaaS and related solutions.

GAAP operating income for the third quarter of 2025 was $30.5 million, or 10.0% of total revenue, compared to $31.8 million, or 10.8% of total revenue, for the third quarter of 2024.

GAAP EPS for the third quarter of 2025 was $0.73, compared to $0.67 for the third quarter of 2024, with the increase mainly attributed to foreign currency movements.

Non-GAAP Results: Non-GAAP operating income for the third quarter of 2025 was $54.5 million, or a non-GAAP adjusted operating margin of 19.5%, compared to $50.1 million, or a non-GAAP adjusted operating margin of 18.4% for the third quarter of 2024. The increase in non-GAAP operating margin can be mainly attributed to the cost efficiency actions discussed above.

Non-GAAP EPS for the third quarter of 2025 was $1.31, compared to $1.06 for the third quarter of 2024. The increase in non-GAAP EPS is mainly due the higher non-GAAP operating income, discussed above, and foreign currency movements.

Balance Sheet and Cash Flows

Cash and cash equivalents as of September 30, 2025 were $158.4 million compared to $145.9 million as of June 30, 2025 and $161.8 million as of December 31, 2024. CSG had net cash flows provided by operations for the third quarters ended September 30, 2025 and 2024 of $47.9 million and $39.5 million, respectively, and had non-GAAP adjusted free cash flow of $43.9 million and $32.0 million, respectively.

Additional Information

For information about CSG, please visit CSG’s website at csgi.com. Additional information can be found in the Investor Relations section of the website.

About CSG

CSG empowers companies to build unforgettable experiences, making it easier for people and businesses to connect with, use and pay for the services they value most. Our customer experience, billing and payments solutions help companies of any size make money and make a difference. With our SaaS solutions, company leaders can take control of their future and tap into guidance along the way from our fiercely committed and forward-thinking CSGers around the world.

Want to be future-ready and a change-maker like the global brands that trust CSG? Visit csgi.com to learn more.

Forward-Looking Statements

This news release contains forward-looking statements as defined under the Securities Act of 1933, as amended, that are based on assumptions about a number of important factors and involve risks and uncertainties that could cause actual results to differ materially from what appears in this news release. Some of these key factors include, but are not limited to the following items:

• CSG derives a significant portion of its revenue from a limited number of customers, with approximately forty percent of its revenue from its two largest customers;
• Fluctuations in credit market conditions, general global economic and political conditions, and foreign currency exchange rates;
• CSG’s ability to maintain a reliable, secure computing environment;
• Continued market acceptance of CSG’s products and services;
• CSG’s ability to continuously develop and enhance products in a timely, cost-effective, technically advanced and competitive manner;
• CSG’s ability to deliver its solutions in a timely fashion within budget, particularly large and complex software implementations;
• CSG’s dependency on the global telecommunications industry, and in particular, the North American telecommunications industry;
• CSG’s ability to meet its financial expectations;
• Increasing competition in CSG’s market from companies of greater size and with broader presence;
• CSG’s ability to successfully integrate and manage acquired businesses or assets to achieve expected strategic, operating and financial goals;
• CSG’s ability to protect its intellectual property rights;
• CSG’s ability to conduct business in the international marketplace;
• CSG’s ability to comply with applicable U.S. and International laws and regulations;
• CSG’s business may be disrupted, and its results of operations and cash flows adversely affected by a global pandemic; and the risks and uncertainties associated with CSG’s previously disclosed entry into the Agreement and Plan of Merger, dated October 29, 2025, with NEC Corporation, Inc. and Canvas Transaction Company, Inc., including the ability of the parties to complete the proposed transaction contemplated thereby on the anticipated terms and timing, or at all.

This list is not exhaustive, and readers are encouraged to review the additional risks and important factors described in CSG’s reports on Forms 10-K and 10-Q and other filings made with the SEC.

CSG SYSTEMS INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS-UNAUDITED (in thousands)
		September 30, 2025				December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents		$	158,385			$	161,789
Settlement and merchant reserve assets			301,545				343,235
Trade accounts receivable:
Billed, net of allowance of $4,331 and $3,041			268,024				266,903
Unbilled			86,064				80,173
Income taxes receivable			6,930				2,600
Other current assets			41,939				46,182
Total current assets			862,887				900,882
Non-current assets:
Property and equipment, net of depreciation of $143,445 and $133,514			45,292				56,595
Operating lease right-of-use assets			17,353				24,166
Software, net of amortization of $166,726 and $154,648			22,897				19,927
Goodwill			323,909				316,041
Acquired customer contracts, net of amortization of $145,489 and $133,279			31,291				39,377
Customer contract costs, net of amortization of $53,643 and $44,587			69,877				60,809
Deferred income taxes			83,700				73,295
Other assets			16,313				9,595
Total non-current assets			610,632				599,805
Total assets		$	1,473,519			$	1,500,687
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt		$	-			$	7,500
Operating lease liabilities			5,982				11,067
Customer deposits			44,158				41,448
Trade accounts payable			42,466				36,370
Accrued employee compensation			66,414				67,944
Settlement and merchant reserve liabilities			298,419				341,924
Deferred revenue			60,184				54,424
Income taxes payable			566				7,802
Other current liabilities			56,746				46,730
Total current liabilities			574,935				615,209
Non-current liabilities:
Long-term debt, net of unamortized discounts of $11,394 and $12,128			538,606				530,997
Operating lease liabilities			21,713				25,020
Deferred revenue			26,925				26,469
Income taxes payable			2,331				2,732
Deferred income taxes			69				94
Other non-current liabilities			19,444				17,597
Total non-current liabilities			609,088				602,909
Total liabilities			1,184,023				1,218,118
Stockholders' equity:
Preferred stock, par value $.01 per share; 10,000 shares authorized; zero shares issued and outstanding			-				-
Common stock, par value $.01 per share; 100,000 shares authorized; 28,608 and 28,854 shares outstanding			722				718
Additional paid-in capital			532,082				518,215
Treasury stock, at cost; 42,286 and 41,583 shares			(1,238,633	)			(1,194,224	)
Accumulated other comprehensive income (loss):
Cumulative foreign currency translation adjustments			(45,975	)			(62,290	)
Accumulated earnings			1,041,300				1,020,150
Total stockholders' equity			289,496				282,569
Total liabilities and stockholders' equity		$	1,473,519			$	1,500,687

CSG SYSTEMS INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME-UNAUDITED (in thousands, except per share amounts)
	Quarter Ended								Nine Months Ended
��	September 30, 2025				September 30, 2024				September 30, 2025				September 30, 2024
Revenue	$	303,615			$	295,143			$	900,196			$	880,596
Cost of revenue (exclusive of depreciation, shown separately below)		157,534				149,487				462,172				460,266
Other operating expenses:
Research and development		40,300				41,665				121,619				116,171
Selling, general and administrative		65,430				63,913				195,260				186,794
Depreciation		4,301				5,313				13,899				16,286
Restructuring and reorganization charges		5,591				2,943				17,547				12,040
Total operating expenses		273,156				263,321				810,497				791,557
Operating income		30,459				31,822				89,699				89,039
Other income (expense):
Interest expense		(7,367	)			(7,778	)			(21,964	)			(22,982	)
Interest income		1,284				1,922				4,266				6,641
Loss on debt extinguishment		-				-				(453	)			-
Other, net		1,964				(2,187	)			(3,787	)			(1,455	)
Total other		(4,119	)			(8,043	)			(21,938	)			(17,796	)
Income before income taxes		26,340				23,779				67,761				71,243
Income tax provision		(5,857	)			(4,691	)			(18,881	)			(18,859	)
Net income	$	20,483			$	19,088			$	48,880			$	52,384
Weighted-average shares outstanding:
Basic		27,627				28,362				27,762				28,475
Diluted		27,970				28,468				28,123				28,621
Earnings per common share:
Basic	$	0.74			$	0.67			$	1.76			$	1.84
Diluted		0.73				0.67				1.74				1.83

	Nine Months Ended
	September 30, 2025				September 30, 2024
Cash flows from operating activities:
Net income	$	48,880			$	52,384
Adjustments to reconcile net income to net cash provided by operating activities-
Depreciation		14,533				16,724
Amortization		39,874				37,467
Loss on debt extinguishment		453				-
Asset impairments		94				-
Loss on unrealized foreign currency transactions, net		547				225
Deferred income taxes		(9,093	)			(189	)
Stock-based compensation		25,654				25,023
Subtotal		120,942				131,634
Changes in operating assets and liabilities, net of acquired amounts:
Trade accounts receivable, net		(9,132	)			(7,873	)
Other current and non-current assets and liabilities		(14,001	)			(12,771	)
Income taxes payable/receivable		(11,946	)			(16,194	)
Trade accounts payable and accrued liabilities		7,639				(48,658	)
Deferred revenue		3,236				7,075
Net cash provided by operating activities		96,738				53,213
Cash flows from investing activities:
Purchases of software, property, and equipment		(11,154	)			(16,528	)
Receipts from sale of software, property, and equipment		327				-
Business combinations, net of cash and settlement assets acquired of zero and $46,432		-				17,293
Net cash provided by (used in) investing activities		(10,827	)			765
Cash flows from financing activities:
Proceeds from issuance of common stock		2,245				2,416
Payments of cash dividends		(27,415	)			(26,598	)
Repurchases of common stock		(58,525	)			(42,439	)
Deferred acquisition payments		(314	)			(2,488	)
Proceeds from long-term debt		150,625				15,000
Payments on long-term debt		(151,250	)			(20,625	)
Payments of debt financing costs		(2,258	)			-
Payments on financing obligations		(5,513	)			(2,191	)
Settlement and merchant reserve activity		(43,671	)			(79,606	)
Net cash used in financing activities		(136,076	)			(156,531	)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash		5,113				(337	)
Net decrease in cash, cash equivalents, and restricted cash		(45,052	)			(102,890	)
Cash, cash equivalents, and restricted cash, beginning of period		506,763				463,876
Cash, cash equivalents, and restricted cash, end of period	$	461,711			$	360,986
Supplemental disclosures of cash flow information:
Cash paid during the period for-
Interest	$	23,243			$	24,592
Income taxes		39,998				35,292
Non-cash investing and financing activities-
Software, property, and equipment included in current and non-current liabilities		11,868				9,830
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	158,385			$	118,444
Settlement and merchant reserve assets		301,545				240,755
Restricted cash included in current and non-current assets		1,781				1,787
Total cash, cash equivalents, and restricted cash	$	461,711			$	360,986

EXHIBIT 1 CSG SYSTEMS INTERNATIONAL, INC. SUPPLEMENTAL REVENUE ANALYSIS
Revenue by Significant Customers: 10% or more of Revenue
		Quarter Ended								Quarter Ended								Quarter Ended
		September 30, 2025								June 30, 2025								September 30, 2024
		Amount				% of Revenue				Amount				% of Revenue				Amount				% of Revenue
Charter		$	58,859				19	%		$	57,667				19	%		$	59,070				20	%
Comcast			53,204				18	%			51,415				17	%			58,688				20	%

Revenue by Vertical
		Quarter Ended				Quarter Ended				Quarter Ended
		September 30, 2025				June 30, 2025				September 30, 2024
Broadband/Cable/Satellite			51	%			51	%			53	%
Telecommunications			18	%			18	%			18	%
All other			31	%			31	%			29	%
Total revenue			100	%			100	%			100	%

Revenue by Geography
		Quarter Ended				Quarter Ended				Quarter Ended
		September 30, 2025				June 30, 2025				September 30, 2024
Americas			85	%			85	%			88	%
Europe, Middle East and Africa			10	%			11	%			9	%
Asia Pacific			5	%			4	%			3	%
Total revenue			100	%			100	%			100	%

EXHIBIT 2

CSG SYSTEMS INTERNATIONAL, INC.

DISCLOSURES FOR NON-GAAP FINANCIAL MEASURES

Use of Non-GAAP Financial Measures and Limitations

To supplement its condensed consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), CSG uses non-GAAP operating income, non-GAAP adjusted operating margin percentage, non-GAAP EPS, non-GAAP adjusted EBITDA, and non-GAAP adjusted free cash flow. CSG believes that these non-GAAP financial measures, when reviewed in conjunction with its GAAP financial measures, provide investors with greater transparency to the information used by CSG’s management in its financial and operational decision making. CSG uses these non-GAAP financial measures for the following purposes:

• Certain internal financial planning, reporting, and analysis;
• Forecasting and budgeting;
• Certain management compensation incentives; and
• Communications with CSG’s Board of Directors, stockholders, financial analysts, and investors.

These non-GAAP financial measures are provided with the intent of providing investors with the following information:

• A more complete understanding of CSG’s underlying operational results, trends, and cash generating capabilities;
• Consistency and comparability with CSG’s historical financial results; and
• Comparability to similar companies, many of which present similar non-GAAP financial measures to investors.

Non-GAAP financial measures are not measures of performance under GAAP, and therefore should not be considered in isolation or as a substitute for GAAP financial information. Limitations with the use of non-GAAP financial measures include the following items:

• Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles;
• The way in which CSG calculates non-GAAP financial measures may differ from the way in which other companies calculate similar non-GAAP financial measures;
• Non-GAAP financial measures do not include all items of income and expense that affect CSG’s operations and that are required by GAAP to be included in financial statements;
• Certain adjustments to CSG’s non-GAAP financial measures result in the exclusion of items that are recurring and will be reflected in CSG’s financial statements in future periods; and
• Certain charges excluded from CSG’s non-GAAP financial measures are cash expenses, and therefore do impact CSG’s cash position.

CSG compensates for these limitations by relying primarily on its GAAP results and using non-GAAP financial measures as a supplement only. Additionally, CSG provides specific information regarding the treatment of GAAP amounts considered in preparing the non-GAAP financial measures and reconciles each non-GAAP financial measure to the most directly comparable GAAP measure.

Non-GAAP Financial Measures: Basis of Presentation

The table below outlines the exclusions from CSG’s non-GAAP financial measures:

Non-GAAP Exclusions		Operating Income		Adjusted Operating Margin Percentage		EPS
Transaction fees		—		X		—
Restructuring and reorganization charges		X		X		X
Executive transition costs		X		X		X
Acquisition-related expenses:
Amortization of acquired intangible assets		X		X		X
Earn-out compensation		X		X		X
Transaction-related costs		X		X		X
Stock-based compensation		X		X		X
Gain (loss) on debt extinguishment/conversion		—		—		X
Gain (loss) on acquisitions or dispositions		—		—		X
Unusual income tax matters		—		—		X

CSG believes that excluding certain items in calculating its non-GAAP financial measures provides meaningful supplemental information regarding CSG’s performance and these items are excluded for the following reasons:

• Transaction fees are primarily comprised of fees paid to third-party payment processors and financial institutions and interchange fees under CSG’s payment services contracts. Transaction fees are included in revenue in CSG’s Income Statement (and not netted against revenue) because CSG maintains control and acts as principal over the integrated service provided under its payment services customer contracts. However, CSG excludes expense associated with transaction fees from the numerator and denominator in calculating its non-GAAP adjusted operating margin percentage in order to provide comparability with historical and future periods and with its peer group and competitors.
• Restructuring and reorganization charges are expenses that result from cost reduction initiatives and/or significant changes to CSG’s business, to include such things as involuntary employee terminations, changes in management structure, divestitures of businesses, facility consolidations and abandonments, and fundamental reorganizations impacting operational focus and direction. These charges are not considered reflective of CSG’s recurring business operating results. The exclusion of these items in calculating CSG’s non-GAAP financial measures allows management and investors an additional means to compare CSG’s current financial results with historical and future periods.
• Executive transition costs include expenses incurred related to a departure of a CSG executive officer under the terms of the related separation agreement. These types of costs are not considered reflective of CSG’s recurring business operating results. The exclusion of these costs in calculating CSG’s non-GAAP financial measures allows management and investors an additional means to compare CSG’s current financial results with historical and future periods.
• Acquisition-related expenses include amortization of acquired intangible assets, earn-out compensation, and transaction-related costs. Transaction-related costs, which typically include expenses related to legal, accounting, and other professional services, are direct and incremental expenses related to business acquisitions, and thus, are not considered reflective of CSG’s recurring business operating results. The total amount of acquisition-related expenses can vary significantly between periods based on the number and size of acquisition activities, previously acquired intangible assets becoming fully amortized, and ultimate realization of earn-out compensation. In addition, the timing of these expenses may not directly correlate with underlying performance of the CSG’s operations. Therefore, the exclusion of acquisition-related expenses in calculating CSG’s non-GAAP financial measures allows management and investors an additional means to compare CSG’s current financial results with historical and future periods.
• Stock-based compensation results from CSG’s issuance of equity awards to its employees under incentive compensation programs. The amount of this incentive compensation in any period is not generally linked to the level of performance by employees or CSG. The exclusion of these expenses in calculating CSG’s non-GAAP financial measures allows management and investors an additional means to evaluate the non-cash expense related to compensation included in CSG’s results of operations, and therefore, the exclusion of this item allows investors to further evaluate the cash generating capabilities of CSG’s business.
• Gains and losses related to the extinguishment/conversion of debt can be as a result of the refinancing of CSG’s credit agreement and/or repurchase, conversion, or settlement of CSG’s convertible notes. These activities, to include any derivative activity related to debt conversions, are not considered reflective of CSG’s recurring business operating results. Any resulting gain or loss is generally non-cash income or expense, and therefore, the exclusion of these items allows investors to further evaluate the cash impact of these activities for cash flow and liquidity purposes. In addition, the exclusion of these gains and losses in calculating CSG’s non-GAAP EPS allows management and investors an additional means to compare CSG’s current operating results with historical and future periods.
• Gains or losses related to the acquisition or disposition of certain of CSG’s business activities are not considered reflective of CSG’s recurring business operating results. Any resulting gain or loss is generally non-cash income or expense, and therefore, the exclusion of these items allows investors to further evaluate the cash impact of these activities for cash flow and liquidity purposes. In addition, the exclusion of these gains and losses in calculating CSG’s non-GAAP EPS allows management and investors an additional means to compare CSG’s current operating results with historical and future periods.
• Unusual items within CSG’s quarterly and/or annual income tax expense can occur from such things as income tax accounting timing matters, income taxes related to unusual events, or as a result of different treatment of certain items for book accounting and income tax purposes. Consideration of such items in calculating CSG’s non-GAAP financial measures allows management and investors an additional means to compare CSG’s current financial results with historical and future periods.

CSG also reports non-GAAP adjusted EBITDA and non-GAAP adjusted free cash flow. Management believes non-GAAP adjusted EBITDA is a useful measure to investors in evaluating CSG’s operating performance, debt servicing capabilities, and enterprise valuation. CSG defines non-GAAP adjusted EBITDA as income before interest, income taxes, depreciation, amortization, stock-based compensation, foreign currency transaction adjustments, acquisition-related expenses, and unusual items, such as restructuring and reorganization charges, executive transition costs, gains and losses related to the extinguishment of debt, and gains and losses on acquisitions or dispositions, as discussed above. Additionally, management uses non-GAAP adjusted free cash flow, among other measures, to assess its financial performance and cash generating capabilities, and believes that it is useful to investors because it shows CSG’s cash available to service debt, make strategic acquisitions and investments, repurchase its common stock, pay cash dividends, and fund ongoing operations. CSG defines non-GAAP adjusted free cash flow as net cash flows from operating activities before earn-out compensation payments related to acquisitions less the purchases of software, property, and equipment.

Non-GAAP Financial Measures

Non-GAAP Operating Income and Non-GAAP Adjusted Operating Margin Percentage:

The reconciliation of GAAP operating income to non-GAAP operating income, and calculation of CSG’s non-GAAP adjusted operating margin percentage, for the indicated periods are as follows (in thousands, except percentages):

		Quarter Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Non-GAAP Operating Income
GAAP operating income		$	30,459			$	31,822			$	89,699			$	89,039
Restructuring and reorganization charges (1)			5,591				2,943				17,547				12,040
Executive transition costs			-				-				-				352
Acquisition-related expenses:
Amortization of acquired intangible assets			3,474				3,929				10,385				10,174
Earn-out compensation			2,954				2,591				13,320				3,416
Transaction-related costs			3,200				32				3,200				243
Stock-based compensation (1)			8,818				8,759				26,292				25,821
Non-GAAP operating income		$	54,496			$	50,076			$	160,443			$	141,085
Non-GAAP Adjusted Operating Margin Percentage
Revenue		$	303,615			$	295,143			$	900,196			$	880,596
Less: Transaction fees (2)			(24,333	)			(22,524	)			(78,100	)			(71,793	)
Revenue less transaction fees		$	279,282			$	272,619			$	822,096			$	808,803
Non-GAAP adjusted operating margin percentage			19.5	%			18.4	%			19.5	%			17.4	%

(1)		Restructuring and reorganization charges include stock-based compensation, which is not included in the stock-based compensation line in the tables above and following, and depreciation, which has not been recorded to the depreciation line item on CSG’s Income Statement.
(2)		Transaction fees are primarily comprised of fees paid to third-party payment processors and financial institutions and interchange fees under CSG’s payment services contracts.  Transaction fees are included in revenue in CSG's Income Statement (and not netted against revenue) because CSG maintains control and acts as principal over the integrated service provided under its payment services customer contracts.  However, CSG excludes expense associated with transaction fees from the numerator and denominator in calculating its non-GAAP adjusted operating margin percentage in order to provide comparability with historical and future periods and with its peer group and competitors.

Non-GAAP EPS:

The reconciliations of GAAP EPS to non-GAAP EPS for the indicated periods are as follows (in thousands, except per share amounts):

		Quarter Ended								Quarter Ended
		September 30, 2025								September 30, 2024
		Amounts				EPS (4)				Amounts				EPS (4)
GAAP net income		$	20,483			$	0.73			$	19,088			$	0.67
GAAP income tax provision (3)			5,857								4,691
GAAP income before income taxes			26,340								23,779
Restructuring and reorganization charges (1)			5,591								2,943
Acquisition-related costs:
Amortization of acquired intangible assets			3,474								3,929
Earn-out compensation			2,954								2,591
Transaction-related costs			3,200								32
Stock-based compensation (1)			8,818								8,759
Non-GAAP income before income taxes			50,377								42,033
Non-GAAP income tax provision (3)			(13,602	)							(11,979	)
Non-GAAP net income		$	36,775			$	1.31			$	30,054			$	1.06

		Nine Months Ended								Nine Months Ended
		September 30, 2025								September 30, 2024
		Amounts				EPS (4)				Amounts				EPS (4)
GAAP net income		$	48,880			$	1.74			$	52,384			$	1.83
GAAP income tax provision (3)			18,881								18,859
GAAP income before income taxes			67,761								71,243
Restructuring and reorganization charges (1)			17,547								12,040
Executive transition costs			-								352
Acquisition-related expenses:
Amortization of acquired intangible assets			10,385								10,174
Earn-out compensation			13,320								3,416
Transaction-related costs			3,200								243
Stock-based compensation (1)			26,292								25,821
Loss on extinguishment of debt			453								-
Non-GAAP income before income taxes			138,958								123,289
Non-GAAP income tax provision (3)			(37,519	)							(35,137	)
Non-GAAP net income		$	101,439			$	3.61			$	88,152			$	3.08

(3)		The GAAP effective income tax rates for the third quarters of 2025 and 2024 were approximately 22% and 20%, respectively, and for the nine months ended September 30, 2025 and 2024 were approximately 28% and 26%, respectively.  The GAAP effective tax rate increases are due primarily to certain one-time benefits recognized in the third quarter of 2024 and the earn-out compensation, for which a valuation allowance has been established for income tax purposes.
		The non-GAAP effective income tax rates for the third quarter and nine months ended September 30, 2025 were 27% in each period and for the third quarter and nine months ended September 30, 2024 were 28.5% in each period.
(4)		The outstanding diluted shares for the third quarter and nine months ended September 30, 2025 were 28.0 million and 28.1 million, respectively, and for the third quarter and nine months ended September 30, 2024 were 28.5 million and 28.6 million, respectively.

Non-GAAP Adjusted EBITDA:

CSG’s calculation of non-GAAP adjusted EBITDA and the reconciliation of CSG’s non-GAAP adjusted EBITDA measure to GAAP net income is provided below for the indicated periods (in thousands, except percentages):

		Quarter Ended								Nine Months Ended
		September 30,								September 30,
		2025				2024				2025				2024
GAAP net income		$	20,483			$	19,088			$	48,880			$	52,384
GAAP income tax provision			5,857				4,691				18,881				18,859
Interest expense (5)			7,367				7,778				21,964				22,982
Loss on debt extinguishment			-				-				453				-
Interest income and other, net			(3,248	)			265				(479	)			(5,186	)
GAAP operating income			30,459				31,822				89,699				89,039
Restructuring and reorganization charges (1)			5,591				2,943				17,547				12,040
Executive transition costs			-				-				-				352
Acquisition-related expenses:
Amortization of acquired intangible assets (6)			3,474				3,929				10,385				10,174
Earn-out compensation			2,954				2,591				13,320				3,416
Transaction-related costs			3,200				32				3,200				243
Stock-based compensation (1)			8,818				8,759				26,292				25,821
Amortization of other intangible assets (6)			4,301				3,139				11,628				8,584
Amortization of customer contract costs (6)			5,877				5,373				15,322				16,095
Depreciation (1)			4,301				5,313				13,899				16,286
Non-GAAP adjusted EBITDA		$	68,975			$	63,901			$	201,292			$	182,050
Non-GAAP adjusted EBITDA as a percentage of revenue less transaction fees (2)			24.7	%			23.4	%			24.5	%			22.5	%

(5)		Interest expense includes amortization of deferred financing costs as provided in Note 6 below.
(6)		Amortization on the statement of cash flows is made up of the following items for the indicated periods (in thousands):

		Quarter Ended								Nine Months Ended
		September 30,								September 30,
		2025				2024				2025				2024
Amortization of acquired intangible assets		$	3,474			$	3,929			$	10,385			$	10,174
Amortization of other intangible assets			4,301				3,139				11,628				8,584
Amortization of customer contract costs			5,877				5,373				15,322				16,095
Amortization of deferred financing costs			839				879				2,539				2,614
Total amortization		$	14,491			$	13,320			$	39,874			$	37,467

Non-GAAP Adjusted Free Cash Flow:

CSG’s calculation of non-GAAP adjusted free cash flow and the reconciliation of CSG’s non-GAAP adjusted free cash flow measure to cash flows from operating activities are provided below for the indicated periods (in thousands):

		Quarter Ended								Nine Months Ended
		September 30,								September 30,
		2025				2024				2025				2024
Cash flows from operating activities		$	47,943			$	39,459			$	96,738			$	53,213
Earn-out compensation payments			-				-				5,000				-
Purchases of software, property, and equipment			(4,002	)			(7,455	)			(11,154	)			(16,528	)
Non-GAAP adjusted free cash flow		$	43,941			$	32,004			$	90,584			$	36,685

 

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