CSG Systems International Reports Second Quarter 2024 Results
CSG Systems International (NASDAQ: CSGS) reported solid Q2 2024 results, with total revenue of $290.3 million, up 1.4% year-over-year. The company achieved GAAP EPS of $0.48 and non-GAAP EPS of $1.02, a 27.5% increase from Q2 2023. CSG raised its 2024 profitability and non-GAAP EPS guidance targets, while reiterating other guidance. The company announced exciting customer wins, including Telenor Denmark, Telstra, One New Zealand, and Lyse Norway. CSG's Board authorized an additional $100 million share repurchase program. The company's industry diversification strategy progressed, with 31% of revenue now coming from verticals outside Communication Service Providers, up from 7% in 2017.
CSG Systems International (NASDAQ: CSGS) ha riportato risultati solidi per il secondo trimestre del 2024, con un fatturato totale di 290,3 milioni di dollari, in crescita dell'1,4% rispetto all'anno precedente. L'azienda ha raggiunto un GAAP EPS di 0,48 dollari e un non-GAAP EPS di 1,02 dollari, con un aumento del 27,5% rispetto al secondo trimestre del 2023. CSG ha rivisto al rialzo le sue previsioni di redditività e il target di non-GAAP EPS per il 2024, confermando altre indicazioni. L'azienda ha annunciato importanti successi con i clienti, tra cui Telenor Danimarca, Telstra, One Nuova Zelanda e Lyse Norvegia. Il Consiglio di CSG ha autorizzato un programma di riacquisto di azioni aggiuntivo da 100 milioni di dollari. La strategia di diversificazione settoriale dell'azienda ha fatto progressi, con il 31% del fatturato proveniente ora da settori al di fuori dei Fornitori di Servizi di Comunicazione, rispetto al 7% nel 2017.
CSG Systems International (NASDAQ: CSGS) reportó resultados sólidos en el segundo trimestre de 2024, con ingresos totales de 290,3 millones de dólares, un aumento del 1,4% en comparación con el año anterior. La compañía logró un EPS GAAP de 0,48 dólares y un EPS no GAAP de 1,02 dólares, un incremento del 27,5% respecto al segundo trimestre de 2023. CSG elevó sus objetivos de rentabilidad y de EPS no GAAP para 2024, mientras reafirmó otras guías. La empresa anunció emocionantes nuevos clientes, incluidos Telenor Dinamarca, Telstra, One Nueva Zelanda y Lyse Noruega. La Junta de CSG autorizó un programa de recompra de acciones adicional por 100 millones de dólares. La estrategia de diversificación de la industria de la compañía avanzó, con el 31% de los ingresos ahora provenientes de sectores fuera de los Proveedores de Servicios de Comunicación, en comparación con el 7% en 2017.
CSG 시스템스 인터내셔널(NASDAQ: CSGS)는 2024년 2분기 실적을 발표하며 총 수익 2억 9,030만 달러를 기록했다고 밝혔으며, 이는 전년 대비 1.4% 증가한 수치입니다. 회사는 GAAP EPS 0.48 달러, 비GAAP EPS 1.02 달러를 달성하며, 이는 2023년 2분기 대비 27.5% 증가한 것입니다. CSG는 2024년 수익성 및 비GAAP EPS 목표를 상향 조정했으며, 다른 가이던스도 재확인했습니다. 또한 Telenor Denmark, Telstra, One New Zealand, Lyse Norway를 포함한 흥미로운 고객 확보 발표했습니다. CSG의 이사회는 추가 1억 달러의 자사주 매입 프로그램을 승인했습니다. 회사의 산업 다각화 전략이 진행되어, 현재 수익의 31%가 통신 서비스 공급업체 외의 분야에서 발생하고 있으며, 이는 2017년의 7%에서 증가한 수치입니다.
CSG Systems International (NASDAQ: CSGS) a annoncé des résultats solides pour le deuxième trimestre 2024, avec un chiffre d'affaires total de 290,3 millions de dollars, en hausse de 1,4 % par rapport à l'année précédente. L'entreprise a réalisé un BPA GAAP de 0,48 dollar et un BPA non-GAAP de 1,02 dollar, soit une augmentation de 27,5 % par rapport au deuxième trimestre 2023. CSG a relevé ses prévisions de rentabilité et ses objectifs de BPA non-GAAP pour 2024, tout en réitérant d'autres prévisions. L'entreprise a annoncé des succès clients passionnants, y compris Telenor Danemark, Telstra, One Nouvelle-Zélande et Lyse Norvège. Le conseil d'administration de CSG a autorisé un programme supplémentaire de rachat d'actions de 100 millions de dollars. La stratégie de diversification sectorielle de l'entreprise a progressé, 31 % des revenus provenant désormais de secteurs hors Prestataires de Services de Communication, contre 7 % en 2017.
CSG Systems International (NASDAQ: CSGS) meldete solide Ergebnisse für das 2. Quartal 2024, mit Gesamterlösen von 290,3 Millionen US-Dollar, was einer Steigerung von 1,4 % im Vergleich zum Vorjahr entspricht. Das Unternehmen erzielte GAAP EPS von 0,48 US-Dollar und non-GAAP EPS von 1,02 US-Dollar, was einem Anstieg von 27,5 % gegenüber dem 2. Quartal 2023 entspricht. CSG erhöhte seine Ziele für Rentabilität und non-GAAP EPS für 2024 und bestätigte andere Prognosen. Das Unternehmen kündigte spannende Neukunden an, darunter Telenor Dänemark, Telstra, One Neuseeland und Lyse Norwegen. Der Vorstand von CSG genehmigte ein zusätzliches Aktienrückkaufprogramm über 100 Millionen US-Dollar. Die Diversifizierungsstrategie des Unternehmens machte Fortschritte, wobei nun 31 % des Umsatzes aus Bereichen außerhalb von Kommunikationsdienstleistern stammen, verglichen mit 7 % im Jahr 2017.
- Revenue increased by 1.4% year-over-year to $290.3 million
- Non-GAAP EPS grew by 27.5% to $1.02
- Non-GAAP operating income increased by 7.4% to $46.1 million
- New customer wins including Telenor Denmark, Telstra, One New Zealand, and Lyse Norway
- Board authorized additional $100 million share repurchase program
- Raised 2024 profitability and non-GAAP EPS guidance targets
- Industry diversification strategy progressed, with 31% of revenue from non-CSP verticals
- GAAP operating income decreased by 9.9% to $25.4 million
- GAAP operating margin declined from 9.9% to 8.8%
- $5 million increase in restructuring and reorganization charges due to workforce reduction
Insights
CSG Systems International's Q2 2024 results show a mixed performance. While revenue increased by
- Non-GAAP operating income increased by
7.4% to$46.1 million - Non-GAAP EPS rose by
27.5% to$1.02 - Non-GAAP adjusted operating margin improved to
17.3% from16.2%
The company's raised guidance for profitability and non-GAAP EPS is encouraging, indicating management's confidence in future performance. The additional
CSG's strategic shift towards industry diversification is yielding results, with
CSG's focus on SaaS and related solutions is driving growth, offsetting lower software and services revenue. This shift towards recurring revenue models could enhance long-term stability. The company's recent acquisitions, totaling
Exciting Customer Wins including Telenor Denmark, Telstra, One New Zealand & Lyse Norway
Raising 2024 Profitability and Non-GAAP EPS Guidance Targets; Reiterating All Others
Board of Directors Authorized Additional
Financial Results:
Second quarter 2024 financial results:
-
Total revenue was
.$290.3 million -
GAAP operating income was
million, or an operating margin of 8.8%, and non-GAAP operating income was$25.4 million, or a non-GAAP adjusted operating margin of 17.3%.$46.1 -
GAAP earnings per diluted share (EPS) was
and non-GAAP EPS was$0.48 .$1.02 -
Cash flows from operations were
, with non-GAAP free cash flow of$43.1 million .$38.8 million
Shareholder Returns:
-
CSG declared its quarterly cash dividend of
per share of common stock, or a total of approximately$0.30 , to shareholders.$9 million -
During the second quarter of 2024, CSG repurchased under its stock repurchase program, approximately 219,000 shares of its common stock for approximately
.$10 million -
In August, CSG’s Board of Directors increased the authorization under CSG’s existing Stock Repurchase Program by an additional
.$100 million
Business Activities:
-
During the quarter, CSG closed two acquisitions at a total combined purchase price of approximately
.$33 million
“Team CSG delivered solid results in a challenging macroeconomic environment during the first half of 2024. With this backdrop, we are thrilled to raise our profitability and non-GAAP EPS guidance targets for the full year. Further, we are very excited to announce several important new logo sales wins and deal expansions, including with Telenor Denmark, One New Zealand (formerly Vodafone New Zealand), Lyse Norway, Telstra, and many others. We also achieved another high-water mark on our industry diversification strategy as
Financial Overview (unaudited)
(in thousands, except per share amounts and percentages):
|
|
Quarter Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
Percent
|
|
|
2024 |
|
|
2023 |
|
|
Percent
|
|
||||||
GAAP Results: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
290,318 |
|
|
$ |
286,327 |
|
|
|
1.4 |
% |
|
$ |
585,453 |
|
|
$ |
585,066 |
|
|
|
0.1 |
% |
Operating Income |
|
|
25,420 |
|
|
|
28,206 |
|
|
|
(9.9 |
%) |
|
|
57,217 |
|
|
|
66,399 |
|
|
|
(13.8 |
%) |
Operating Margin Percentage |
|
|
8.8 |
% |
|
|
9.9 |
% |
|
|
|
|
|
|
9.8 |
% |
|
|
11.3 |
% |
|
|
|
|
EPS |
|
$ |
0.48 |
|
|
$ |
0.45 |
|
|
|
6.7 |
% |
|
$ |
1.16 |
|
|
$ |
1.14 |
|
|
|
1.8 |
% |
Non-GAAP Results: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
46,141 |
|
|
$ |
42,950 |
|
|
|
7.4 |
% |
|
$ |
91,009 |
|
|
$ |
96,461 |
|
|
|
(5.7 |
%) |
Adjusted Operating Margin Percentage |
|
|
17.3 |
% |
|
|
16.2 |
% |
|
|
|
|
|
|
17.0 |
% |
|
|
17.8 |
% |
|
|
|
|
EPS |
|
$ |
1.02 |
|
|
$ |
0.80 |
|
|
|
27.5 |
% |
|
$ |
2.02 |
|
|
$ |
1.84 |
|
|
|
9.8 |
% |
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 second quarter of 2024 was
GAAP operating income for the second quarter of 2024 was
GAAP EPS for the second quarter of 2024 was
Non-GAAP Results: Non-GAAP operating income for the second quarter of 2024 was
Non-GAAP EPS for the second quarter of 2024 was
Balance Sheet and Cash Flows
Cash and cash equivalents as of June 30, 2024 were
Summary of Financial Guidance
CSG is revising its financial guidance for the full year 2024, as follows:
|
|
As of August 7, 2024 |
|
Previous |
GAAP Measures: |
|
|
|
|
Revenue |
|
No change |
|
|
Non-GAAP Measures: |
|
|
|
|
Adjusted Operating Margin Percentage |
|
|
|
|
EPS |
|
|
|
|
Adjusted EBITDA |
|
|
|
|
Free Cash Flow |
|
No change |
|
|
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.
Conference Call
CSG will host a conference call on Wednesday, August 7, 2024 at 5:00 p.m. ET, to discuss CSG’s second quarter of 2024 earnings results. The call will be carried live and archived on the Internet. A link to the conference call is available at http://ir.csgi.com. In addition, to reach the conference by phone, call 1-888-412-4131 and use the passcode 2327393.
Additional Information
For information about CSG, please visit CSG’s web site 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; and - CSG’s business may be disrupted, and its results of operations and cash flows adversely affected by a global pandemic.
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) |
||||||||
|
|
June 30,
|
|
|
December 31,
|
|
||
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
110,435 |
|
|
$ |
186,264 |
|
Settlement and merchant reserve assets |
|
|
232,054 |
|
|
|
274,699 |
|
Trade accounts receivable: |
|
|
|
|
|
|
|
|
Billed, net of allowance of |
|
|
266,214 |
|
|
|
267,680 |
|
Unbilled |
|
|
84,570 |
|
|
|
82,163 |
|
Income taxes receivable |
|
|
10,028 |
|
|
|
1,345 |
|
Other current assets |
|
|
55,740 |
|
|
|
50,075 |
|
Total current assets |
|
|
759,041 |
|
|
|
862,226 |
|
Non-current assets: |
|
|
|
|
|
|
|
|
Property and equipment, net of depreciation of |
|
|
59,111 |
|
|
|
65,545 |
|
Operating lease right-of-use assets |
|
|
28,656 |
|
|
|
34,283 |
|
Software, net of amortization of |
|
|
21,408 |
|
|
|
14,224 |
|
Goodwill |
|
|
317,129 |
|
|
|
308,596 |
|
Acquired customer contracts, net of amortization of |
|
|
46,818 |
|
|
|
35,879 |
|
Customer contract costs, net of amortization of |
|
|
57,128 |
|
|
|
54,421 |
|
Deferred income taxes |
|
|
54,934 |
|
|
|
57,855 |
|
Other assets |
|
|
9,063 |
|
|
|
10,017 |
|
Total non-current assets |
|
|
594,247 |
|
|
|
580,820 |
|
Total assets |
|
$ |
1,353,288 |
|
|
$ |
1,443,046 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Current portion of long-term debt |
|
$ |
7,500 |
|
|
$ |
7,500 |
|
Operating lease liabilities |
|
|
14,841 |
|
|
|
15,946 |
|
Customer deposits |
|
|
35,993 |
|
|
|
41,035 |
|
Trade accounts payable |
|
|
52,862 |
|
|
|
46,406 |
|
Accrued employee compensation |
|
|
49,765 |
|
|
|
84,380 |
|
Settlement and merchant reserve liabilities |
|
|
229,636 |
|
|
|
273,817 |
|
Deferred revenue |
|
|
56,145 |
|
|
|
54,199 |
|
Income taxes payable |
|
|
645 |
|
|
|
4,104 |
|
Other current liabilities |
|
|
29,057 |
|
|
|
33,449 |
|
Total current liabilities |
|
|
476,444 |
|
|
|
560,836 |
|
Non-current liabilities: |
|
|
|
|
|
|
|
|
Long-term debt, net of unamortized discounts of |
|
|
532,982 |
|
|
|
534,997 |
|
Operating lease liabilities |
|
|
27,722 |
|
|
|
34,360 |
|
Deferred revenue |
|
|
22,375 |
|
|
|
23,447 |
|
Income taxes payable |
|
|
3,241 |
|
|
|
3,041 |
|
Deferred income taxes |
|
|
122 |
|
|
|
123 |
|
Other non-current liabilities |
|
|
17,073 |
|
|
|
12,916 |
|
Total non-current liabilities |
|
|
603,515 |
|
|
|
608,884 |
|
Total liabilities |
|
|
1,079,959 |
|
|
|
1,169,720 |
|
Stockholders' equity: |
|
|
|
|
|
|
|
|
Preferred stock, par value |
|
|
- |
|
|
|
- |
|
Common stock, par value |
|
|
717 |
|
|
|
713 |
|
Additional paid-in capital |
|
|
499,995 |
|
|
|
490,947 |
|
Treasury stock, at cost; 40,802 and 40,398 shares |
|
|
(1,155,542 |
) |
|
|
(1,136,055 |
) |
Accumulated other comprehensive income (loss): |
|
|
|
|
|
|
|
|
Unrealized gain on short-term investments, net of tax |
|
|
- |
|
|
|
1 |
|
Cumulative foreign currency translation adjustments |
|
|
(55,629 |
) |
|
|
(50,414 |
) |
Accumulated earnings |
|
|
983,788 |
|
|
|
968,134 |
|
Total stockholders' equity |
|
|
273,329 |
|
|
|
273,326 |
|
Total liabilities and stockholders' equity |
$ |
1,353,288 |
|
|
$ |
1,443,046 |
|
|
CSG SYSTEMS INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME-UNAUDITED (in thousands, except per share amounts) |
||||||||||||||||
|
Quarter Ended |
|
Six Months Ended |
|
||||||||||||
|
June 30, 2024 |
|
June 30, 2023 |
|
June 30, 2024 |
|
June 30, 2023 |
|
||||||||
Revenue |
$ |
290,318 |
|
|
$ |
286,327 |
|
|
$ |
585,453 |
|
|
$ |
585,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue (exclusive of depreciation, shown separately below) |
|
152,892 |
|
|
|
151,142 |
|
|
|
310,779 |
|
|
|
306,163 |
|
|
Other operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
38,411 |
|
|
|
36,645 |
|
|
|
74,506 |
|
|
|
72,109 |
|
|
Selling, general and administrative |
|
61,159 |
|
|
|
62,686 |
|
|
|
122,881 |
|
|
|
121,833 |
|
|
Depreciation |
|
5,337 |
|
|
|
5,573 |
|
|
|
10,973 |
|
|
|
11,293 |
|
|
Restructuring and reorganization charges |
|
7,099 |
|
|
|
2,075 |
|
|
|
9,097 |
|
|
|
7,269 |
|
|
Total operating expenses |
|
264,898 |
|
|
|
258,121 |
|
|
|
528,236 |
|
|
|
518,667 |
|
|
Operating income |
|
25,420 |
|
|
|
28,206 |
|
|
|
57,217 |
|
|
|
66,399 |
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
(7,698 |
) |
|
|
(7,837 |
) |
|
|
(15,204 |
) |
|
|
(15,056 |
) |
|
Interest income |
|
2,103 |
|
|
|
772 |
|
|
|
4,719 |
|
|
|
1,341 |
|
|
Other, net |
|
174 |
|
|
|
(1,428 |
) |
|
|
732 |
|
|
|
(3,860 |
) |
|
Total other |
|
(5,421 |
) |
|
|
(8,493 |
) |
|
|
(9,753 |
) |
|
|
(17,575 |
) |
|
Income before income taxes |
|
19,999 |
|
|
|
19,713 |
|
|
|
47,464 |
|
|
|
48,824 |
|
|
Income tax provision |
|
(6,170 |
) |
|
|
(5,759 |
) |
|
|
(14,168 |
) |
|
|
(13,942 |
) |
|
Net income |
$ |
13,829 |
|
|
$ |
13,954 |
|
|
$ |
33,296 |
|
|
$ |
34,882 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
28,546 |
|
|
|
30,629 |
|
|
|
28,531 |
|
|
|
30,524 |
|
|
Diluted |
|
28,600 |
|
|
|
30,726 |
|
|
|
28,698 |
|
|
|
30,668 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
$ |
0.48 |
|
|
$ |
0.46 |
|
|
$ |
1.17 |
|
|
$ |
1.14 |
|
|
Diluted |
|
0.48 |
|
|
|
0.45 |
|
|
|
1.16 |
|
|
|
1.14 |
|
|
CSG SYSTEMS INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS-UNAUDITED (in thousands) |
||||||||
|
Six Months Ended |
|
||||||
|
June 30, 2024 |
|
June 30, 2023 |
|
||||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net income |
$ |
33,296 |
|
|
$ |
34,882 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities- |
|
|
|
|
|
|
||
Depreciation |
|
11,409 |
|
|
|
11,506 |
|
|
Amortization |
|
24,147 |
|
|
|
22,808 |
|
|
Asset impairment |
|
- |
|
|
|
1,689 |
|
|
Gain on lease modifications |
|
- |
|
|
|
(3,812 |
) |
|
Unrealized foreign currency transaction (gain) loss, net |
|
(254 |
) |
|
|
241 |
|
|
Deferred income taxes |
|
2,311 |
|
|
|
(4,673 |
) |
|
Stock-based compensation |
|
16,371 |
|
|
|
14,056 |
|
|
Subtotal |
|
87,280 |
|
|
|
76,697 |
|
|
Changes in operating assets and liabilities, net of acquired amounts: |
|
|
|
|
|
|
||
Trade accounts receivable, net |
|
892 |
|
|
|
(7,789 |
) |
|
Other current and non-current assets and liabilities |
|
(11,154 |
) |
|
|
(16,083 |
) |
|
Income taxes payable/receivable |
|
(11,937 |
) |
|
|
(7,235 |
) |
|
Trade accounts payable and accrued liabilities |
|
(52,596 |
) |
|
|
(26,853 |
) |
|
Deferred revenue |
|
1,269 |
|
|
|
9,046 |
|
|
Net cash provided by operating activities |
|
13,754 |
|
|
|
27,783 |
|
|
|
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of software, property, and equipment |
|
(9,073 |
) |
|
|
(16,428 |
) |
|
Proceeds from sale/maturity of short-term investments |
|
- |
|
|
|
71 |
|
|
Business combinations, net of cash and settlement assets acquired of |
|
17,293 |
|
|
|
- |
|
|
Net cash provided by (used in) investing activities |
|
8,220 |
|
|
|
(16,357 |
) |
|
|
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from issuance of common stock |
|
1,618 |
|
|
|
1,664 |
|
|
Payment of cash dividends |
|
(18,088 |
) |
|
|
(17,712 |
) |
|
Repurchase of common stock |
|
(27,943 |
) |
|
|
(9,418 |
) |
|
Deferred acquisition payments |
|
(488 |
) |
|
|
(1,220 |
) |
|
Proceeds from long-term debt |
|
15,000 |
|
|
|
30,000 |
|
|
Payments on long-term debt |
|
(18,750 |
) |
|
|
(18,750 |
) |
|
Payments on financing obligations |
|
(469 |
) |
|
|
- |
|
|
Settlement and merchant reserve activity |
|
(88,703 |
) |
|
|
(63,107 |
) |
|
Net cash used in financing activities |
|
(137,823 |
) |
|
|
(78,543 |
) |
|
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash |
|
(2,438 |
) |
|
|
708 |
|
|
|
|
|
|
|
|
|
||
Net decrease in cash, cash equivalents, and restricted cash |
|
(118,287 |
) |
|
|
(66,409 |
) |
|
|
|
|
|
|
|
|
||
Cash, cash equivalents, and restricted cash, beginning of period |
|
463,876 |
|
|
|
389,018 |
|
|
Cash, cash equivalents, and restricted cash, end of period |
$ |
345,589 |
|
|
$ |
322,609 |
|
|
|
|
|
|
|
|
|
||
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
||
Cash paid during the period for- |
|
|
|
|
|
|
||
Interest |
$ |
13,566 |
|
|
$ |
14,672 |
|
|
Income taxes |
|
23,822 |
|
|
|
23,720 |
|
|
|
|
|
|
|
|
|
||
Non-cash investing and financing activities: |
|
|
|
|
|
|
||
Software, property, and equipment included in current and noncurrent liabilities |
|
9,017 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
||
Reconciliation of cash, cash equivalents, and restricted cash: |
|
|
|
|
|
|
||
Cash and cash equivalents |
$ |
110,435 |
|
|
$ |
146,212 |
|
|
Settlement and merchant reserve assets |
|
232,054 |
|
|
|
176,397 |
|
|
Restricted cash included in current and non-current assets |
|
3,100 |
|
|
|
- |
|
|
Total cash, cash equivalents, and restricted cash |
$ |
345,589 |
|
|
$ |
322,609 |
|
|
EXHIBIT 1 CSG SYSTEMS INTERNATIONAL, INC. SUPPLEMENTAL REVENUE ANALYSIS |
||||||||||||||||||||||||
Revenue by Significant Customers: |
||||||||||||||||||||||||
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|||||||||||||||
|
|
June 30, 2024 |
|
|
March 31, 2024 |
|
|
June 30, 2023 |
|
|||||||||||||||
|
|
Amount |
|
|
% of Revenue |
|
|
Amount |
|
|
% of Revenue |
|
|
Amount |
|
|
% of Revenue |
|
||||||
Charter |
|
$ |
60,629 |
|
|
|
21 |
% |
|
$ |
60,849 |
|
|
|
21 |
% |
|
$ |
60,175 |
|
|
|
21 |
% |
Comcast |
|
|
54,576 |
|
|
|
19 |
% |
|
|
52,804 |
|
|
|
18 |
% |
|
|
53,757 |
|
|
|
19 |
% |
Revenue by Vertical |
||||||||||||
|
|
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
||||||
|
|
June 30, 2024 |
|
March 31, 2024 |
|
June 30, 2023 |
||||||
Broadband/Cable/Satellite |
|
|
53 |
% |
|
|
51 |
% |
|
|
54 |
% |
Telecommunications |
|
|
16 |
% |
|
|
19 |
% |
|
|
18 |
% |
All other |
|
|
31 |
% |
|
|
30 |
% |
|
|
28 |
% |
Total revenue |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
Revenue by Geography
|
|
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
||||||
|
|
June 30, 2024 |
|
March 31, 2024 |
|
June 30, 2023 |
||||||
|
|
|
89 |
% |
|
|
86 |
% |
|
|
87 |
% |
|
|
|
6 |
% |
|
|
9 |
% |
|
|
9 |
% |
|
|
|
5 |
% |
|
|
5 |
% |
|
|
4 |
% |
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 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
|
|
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 |
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 and transaction-related costs, to include earn-out compensation. 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 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 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 free cash flow as net cash flows from operating activities 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 June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Non-GAAP Operating Income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP operating income |
|
$ |
25,420 |
|
|
$ |
28,206 |
|
|
$ |
57,217 |
|
|
$ |
66,399 |
|
Restructuring and reorganization charges (1) |
|
|
7,099 |
|
|
|
2,075 |
|
|
|
9,097 |
|
|
|
7,269 |
|
Executive transition costs |
|
|
- |
|
|
|
- |
|
|
|
352 |
|
|
|
- |
|
Acquisition-related expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of acquired intangible assets |
|
|
3,393 |
|
|
|
2,998 |
|
|
|
6,245 |
|
|
|
6,207 |
|
Transaction-related costs |
|
|
1,036 |
|
|
|
2,004 |
|
|
|
1,036 |
|
|
|
2,162 |
|
Stock-based compensation (1) |
|
|
9,193 |
|
|
|
7,667 |
|
|
|
17,062 |
|
|
|
14,424 |
|
Non-GAAP operating income |
|
$ |
46,141 |
|
|
$ |
42,950 |
|
|
$ |
91,009 |
|
|
$ |
96,461 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-GAAP Adjusted Operating Margin Percentage |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue |
|
$ |
290,318 |
|
|
$ |
286,327 |
|
|
$ |
585,453 |
|
|
$ |
585,066 |
|
Less: Transaction fees (2) |
|
|
(24,207 |
) |
|
|
(21,176 |
) |
|
|
(49,269 |
) |
|
|
(43,149 |
) |
Revenue less transaction fees |
|
$ |
266,111 |
|
|
$ |
265,151 |
|
|
$ |
536,184 |
|
|
$ |
541,917 |
|
Non-GAAP adjusted operating margin percentage |
|
|
17.3 |
% |
|
|
16.2 |
% |
|
|
17.0 |
% |
|
|
17.8 |
% |
(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 |
|
||||||||||
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
||||||||||
|
|
Amounts |
|
EPS (4) |
|
|
Amounts |
|
EPS (4) |
|
||||||
GAAP net income |
|
$ |
13,829 |
|
|
$ |
0.48 |
|
|
$ |
13,954 |
|
|
$ |
0.45 |
|
GAAP income tax provision (3) |
|
|
6,170 |
|
|
|
|
|
|
|
5,759 |
|
|
|
|
|
GAAP income before income taxes |
|
|
19,999 |
|
|
|
|
|
|
|
19,713 |
|
|
|
|
|
Restructuring and reorganization charges (1) |
|
|
7,099 |
|
|
|
|
|
|
|
2,075 |
|
|
|
|
|
Acquisition-related costs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Amortization of acquired intangible assets |
|
|
3,393 |
|
|
|
|
|
|
|
2,998 |
|
|
|
|
|
Transaction-related costs |
|
|
1,036 |
|
|
|
|
|
|
|
2,004 |
|
|
|
|
|
Stock-based compensation (1) |
|
|
9,193 |
|
|
|
|
|
|
|
7,667 |
|
|
|
|
|
Non-GAAP income before income taxes |
|
|
40,720 |
|
|
|
|
|
|
|
34,457 |
|
|
|
|
|
Non-GAAP income tax provision (3) |
|
|
(11,605 |
) |
|
|
|
|
|
|
(9,820 |
) |
|
|
|
|
Non-GAAP net income |
|
$ |
29,115 |
|
|
$ |
1.02 |
|
|
$ |
24,637 |
|
|
$ |
0.80 |
|
|
|
Six Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, 2024 |
|
|
June 30, 2023 |
|
||||||||||
|
|
Amounts |
|
EPS (4) |
|
|
Amounts |
|
EPS (4) |
|
||||||
GAAP net income |
|
$ |
33,296 |
|
|
$ |
1.16 |
|
|
$ |
34,882 |
|
|
$ |
1.14 |
|
GAAP income tax provision (3) |
|
|
14,168 |
|
|
|
|
|
|
|
13,942 |
|
|
|
|
|
GAAP income before income taxes |
|
|
47,464 |
|
|
|
|
|
|
|
48,824 |
|
|
|
|
|
Restructuring and reorganization charges (1) |
|
|
9,097 |
|
|
|
|
|
|
|
7,269 |
|
|
|
|
|
Executive transition costs |
|
|
352 |
|
|
|
|
|
|
|
- |
|
|
|
|
|
Acquisition-related expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Amortization of acquired intangible assets |
|
|
6,245 |
|
|
|
|
|
|
|
6,207 |
|
|
|
|
|
Transaction-related costs |
|
|
1,036 |
|
|
|
|
|
|
|
2,162 |
|
|
|
|
|
Stock-based compensation (1) |
|
|
17,062 |
|
|
|
|
|
|
|
14,424 |
|
|
|
|
|
Non-GAAP income before income taxes |
|
|
81,256 |
|
|
|
|
|
|
|
78,886 |
|
|
|
|
|
Non-GAAP income tax provision (3) |
|
|
(23,158 |
) |
|
|
|
|
|
|
(22,483 |
) |
|
|
|
|
Non-GAAP net income |
|
$ |
58,098 |
|
|
$ |
2.02 |
|
|
$ |
56,403 |
|
|
$ |
1.84 |
|
(3) |
For the second quarter and six months ended June 30, 2024 the GAAP effective income tax rates were approximately |
(4) |
The outstanding diluted shares for the second quarter and six months ended June 30, 2024 were 28.6 million and 28.7 million, respectively, and for the second quarter and six months ended June 30, 2023 were 30.7 million, for both periods. |
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 |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
GAAP net income |
|
$ |
13,829 |
|
|
$ |
13,954 |
|
|
$ |
33,296 |
|
|
$ |
34,882 |
|
GAAP income tax provision |
|
|
6,170 |
|
|
|
5,759 |
|
|
|
14,168 |
|
|
|
13,942 |
|
Interest expense (5) |
|
|
7,698 |
|
|
|
7,837 |
|
|
|
15,204 |
|
|
|
15,056 |
|
Interest and investment income and other, net |
|
|
(2,277 |
) |
|
|
656 |
|
|
|
(5,451 |
) |
|
|
2,519 |
|
GAAP operating income |
|
|
25,420 |
|
|
|
28,206 |
|
|
|
57,217 |
|
|
|
66,399 |
|
Restructuring and reorganization charges (1) |
|
|
7,099 |
|
|
|
2,075 |
|
|
|
9,097 |
|
|
|
7,269 |
|
Executive transition costs |
|
|
- |
|
|
|
- |
|
|
|
352 |
|
|
|
- |
|
Acquisition-related expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of acquired intangible assets (6) |
|
|
3,393 |
|
|
|
2,998 |
|
|
|
6,245 |
|
|
|
6,207 |
|
Transaction-related costs |
|
|
1,036 |
|
|
|
2,004 |
|
|
|
1,036 |
|
|
|
2,162 |
|
Stock-based compensation (1) |
|
|
9,193 |
|
|
|
7,667 |
|
|
|
17,062 |
|
|
|
14,424 |
|
Amortization of other intangible assets (6) |
|
|
2,880 |
|
|
|
3,383 |
|
|
|
5,445 |
|
|
|
6,836 |
|
Amortization of customer contract costs (6) |
|
|
5,694 |
|
|
|
4,771 |
|
|
|
10,722 |
|
|
|
9,393 |
|
Depreciation (1) |
|
|
5,337 |
|
|
|
5,573 |
|
|
|
10,973 |
|
|
|
11,293 |
|
Non-GAAP adjusted EBITDA |
|
$ |
60,052 |
|
|
$ |
56,677 |
|
|
$ |
118,149 |
|
|
$ |
123,983 |
|
Non-GAAP adjusted EBITDA as a percentage of revenue less transaction fees (2) |
|
|
22.6 |
% |
|
|
21.4 |
% |
|
|
22.0 |
% |
|
|
22.9 |
% |
(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 |
|
|
Six Months Ended |
|
|||||||||||||||||||||
|
|
June 30, |
|
|
June 30, |
|
|||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|||||||||||||||
Amortization of acquired intangible assets |
|
$ |
3,393 |
|
|
$ |
2,998 |
|
|
$ |
6,245 |
|
|
$ |
6,207 |
|
|||||||||||
Amortization of other intangible assets |
|
|
2,880 |
|
|
|
3,383 |
|
|
|
5,445 |
|
|
|
6,836 |
|
|||||||||||
Amortization of customer contract costs |
|
|
5,694 |
|
|
|
4,771 |
|
|
|
10,722 |
|
|
|
9,393 |
|
|||||||||||
Amortization of deferred financing costs |
|
|
871 |
|
|
|
185 |
|
|
|
1,735 |
|
|
|
372 |
|
|||||||||||
Total amortization |
|
$ |
12,838 |
|
|
$ |
11,337 |
|
|
$ |
24,147 |
|
|
$ |
22,808 |
|
|||||||||||
Non-GAAP Free Cash Flow:
CSG’s calculation of non-GAAP free cash flow and the reconciliation of CSG’s non-GAAP free cash flow measure to cash flows from operating activities are provided below for the indicated periods (in thousands):
|
|
Quarter Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Cash flows from operating activities |
|
$ |
43,105 |
|
|
$ |
12,386 |
|
|
$ |
13,754 |
|
|
$ |
27,783 |
|
Purchases of software, property and equipment |
|
|
(4,299 |
) |
|
|
(7,728 |
) |
|
|
(9,073 |
) |
|
|
(16,428 |
) |
Non-GAAP free cash flow |
|
$ |
38,806 |
|
|
$ |
4,658 |
|
|
$ |
4,681 |
|
|
$ |
11,355 |
|
Non-GAAP Financial Measures – 2024 Financial Guidance
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 non-GAAP adjusted operating margin percentage, as included in CSG’s 2024 full year financial guidance, is as follows (in thousands, except percentages):
|
|
2024 Guidance Range |
||||||
|
|
Low Range |
|
High Range |
||||
Non-GAAP Operating Income |
|
|
|
|
|
|
||
GAAP operating income |
|
$ |
131,600 |
|
|
$ |
141,600 |
|
Restructuring and reorganization charges |
|
|
9,100 |
|
|
|
9,100 |
|
Executive transition costs |
|
|
400 |
|
|
|
400 |
|
Acquisition-related expenses: |
|
|
|
|
|
|
||
Amortization of acquired intangible assets |
|
|
14,400 |
|
|
|
14,400 |
|
Transaction-related costs |
|
|
1,000 |
|
|
|
1,000 |
|
Stock-based compensation |
|
|
34,200 |
|
|
|
34,200 |
|
Non-GAAP operating income |
|
$ |
190,700 |
|
|
$ |
200,700 |
|
|
|
|
|
|
|
|
||
Non-GAAP Operating Margin Percentage |
|
|
|
|
|
|
||
Revenue |
|
$ |
1,200,000 |
|
|
$ |
1,240,000 |
|
Less: Transaction fees |
|
|
(98,000 |
) |
|
|
(103,000 |
) |
Revenue less transaction fees |
|
$ |
1,102,000 |
|
|
$ |
1,137,000 |
|
Non-GAAP adjusted operating margin percentage |
|
|
17.3 |
% |
|
|
17.7 |
% |
Non-GAAP EPS:
The reconciliation of GAAP EPS to non-GAAP EPS as included in CSG’s 2024 full year financial guidance is as follows (in thousands, except per share amounts):
|
|
2024 Guidance Range |
|
|||||||||||||
|
|
Low Range |
|
|
High Range |
|
||||||||||
|
|
Amounts |
|
|
EPS (8) |
|
|
Amounts |
|
EPS (8) |
|
|||||
GAAP net income |
|
$ |
75,700 |
|
|
$ |
2.59 |
|
|
$ |
82,900 |
|
|
$ |
2.88 |
|
GAAP income tax provision (7) |
|
|
31,500 |
|
|
|
|
|
|
|
34,300 |
|
|
|
|
|
GAAP income before income taxes |
|
|
107,200 |
|
|
|
|
|
|
|
117,200 |
|
|
|
|
|
Restructuring and reorganization charges |
|
|
9,100 |
|
|
|
|
|
|
|
9,100 |
|
|
|
|
|
Executive transition costs |
|
|
400 |
|
|
|
|
|
|
|
400 |
|
|
|
|
|
Acquisition-related expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquired intangible assets |
|
|
14,400 |
|
|
|
|
|
|
|
14,400 |
|
|
|
|
|
Transaction-related costs |
|
|
1,000 |
|
|
|
|
|
|
|
1,000 |
|
|
|
|
|
Stock-based compensation |
|
|
34,200 |
|
|
|
|
|
|
|
34,200 |
|
|
|
|
|
Non-GAAP income before income taxes |
|
|
166,300 |
|
|
|
|
|
|
|
176,300 |
|
|
|
|
|
Non-GAAP income tax provision (7) |
|
|
(48,500 |
) |
|
|
|
|
|
|
(51,000 |
) |
|
|
|
|
Non-GAAP net income |
|
$ |
117,800 |
|
|
$ |
4.05 |
|
|
$ |
125,300 |
|
|
$ |
4.35 |
|
(7) |
For 2024, the estimated effective income tax rates for GAAP and non-GAAP purposes are expected to be approximately |
(8) |
The weighted-average diluted shares outstanding are expected to be approximately 29 million. |
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 CSG’s 2024 full year financial guidance (in thousands, except percentages):
|
|
2024 Guidance Range |
||||||
|
|
Low Range |
|
High Range |
||||
GAAP net income |
|
$ |
75,700 |
|
|
$ |
82,900 |
|
GAAP income tax provision (7) |
|
|
31,500 |
|
|
|
34,300 |
|
Interest expense |
|
|
31,100 |
|
|
|
31,100 |
|
Interest and investment income |
|
|
(6,700 |
) |
|
|
(6,700 |
) |
GAAP operating income |
|
|
131,600 |
|
|
|
141,600 |
|
Restructuring and reorganization charges |
|
|
9,100 |
|
|
|
9,100 |
|
Executive transition costs |
|
|
400 |
|
|
|
400 |
|
Acquisition-related expenses: |
|
|
|
|
|
|
||
Amortization of acquired intangible assets |
|
|
14,400 |
|
|
|
14,400 |
|
Transaction-related costs |
|
|
1,000 |
|
|
|
1,000 |
|
Stock-based compensation |
|
|
34,200 |
|
|
|
34,200 |
|
Amortization of other intangible assets |
|
|
10,000 |
|
|
|
10,000 |
|
Amortization of client contract costs |
|
|
22,500 |
|
|
|
22,500 |
|
Depreciation |
|
|
23,800 |
|
|
|
23,800 |
|
Non-GAAP adjusted EBITDA |
|
$ |
247,000 |
|
|
$ |
257,000 |
|
Non-GAAP adjusted EBITDA as a percentage of revenue less transaction fees (2) |
|
|
22.4 |
% |
|
|
22.6 |
% |
Non-GAAP Free Cash Flow:
CSG’s calculation of non-GAAP free cash flow and the reconciliation of CSG’s non-GAAP free cash flow measure to cash flows from operating activities is provided below for CSG’s 2024 full year financial guidance (in thousands):
|
|
2024 Guidance Range |
||||||
|
|
Low Range |
|
High Range |
||||
Cash flows from operating activities |
|
$ |
120,000 |
|
|
$ |
170,000 |
|
Purchases of software, property and equipment |
|
|
(25,000 |
) |
|
|
(35,000 |
) |
Non-GAAP free cash flow |
|
$ |
95,000 |
|
|
$ |
135,000 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240807218127/en/
John Rea, Head Investor Relations, Treasury and ESG Reporting
(210) 687-4409
E-mail: John.Rea@csgi.com
Davis Barker, Manager Investor Relations & Corporate Development
(303) 884-4506
E-mail: Davis.Barker@csgi.com
Source: CSG Systems International
FAQ
What were CSG Systems International's Q2 2024 financial results?
Has CSG Systems International (CSGS) updated its 2024 financial guidance?
What major customer wins did CSG Systems International (CSGS) announce in Q2 2024?