CSG Systems’ Earnings Call: Record Revenue and Strategic Growth

CSG Systems ((CSGS)) has held its Q2 earnings call. Read on for the main highlights of the call.

CSG Systems’ latest earnings call painted a picture of robust financial health, marked by record revenue and improved margins. The sentiment was largely positive, with the company showcasing significant cash flow growth and successful diversification of revenue streams. Despite these achievements, CSG acknowledged that revenue growth is expected to be at the lower end of its guidance range, partly due to a contract termination that slightly impacted revenue.

Improved Non-GAAP Operating Margin

CSG Systems reported a notable improvement in its non-GAAP operating margin, reaching 19.5% in the first half of 2025. This represents a 250-basis-point increase from the previous year’s 17%, highlighting the company’s effective cost management and operational efficiency.

Record Revenue and Growth

The company achieved a record high revenue of $597 million in the first half of 2025, surpassing the $585 million recorded in the same period of 2024. This growth underscores CSG’s ability to expand its market presence and capitalize on new opportunities.

Non-GAAP Adjusted Free Cash Flow Surge

CSG’s non-GAAP adjusted free cash flow surged to $47 million in the first half of 2025, a dramatic increase from $5 million in the prior year. This substantial growth in cash flow reflects the company’s strong financial management and operational success.

Diversification of Revenue Streams

In a strategic move, CSG has diversified its revenue streams, with 32% of total revenue now coming from industries outside of cable and telecom. This is an increase from 31% in the previous year, demonstrating CSG’s commitment to reducing dependency on traditional markets.

Strong Shareholder Returns

CSG returned $59 million to shareholders in the first half of 2025, including $19 million in dividends and $40 million in share repurchases. This highlights the company’s dedication to delivering value to its shareholders through consistent returns.

Exciting New Business Wins

The company announced new business deals with major players like Orange Business and Liberty Communications, along with significant expansions in financial services and property management. These wins are expected to drive future growth and strengthen CSG’s market position.

Revenue Growth at Lower End of Guidance

CSG reiterated its full-year 2025 revenue guidance range but expects growth at the lower end of 2% to 3%. This cautious outlook is due to minor headwinds in the North American broadband market and elongated sales cycles.

Contract Termination in Latin America

A contract termination with Digicel, a Latin American telecommunications customer, accounted for a $1.4 million revenue impact in the first half of 2025. This development slightly affected CSG’s revenue but was managed within the broader context of the company’s financial performance.

Forward-Looking Guidance

CSG’s forward-looking guidance remains optimistic, with raised full-year profitability targets and adjusted free cash flow expectations. The company aims for 2% to 6% organic revenue growth and plans to increase revenue from new industry verticals to over 35% by 2026. CSG is also on track to meet its $100 million shareholder remuneration commitment for 2025, reflecting a strong focus on long-term growth and shareholder value.

In summary, CSG Systems’ earnings call highlighted a period of strong financial performance, with record revenue and improved margins. The company successfully diversified its revenue streams and maintained robust shareholder returns, despite some challenges in revenue growth projections. Looking ahead, CSG remains committed to strategic growth initiatives and delivering value to its shareholders.