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Jun 30, 2025
CSG Systems Q2 2025 Earnings Report
CSG Systems reported strong second quarter 2025 results, with increased revenue and significant growth in GAAP and non-GAAP operating income, leading to raised full-year profitability and non-GAAP adjusted free cash flow guidance.
Key Takeaways
CSG Systems delivered a strong second quarter in 2025, with total revenue reaching $297.1 million, a 2.3% increase year-over-year. The company saw robust growth in both GAAP and non-GAAP operating income, driven by the expansion of SaaS and related solutions and effective cost efficiency measures. Non-GAAP EPS also increased significantly, and the company generated strong cash flow from operations, leading to raised full-year profitability and non-GAAP adjusted free cash flow guidance.
Total revenue for Q2 2025 was $297.1 million, a 2.3% increase compared to Q2 2024, primarily due to growth in SaaS and related solutions and the acquisition of iCG business.
GAAP operating income increased by 17.5% to $29.9 million, with the operating margin rising to 10.0%, attributed to decreased restructuring charges and cost efficiency actions.
Non-GAAP operating income grew by 18.1% to $54.5 million, resulting in a non-GAAP adjusted operating margin of 20.1%, up from 17.3% in the prior year.
Non-GAAP EPS increased by 13.7% to $1.16, and non-GAAP adjusted free cash flow was $39.6 million, demonstrating strong cash generation.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
CSG is revising its financial guidance for the full year 2025, raising profitability targets and non-GAAP adjusted free cash flow targets.
Positive Outlook
- Adjusted Operating Margin Percentage guidance raised to 18.6% - 19.0% (from 18.4% - 18.8%).
- Adjusted EBITDA guidance raised to $261 million - $272 million (from $258 million - $269 million).
- Adjusted Free Cash Flow guidance raised to $120 million - $150 million (from $110 million - $150 million).
- Continued commitment to return over $100 million in capital to shareholders in 2025.
- Strong operating income growth and highest first half non-GAAP adjusted free cash flow in a decade.
Challenges Ahead
- Revenue guidance remains unchanged at $1,210 million - $1,250 million, indicating no upward revision despite strong Q2 performance.
- EPS guidance remains unchanged at $4.65 - $4.90, suggesting no anticipated further upside from Q2 results.
- GAAP EPS for Q2 2025 decreased compared to Q2 2024, mainly due to a higher effective income tax rate.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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