CSG Systems International Inc (CSGS, Financial) released its Q3 2023 earnings report on November 1, 2023, showcasing a strong financial performance with a 9.0% YoY organic revenue growth. The company's total revenue for the quarter was $286.9 million, marking a 5.0% increase compared to the same period in 2022.
Financial Performance
CSGS's GAAP operating income for Q3 2023 was $32.7 million, representing an operating margin of 11.4%. The non-GAAP operating income stood at $45.2 million, translating to a non-GAAP adjusted operating margin of 17.0%. The company's GAAP earnings per diluted share (EPS) was $0.62, while the non-GAAP EPS was $0.92. Cash flows from operations were $24.6 million, with non-GAAP free cash flow of $18.1 million.
Shareholder Returns and Business Activities
During Q3 2023, CSG declared a quarterly cash dividend of $0.28 per share of common stock, totaling approximately $9 million, to shareholders. The company also repurchased approximately 1,991,000 shares of its common stock for approximately $107 million under its stock repurchase program. In September 2023, CSG issued $425.0 million of convertible notes due in 2028.
Financial Overview and Results of Operations
CSGS's GAAP operating income for the third quarter of 2023 increased significantly compared to the same period in 2022, mainly due to a $13.0 million decrease in restructuring and reorganization charges. The GAAP EPS for Q3 2023 was $0.62, compared to $0.40 for Q3 2022. This increase in GAAP EPS is mainly due to the higher operating income in Q3 2023, partially offset by higher interest expense and foreign currency movements.
Balance Sheet and Cash Flows
As of September 30, 2023, CSG's cash, cash equivalents, and short-term investments were $146.7 million. The company had net cash flows provided by operations for the third quarters ended September 30, 2023, and 2022 of $24.6 million and $22.8 million, respectively, and had non-GAAP free cash flow of $18.1 million and $10.9 million, respectively.
Summary of Financial Guidance
CSG is revising its financial guidance for the full year 2023, with the EPS now expected to be between $3.50 and $3.70, up from the previous guidance of $3.42 - $3.58. All other financial guidance metrics remain unchanged.
About CSG Systems International Inc (CSGS, Financial)
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. Their customer experience, billing, and payments solutions help companies of any size make money and make a difference. With CSG's SaaS solutions, company leaders can take control of their future and tap into guidance along the way from their fiercely committed and forward-thinking CSGers around the world.
Explore the complete 8-K earnings release (here) from CSG Systems International Inc for further details.
