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What changed in CSG SYSTEMS INTERNATIONAL INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CSG SYSTEMS INTERNATIONAL INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+469 added−465 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-16)

Top changes in CSG SYSTEMS INTERNATIONAL INC's 2024 10-K

469 paragraphs added · 465 removed · 381 edited across 4 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe also believe that diverse experiences and perspectives help bring out the best ideas, drive innovation, and achieve transformative results to benefit the clients we serve. We are committed to digital inclusivity, doing the right thing for the users of our products, and taking action to improve the accessibility of our digital products and services.
Biggest changeEnabling Digital Inclusion: We strive to develop technological solutions that promote social progress and make navigating the digital world easier for anyone, anywhere in the world. We also believe that diverse experiences and perspectives help bring out the best ideas, drive innovation, and achieve transformative results to benefit the clients we serve.
Our all-in-one payments platform simplifies and enables businesses and governments to onboard merchants quickly, deliver ongoing innovation, and address the changing market demands in digital payments. Our platform handles tens of billions of dollars in payment volumes annually for approximately 114,000 active merchants and we do this all in a secure, PCI-compliant environment.
Our all-in-one payments platform simplifies and enables businesses and governments to onboard merchants quickly, deliver ongoing innovation, and address the changing market demands in digital payments. Our platform handles tens of billions of dollars in payment volumes annually for approximately 131,000 active merchants and we do this all in a secure, PCI-compliant environment.
The race/ethnicity of our U.S. workforce was 67% White, 12% Asian, 7% Hispanic or Latino, 6% Black or African American, We believe our employee relations are good and we work hard to constantly improve in this area. 8 Sustainability and Social Responsibility We aspire to envision, invent, and create a better, more inclusive, and future ready world by channeling the power of all.
The race/ethnicity of our U.S. workforce was 67% White, 12% Asian, 7% Hispanic or Latino, 6% Black or African American, 1% two or more races, We believe our employee relations are good and we work hard to constantly improve in this area. 8 Sustainability and Social Responsibility We aspire to envision, invent, and create a better, more inclusive, and future ready world by channeling the power of all.
Our cloud-first architecture and customer-centric approach empower companies to deliver unforgettable experiences for their B2B (business-to-business), B2C (business-to-consumer), and B2B2X (business-to-business-to-consumer) customers, making it easier for people and businesses to connect to, use and pay for the services they value most.
Our cloud-first architecture and customer-centric approach empower companies to deliver unforgettable experiences for their B2B (business-to-business), B2C (business-to-consumer), and B2B2X (business-to-business-to-consumer) customers, making it easier for people and businesses to buy, use, and pay for the services they value most.
Human Capital We believe that our culture serves as a competitive differentiator in the marketplace and gives CSG a competitive edge. As a result, our success is dependent upon our ability to attract, develop, and retain this smart, talented, and diverse team.
Human Capital We believe that our culture serves as a competitive differentiator in the marketplace and gives CSG a competitive edge. As a result, our success is dependent upon our ability to attract, develop, and retain this smart, talented, and inclusive team.
In addition, we've continued our commitment to CSG's Global Days of Action, where we give every team member an opportunity (two free days) to volunteer their time giving back to the community. Enhancing Our Environmental Stewardship: With employees in over 20 countries and serving customers globally, this is a vital and important focus area.
In addition, we've continued our commitment to CSG's Global Days of Action, where we give every team member an opportunity (two days of paid leave) to volunteer their time giving back to the community. Enhancing Our Environmental Stewardship: With employees in over 20 countries and serving customers globally, this is a vital and important focus area.
We are also required to be in compliance with transfer pricing, securities laws, and other statutes and regulations, such as the Foreign Corrupt Practices Act (“FCPA”), and other countries’ anti-corruption and anti-bribery laws. In addition, we are subject to laws relating to information security, privacy, anti-money laundering, counter-terrorist financing, consumer credit, protection, and fraud.
We are also required to comply with transfer pricing, securities laws, and other statutes and regulations, such as the Foreign Corrupt Practices Act (“FCPA”), and other countries’ anti-corruption and anti-bribery laws. In addition, we are subject to laws relating to information security, privacy, anti-money laundering, counter-terrorist financing, consumer credit, protection, and fraud.
Available Information Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy materials, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act are available free of charge on our website at www.csgi.com.
Available Information Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy materials, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") are available free of charge on our website at www.csgi.com.
However, as these companies wrestle with new competitors, changes in customer demands, and disruptive technologies like 5G, they need a partner that can provide them with a suite of solutions that can help them turn these challenges into opportunities, higher revenues, and greater operating profits.
As these companies wrestle with new competitors, changes in customer demands, and disruptive technologies, they need a partner that can provide them with a suite of solutions that can help them turn these challenges into opportunities, higher revenues, and greater operating profits.
To accomplish that, we are focusing on these key areas: Expanding Our Community Impact: We support Community Based Organizations (“CBOs”) that provide underrepresented communities with the opportunity to participate, thrive, and make a lasting impact across the globe. We continue to expand our partnerships with CBOs like WeMakeChange and Earthday.org.
To accomplish that, we are focusing on these key areas: Expanding Our Community Impact: We support Community Based Organizations (“CBOs”) that provide underrepresented communities with the opportunity to participate, thrive, and make a lasting impact across the globe. We continue to expand our partnerships with CBOs like WeMakeChange, WeHero, The Arbor Day Foundation, and Earthday.org.
Our data and orchestration approach utilizes AI to ignite exceptional experiences that fuel loyalty and growth by creating detailed profiles and propelling customized acquisition, engagement, and retention strategies. This translates into faster results, lower risk, and ultimately, better business outcomes for our customers.
Our data and orchestration approach utilizes AI to ignite exceptional experiences that fuel loyalty and growth by creating detailed profiles and propelling customized acquisition, engagement, and retention strategies. This translates into faster results, lower risk, and ultimately, better business outcomes for our customers with a lower total cost to serve.
As a purpose-driven, SaaS platform company, we foster a culture where we prioritize employee experience, learning, and development to provide a workplace environment where our employees can do their best work and thrive. We foster a culture of diversity, equity, and belonging for all employees. By being customer-obsessed every day, CSG will continue to win big in the market.
As a purpose-driven, SaaS platform company, we foster a culture where we prioritize employee experience, learning, and development to provide a workplace environment where our employees can do their best work and thrive. By being customer-obsessed every day, CSG will continue to win big in the market.
Customers that represented 10% or more of our revenue for 2023 and 2022 were as follows (in millions, except percentages): 2023 2022 Amount % of Revenue Amount % of Revenue Charter $ 241 21 % $ 221 20 % Comcast 215 18 % 214 20 % See the Significant Customer Relationships section of our Management’s Discussion and Analysis (“MD&A”) for additional information regarding our business relationships with these key customers.
Customers that represented 10% or more of our revenue for 2024 and 2023 were as follows (in millions, except percentages): 2024 2023 Amount % of Revenue Amount % of Revenue Charter $ 240 20 % $ 241 21 % Comcast 225 19 % 215 18 % See the Significant Customer Relationships section of our Management’s Discussion and Analysis (“MD&A”) for additional information regarding our business relationships with these key customers.
We seek to work with partners that are committed to reducing and recycling waste, investing in green energy, and responsible sourcing to create a more sustainable future. Reducing global emissions is critical, and we recently announced our goal to become carbon neutral for Scope 1 and 2 greenhouse emissions by 2035.
We seek to work with partners that are committed to reducing and recycling waste, investing in green energy, and responsible sourcing to create a more sustainable future. Reducing global emissions is critical, and we have a goal to be carbon neutral for Scope 1 and 2 greenhouse emissions by 2035.
In addition to our already competitive pay and benefits, we continue to introduce many new benefits and programs that are designed to promote mental and physical wellness. • Grow@CSG by developing bold, agile, inventive team members and leaders; innovating talent development and succession planning; and expanding cross-company and cross-unit rotations and promotions.
In addition to our already competitive pay and benefits, we continue to introduce many new benefits and programs that are designed to promote mental and physical wellness. • Developing our People into bold, agile, inventive team members and leaders; innovating talent development and succession planning; and expanding cross-company and cross-unit rotations and promotions is critical to the success of CSG and our employees.
Our current competitors include companies who deliver on-premise bespoke custom offerings (i.e., Amdocs Limited, NEC Netcracker), software solutions (i.e., Salesforce, Adobe, Pegasystems, Twilio), internally developed enterprise applications, network operators (i.e., Ericsson, Huawei), large outsourced transactional communications companies (i.e., Intrado, Fiserv), systems integrators (i.e., Accenture, Tech Mahindra) and large payments processors (i.e., FIS and Fiserv) and payments specialists (i.e., Stripe and Nuvei/Paya).
Our current competitors include companies who deliver on-premise bespoke custom offerings (i.e., Amdocs Limited, NEC Netcracker), software solutions (i.e., Salesforce, Adobe, Pegasystems, Twilio), internally developed enterprise applications, network operators (i.e., Ericsson, Huawei), large outsourced transactional communications companies (i.e., Intrado, Genesys), systems integrators (i.e., Accenture, Tech Mahindra) and large payments processors (i.e., FIS, Chase Payment Solutions) and payments specialists (i.e., Stripe, Square) and niche players (i.e., Paymentus, Invoice Cloud).
While we’ve made significant progress over the years, we have significant opportunities to expand our footprint in these verticals.
While we’ve made significant progress over the years, we have an ongoing opportunity to further expand our footprint in these verticals.
Item 1. Business Who We Are CSG Systems International, Inc. (the “Company”, “CSG”, or forms of the pronoun “we”) is a purpose-driven, SaaS platform company that enables global companies in a wide variety of industry verticals to tackle the ever-growing complexity of business in the digital age.
Item 1. Business Who We Are CSG Systems International, Inc. (the “Company”, “CSG”, or forms of the pronoun “we”) is a purpose-driven, SaaS platform company that enables global companies in a wide variety of industry verticals to simplify their complex customer engagement and how they monetize in the digital age.
Additionally, as a U.S. entity operating through subsidiaries in non-U.S. jurisdictions, we are subject to foreign exchange control, transfer pricing, and custom laws that regulate the flow of funds between CSG and its subsidiaries.
We are also subject to regulation by various U.S. federal regulatory agencies and by the applicable regulatory authorities in countries in which we operate. Additionally, as a U.S. entity operating through subsidiaries in non-U.S. jurisdictions, we are subject to foreign exchange control, transfer pricing, and custom laws that regulate the flow of funds between CSG and its subsidiaries.
Creating and leading with category-defining technology: Our broad portfolio of industry-leading solutions provide our customers with a competitive advantage. These solutions enable customers to efficiently manage their traditional businesses while being able to quickly deliver new digital services and incorporating AI to create a more personalized and relevant experience to their consumers.
Creating and leading with category-defining technology: Our broad portfolio of industry-leading integrated, domain specific technology provides our customers with a competitive advantage. These solutions enable customers to simplify the complexity in their traditional customer engagements while being able to quickly deliver new digital services and incorporating AI to create a more personalized and relevant experience to their consumers.
Specifically, our mission is focused on helping some of the world's most recognizable brands compete and win in the digital age by making it easier for their customers to do business. Every company needs to make it easier for their consumer and enterprise customers to do business with them in the customers’ preferred channel of choice.
Specifically, our mission is focused on helping some of the world's most recognizable brands compete and win in the digital age by making it easier for their customers to do business.
Our Industry-Leading Solutions Revenue Management and Digital Monetization: We provide robust, integrated real-time revenue management platforms leveraging public cloud, private cloud, or on-premise deployments to optimize and monetize transactions at every stage of the customer lifecycle. Our flexible, configurable business support systems help companies monetize and digitally enable their customer engagement.
Our Industry-Leading Solutions Revenue Management and Digital Monetization: We provide robust, integrated real-time revenue management platforms leveraging public cloud, private cloud, or on-premise deployments to optimize and monetize transactions at every stage of the customer lifecycle. Our flexible, configurable business support systems help companies be more profitable because they sell, engage, and monetize better with CSG integrated, domain specific technology.
The power of all means we are mindful of living our guiding principles and creating a diverse and inclusive environment where team members around the world can reach their full potential by being valued for their authentic selves.
The power of all means that we draw on the experiences and innovations of the best, most diverse global talent to serve our customers. The power of all means we are mindful of living our guiding principles and creating an inclusive environment where team members around the world can reach their full potential by being valued for their authentic selves.
As of December 31, 2023, we employed over 6,000 people, of which approximately 45% were in our locations in Asia-Pacific and Australia, 38% were in our locations in North America, 10% were in our locations in Europe, the Middle East, and Africa, and 7% were in our locations in South and Central America.
As of December 31, 2024, we employed over 5,800 people, of which approximately 46% were in our locations in Asia-Pacific and Australia, 36% were in our locations in North America, 10% were in our locations in Europe, the Middle East, and Africa, and 8% were in our locations in South and Central America.
Our products are recognized by industry analysts as best-in-class in the areas of 5G/IOT monetization, financial services, technology, telecom, field service management, OSS/BSS, journey orchestration, journey analytics, customer experience, and integrated payments. In 2023 we made our debut in the Gartner Magic Quadrant for Configure, Price and Quote (“CPQ”).
Our products are recognized by industry analysts as best-in-class in the areas of monetization, financial services, technology, telecom, field service management, OSS/BSS, journey orchestration, journey analytics, customer experience, and integrated payments.
This will change the way we work, live, and interact, bringing a new digital reality to everything we do. For Communication Service Providers ("CSPs"), it provides new revenue sources beyond connectivity, information, and communications services. For consumers, it enables personalized new digital capabilities in a simpler to consume and engage model.
For Communication Service Providers ("CSPs"), it provides new revenue sources beyond connectivity, information, and communications services. For consumers, it enables personalized new digital capabilities in a simpler to consume and engage model.
CSG is helping some of the biggest brands in retail, healthcare, financial services, and government digitize and modernize their revenue management, customer experience and payments capabilities. 6 Customers We work with some of the world’s leading brands in a wide variety of industry verticals.
CSG is helping some of the biggest brands in retail, healthcare, financial services, insurance, and government digitize and modernize their revenue management, customer experience, and payments capabilities. 6 Customers We work with some of the world’s leading brands in a wide variety of industry verticals, including leading CSPs like Charter, Comcast, MTN, Airtel Africa, DISH, Mobily, Verizon, AT&T, American Movil, and Telstra.
What We Do Simply put, CSG helps companies solve their toughest business challenges. We help our customers deliver personalized, secure, and integrated customer experience solutions in order to grow their revenues and wow their customers with future-ready solutions that drive exceptional customer experiences.
We help our customers deliver personalized, secure, and integrated customer experience solutions in order to grow their revenue and wow their customers with future-ready solutions that drive exceptional customer experiences.
This means fostering a diverse, industry leading employee experience focused on employee choice and flexibility, providing programs and events focusing on wellbeing and mental health of all team members, and inspiring collaborative and connected teams. • Winning with Talent by attracting and retaining the best, most diverse global talent; accelerating time to productivity, integration, and engagement; embedding sustainability and inclusion considerations into our strategy; and ensuring our global team members thrive in an inclusive environment.
Delivering on our greater purpose and mission at speed and scale while delighting our customers and being mindful of our team members’ growth, wellbeing, and happiness requires a people and culture philosophy that accelerates sustainable growth and innovation through three pillars: • Leading the Future of Work by fostering an industry leading employee experience focused on employee choice and flexibility, providing programs and events focusing on wellbeing and mental health of all team members, and inspiring collaborative and connected teams. • Winning with Talent by attracting and retaining the best, most diverse global talent; accelerating time to productivity, integration, and engagement; embedding sustainability and inclusion considerations into our strategy; and ensuring our global team members thrive in an inclusive environment.
These solutions span the commerce lifecycle, streamlining the entire revenue monetization process from concept to cash, helping companies address digital transformation in the ever-changing and dynamic business world in which they operate. The power and capacity of 5G will fuel the growth of digital services across many industries including healthcare, education, transportation, agriculture, and manufacturing.
These solutions span the commerce lifecycle, streamlining the entire revenue monetization process from concept to cash, helping companies address digital transformation in the ever-changing and dynamic business world in which they operate. With the growth in digital services across many industries, the way our customers interact with their customers is rapidly changing.
Outside of the CSP space, we work with hundreds of other customers and approximately 114,000 active merchants including some of the largest financial services companies, three of the largest pharmacy retailers in the U.S., property management companies, and state and local governments.
Outside of the CSP space, we work with hundreds of other customers like JP Morgan Chase, Walgreens, Formula 1, and NRC Health, and approximately 131,000 active merchants including some of the largest financial services companies, property management companies, and state and local governments.
These authorities can modify or revoke our permits, registrations, or other authorizations and can enforce compliance through fines and injunctions. We expect to incur ongoing costs to comply with existing and future requirements. We are also subject to regulation by various U.S. federal regulatory agencies and by the applicable regulatory authorities in countries in which we operate.
Additionally, these laws and regulations also require us to obtain and comply with permits, registrations, and other authorizations issued by governmental authorities. These authorities can modify or revoke our permits, registrations, or other authorizations and can enforce compliance through fines and injunctions. We expect to incur ongoing costs to comply with existing and future requirements.
We do this by putting the customer at the heart of our decision-making and by continuing to raise the bar on our agility, delivery capabilities, efficiency, and reliability to power our customers’ success. Becoming the SaaS technology provider of choice for CSPs: We have a strong presence in the world’s largest CSPs technology ecosystem with our award-winning revenue management platforms.
We do this by putting the customer at the heart of our decision-making and by continuing to raise the bar on our agility, delivery capabilities, efficiency, and reliability to power our customers’ success.
Our solutions are architected to bring speed, agility, and interoperability while maintaining the operational stability, security, reliability, and scalability needed to power these complex ecosystems.
Our solutions are architected to bring speed, agility, and interoperability while maintaining the operational stability, security, reliability, and scalability needed to power these complex ecosystems. We enable companies to bring new services to market with hyper speed and scale with our revenue management platforms which are key to growing revenue and profits in a digital world.
With the goal of reducing our environmental impact, we’ve established a baseline to drive improvement in our environmental performance as part of our ongoing business strategy and operating methods. Enabling Digital Inclusion: We strive to develop technological solutions that promote social progress and make navigating the digital world easier for anyone, anywhere in the world.
With the goal of reducing our environmental impact, we’ve established a baseline to drive improvement in our environmental performance as part of our ongoing business strategy and operating methods and we recently completed our Double Materiality Assessment.
Industry leaders in telecom, broadband cable, media, retail, healthcare, financial services, insurance, government, and other industries leverage the power of our technology to compete and win in the digital age. Our 6,000-plus employees around the globe have made CSG a trusted technology leader and SaaS platform company to some of the biggest and most innovative brands around the world.
Industry leaders in telecom, broadband cable, media, retail, healthcare, financial services, insurance, government, and other industries leverage the power of our integrated, domain specific technology to compete and win in the digital age.
Post-acquisition, we help these companies deliver differentiated experiences across digital channels creating engagements that are personalized, predictive, and proactive. Our extensive customer analytics unlock critical insights from the trail of data footprints across websites, stores, emails, texts, and other channels throughout consumer journeys, enabling real-time decisions and personalized digital communication.
Our extensive customer analytics unlock critical insights from the trail of data footprints across websites, stores, billing systems, internal data warehouses, emails, texts, and other channels to power personalized consumer journeys and real-time customer engagement.
We help businesses "win" on this front by helping them be easier to do business with digitally in the moments that matter. We do this with our SaaS platforms that leverage AI technology and drives loyalty, growth, and cost efficiency across the customer lifecycle.
Transformational Customer Experiences: We believe customer experience is the number one differentiator for businesses today. We help businesses "win" on this front by helping them be easier to do business with digitally in the moments that matter.
As of December 31, 2023, our workforce was approximately 64% male, 36% female, and less than 1% nonbinary or undeclared.
As of December 31, 2024, our workforce was approximately 63% male and 37% female.
Our corporate headquarters is located at 169 Inverness Dr W, Suite 300, Englewood, Colorado 80112, and the telephone number at that address is (303) 200-2000. Our common stock is listed on the NASDAQ Stock Market LLC (“NASDAQ”) under the symbol “CSGS”. We are a member of the S&P Small Cap 600 and Russell 2000 indices.
Our common stock is listed on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “CSGS”. We are a member of the S&P Small Cap 600 and Russell 2000 indices. What We Do Simply put, CSG helps companies solve their toughest business challenges.
Some of the biggest communications, financial services, healthcare, and retail brands in the world rely on our solutions, expertise, and insights to enable better experiences and drive customer engagement and retention. Retaining and growing these consumer relationships is critical for industry leaders to continue to thrive and grow.
We do this with our SaaS platforms that leverage AI technology and drive loyalty, growth, and cost efficiency across the customer lifecycle. 4 Some of the biggest communications, financial services, healthcare, and retail brands in the world rely on our solutions, expertise, and insights to enable better experiences and drive customer engagement and retention.
Regulatory Matters We are subject to numerous international, federal, state, and local laws and regulations. These laws and regulations govern matters that include environmental, employment, and occupational health and safety matters. Additionally, these laws and regulations also require us to obtain and comply with permits, registrations, and other authorizations issued by governmental authorities.
We are committed to digital inclusivity, doing the right thing for the users of our products, and taking action to improve the accessibility of our digital products and services. Regulatory Matters We are subject to numerous international, federal, state, and local laws and regulations. These laws and regulations govern matters that include environmental, employment, and occupational health and safety matters.
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We enable companies to bring new services to market with hyper speed and scale with our revenue management platforms which are key to growing revenue and profits in a digital world. 4 Transformational Customer Experiences: We believe customer experience is the number one differentiator for businesses today.
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Every company in every industry vertical with recurring customer relationships needs to make it easier for their consumer and enterprise customers to do business with them in their customers’ preferred channel of choice.
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New Analyst leadership recognition for 2023 includes MGI Research for Agile Billing, Kaleido Intelligence for Data and Financial Clearing, and Frost and Sullivan for 5G Revenue Management and Monetization. We were also recipients of the TSG Best of Breed API Award for Payments in 2023.
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Our 5,800-plus employees around the globe have made CSG a trusted technology leader and SaaS platform company to some of the biggest and most innovative brands around the world. Our corporate headquarters is located at 169 Inverness Dr W, Suite 300, Englewood, Colorado 80112, and the telephone number at that address is (303) 200-2000.
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Additionally, analysts ranked CSG as a Leader in the Forrester Wave: Customer Journey Orchestration, SPARK Matrix: Customer Communication Management, SPARK Matrix: Customer Data Platform, SPARK Matrix: Journey Analytics, and SPARK Matrix: CPQ.
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Retaining and growing these consumer relationships is critical for industry leaders to continue to thrive and grow. We help our customers deliver differentiated experiences across digital channels creating engagements that are personalized, predictive, and proactive.
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These range from working with leading CSPs like Charter, Comcast, MTN, Airtel Africa, DISH, Mobily, Verizon, AT&T, American Movil, and Telstra.
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In 2024, analysts ranked CSG as a Leader in the Forrester Wave: Customer Journey Orchestration, a Champion in Clearing & Settlement and Testing, and a High-Flyer in Roaming Analytics in the 2024 Kaleido Intelligence Roaming Vendor Hub Report. For the fourth consecutive year, we received a BIG Innovations Award, as CSG Bill Explainer was named Best Product in Telecommunications 2024.
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The power of all means that we draw on the experiences and innovations of the best, most diverse global talent to serve our customers.
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We were awarded for top innovation in payments at the 2024 PayTech Awards USA and honored for our omnichannel experience and recurring payment innovation at the 2024 Juniper Future Digital Awards.
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Delivering on our greater purpose and mission at speed and scale while delighting our customers and being mindful of our team members’ growth, wellbeing, and happiness requires a people and culture philosophy that accelerates sustainable growth and innovation through three pillars: • Leading the Future of Work through our flexible work approach.
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We also earned the TSG Best of Breed API Award for Payments for the second year in a row, and TSG honored CSG as the payment gateway provider with the Lowest Minute Outage in North America at the TSG 2024 Real Transaction Metrics Awards.
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Becoming the SaaS technology provider of choice for CSPs: We have a strong presence in the world’s largest CSPs technology ecosystems with our award-winning revenue management and customer engagement platforms.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf any of the services or products that any other company provides have any defects or problems causing the integrated systems to malfunction or otherwise fail to meet customer requirements, our reputation and business could be harmed. 15 Risks Related to Our Industry Our Business is Highly Dependent on the Global Communications Industry.
Biggest changeWe participate in large projects where various other companies provide services and products that are integrated into systems to meet customer requirements. If any of the services or products that any other company provides have any defects or problems causing the integrated systems to malfunction or otherwise fail to meet customer requirements, our reputation and business could be harmed.
We are subject to certain risks associated with operating globally including the following items: • Our solutions may not meet local or legal requirements; • Fluctuations and unexpected changes in foreign currency exchange rates that may be due to inflation, interest rate spreads, and geopolitical events; • Staffing and managing of our global operations at a reasonable cost; • Longer sales cycles for new contracts; • Longer collection cycles for customer billings or accounts receivable, as well as heightened customer collection risks, especially in countries with high inflation rates and/or restrictions on the movement of cash or certain currencies out of the country; • Trade barriers; • Governmental and economic sanctions; • Complying with varied legal and regulatory requirements across jurisdictions; • Growing requirements related to human rights and occupational safety and health; • Reduced protection for intellectual property rights in some countries; • Inability to recover value added taxes and/or goods and services taxes in foreign jurisdictions; • Political and financial instability and threats of terrorism and/or war; • A potential adverse impact to our overall effective income tax rate resulting from, among other things: o Operations in foreign countries with higher tax rates than the U.S.; o The inability to utilize certain foreign tax credits; and o The inability to utilize some or all of losses generated in one or more foreign countries.
We are subject to certain risks associated with operating globally including the following items: • Our solutions may not meet local or legal requirements; • Fluctuations and unexpected changes in foreign currency exchange rates that may be due to inflation, interest rate spreads, and geopolitical events; • Staffing and managing of our global operations at a reasonable cost; • Longer sales cycles for new contracts; • Longer collection cycles for customer billings or accounts receivable, as well as heightened customer collection risks, especially in countries with high inflation rates and/or restrictions on the movement of cash or certain currencies out of the country; • Trade barriers; • Governmental and economic sanctions; • Complying with varied legal and regulatory requirements across jurisdictions; • Growing requirements related to human rights and occupational safety and health; • Reduced protection for intellectual property rights in some countries; • Inability to recover value added taxes and/or goods and services taxes in foreign jurisdictions; • Political and financial instability and threats of terrorism and/or war; • A potential adverse impact to our overall effective income tax rate resulting from, among other things: o Operations in foreign countries with higher tax rates than the U.S.; o The inability to utilize certain foreign tax credits; and o The inability to utilize some or all losses generated in one or more foreign countries.
We have implemented heightened monitoring of our Networks and Systems, but cannot guarantee that our efforts, or those of third parties on whom we rely on or with whom we partner, will be successful in preventing any such information security incidents or attacks. We May Be Subject to Enforcement Actions or Financial Penalties with Payments Regulation in the U.S.
We have implemented heightened monitoring of our Networks and Systems, but cannot guarantee that our efforts, or those of third parties on whom we rely on or with whom we partner, will be successful in preventing any such information security incidents or attacks. 16 We May Be Subject to Enforcement Actions or Financial Penalties with Payments Regulation in the U.S.
These measures need to be continually updated to address emerging means of perpetrating fraud or to accommodate new solution offerings, but the increase in costs could adversely impact our business. 14 Our Use of Open Source Software May Subject Us to Certain Intellectual Property-Related Claims or Require Us to Re-Engineer Our Software, Which Could Harm Our Business.
These measures need to be continually updated to address emerging means of perpetrating fraud or to accommodate new solution offerings, but the increase in costs could adversely impact our business. Our Use of Open Source Software May Subject Us to Certain Intellectual Property-Related Claims or Require Us to Re-Engineer Our Software, Which Could Harm Our Business.
If an impairment was to be recorded in the future, it could materially impact our results of operations in the period such impairment is recognized, but such an impairment charge would be a non-cash expense, and therefore would have no impact on our current or future cash flows. I tem 1B. Unresolved Staff Comments None.
If an impairment was to be recorded in the future, it could materially impact our results of operations in the period such impairment is recognized, but such an impairment charge would be a non-cash expense, and therefore would have no impact on our current or future cash flows. I tem 1B. Unresolved Staff Comments None. 19
One or any combination of these or other risks could have an adverse impact on our operations and business. Failure to Deal Effectively with Fraud, Fictitious Transactions, Bad Transactions, and Negative Experiences Could Increase Our Loss Rate and Harm Our Payments Business, and Could Severely Diminish Merchant and Consumer Confidence in and Use of Our Services.
One or any combination of these or other risks could have an adverse impact on our operations and business. 13 Failure to Deal Effectively with Fraud, Fictitious Transactions, Bad Transactions, and Negative Experiences Could Increase Our Loss Rate and Harm Our Payments Business, and Could Severely Diminish Merchant and Consumer Confidence in and Use of Our Services.
Also, as consolidated entities execute on their revenue and operational synergies, there is generally a slowdown in decision-making on discretionary spending and/or on new business initiatives which could adversely impact our quarterly and annual financial results. • Competition : Our customers operate in a highly competitive environment.
Also, as consolidated entities execute on their revenue and operational synergies, there is generally a slowdown in decision-making on discretionary spending and/or on new business initiatives which could adversely impact our quarterly and annual financial results. 15 • Competition : Our customers operate in a highly competitive environment.
We may also be subject to card association and network rules and requirements, and violations of such rules and requirements could result in fines or the inability to use third-party networks to conduct our business. 17 We Are Subject to Various Anti-Money Laundering and Counter-Terrorist Financing Laws and Regulations.
We may also be subject to card association and network rules and requirements, and violations of such rules and requirements could result in fines or the inability to use third-party networks to conduct our business. We Are Subject to Various Anti-Money Laundering and Counter-Terrorist Financing Laws and Regulations.
The significance of the impact of a global pandemic on our operations depends on numerous evolving factors that we may not be able to accurately predict or effectively respond to, including, among others: • the effect on global economic activity and the resulting impact on our customer’s businesses, their credit and liquidity, and their demand for our solutions and services, as well as their ability to pay; • our ability to deliver and implement our solutions in a timely manner, including as a result of supply chain disruptions and related cost increases; and • actions taken by U.S., foreign, state, and local governments, suppliers, and individuals in response to the outbreak.
The significance of the impact of a global pandemic on our operations depends on numerous evolving factors that we may not be able to accurately predict or effectively respond to, including, among others: • the effect on global economic activity and the resulting impact on our customers' businesses, their credit and liquidity, and their demand for our solutions and services, as well as their ability to pay; • our ability to deliver and implement our solutions in a timely manner, including as a result of supply chain disruptions and related cost increases; and • actions taken by U.S., foreign, state, and local governments, suppliers, and individuals in response to the outbreak.
Most recently, the global marketplace is experiencing an ever-increasing exposure to both the number and severity of cyber-attacks. In particular, ransomware attacks are becoming increasingly prevalent and can lead to significant reputational harm, loss of data, operational disruption, and significant monetary loss.
Most recently, the global marketplace is experiencing an ever-increasing exposure to both the number and severity of cyber-attacks. In particular, ransomware attacks are increasingly prevalent and can lead to significant reputational harm, loss of data, operational disruption, and significant monetary loss.
Common causes of failure to meet revenue and operating profit expectations include, among others: • Inability to close and/or recognize revenue on certain transactions in the period originally anticipated; • Inability to accurately forecast payments transaction volumes and related transaction costs; • Delays in renewal of multiple or individually significant agreements; • Inability to renew existing customer or vendor arrangements at anticipated rates; • Delays in timing of initiation and/or implementation of significant projects or arrangements; • Inability to meet customer expectations materially within our cost estimates; • Changes in spending and investment levels; • Inflationary pressures; • Significant increase in our cost of borrowing; • Foreign currency fluctuations; and • Economic and political conditions.
Common causes of failure to meet revenue and operating profit expectations include, among others: • Inability to close and/or recognize revenue on certain transactions in the period originally anticipated; • Inability to accurately forecast payments transaction volumes and related transaction costs; • Delays in renewal of multiple or individually significant agreements; • Inability to renew existing customer or vendor arrangements at anticipated rates; • Delays in timing of implementation or changes in scope of significant projects or arrangements; • Inability to meet customer expectations materially within our cost estimates; • Changes in spending and investment levels; • Inflationary pressures; • Significant increase in our cost of borrowing; • Foreign currency fluctuations; and • Economic and political conditions.
The regulations of other countries and/or any increased compliance costs associated with such regulations could prevent us from entering new markets for our services. Our Global Operations Require Us to Comply with Applicable U.S. and International Laws and Regulations.
The regulations of other countries and/or increased compliance costs associated with such regulations could prevent us from entering new markets for our services. Our Global Operations Require Us to Comply with Applicable U.S. and International Laws and Regulations.
However, there is no guarantee that our employees, third-party sales representatives, or other agents have not or will not engage in conduct undetected by our processes and for which we might be held responsible under the FCPA or other anti-corruption laws. Economic sanctions programs restrict our business dealings with certain countries and individuals.
However, there is no guarantee that our employees, third-party sales representatives, or other partners have not or will not engage in conduct undetected by our processes and for which we might be held responsible under the FCPA or other anti-corruption laws. Economic sanctions programs restrict our business dealings with certain countries and individuals.
We are subject to various anti-money laundering (“AML”) and counter-terrorist financing laws and regulations that prohibit, among other things, our involvement in processing the proceeds of criminal activities. We maintain AML Compliance Policies and Procedures applicable to our payments processing business which policies are intended to comply with any applicable U.S. federal and foreign requirements.
We are subject to various anti-money laundering (“AML”) and counter-terrorist financing laws and regulations that prohibit, among other things, our involvement in processing the proceeds associated with criminal activities. We maintain AML Compliance Policies and Procedures applicable to our payments processing business which policies are intended to comply with any applicable U.S. federal and foreign requirements.
In response to these evolving restrictions and regulations (which include, without limitation, the Health Insurance Portability and Accountability Act (“HIPAA”), the Health Information Technology for Economic and Clinical Health Act (“HITECH”), the California Consumer Privacy Act (“CCPA”), the Gramm-Leach-Bliley Act (“GLBA”), and other U.S. federal and state privacy laws and regulations, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR”), the South Africa Protection of Personal Information Act (“POPIA”) and the Brazilian General Data Protection Low (“LGPD”)), we have implemented and maintain administrative, technical, and physical security measures and it is our standard practice to contractually require our service providers to whom we disclose data (including PII) to implement and maintain reasonable privacy, data protection, and information security measures, in each case to protect against loss, theft, misuse, or unauthorized access to or disclosure of such information, and otherwise comply with these laws and regulations.
In response to these evolving restrictions and regulations (which include, without limitation, the Health Insurance Portability and Accountability Act (“HIPAA”), the Health Information Technology for Economic and Clinical Health Act (“HITECH”), the California Consumer Privacy Act (“CCPA”), the Gramm-Leach-Bliley Act (“GLBA”), and other U.S. federal and state privacy laws and regulations, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR”), the South Africa Protection of Personal Information Act (“POPIA”), the Brazilian General Data Protection Law (“LGPD”), the Colombian General Data Protection Law (“GDPL”) and other global privacy laws and regulations), we have implemented and maintain administrative, technical, and physical security measures and it is our standard practice to contractually require our service providers to whom we disclose data (including PII) to implement and maintain reasonable privacy, data protection, and information security measures, in each case to protect against loss, theft, misuse, or unauthorized access to or disclosure of such information, and otherwise comply with these laws and regulations.
Since a large percentage of our revenue is generated from customers that operate within the global communications industry, we are highly dependent on the health and the business trends occurring within this industry (in particular for our North American cable and satellite customers).
Risks Related to Our Industry Our Business is Highly Dependent on the Global Communications Industry. Since a large percentage of our revenue is generated from customers that operate within the global communications industry, we are highly dependent on the health and the business trends occurring within this industry (in particular for our North American cable and satellite customers).
The laws or their application, our interpretation of the laws, and/or our services may change so that we could be subject to additional regulation and incur additional costs of compliance.
The laws or their application, our interpretation of the laws, and/or our services may change such that we could be subject to additional regulation and incur additional costs of compliance.
Implementing the use of AI successfully, ethically, and as intended, will require significant resources, including having the technical complexity and expertise required to develop, test, and maintain our solutions. In addition, we expect that there will continue to be new laws or regulations implemented concerning the use of AI.
Implementing the use of AI successfully, ethically, and as intended, will require significant resources, including having the technical competency and expertise required to develop, test, and continuously monitor our solutions. In addition, we expect that there will continue to be new laws or regulations implemented concerning the use of AI.
As a result of various acquisitions and the growth of our Company over the last several years, as of December 31, 2023, we have approximately $204 million of long-lived assets other than goodwill (principally, property and equipment, operating lease right-of-use assets, software, acquired customer contracts, and customer contract costs) and approximately $309 million of goodwill.
As a result of various acquisitions and the growth of our Company over the last several years, as of December 31, 2024, we have approximately $201 million of long-lived assets other than goodwill (principally, property and equipment, operating lease right-of-use assets, software, acquired customer contracts, and customer contract costs) and approximately $316 million of goodwill.
In addition, we continue to expand our use of third-party Systems and Networks with our solution offerings thereby permitting, for example, our customers’ customers to use the Internet to review account balances, order services, or execute similar account management functions.
In addition, we continue to expand our use of third-party Systems and Networks with our solution offerings thereby permitting, for example, our customers’ customers to access our cloud solutions to review account balances, order services, or execute similar account management functions.
Additionally, if these third-party vendors would decide to significantly increase our costs, due to inflationary pressures or otherwise, it could have an adverse financial impact to our business as we may have limited third-party options and the ability to shift to a competing solution, or redesign our solutions would take considerable time, effort, and money. 13 Our Global Operations Subject Us to Additional Risks.
Additionally, if these third-party vendors decide to significantly increase our costs, due to inflationary pressures or otherwise, it could have an adverse financial impact to our business as we may have limited third-party options and the ability to shift to a competing solution, or redesign our solutions would take considerable time, effort, and money.
As a result, there is a risk that we may experience cancellations, delays, or unexpected costs associated with implementations.
As a result, there is a risk that we may experience cancellations, delays, changes in scope, or unexpected costs associated with implementations.
Access to Networks and Systems via the Internet has the potential to increase their vulnerability to unauthorized access and corruption, as well as increasing the dependency of the Systems’ reliability on the availability and performance of the Internet and end users’ infrastructure they obtain through other third-party providers.
Increased access to Networks and Systems has the potential to increase their vulnerability to unauthorized access and corruption, as well as increasing the dependency of the Systems’ reliability on the availability and performance of our cloud solutions and end users’ infrastructure they obtain through other third-party providers.
Downturns in these conditions may result in rising inflation rates and interest rates, slower or deferred customer buying decisions, and pricing pressures that may adversely affect our ability to generate profitable revenue and sustain revenue growth.
Our business is exposed to global market and economic conditions. Downturns in these conditions may result in rising inflation rates and interest rates, slower or deferred customer buying decisions, and pricing pressures that may adversely affect our ability to generate profitable revenue and sustain revenue growth.
Any failure to successfully or ethically implement the use of AI, or its incorporation into our products, could cause reputational harm to our business and could result in an adverse material impact to our business. We May Incur Material Restructuring or Reorganization Charges in the Future.
Any failure to successfully or ethically implement the use of AI into our operations or our products could result in an adverse material impact to our business or to a third party and could cause reputational harm to our business. 12 We May Incur Material Restructuring or Reorganization Charges in the Future.
While we actively screen and monitor the global companies and individuals that we do business with, utilizing a risk-based approach, there is no guarantee that we have not or will not, through the lack of accurate information, changing customer business structures, process failure, oversight, or error, have violations occur.
While we actively screen and monitor the global companies and individuals that we do business with, utilizing a risk-based approach, there is no guarantee that we have not or will not, through the lack of accurate information, changing customer business structures, process failure, oversight, or error, have violations occur. 17 General Risks Our Business Is Exposed to Global Market and Economic Conditions.
Our competitors include companies who deliver on-premise bespoke custom offerings (i.e., Amdocs Limited, NEC Netcracker), software solutions (i.e., Salesforce, Adobe, Pegasystems, Twilio), internally developed enterprise applications, network operators (i.e., Ericsson, Huawei), large outsourced transactional communications companies (i.e., Intrado, Fiserv), systems integrators (i.e., Accenture, Tech Mahindra) and large payments processors (i.e., FIS and Fiserv) and payments specialists (i.e., Stripe and Nuvei/Paya).
Our competitors include companies who deliver on-premise bespoke custom offerings (i.e., Amdocs Limited, NEC Netcracker), software solutions (i.e., Salesforce, Adobe, Pegasystems, Twilio), internally developed enterprise applications, network operators (i.e., Ericsson, Huawei), large outsourced transactional communications companies (i.e., Intrado, Genesys), systems integrators (i.e., Accenture, Tech Mahindra) and large payments processors (i.e., FIS, Chase Payments Solutions) and payments specialists (i.e., Stripe, Square) and niche players (i.e., Paymentus, Invoice Cloud).
In addition, our inability to complete implementations in an efficient and effective manner could damage our reputation in the global marketplace, adversely impacting our financial results and/or reducing our opportunity to grow our organic business with both new and existing customers and merchants. We May Not Be Successful in the Integration or Achievement of Financial Targets of Our Acquisitions.
In addition, our inability to complete implementations in an efficient and effective manner could damage our reputation in the global marketplace, adversely impacting our financial results and/or reducing our opportunity to grow our organic business with both new and existing customers and merchants. We May Not Be Able to Respond to Rapid Technological Changes.
Further, laws governing payments activities may evolve and changes in such law could affect our ability to provide our solutions or services in the same form and on the same terms as we have historically, or at all.
In addition, as we continue to provide new services, these limitations may adversely affect our ability to grow our business. Further, laws governing payments activities may evolve and changes in such laws could affect our ability to provide our solutions or services in the same form and on the same terms as we have historically, or at all.
There can be no assurance: (i) of continued market acceptance of our solutions; (ii) that we will be successful in the development of enhancements or new solutions that respond to technological advances or changing customer needs at the pace the market demands; or (iii) that we will be successful in supporting the implementation, conversion, integration, and/or operations of enhancements or new solutions. 12 We Are Incorporating Generative Artificial Intelligence into Certain of Our Solutions, Which is New and Developing, and May Result in Operational, Financial and Other Adverse Consequences to Our Business.
There can be no assurance: (i) of continued market acceptance of our solutions; (ii) that we will be successful in the development of enhancements or new solutions that respond to technological advances or changing customer needs at the pace the market demands; or (iii) that we will be successful in supporting the implementation, conversion, integration, and/or operations of enhancements or new solutions.
We would seek to recover such losses from the merchant; however, we may not be able to recover the amounts in full if the merchant is unwilling or unable to pay or the deposit does not cover the damages.
We would seek to recover such losses from the merchant; however, we may not be able to recover the amounts in full if the merchant is unwilling or unable to pay or the deposit does not cover the losses, but we are still required to meet obligations with our banks and card brands we serve.
Due to the multiple risks and potential disruptions associated with any acquisition, there can be no assurance that we will be successful in achieving our expected strategic, operating, and financial goals for any such acquisition(s). We May Not Be Able to Respond to Rapid Technological Changes.
Due to the multiple risks and potential disruptions associated with any acquisition, there can be no assurance that we will be successful in achieving our expected strategic, operating, and financial goals for any such acquisition(s). Our Alliances with Strategic Partners Could Put Our Business at Risk if the Partner Does Not Perform as Expected.
We currently conduct a portion of our business outside the U.S.
Our Global Operations Subject Us to Additional Risks. We currently conduct a portion of our business outside the U.S.
Many of our current and potential competitors have significantly greater financial, marketing, technical, and other competitive resources than our Company, many with significant and well-established domestic and international operations.
Many of our current and potential competitors have significantly greater financial, marketing, technical, and other competitive resources than our Company, many with significant and well-established domestic and international operations. There can be no assurance that we will be able to compete successfully with our existing competitors or with new competitors.
While we have significant sources of cash and liquidity and access to a committed credit line, a prolonged period of generating lower cash from operations could adversely affect our financial condition and the achievement of our strategic objectives. 18 Our Business Is Exposed to Global Market and Economic Conditions. Our business is exposed to global market and economic conditions.
While we have significant sources of cash and liquidity and access to a committed credit line, a prolonged period of generating lower cash from operations could adversely affect our financial condition and the achievement of our strategic objectives. We are Subject to a Series of Risks Associated with Our Environmental, Social, and Governance Initiatives and Sustainability Commitments.
In providing solutions to our customers, we transmit, use, store and otherwise process, confidential and personally identifiable information (“PII”) including health, financial, and other personal information.
Risks Related to Laws and Regulations The Occurrence or Perception of a Security Breach or Disclosure of Confidential Personally Identifiable Information Could Harm Our Business. In providing solutions to our customers, we transmit, use, store and otherwise process, confidential and personally identifiable information (“PII”) including health, financial, and other personal information.
Additionally, AI algorithms are based on machine learning and predictive analytics, which can create accuracy issues and unintended biases. Further, our competitors or other third parties may incorporate AI into their business and solutions more rapidly or more successfully than us, which could hinder our ability to compete effectively and adversely affect our results of operations.
Further, our competitors or other third parties may incorporate AI into their business and solutions more rapidly or more successfully than us, which could hinder our ability to compete effectively.
There can be no assurance that our tax positions will not be challenged by relevant tax authorities or that we would be successful in any such challenge. 19 Substantial Impairment of Long-lived Assets in the Future May Be Possible.
There can be no assurance that our tax positions will not be challenged by relevant tax authorities or that we would be successful in any such challenge. 18 Our Business May Be Disrupted and Our Results of Operations and Cash Flows May be Adversely Affected by a Global Pandemic.
Long-lived assets are required to be evaluated for possible impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. We utilize our market capitalization, third party valuation and/or cash flow models as the primary basis to estimate the fair value amounts used in our long-lived asset impairment valuations.
We utilize our market capitalization, third party valuation and/or cash flow models as the primary basis to estimate the fair value amounts used in our impairment valuations.
Many states in which we operate have laws that govern payments activities and have implemented various definitions and licensing requirements for entities deemed to be money transmitters, including licensure. We have applied for money transmitter licenses in all states where the state regulates for money transmission and where we do business.
Many states in which we operate have laws that govern payments activities and have implemented various definitions and licensing requirements for entities deemed to be money transmitters. These licenses require us to maintain certain financial metrics, file periodic reports, and subject us to inspections by state regulatory agencies.
Our failure to adequately establish, maintain, and protect our intellectual property rights could have a material adverse effect on our business. Our Alliances with Strategic Partners Could Put Our Business at Risk if the Partner Does Not Perform as Expected.
Our failure to adequately establish, maintain, and protect our intellectual property rights could have a material adverse effect on our business. 14 We May Not Be Successful in the Integration or Achievement of Financial Targets of Our Acquisitions.
Removed
We have been and expect to continue to use artificial intelligence (“AI”) in our solutions that support our business. This emerging technology is in its early stages of commercial use and presents a number of risks inherent in its use, including risks related to cybersecurity and data practices as well as intellectual property ownership.
Added
A large percentage of our revenue is generated from a limited number of customers in the global communications industry, with our three largest customers being Charter, Comcast, and DISH Network L.L.C.
Removed
We participate in large projects where various other companies provide services and products that are integrated into systems to meet customer requirements.
Added
We Use Artificial Intelligence in Our Business and Solutions and May Have Challenges with Properly Managing its Use Resulting in Operational, Financial, and Other Adverse Consequences to Our Business. We have been and expect to continue to use artificial intelligence (“AI”) in our solutions and other third-party products that support our business.
Removed
There can be no assurance that we will be able to compete successfully with our existing competitors or with new competitors. 16 Risks Related to Laws and Regulations The Occurrence or Perception of a Security Breach or Disclosure of Confidential Personally Identifiable Information Could Harm Our Business.
Added
This technology continues to evolve and presents a number of risks inherent in its use, including risks related to cybersecurity, data privacy, ethics, and intellectual property ownership. Additionally, AI algorithms are based on machine learning and predictive analytics, which can create accuracy issues and unintended biases.
Removed
We have been issued licenses in all but three of those states, and in those three states where licenses are pending, we could be subject to enforcement actions and financial penalties and other costs.
Added
The technologies underlying AI and their use cases are rapidly developing, and it is not possible to predict all of the legal, operational, or technological risks related to the use of AI.
Removed
An enforcement action could result in restrictions on, or a prohibition on engaging in, the business of money transmission in one or more states and it could delay or prevent us from obtaining a money transmitter license in one or more states.
Added
As part of the growing interest in environmental, social, and governance (“ESG”) matters, we face increased scrutiny and changing expectations from a variety of stakeholders related to our ESG practices. Additionally, we anticipate that we will become subject to changes in regulation and disclosure requirements related to ESG matters, including environmental and social topics.
Removed
Enforcement actions could also result in reputational harm to our business and force us to cease or limit certain aspects of our business or prevent us from growing our business.
Added
Although we have engaged in certain ESG-related voluntary disclosures on goals and commitments, there can be no assurances that stakeholders will be satisfied with our efforts. Additionally, our ability to achieve these goals and commitments is subject to numerous risks and uncertainties, many of which are outside of our control.
Removed
In addition, as we continue to provide new services, these limitations may adversely affect our ability to grow our business.
Added
If we fail to meet any of our goals and commitments, or if there are unfavorable stakeholder perceptions of our ESG efforts, we may be subject to various adverse impacts to our business, reputational harm, or legal liability. There are also changing expectations for ESG-related disclosures that may be required by regulators.
Removed
General Risks Our Business May Be Disrupted and Our Results of Operations and Cash Flows May be Adversely Affected by a Global Pandemic.
Added
Any changes in laws, regulations, or customer requirements could result in significant revisions to our current goals and commitments, reported progress, or ability to achieve such goals and commitments in the future. Furthermore, the application of these laws and regulations to our business is often unclear and may at times conflict.
Added
Compliance with the applicable regulatory requirements may be onerous, time-consuming, and expensive, especially when these requirements vary from jurisdiction to jurisdiction or where the jurisdictional reach of certain requirements is not clearly defined. Non-compliance with the applicable laws or regulations could result in fines, damages, business restrictions, and damage to our reputation.
Added
Substantial Impairment of Goodwill and Long-lived Assets in the Future May Be Possible.
Added
Long-lived assets are required to be evaluated for possible impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable and goodwill is tested for impairment at least annually, and more frequently if there are signs of impairment.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeShepherd (President and Chief Executive Officer), Hai Tran (Executive Vice President, Chief Financial Officer), Elizabeth A. Bauer (Executive Vice President, Chief Experience Officer), Rasmani Bhattacharya (Executive Vice President, Chief Legal Officer), Chad C. Dunavant (Executive Vice President, Chief Product and Strategy Officer), Eric M. Carrasquilla (Executive Vice President, President Customer Experience), Michael J.
Biggest changeMine Safety Disclosures Not applicable. 21 Information about our Executive Officers As of the date of this filing, our executive officers are Brian A. Shepherd (President and Chief Executive Officer), Hai Tran (Executive Vice President and Chief Financial Officer), Elizabeth A. Bauer (Executive Vice President and Chief Experience Officer), Rasmani Bhattacharya (Executive Vice President and Chief Legal Officer), Chad C.
Woods has served as Senior Vice President, Broadband, Cable, and Satellite (2023-2024), Senior Vice President and General Manager, Communications, Design and Delivery (2022-2023), Vice President, Output Solutions (2021-2022) and Executive Director, Customer Business Executive (2018-2020). Previously, he held leadership roles at Business Ink, prior to its acquisition by CSG, in addition to, finance and commercial roles at Shell plc. Mr.
Woods has served as Senior Vice President, Broadband, Cable, and Satellite (2023-2024), Senior Vice President and General Manager, Communications, Design and Delivery (2022- 2023), Vice President, Output Solutions (2021-2022) and Executive Director, Customer Business Executive (2018-2020). Previously, he held leadership roles at Business Ink, prior to its acquisition by CSG, in addition to, finance and commercial roles at Shell plc.
The ISSC meets quarterly to guide, direct, and monitor the performance and effectiveness of our cybersecurity program and elevates risks and mitigation plans, as appropriate, to the Board. Governance Overall Risk Approach The Board is responsible for oversight of our risks, including establishing our risk appetite and overseeing our risk management framework.
The ISSC meets quarterly to guide, direct, and monitor the performance and effectiveness of our cybersecurity program and elevates risks and mitigation plans, as appropriate, to the Board. 20 Governance Overall Risk Approach The Board is responsible for oversight of our risks, including establishing our risk appetite and overseeing our risk management framework.
Bauer, 61, is Chief Experience Officer at CSG, leading the human capital management, marketing, corporate communications, customer centricity and sales enablement teams. Having previously served as Chief Marketing and Customer Officer (2021-2022) and Senior Vice President, Chief Investor Relations and Communications Officer (2016-2021), Ms. Bauer has greatly impacted the Company’s growth strategy and the development of CSG’s customer-first, values-based culture.
Bauer, 62, is Chief Experience Officer at CSG, leading the human capital management, marketing, corporate communications, customer centricity, and sales enablement teams. Having previously served as Chief Marketing and Customer Officer (2021-2022) and Senior Vice President, Chief Investor Relations and Communications Officer (2016-2021), Ms. Bauer has greatly impacted the Company’s growth strategy and the development of CSG’s customer-first, values-based culture.
She holds a BA in Economics and Foreign Affairs from the University of Virginia and JD from the University of Virginia School of Law. Chad C. Dunavant Executive Vice President and Chief Product and Strategy Officer Mr. Dunavant, 47, serves as Chief Strategy and Product Officer at CSG, responsible for developing, communicating, executing, and sustaining corporate strategic initiatives. Mr.
She holds a BA in Economics and Foreign Affairs from the University of Virginia and JD from the University of Virginia School of Law. Chad C. Dunavant Executive Vice President and Chief Product and Strategy Officer Mr. Dunavant, 48, serves as Chief Strategy and Product Officer at CSG, responsible for developing, communicating, executing, and sustaining corporate strategic initiatives. Mr.
The graph assumes that $100 was invested on December 31, 2018, in our common stock and in each of the two indexes, and all dividends, if any, were reinvested.
The graph assumes that $100 was invested on December 31, 2019, in our common stock and in each of the two indexes, and all dividends, if any, were reinvested.
She has extensive experience in structuring and negotiating complex, multijurisdictional transactions supporting business transformations, including joint ventures, corporate restructurings, and strategic partnerships. Ms. Bhattacharya started her career as a corporate lawyer in the Houston office of the law firm of Vinson & Elkins, LLP.
She has extensive experience in structuring and negotiating complex, multi-jurisdictional transactions supporting business transformations, including joint ventures, corporate restructurings, and strategic partnerships. Ms. Bhattacharya started her career as a corporate lawyer in the Houston office of the law firm of Vinson & Elkins, LLP.
He possesses deep industry knowledge and experience developing enterprise SaaS software for multiple industry verticals and is an author and speaker on best practices for driving profits in the digital era. Mr. Dunavant holds a BBS in Finance and Management Information Systems from Gonzaga University and received an MBA in International Business from the University of Denver. 22 Eric M.
He possesses deep industry knowledge and experience developing enterprise SaaS software for multiple industry verticals and is an author and speaker on best practices for driving profits in the digital era. Mr. Dunavant holds a BBS in Finance and Management Information Systems from Gonzaga University and received an MBA in International Business from the University of Denver. 22 Michael J.
Properties Our corporate headquarters is located in Denver, Colorado where we occupy office space under a lease that expires in 2033. We also lease office space for our operations in various locations throughout the U.S. as well as a number of countries in Europe, North America, Asia, South America, and Africa. These leases expire in the years 2024 through 2026.
Properties Our corporate headquarters is located in Denver, Colorado where we occupy office space under a lease that expires in 2033. We also lease office space for our operations in various locations throughout the U.S. as well as a number of countries in Europe, North America, Asia, South America, and Africa. These leases run through 2026.
The Board also reviews the strategic direction of the Company’s cybersecurity program and ensures that adequate resources and budget are allocated to address cybersecurity threats. The Board exercises its cyber risk oversight primarily through executive management, our CIO and our CISO.
The Board also reviews the strategic direction of the Company’s cybersecurity program and ensures that adequate resources and budget are allocated to address cybersecurity threats. The Board exercises its cyber risk oversight primarily through updates provided by executive management, our CIO, and our CISO.
The Board also has a standing committee (the “Cybersecurity Committee”) that advises it on cybersecurity matters and provides strategic guidance and direction for our cybersecurity program. The Cybersecurity Committee convenes as necessary to address critical or emerging cybersecurity concerns and to ensure alignment on approach.
The Board also has a standing committee (the “Cybersecurity Committee”), comprised of certain members of the Board, that advises it on cybersecurity matters and provides strategic guidance and direction for our cybersecurity program. The Cybersecurity Committee convenes as necessary to address critical or emerging cybersecurity concerns and to ensure alignment on approach.
Woods, 39, is President of North America Communications, Media and Technology at CSG, where he is responsible for driving revenue, business development, product management, and account management for CSG’s largest customers in North America. Since joining CSG in 2018, Mr.
Woods Executive Vice President and President of North America Communications, Media, and Technology Mr. Woods, 40, is President of North America Communications, Media and Technology at CSG, where he is responsible for driving revenue, business development, product management, and account management for CSG’s largest customers in North America. Since joining CSG in March 2018, Mr.
Szwanek was the Chief Accounting Officer at Orion Advisor Solutions, LLC (2021-2023) and held multiple roles at CSG (since 1996), most recently as Vice President and Global Controller (2014-2021). She possesses a wealth of expertise in technical accounting matters and is a demonstrated strategic leader within the technology industry. Ms.
Previously, Ms. Szwanek was the Chief Accounting Officer at Orion Advisor Solutions, LLC (2021-2023). Prior to that, Ms. Szwanek held multiple roles at CSG, beginning in 1996, most recently as Vice President and Global Controller (2014-2021). Ms. Szwanek possesses a wealth of expertise in technical accounting matters and is a demonstrated strategic leader within the technology industry. Ms.
Bhattacharya, 55, is Chief Legal Officer at CSG, where she leads the Company’s legal, compliance, procurement, and DEI teams. Ms.
Bhattacharya, 56, is Chief Legal Officer at CSG, where she leads the Company’s legal, compliance, and procurement teams. Ms.
On January 31, 2024, the number of holders of record of common stock was 122. Stock Price Performance The following graph compares the cumulative total stockholder return on our common stock, the Russell 2000 Index, and our Standard Industrial Classification (“SIC”) Code Index: Computer Processing and Data Preparation and Processing Services during the indicated five-year period.
Stock Price Performance The following graph compares the cumulative total stockholder return on our common stock, the Russell 2000 Index, and our Standard Industrial Classification (“SIC”) Code Index: Computer Processing and Data Preparation and Processing Services during the indicated five-year period.
Woods holds a BS in Business Administration and a BA in History from the University of Colorado at Boulder as well as an MBA from Rice University, where he was a Jones Scholar. Lori J. Szwanek Senior Vice President and Chief Accounting Officer Ms. Szwanek, 57, serves as Chief Accounting Officer at CSG. Prior to this role, Ms.
Mr. Woods holds a BS in Business Administration and a BA in History from the University of Colorado at Boulder as well as an MBA from Rice University, where he was a Jones Scholar. Lori J. Szwanek Senior Vice President and Chief Accounting Officer Ms. Szwanek, 58, serves as Chief Accounting Officer at CSG, having re-joined CSG in September 2023.
Risk treatment plans are strategically prioritized and executed, and residual risks are reported through our enterprise risk program and elevated to executive management and the Board. 20 Our cross-functional Information Security Steering Committee (“ISSC”) is the senior management team that oversees the direction, execution, and effectiveness of our cybersecurity program, policies and procedures including: cyber risks, mitigations, risk treatment plans, incident response plans, compliance with applicable regulations, and ensuring business-aligned cybersecurity objectives.
Our cross-functional Information Security Steering Committee (“ISSC”) is the senior management team that oversees the direction, execution, and effectiveness of our cybersecurity program, policies and procedures including: cyber risks, mitigations, risk treatment plans, incident response plans, compliance with applicable regulations, and ensuring business-aligned cybersecurity objectives.
Additionally, we lease approximately 330,000 square feet for our three design and delivery centers located in: (i) Omaha, Nebraska; (ii) Crawfordville, Florida; and (iii) Fort Worth, Texas. The leases for these facilities expire in the years 2026 through 2029. We believe that our facilities are adequate for our current and anticipated needs.
Additionally, we lease approximately 330,000 square feet for our three design and delivery centers located in: (i) Omaha, Nebraska; (ii) Crawfordville, Florida; and (iii) Fort Worth, Texas. The leases for these facilities expire in the years 2026 through 2029, all of which include the option to extend the leases for up to an additional ten years.
Shepherd received an MBA from Harvard Business School and graduated from Wabash College with a BA in Economics. Hai Tran Executive Vice President and Chief Financial Officer Mr. Tran, 54, is Chief Financial Officer of CSG, where he oversees finance, accounting, treasury, investor relations and also serves as President of Global Telecommunications. Mr.
Hai Tran Executive Vice President and Chief Financial Officer Mr. Tran, 55, is Chief Financial Officer of CSG, where he oversees finance, accounting, treasury, investor relations and also serves as President of Global Telecommunications. Mr.
Prior to his role as Chief Executive Officer, Mr. Shepherd served as Executive Vice President and Group President (2017-2021), where he focused on accelerating the growth and strategic development of the Company, and Executive Vice President and President of Global Broadband, Cable and Satellite at CSG (2016-2017). Mr.
Shepherd served as Executive Vice President and Group President (2017-2021), where he focused on accelerating the growth and strategic development of the Company, and Executive Vice President and President of Global Broadband, Cable and Satellite at CSG (2016-2017). Mr. Shepherd received an MBA from Harvard Business School and graduated from Wabash College with a BA in Economics.
As of December 31, 2018 2019 2020 2021 2022 2023 CSG Systems International, Inc. $ 100.00 $ 166.02 $ 147.75 $ 192.83 $ 194.97 $ 185.34 Russell 2000 Index $ 100.00 $ 125.52 $ 150.58 $ 172.90 $ 137.56 $ 160.85 Data Preparation and Processing Services $ 100.00 $ 105.74 $ 148.41 $ 119.30 $ 76.43 $ 59.29 24 Issuer Repurchases of Equity Securities The following table presents information with respect to purchases of our common stock made during the fourth quarter of 2023 by CSG Systems International, Inc. or any “affiliated purchaser” of CSG Systems International, Inc., as defined in Rule 10b-18(a)(3) under the Exchange Act.
As of December 31, 2019 2020 2021 2022 2023 2024 CSG Systems International, Inc. $ 100.00 $ 89.00 $ 116.15 $ 117.44 $ 111.64 $ 110.00 Russell 2000 Index $ 100.00 $ 119.96 $ 137.74 $ 109.59 $ 128.14 $ 142.93 Data Preparation and Processing Services $ 100.00 $ 142.13 $ 111.46 $ 57.13 $ 39.65 $ 43.33 24 Issuer Purchases of Equity Securities The following table presents information with respect to purchases of our common stock made during the fourth quarter of 2024 by CSG Systems International, Inc. or any “affiliated purchaser” of CSG Systems International, Inc., as defined in Rule 10b-18(a)(3) under the Exchange Act.
Woods (Executive Vice President, President of North America Communications, Media and Technology), and Lori J. Szwanek (Senior Vice President, Chief Accounting Officer). Brian A. Shepherd President and Chief Executive Officer Mr. Shepherd, 56, is the President and Chief Executive Officer at CSG and a member of the Board, having been appointed in January 2021.
Dunavant (Executive Vice President and Chief Product and Strategy Officer), Michael J. Woods (Executive Vice President and President of North America Communications, Media, and Technology), and Lori J. Szwanek (Senior Vice President and Chief Accounting Officer). Brian A. Shepherd President and Chief Executive Officer Mr.
We may enter into new leases or renew or terminate existing leases as necessary as our business evolves. See Note 6 to our Financial Statements for information regarding our obligations under our facility leases. I tem 3. Legal Proceedings From time-to-time, we are involved in litigation relating to claims arising out of our operations in the normal course of business.
We believe that our facilities are adequate for our current and anticipated needs. We may enter into new leases or renew or terminate existing leases as necessary as our business evolves. See Note 6 to our Financial Statements for information regarding our obligations under our facility leases. I tem 3.
Szwanek obtained a BBA from Midland University in Nebraska and is a Certified Public Accountant (inactive) and a member of the AICPA and Nebraska Society of CPAs. 23 P ART II I tem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on NASDAQ under the symbol ‘‘CSGS’’.
Szwanek obtained a Bachelor of Business Administration from Midland University in Nebraska and is a Certified Public Accountant (inactive) and is a member of the AICPA and Nebraska Society of CPAs. 23 P ART II I tem 5.
In the opinion of our management, we are not presently a party to any material pending or threatened legal proceedings. I tem 4. Mine Safety Disclosures Not applicable. 21 Executive Officers of the Registrant As of the date of this filing, our executive officers are Brian A.
Legal Proceedings From time-to-time, we are involved in litigation relating to claims arising out of our operations in the normal course of business. In the opinion of our management, we are not presently a party to any material pending or threatened legal proceedings. I tem 4.
(2) See Note 12 to our Financial Statements for additional information regarding our share repurchases. (3) During the fourth quarter of 2023, we completed the last of the share repurchases with respect to our Board's prior authorization under our Stock Repurchase Program.
See Note 12 to our Financial Statements for additional information regarding our share repurchases and our Stock Repurchase Program.
(4) In August 2023, we announced that our Board had authorized the repurchase of an additional $100.0 million of common stock (the "new repurchase authorization") under our Stock Repurchase Program. As of December 31, 2023, $95.8 million of common stock remained available for repurchase with respect to the new repurchase authorization. The new repurchase authorization has no expiration date.
(2) In August 2023, our Board authorized the repurchase of $100.0 million of common stock under our Stock Repurchase Program. In August 2024, our Board authorized an additional $100.0 million of repurchases under our Stock Repurchase Program, with all outstanding authorized repurchases to be completed by December 31, 2025.
Stock Repurchase Program Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Program (2)(3) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program (2) (4) October 1 - October 31 79,279 $ 50.97 69,000 46,601 $ 100,000,000 November 1 - November 30 67,429 50.25 67,000 - $ 98,962,268 December 1 - December 31 60,920 52.92 60,500 - $ 95,760,121 Total 207,628 $ 51.31 196,500 (1) The total number of shares purchased that are not part of the Stock Repurchase Program represents shares purchased and cancelled in connection with stock incentive plans.
Period Total Number of Shares Purchased (1) (2) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program (2) October 1 - October 31 181,841 $ 48.18 179,182 $ 153,400,374 November 1 - November 30 142,915 53.58 140,521 $ 145,863,553 December 1 - December 31 149,320 53.18 148,792 $ 137,950,850 Total 474,076 $ 51.38 468,495 (1) The total number of shares purchased that are not part of the Stock Repurchase Program represents shares purchased and cancelled in connection with stock incentive plans.
Removed
Carrasquilla Executive Vice President and President Customer Experience Mr. Carrasquilla, 52, is President of Customer Experience at CSG, where he oversees product, sales, and services for these solutions. Having joined CSG in February 2021, Mr. Carrasquilla previously served as Senior Vice President, Customer Experience (2022-2023) and General Manager, Digital Engagement Solutions (2021-2022).
Added
In addition, we have taken steps to address cybersecurity threats presented by third-party service providers, to include third-party systems that could adversely impact our business in the event of a significant cybersecurity incident affecting those third-party systems.
Removed
Prior to CSG, he was Senior Vice President of Product at Conga (2017-2021) and held leadership roles in product, go-to-market, and general management for Model N, [24]7.ai, Amdocs, Clarify, and Aurum/Baan. Mr. Carrasquilla has over 20 years of experience building, launching, and monetizing enterprise-grade solutions that deliver extraordinary customer experiences.
Added
We have formal requirements that these third parties maintain certain security controls, we assess their compliance with these requirements on an ongoing basis, and we require timely notification of potential or confirmed security breaches. We also use third-party services that help us to monitor the security risks associated with our third-party service providers.
Removed
He holds a BS in marketing from San Jose State University as well as an MBA from Santa Clara University. Michael J. Woods Executive Vice President and President of North America Communications, Media and Technology Mr.
Added
Risk treatment plans are strategically prioritized and executed, and residual risks are reported through our enterprise risk program and elevated to executive management and the Board. We foster a proactive cybersecurity culture across our organization through employee education, awareness, and engagement.
Added
This approach includes monthly e-mail phishing simulations, quarterly computer-based security awareness training on topics relevant to protecting our organization, role-based secure design and coding training, role-based security practitioner training, cybersecurity tabletop exercises, and adversary emulation exercises.
Added
Shepherd, 57, is the President and Chief Executive Officer at CSG and a member of the Board, having been appointed in January 2021. Prior to his role as Chief Executive Officer, Mr.
Added
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on Nasdaq under the symbol ‘‘CSGS’’. On January 31, 2025, the number of holders of record of common stock was 124.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

270 edited+64 added−67 removed158 unchanged
Biggest changeCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands) Shares of Common Stock Outstanding Common Stock Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Accumulated Earnings Noncontrolling Interest Total Stockholders' Equity BALANCE, January 1, 2021 32,713 $ 700 $ 470,557 $ ( 894,126 ) $ ( 31,138 ) $ 876,402 $ - $ 422,395 Comprehensive income: Net income - - - - - 72,331 - Unrealized loss on short-term investments, net of tax - - - - ( 19 ) - - Foreign currency translation adjustments - - - - ( 7,196 ) - - Total comprehensive income 65,116 Repurchase of common stock ( 863 ) - ( 6,258 ) ( 35,980 ) - - - ( 42,238 ) Issuance of common stock pursuant to employee stock purchase plan 64 - 2,610 - - - - 2,610 Issuance of restricted common stock pursuant to stock- based compensation plans 661 6 ( 6 ) - - - - - Cancellation of restricted common stock issued pursuant to stock-based compensation plans ( 80 ) ( 1 ) - - - - - ( 1 ) Stock-based compensation expense - - 21,400 - - - - 21,400 Dividends - - - - - ( 32,673 ) - ( 32,673 ) Noncontrolling interest related to business combination - - - - - - 3,635 3,635 BALANCE, December 31, 2021 32,495 705 488,303 ( 930,106 ) ( 38,353 ) 916,060 3,635 440,244 Comprehensive income: Net income - - - - - 44,060 - Unrealized gain on short-term investments, net of tax - - - - 7 - - Foreign currency translation adjustments - - - - ( 20,483 ) - - Total comprehensive income 23,584 Repurchase of common stock ( 1,635 ) ( 1 ) ( 8,675 ) ( 87,928 ) - - - ( 96,604 ) Issuance of common stock pursuant to employee stock purchase plan 57 - 2,969 - - - - 2,969 Issuance of restricted common stock pursuant to stock- based compensation plans 544 6 ( 6 ) - - - - - Cancellation of restricted common stock issued pursuant to stock-based compensation plans ( 192 ) ( 2 ) 2 - - - - - Stock-based compensation expense - - 27,243 - - - - 27,243 Settlement of convertible debt securities, net of tax - - ( 4,845 ) - - - - ( 4,845 ) Adjustments due to adoption of new accounting standard - - ( 9,802 ) - - 9,802 - - Dividends - - - - - ( 33,707 ) - ( 33,707 ) Write-off of noncontrolling interest - - - - - - ( 3,635 ) ( 3,635 ) BALANCE, December 31, 2022 31,269 708 495,189 ( 1,018,034 ) ( 58,829 ) 936,215 - 355,249 Comprehensive income: Net income - - - - - 66,246 - Foreign currency translation adjustments - - - - 8,416 - - Total comprehensive income 74,662 Repurchase of common stock ( 2,369 ) ( 2 ) ( 10,156 ) ( 118,021 ) - - - ( 128,179 ) Issuance of common stock pursuant to employee stock purchase plan 74 - 3,284 - - - - 3,284 Issuance of restricted common stock pursuant to stock- based compensation plans 666 7 ( 7 ) - - - - - Cancellation of restricted common stock issued pursuant to stock-based compensation plans ( 99 ) - - - - - - - Stock-based compensation expense - - 28,990 - - - - 28,990 Purchase of capped call transactions, net of tax - - ( 26,353 ) - - - - ( 26,353 ) Dividends - - - - - ( 34,327 ) - ( 34,327 ) BALANCE, December 31, 2023 29,541 $ 713 $ 490,947 $ ( 1,136,055 ) $ ( 50,413 ) $ 968,134 $ - $ 273,326 The accompanying notes are an integral part of these consolidated financial statements . 45 C SG SYSTEMS INTERNATIONAL, INC.
Biggest changeCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands) Shares of Common Stock Outstanding Common Stock Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Accumulated Earnings Noncontrolling Interest Total Stockholders' Equity BALANCE, January 1, 2022 32,495 $ 705 $ 488,303 $ ( 930,106 ) $ ( 38,353 ) $ 916,060 $ 3,635 $ 440,244 Comprehensive income: Net income - - - - - 44,060 - Unrealized gain on short-term investments, net of tax - - - - 7 - - Foreign currency translation adjustments - - - - ( 20,483 ) - - Total comprehensive income 23,584 Repurchase of common stock ( 1,635 ) ( 1 ) ( 8,675 ) ( 87,928 ) - - - ( 96,604 ) Issuance of common stock pursuant to employee stock purchase plan 57 - 2,969 - - - - 2,969 Issuance of restricted common stock pursuant to stock- based compensation plans 544 6 ( 6 ) - - - - - Cancellation of restricted common stock issued pursuant to stock-based compensation plans ( 192 ) ( 2 ) 2 - - - - - Stock-based compensation expense - - 27,243 - - - - 27,243 Settlement of convertible debt securities, net of tax - - ( 4,845 ) - - - - ( 4,845 ) Adjustments due to adoption of new accounting standard - - ( 9,802 ) - - 9,802 - - Dividends - - - - - ( 33,707 ) - ( 33,707 ) Write-off of noncontrolling interest - - - - - - ( 3,635 ) ( 3,635 ) BALANCE, December 31, 2022 31,269 708 495,189 ( 1,018,034 ) ( 58,829 ) 936,215 - 355,249 Comprehensive income: Net income - - - - - 66,246 - Foreign currency translation adjustments - - - - 8,416 - - Total comprehensive income 74,662 Repurchase of common stock ( 2,369 ) ( 2 ) ( 10,156 ) ( 118,021 ) - - - ( 128,179 ) Issuance of common stock pursuant to employee stock purchase plan 74 - 3,284 - - - - 3,284 Issuance of restricted common stock pursuant to stock- based compensation plans 666 7 ( 7 ) - - - - - Cancellation of restricted common stock issued pursuant to stock-based compensation plans ( 99 ) - - - - - - - Stock-based compensation expense - - 28,990 - - - - 28,990 Purchase of capped call transactions, net of tax - - ( 26,353 ) - - - - ( 26,353 ) Dividends - - - - - ( 34,327 ) - ( 34,327 ) BALANCE, December 31, 2023 29,541 713 490,947 ( 1,136,055 ) ( 50,413 ) 968,134 - 273,326 Comprehensive income: Net income - - - - - 86,852 - Foreign currency translation adjustments - - - - ( 11,877 ) - - Total comprehensive income 74,975 Repurchase of common stock ( 1,362 ) ( 1 ) ( 9,361 ) ( 58,169 ) - - - ( 67,531 ) Issuance of common stock pursuant to employee stock purchase plan 73 - 3,072 - - - - 3,072 Issuance of restricted common stock pursuant to stock- based compensation plans 777 8 ( 9 ) - - - - ( 1 ) Cancellation of restricted common stock issued pursuant to stock-based compensation plans ( 175 ) ( 2 ) 2 - - - - - Stock-based compensation expense - - 33,564 - - - - 33,564 Dividends - - - - - ( 34,836 ) - ( 34,836 ) BALANCE, December 31, 2024 28,854 $ 718 $ 518,215 $ ( 1,194,224 ) $ ( 62,290 ) $ 1,020,150 $ - $ 282,569 The accompanying notes are an integral part of these consolidated financial statements . 45 C SG SYSTEMS INTERNATIONAL, INC.
Our cost of revenue consist principally of the following: (i) computing capacity and network communications costs; (ii) statement production costs (e.g., labor, paper, envelopes, equipment, equipment maintenance, etc.); (iii) transaction fees, which are primarily comprised of fees paid to third-party payment processors and financial institutions and interchange fees; (iv) customer support organizations (e.g., our customer support call center, account management, etc.); (v) professional services organization; (vi) various product delivery and support organizations (e.g., managed services delivery, product management, product maintenance, etc.); (vii) third-party software costs and/or royalties related to certain software products; (viii) facilities and infrastructure costs related to the statement production and support organizations; and (ix) amortization of acquired intangibles.
Our cost of revenue consist principally of the following: (i) computing capacity and network communications costs; (ii) statement production costs (e.g., labor, paper, envelopes, equipment, equipment maintenance, etc.); (iii) transaction fees, which are primarily comprised of fees paid to third-party payment processors and financial institutions and interchange fees; (iv) customer support organizations (e.g., customer support call center, account management, etc.); (v) professional services organization; (vi) various product delivery and support organizations (e.g., managed services delivery, product management, product maintenance, etc.); (vii) third-party software costs and/or royalties related to certain software products; (viii) facilities and infrastructure costs related to the statement production and support organizations; and (ix) amortization of acquired intangibles.
All other changes in our gross and net billed accounts receivable reflect the normal fluctuations in the timing of customer payments at quarter-end, as evidenced by our relatively consistent DBO metric. As a global provider of solutions and services, a portion of our billed trade accounts receivable balance relates to international customers.
All other changes in our gross and net billed accounts receivable reflect the normal fluctuations in the timing of customer payments at quarter-end, as evidenced by our relatively consistent DBO metric. As a global provider of solutions and services, a portion of our trade accounts receivable balance relates to international customers.
Should a significant customer: (i) terminate or fail to renew their contracts with us, in whole or in part for any reason; (ii) significantly reduce the number of customer accounts processed on our solutions, the price paid for our solutions and services, or the scope of solutions and services that we provide; or (iii) experience financial or operating difficulties, it could have a material adverse effect on our financial position and results of operations. 4.
Should a significant customer: (i) terminate or fail to renew their contracts with us, in whole or in part for any reason; (ii) significantly reduce the number of customer accounts processed on our solutions, the price paid for our services, or the scope of services that we provide; or (iii) experience financial or operating difficulties, it could have a material adverse effect on our financial position and results of operations. 4.
The amortization of acquired software is reflected as a cost of revenue in our Income Statements. (3) Internal use software represents: (i) third-party software licenses; and (ii) the internal and external costs related to the implementation of the third-party software licenses. Internal use software is amortized over its estimated useful life ranging from one to ten years .
The amortization of acquired software is reflected as a cost of revenue in our Income Statements. (3) Internal use software represents: (i) third-party software licenses; and (ii) the internal and external costs related to the implementation of third-party software licenses. Internal use software is amortized over its estimated useful life ranging from one to ten years.
Shares granted under the 2005 Plan in the form of a performance unit award, restricted stock award, or stock bonus award are counted toward the aggregate number of shares of common stock available for issuance under the 2005 Plan as two shares for every one share granted or issued in payment of such award.
Shares granted in the form of a performance unit award, restricted stock award, or stock bonus award are counted toward the aggregate number of shares of common stock available for issuance under the 2005 Plan as two shares for every one share granted or issued in payment of such award.
(2) We use our functional currency adjusted incremental borrowing rate for the discount rate. During 2023, we entered into a new agreement with our outsourced data center environment provider that is effective in 2025 (see Note 11). As a result, upon commencement we will evaluate the lease and non-lease components and allocate the consideration between them. 60 7.
(2) We use our functional currency adjusted incremental borrowing rate for the discount rate. During 2023, we entered into a new agreement with our outsourced data center environment provider that is effective in 2025 (see Note 11 ). As a result, upon commencement we will evaluate the lease and non-lease components and allocate the consideration between them. 7.
To mitigate the inherent risks in using this hours-based method, we track our current hours expended against our estimates on a periodic basis and continually reevaluate the appropriateness of our estimates. 48 In certain instances, we sell software license volume upgrades, which provide our customers with the right to use our software to process higher transaction volume levels.
To mitigate the inherent risks in using this hours-based method, we track our current hours expended against our estimates on a periodic basis and continually reevaluate the appropriateness of our estimates. In certain instances, we sell software license volume upgrades, which provide our customers with the right to use our software to process higher transaction volume levels.
Our customers are connected to the outsourced data center environment through a combination of private and commercially provided networks. Our SaaS platforms are generally considered to be mission critical customer management systems by our customers. As a result, we are highly dependent upon Ensono for system availability, security, and response time. 65 Guarantees .
Our customers are connected to the outsourced data center environment through a combination of private and commercially provided networks. Our SaaS platforms are generally considered to be mission critical customer management systems by our customers. As a result, we are highly dependent upon Ensono for system availability, security, and response time. Guarantees .
In these instances, we analyze the contract to determine if the volume upgrade is a separate performance obligation and if so, we recognize the value associated with the software license as revenue on the effective date of the volume upgrade. A portion of our professional services revenue is contracted separately (e.g., business consulting services, etc.).
In these instances, we analyze the contract to determine if the volume upgrade is a separate performance obligation and if so, we recognize the value associated with the software license as revenue on the effective date of the volume upgrade. 48 A portion of our professional services revenue is contracted separately (e.g., business consulting services, etc.).
We intend to indefinitely reinvest these foreign earnings; therefore, a provision has not been made for foreign withholding taxes that might be payable upon remittance of such earnings. Determination of the amount of unrecognized deferred tax liability on unremitted foreign earnings is not practicable because of the complexities of the hypothetical calculation. 63 Deferred Income Taxes.
We intend to indefinitely reinvest these foreign earnings; therefore, a provision has not been made for foreign withholding taxes that might be payable upon remittance of such earnings. Determination of the amount of unrecognized deferred tax liability on unremitted foreign earnings is not practicable because of the complexities of the hypothetical calculation. Deferred Income Taxes.
From time-to-time, we are involved in litigation relating to claims arising out of our operations in the normal course of business. 66 12. Stockholders’ Equity Stock Repurchase Program. We currently have a stock repurchase program, approved by our Board, authorizing us to repurchase shares of our common stock from time-to-time as market and business conditions warrant (the “Stock Repurchase Program”).
From time-to-time, we are involved in litigation relating to claims arising out of our operations in the normal course of business. 12. Stockholders’ Equity Stock Repurchase Program. We currently have a stock repurchase program, approved by our Board, authorizing us to repurchase shares of our common stock from time-to-time as market and business conditions warrant (the “Stock Repurchase Program”).
We are using hours worked on the project, compared against expected hours to complete the project, as the measure to determine progress toward completion as we believe it is the most appropriate metric to measure such progress. The software and services fees are generally fixed fees billed to our customers on a milestone or date basis.
We are using hours worked on the project, compared against total expected hours to complete the project, as the measure to determine progress toward completion as we believe it is the most appropriate metric to measure such progress. The software and services fees are generally fixed fees billed to our customers on a milestone or date basis.
As of December 31, 2023, none of the conditions to early convert have been met. Holders may require us, subject to certain conditions, to repurchase all or a portion of their 2023 Convertible Notes for cash upon the occurrence of a fundamental change (as defined in the Indenture related to the 2023 Convertible Notes (“2023 Notes Indenture”)).
As of December 31, 2024, none of the conditions to early convert have been met. Holders may require us, subject to certain conditions, to repurchase all or a portion of their 2023 Convertible Notes for cash upon the occurrence of a fundamental change (as defined in the Indenture related to the 2023 Convertible Notes (“2023 Notes Indenture”)).
This recurring revenue base provides us with a reliable and predictable source of cash. In addition, software license fees and professional services revenue are sources of cash, but the payment streams for these items are less predictable. The primary use of our cash is to fund our operating activities.
This recurring revenue base provides us with a reliable and predictable source of cash. In addition, software license fees and professional services revenue are sources of cash, but the payment streams for these items are less predictable. 30 The primary use of our cash is to fund our operating activities.
On December 27, 2021 , we notified holders of the 2016 Convertible Notes that we had elected to redeem all of the outstanding notes on March 15, 2022, at a redemption price of 100 % of the principal amount. 58 During the conversion period, $ 229.1 million principal amount of the 2016 Convertible Notes were converted.
On December 27, 2021, we notified holders of the 2016 Convertible Notes that we had elected to redeem all of the outstanding notes on March 15, 2022, at a redemption price of 100 % of the principal amount. During the conversion period, $ 229.1 million principal amount of the 2016 Convertible Notes were converted.
The preparation of our Financial Statements requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our Financial Statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
The preparation of our Financial Statements requires management to make estimates and use assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our Financial Statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Revenue is generally recognized based on activities performed over a series of daily or monthly periods. 47 We contract for managed services using long-term arrangements whose terms have typically ranged from three to five years .
Revenue is generally recognized based on activities performed over a series of daily or monthly periods. We contract for managed services using long-term arrangements whose terms have typically ranged from three to five years .
Additionally, our use of an hours-based method of accounting for software license and other professional services performance obligations that are satisfied over time requires estimates of the expected hours necessary to complete a project.
Additionally, our use of an hours-based method of accounting for software license and other professional services performance obligations that are satisfied over time requires estimates of the total expected hours necessary to complete a project.
We also recorded $ 0.5 million of additional operating lease right-of-use asset impairments. • We exited two reseller agreements that were acquired with the acquisition of Forte Payment Systems, Inc. in 2018.
We also recorded $ 0.5 million of operating lease right-of-use asset impairments. • We exited two reseller agreements that were acquired with the acquisition of Forte Payment Systems, Inc. in 2018.
In addition, we license certain solutions (e.g., mediation, partner management, rating, and charging) and provide our professional services to implement, configure, and maintain these solutions. These solutions are sometimes provided under a managed service arrangement, where we assume long-term responsibility for delivering and maintaining our solutions and related operations under a defined scope and specified service levels. Significant Customers .
In addition, we license certain solutions (e.g., mediation, partner management, rating, and charging) and provide our professional services to implement, configure, and maintain these solutions. These solutions are sometimes provided under a managed service arrangement, where we assume long-term responsibility for delivering and maintaining our solutions and related operations under a defined scope and specified service levels.
We recognize revenue when we satisfy our performance obligations by transferring control of a particular product or service, or group of products or services, to our customers, as described in more detail below. Taxes assessed on our products and services based on governmental authorities at the time of invoicing are generally excluded from our revenue.
We recognize revenue from our customer contracts when we satisfy our performance obligations by transferring control of a particular product or service, or group of products or services, to our customers, as described in more detail below. Taxes assessed on our products and services based on governmental authorities at the time of invoicing are generally excluded from our revenue.
For revenue management platform solution contracts, the total contract consideration (including impacts of discounts, incentives, and/or service level agreements) is primarily variable dependent upon actual monthly volumes and/or usage of services; however, these contracts can also include ancillary fixed consideration in the form of one-time, monthly, or annual fees.
For revenue management platform arrangements, the total contract consideration (including impacts of discounts, incentives, and/or service level agreements) is primarily variable dependent upon actual monthly volumes and/or usage of services; however, these contracts can also include ancillary fixed consideration in the form of one-time, monthly, or annual fees.
The 2023 Convertible Notes will be convertible at a conversion rate of 14.0753 shares of our common stock per $ 1,000 principal amount of the 2023 Convertible Notes, which is equivalent to a conversion price of $ 71.05 per share of our common stock and t he conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events, in accordance with the terms of the indenture.
The 2023 Convertible Notes will be convertible at a conversion rate of 14.0753 shares of our common stock per $ 1,000 principal amount of the 2023 Convertible Notes, which is equivalent to a conversion price of $ 71.05 per share of our common stock and the conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events, in accordance with the terms of the indenture.
The years open for audit vary depending on the taxing jurisdiction. We estimate that it is reasonably possible that the amount of gross unrecognized tax benefits will decrease by up to $ 0.7 million over the next twelve months due to completion of tax audits and the expiration of statute of limitations. 10.
The years open for audit vary depending on the taxing jurisdiction. We estimate that it is reasonably possible that the amount of gross unrecognized tax benefits will decrease by up to $ 0.6 million over the next twelve months due to completion of tax audits and the expiration of statute of limitations. 10.
In July 2014, in conjunction with the execution of an amendment to our agreement with Comcast, we issued stock warrants (the “Warrant Agreement”) for the right to purchase up to 2.9 million shares of our common stock (the “Stock Warrants”) as an additional incentive for Comcast to convert customer accounts onto our solutions based on various milestones.
In July 2014, in conjunction with the execution of an amendment to our agreement with Comcast, we issued stock warrants for the right to purchase up to 2.9 million shares of our common stock (the “Stock Warrants”) as an additional incentive for Comcast to convert customer accounts onto our solutions based on various milestones.
As of December 31, 2023 , we have an employee stock purchase plan whereby 2.9 million shares of our common stock have been reserved for sale to our U.S. employees through payroll deductions. The price for shares purchased under the plan is 85 % of the market value on the last day of the purchase period.
As of December 31, 2024 , we have an employee stock purchase plan whereby 2.9 million shares of our common stock have been reserved for sale to our U.S. employees through payroll deductions. The price for shares purchased under the plan is 85 % of the market value on the last day of the purchase period.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
Managed services can also include us providing other services, such as transitional services, fulfillment, remittance processing, operational consulting, back office, and end-user billing services. For managed services contracts, the total contract consideration is typically a fixed monthly fee, but these contracts may also have variable fee components.
Managed services can also include us providing other services, such as transitional services, fulfillment, remittance processing, operational consulting, back office, and end-user billing services. 47 For managed services arrangements, the total contract consideration is typically a fixed monthly fee, but these contracts may also have variable fee components.
Acquired customer contracts are amortized over their estimated useful lives ranging from three to twenty years based on the approximate pattern in which the economic benefits of the intangible assets are expected to be realized, with the amortization expense included as cost of revenue in our Income Statements.
Acquired customer contracts are amortized over their estimated useful lives ranging from five to twenty years based on the approximate pattern in which the economic benefits of the intangible assets are expected to be realized, with the amortization expense included as cost of revenue in our Income Statements.
The remaining net proceeds were used for general corporate purposes. In conjunction with the closing of the 2023 Convertible Notes, we incurred financing costs of $ 14.0 million which are being amortized to interest expense using the effective interest method through maturity. 57 2021 Credit Agreement.
The remaining net proceeds were used for general corporate purposes. In conjunction with the closing of the 2023 Convertible Notes, we incurred financing costs of $ 14.0 million which are being amortized to interest expense using the effective interest method through maturity. 58 2021 Credit Agreement.
Accounting and disclosure requirements for loss contingencies requires us to assess the likelihood of any adverse judgments in a range of potential outcomes for these matters. A determination of the amount of reserves for such contingencies, if any, is based on an analysis of the issues, often with the assistance of legal counsel.
Accounting and disclosure requirements for loss contingencies require us to assess the likelihood of any adverse judgments in a range of potential outcomes for these matters. A determination of the amount of reserves for such contingencies, if any, is based on an analysis of the issues, often with the assistance of legal counsel.
To the extent we believe that it is more likely than not that a deferred income tax asset will not be realized, a valuation allowance is established. As of December 31, 2023 , we believe we will generate sufficient taxable income in the future such that we will realize 100 % of the benefit of our U.S.
To the extent we believe that it is more likely than not that a deferred income tax asset will not be realized, a valuation allowance is established. As of December 31, 2024 , we believe we will generate sufficient taxable income in the future such that we will realize 100 % of the benefit of our U.S.
CONSOLIDATED FINANCIAL STATEMENTS INDEX Management's Report on Internal Control Over Financial Reporting 39 Reports of Independent Registered Public Accounting Firm (PCAOB: 185 ) 40 Consolidated Balance Sheets as of December 31, 2023 and 2022 42 Consolidated Statements of Income for the Years Ended December 31, 2023, 2022, and 2021 43 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2023, 2022, and 2021 44 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2023, 2022, and 2021 45 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022, and 2021 46 Notes to Consolidated Financial Statements 47 38 Management’s Report on Internal Control Over Financial Reporting Management of CSG Systems International, Inc. and subsidiaries (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f) under the Securities Exchange Act of 1934, as amended.
CONSOLIDATED FINANCIAL STATEMENTS INDEX Management's Report on Internal Control Over Financial Reporting 38 Reports of Independent Registered Public Accounting Firm (PCAOB: 185 ) 39 Consolidated Balance Sheets as of December 31, 2024 and 2023 42 Consolidated Statements of Income for the Years Ended December 31, 2024, 2023, and 2022 43 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2024, 2023, and 2022 44 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2024, 2023, and 2022 45 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023, and 2022 46 Notes to Consolidated Financial Statements 47 37 Management’s Report on Internal Control Over Financial Reporting Management of CSG Systems International, Inc. and subsidiaries (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f) under the Securities Exchange Act of 1934, as amended.
We may experience adverse impacts to our DBOs if and when customer payment delays occur. However, these recurring monthly payments that cross a reporting period-end do not raise collectability concerns, as payment is generally received subsequent to quarter-end.
We may experience adverse impacts to our DBOs if and when customer payment delays occur. However, the recurring monthly payments that cross a reporting period-end do not raise collectability concerns, as payment is generally received subsequent to quarter-end.
Our SaaS payments platform solutions are comprised of one performance obligation. Revenue for these services is based primarily on a fee per transaction or a percentage of the transaction principal, and is recognized as delivered over a series of daily service periods.
Our SaaS payments platform arrangements are comprised of one performance obligation. Revenue for these services is based primarily on a fee per transaction or a percentage of the transaction principal, and is recognized as delivered over a series of daily service periods.
We expend substantial amounts on R&D, particularly for new solutions and enhancements of existing products and services. For development of software solutions that are to be licensed by us, we expense all costs related to the development of the software until technological feasibility is established.
We spend substantial amounts on R&D, particularly for new solutions and enhancements of existing products and services. For development of software solutions that are to be licensed by us, we expense all costs related to the development of the software until technological feasibility is established.
We did not capitalize any R&D costs in 2023, 2022, and 2021, as the costs subject to capitalization during these periods were not material. We did not have any capitalized R&D costs included in our December 31, 2023 and 2022 Balance Sheets. Realizability of Long-Lived Assets.
We did not capitalize any R&D costs in 2024, 2023, and 2022, as the costs subject to capitalization during these periods were not material. We did not have any capitalized R&D costs included in our December 31, 2024 and 2023 Balance Sheets. Realizability of Long-Lived Assets.
Under the Security Agreement and 2021 Credit Agreement, certain of our domestic subsidiaries have guaranteed its obligations, and have pledged substantially all of our assets to secure the obligations under the 2021 Credit Agreement and such guarantees. During 2023 , we made $ 7.5 million of principal repayments on our 2021 Term Loan.
Under the Security Agreement and 2021 Credit Agreement, certain of our domestic subsidiaries have guaranteed its obligations, and have pledged substantially all of our assets to secure the obligations under the 2021 Credit Agreement and such guarantees. During 2024 , we made $ 7.5 million of principal repayments on our 2021 Term Loan.
Based on our assessment, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2023. The Company’s independent registered public accounting firm, KPMG LLP, has issued an attestation report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023.
Based on our assessment, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2024. The Company’s independent registered public accounting firm, KPMG LLP, has issued an attestation report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024.
These costs are amortized over the contract period based on the transfer of goods or services to which the assets relate, which as of December 31, 2023 , range from 2024 to 2036 , and are included in cost of revenue in our Income Statements.
These costs are amortized over the contract period based on the transfer of goods or services to which the assets relate, which as of December 31, 2024 , range from 2025 to 2036 , and are included in cost of revenue in our Income Statements.
Significant fluctuations in key operating assets and liabilities between 2023 and 2022 that impacted our cash flows from operating activities are as follows: Billed Trade Accounts Receivable Management of our trade billed accounts receivable is one of the primary factors in maintaining strong cash flows from operating activities.
Significant fluctuations in key operating assets and liabilities between 2024 and 2023 that impacted our cash flows from operating activities are as follows: Billed Trade Accounts Receivable Management of our billed trade accounts receivable is one of the primary factors in maintaining strong cash flows from operating activities.
These arrangements do not have a material impact and are not reasonably likely to have a material future impact to our financial condition, results of operation, liquidity, capital expenditures, or capital resources. See Note 11 to our Financial Statements for additional information on these guarantees.
These arrangements do not have a material impact and are not reasonably likely to have a material future impact to our financial condition, results of operations, liquidity, capital expenditures, or capital resources. See Note 11 to our Financial Statements for additional information on these guarantees.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Due to the significant assumptions and judgements required in accounting for leases (to include whether a contract contains a lease, the allocation of the consideration, and the determination of the discount rate), the judgements and estimates made could have a significant effect on the amount of assets and liabilities recognized.
Due to the significant assumptions and judgments required in accounting for leases (to include whether a contract contains a lease, the allocation of the consideration, and the determination of the discount rate), the judgments and estimates made could have a significant effect on the amount of assets and liabilities recognized.
As a result, we have not recorded any liabilities related to such indemnifications as of December 31, 2023. In addition, as a result of the insurance policy coverage, we believe these indemnification agreements are not significant to our results of operations. Legal Proceedings.
As a result, we have not recorded any liabilities related to such indemnifications as of December 31, 2024. In addition, as a result of the insurance policy coverage, we believe these indemnification agreements are not significant to our results of operations. Legal Proceedings.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013) .
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013) .
If recognized, the $ 1.9 million of unrecognized tax benefits as of December 31, 2023, would favorably impact our effective tax rate in future periods. We file income tax returns in the U.S. Federal jurisdiction, various U.S. state and local jurisdictions, and many foreign jurisdictions. The U.S., U.K., India, and Australia are the primary taxing jurisdictions in which we operate.
If recognized, the $ 1.1 million of unrecognized tax benefits as of December 31, 2024, would favorably impact our effective tax rate in future periods. We file income tax returns in the U.S. Federal jurisdiction, various U.S. state and local jurisdictions, and many foreign jurisdictions. The U.S., U.K., India, and Australia are the primary taxing jurisdictions in which we operate.
We do not record the benefit from a gain contingency until the benefit is realized. Earnings Per Common Share (“EPS”). Basic and diluted EPS amounts are presented on the face of our Income Statements.
We do not record the benefit from a gain contingency until the benefit is realized. Earnings Per Common Share (“EPS”). Basic and diluted EPS amounts are presented on our Income Statements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Omaha, Nebraska February 16, 2024 40 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors CSG Systems International, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of CSG Systems International, Inc. and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Omaha, Nebraska February 20, 2025 39 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors CSG Systems International, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of CSG Systems International, Inc. and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements).
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements), and our report dated February 16, 2024 expressed an unqualified opinion on those consolidated financial statements.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements), and our report dated February 20, 2025 expressed an unqualified opinion on those consolidated financial statements.
Revenue by geographic region for 2023, 2022, and 2021, as a percentage of our total revenue, was as follows: 2023 2022 2021 Americas (principally the U.S.) 86 % 85 % 85 % Europe, Middle East, and Africa (principally Europe) 10 % 11 % 11 % Asia Pacific 4 % 4 % 4 % Total revenue 100 % 100 % 100 % We generate our revenue primarily from the global communications markets; however, we serve an expanding group of customers in markets including retail, financial services, healthcare, insurance, and government entities.
Revenue by geographic region for 2024, 2023, and 2022, as a percentage of our total revenue, was as follows: 2024 2023 2022 Americas (principally the U.S.) 87 % 86 % 85 % Europe, Middle East, and Africa (principally Europe) 9 % 10 % 11 % Asia Pacific 4 % 4 % 4 % Total revenue 100 % 100 % 100 % We generate our revenue primarily from the global communications markets; however, we serve an expanding group of customers in markets including retail, financial services, healthcare, insurance, and government entities.
Should any of the factors considered in determining the adequacy of this liability change significantly, an adjustment to the liability may be necessary. Due to the potential significance of these issues, such an adjustment could be material.
Should any of the factors considered in determining the adequacy of this liability change significantly, an adjustment to the liability may be necessary. Due to the potential significance of these issues, such an adjustment could be material. Loss Contingencies.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 16, 2024 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 20, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Variations in our net cash provided by/(used in) operating activities are generally related to the changes in our operating assets and liabilities (related mostly to fluctuations in timing at quarter-end of customer payments and changes in accrued expenses), and generally over longer periods of time, do not significantly impact our cash flows from operations.
Variations in our net cash provided by (used in) operating activities are generally related to the changes in our operating assets and liabilities (related mostly to fluctuations in timing of customer payments and changes in accrued expenses), and generally over longer periods of time, do not significantly impact our cash flows from operations.
That report appears immediately following. 39 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors CSG Systems International, Inc.: Opinion on Internal Control Over Financial Reporting We have audited CSG Systems International, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
That report appears immediately following. 38 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors CSG Systems International, Inc.: Opinion on Internal Control Over Financial Reporting We have audited CSG Systems International, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Certain Time-Based Awards may vest (i.e., vesting accelerates) upon a change in control, as defined, the involuntary termination of employment, or death.
Certain Time-Based Awards may vest (i.e., vesting accelerates) upon the involuntary termination of employment, a change in control (as defined) and the subsequent involuntary termination of employment, or death.
We maintain directors’ and officers’ (“D&O”) insurance coverage to protect against such losses. We have not historically incurred any losses related to these types of indemnifications and are not aware of any pending or threatened actions or claims against any officer or member of our Board.
We maintain directors’ and officers’ (“D&O”) insurance coverage to protect against such losses. We have not historically incurred any losses related to these types of indemnifications and are not aware of any pending or threatened actions or claims against any officer or member of our Board of Directors (the “Board”).
As of December 31, 2023 , the maturities of our long-term debt, based upon: (i) the maturity date of the 2023 Convertible Notes; and (ii) the mandatory repayment schedule for the 2021 Term Loan, were as follows (in thousands): 2024 2025 2026 2027 2028 Total 2023 Convertible Notes $ - $ - $ - $ - $ 425,000 $ 425,000 2021 Term Loan 7,500 7,500 118,125 - - 133,125 Total long-term debt repayments $ 7,500 $ 7,500 $ 118,125 $ - $ 425,000 $ 558,125 Deferred Financing Costs.
As of December 31, 2024 , the maturities of our long-term debt, based upon: (i) the maturity date of the 2023 Convertible Notes; and (ii) the mandatory repayment schedule for the 2021 Term Loan, were as follows (in thousands): 2025 2026 2027 2028 Total 2023 Convertible Notes $ - $ - $ - $ 425,000 $ 425,000 2021 Term Loan 7,500 118,125 - - 125,625 Total long-term debt repayments $ 7,500 $ 118,125 $ - $ 425,000 $ 550,625 Deferred Financing Costs.
In the ordinary course of business, we are subject to potential claims related to various items including but not limited to the following: (i) legal and regulatory matters; (ii) vendor contracts; (iii) solution and service delivery matters; and (iv) labor matters.
In the ordinary course of business, we are subject to potential claims related to various items including but not limited to the following: (i) legal and regulatory matters; (ii) vendor contracts; (iii) solution and service delivery matters; (iv) labor matters; and (v) certain tax matters.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires entities to disclose more detailed information about their effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.
In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires entities to disclose more detailed information about their effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.
Transaction Price Allocated to Remaining Performance Obligations As of December 31, 2023 , our aggregate amount of the transaction price allocated to the remaining performance obligations was approximately $ 1.5 billion, which is made up of fixed fee consideration and guaranteed minimums expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied).
Transaction Price Allocated to Remaining Performance Obligations As of December 31, 2024 , our aggregate amount of the transaction price allocated to the remaining performance obligations was approximately $ 1.9 billion, which is made up of fixed fee consideration and guaranteed minimums expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied).
Due to the potential significance of these issues, such an adjustment could be material. Detailed Discussion of Results of Operations The following discussion includes a comparison of our results of operations and liquidity fo r 2023 compared to 2022 .
Due to the potential significance of these issues, such an adjustment could be material. 28 Detailed Discussion of Results of Operations The following discussion includes a comparison of our results of operations and liquidity fo r 2024 compared to 2023 .
Customer contract incentives are amortized ratably over the contract period to include renewal periods, if applicable, which as of December 31, 2023 , have termination dates that range from 2024 to 2027 . The amortization of customer contract incentives is reflected as a reduction of revenue in our Income Statements.
Customer contract incentives are amortized ratably over the contract period to include renewal periods, if applicable, which as of December 31, 2024 , have termination dates that range from 2025 to 2030 . The amortization of customer contract incentives is reflected as a reduction of revenue in our Income Statements.
These fees are amortized over the contract period based on the transfer of goods or services to which the assets relate, which as of December 31, 2023 , range from 2024 to 2029 , and are included in Selling, General, and Administrative (“SG&A”) expenses in our Income Statements.
These fees are amortized over the contract period based on the transfer of goods or services to which the assets relate, which as of December 31, 2024 , range from 2025 to 2031 , and are included in Selling, General, and Administrative (“SG&A”) expenses in our Income Statements.
The 2023 Convertible Notes are unsecured obligations and will pay 3.875 % annual cash interest, payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2024. 56 The 2023 Convertible Notes will be convertible at the option of the noteholders before June 15, 2028, upon the occurrence of certain events.
The 2023 Convertible Notes are unsecured obligations and pay 3.875 % annual cash interest, payable semiannually in arrears on March 15 and September 15 of each year. 57 The 2023 Convertible Notes will be convertible at the option of the noteholders before June 15, 2028, upon the occurrence of certain events.
All contributions are subject to certain IRS limits. The expense related to these contributions for 2023, 2022, and 2021 was $ 12.8 million, $ 13.2 million, and $ 12.4 million, respectively. We also have defined contribution-type plans for certain of our non-U.S.-based employees.
All contributions are subject to certain IRS limits. The expense related to these contributions for 2024, 2023, and 2022 was $ 12.9 million, $ 12.8 million, and $ 13.2 million, respectively. We also have defined contribution-type plans for certain of our non-U.S.-based employees.
(3) Cash flows from operating activities for the fourth quarter of 2023 were positively impacted by favorable changes in working capital, which can mainly be attributed to decreases in our accounts receivable balance and increases in our accrued employee compensation, discussed below.
(4) Cash flows from operating activities for the fourth quarter of 2023 were positively impacted by favorable changes in working capital, which can mainly be attributed to decreases in our accounts receivable balance and increases in our accrued employee compensation.
Other operating expenses consist of: (i) computing capacity and related services and communication lines for our outsourced cloud-based business; (ii) paper, envelopes, and related supplies for our statement processing solutions; (iii) transaction fees paid in conjunction with the delivery of services under our payment services contracts; (iv) hardware and software maintenance and other SaaS-based services; and (v) rent and related facility costs.
Other operating expenses consist of: (i) computing capacity and related services and communication lines for our outsourced cloud-based business; (ii) transaction fees paid in conjunction with the delivery of services under our payment services contracts; (iii) hardware and software maintenance and other SaaS-based services; (iv) paper, envelopes, and related supplies for our customer communications; and (v) rent and related facility costs.
We also terminated approximately 40 Mexico-based employees, which resulted in restructuring charges related to involuntary terminations of $ 0.6 million. • We reduced our workforce by approximately 100 employees, mainly in North America, as a result of organizational changes and efficiencies, to include a margin improvement initiative that began in the second quarter of 2022.
We also terminated approximately 40 Mexico-based employees, which resulted in restructuring charges related to involuntary terminations of $ 0.6 million. 62 • We reduced our workforce by approximately 100 employees, mainly in the U.S., as a result of organizational changes and efficiencies, to include a margin improvement initiative that began in the second quarter of 2022.
SaaS and Related Solutions Our SaaS and related solutions include: (i) our revenue management platforms and various related ancillary services; (ii) our managed services offering in which we operate software solutions (primarily our software solutions) on behalf of our customers; and (iii) our SaaS payments platform.
SaaS and Related Solutions Our SaaS and related solutions include: (i) our revenue management platform solutions; (ii) our managed services offering in which we operate software solutions (primarily our software solutions) on behalf of our customers; and (iii) our SaaS payments platform solutions.
The remaining weighted-average amortization period of the software intangible assets as of December 31, 2023 was approximately 24 months.
The remaining weighted-average amortization period of the software intangible assets as of December 31, 2024 was approximately 24 months.
In addition to the $ 1.9 million, $ 2.6 million, and $ 2.9 million of liability for unrecognized tax benefits as of December 31, 2023, 2022, and 2021 , we had $ 0.9 million, $ 0.6 million, and $ 0.7 million, respectively of income tax-related accrued interest, net of any federal benefit of deduction.
In addition to the $ 1.1 million, $ 1.9 million, and $ 2.6 million of liability for unrecognized tax benefits as of December 31, 2024, 2023, and 2022 , we had $ 1.3 million, $ 0.9 million, and $ 0.6 million, respectively, of income tax-related accrued interest, net of any federal benefit of deduction.
As of December 31, 2023 and 2022 , we have an acquired U.S. Federal net operating loss (“NOL”) carryforward of approximately $ 8 million and $ 13 million, respectively, which will begin to expire in 2029 and can be utilized through 2033 . The acquired U.S. Federal NOL carryforward is attributable to the pre-acquisition periods of acquired businesses.
As of December 31, 2024 and 2023 , we have an acquired U.S. Federal net operating loss (“NOL”) carryforward of approximately $ 2.0 million and $ 8.0 million, respectively, which will begin to expire in 2029 and can be utilized through 2033 . The acquired U.S. Federal NOL carryforward is attributable to the pre-acquisition periods of acquired businesses.
We recorded a deferred income tax benefit related to stock-based compensation expense during 2023, 2022, and 2021 , of $ 6.0 million, $ 5.7 million, and $ 4.9 million, respectively.
We recorded a deferred income tax benefit related to stock-based compensation expense during 2024, 2023, and 2022 , of $ 6.9 million, $ 6.0 million, and $ 5.7 million, respectively.
We believe we could obtain additional capital through other debt sources which may be available to us if deemed appropriate. 36 I tem 7A. Quantitative and Qualitative Disclosures About Market Risk Market risk is the potential loss arising from adverse changes in market rates and prices.
We believe we could obtain additional capital through refinancing options or other debt sources which may be available to us if deemed appropriate. 35 I tem 7A. Quantitative and Qualitative Disclosures About Market Risk Market risk is the potential loss arising from adverse changes in market rates and prices.
As of December 31, 2023 and 2022, we had $274.7 million and $238.7 million, respectively, of cash collected on behalf of our merchants. The cash is held in accounts with various major financial institutions in the U.S. and Canada in an amount equal to at least 100% of the aggregate amount owed to our merchants.
As of December 31, 2024 and 2023, we had $343.2 million and $274.7 million, respectively, of cash collected on behalf of our merchants. The cash is held in accounts with various major financial institutions in the U.S. and Canada in an amount equal to at least 100% of the aggregate amount owed to our merchants.
Our financial instruments as of December 31, 2023 and 2022 include cash and cash equivalents, short-term investments, settlement and merchant reserve assets and liabilities, accounts receivable, accounts payable, and debt. Due to their short maturities, the carrying amounts of cash equivalents, settlement and merchant reserve assets and liabilities, accounts receivable, and accounts payable approximate their fair value.
Our financial instruments as of December 31, 2024 and 2023 include cash and cash equivalents, settlement and merchant reserve assets and liabilities, accounts receivable, accounts payable, and debt. Due to their short maturities, the carrying amounts of cash equivalents, settlement and merchant reserve assets and liabilities, accounts receivable, and accounts payable approximate their fair value.
For a discussion of the 2022 compared to 2021, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 17, 2023. Total Revenue.
For a discussion of the 2023 compared to 2022, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 16, 2024. Revenue.
We expect to recognize over 75 % of this amount by the end of 2026 , with the remaining amount recognized by the end of 2036 . We have excluded from this amount variable consideration expected to be recognized in the future related to performance obligations that are unsatisfied.
We expect to recognize over 70 % of this amount by the end of 2027 , with the remaining amount recognized by the end of 2036 . We have excluded from this amount variable consideration expected to be recognized in the future related to performance obligations that are unsatisfied.

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