CSG Systems International (CSGS) investor relations material

Executive summary

• Revenue for Q1 2026 increased 4.8% year-over-year to $313.7 million, driven by SaaS and related solutions growth.

• GAAP operating income rose to $35.1 million (11.2% margin), up from $29.4 million (9.8% margin) in Q1 2025; non-GAAP operating income was $56.9 million (20.0% margin).

• Net income was $23.9 million, up from $16.1 million year-over-year; GAAP EPS increased to $0.83, up 45.6%, and non-GAAP EPS was $1.37, up 20.2%.

• Significant customer concentration remains, with Charter and Comcast accounting for 19% and 17% of Q1 2026 revenue, respectively.

• A merger with NEC Corporation was approved by stockholders and is expected to close by year-end 2026, with $9.7 million in transaction-related costs recognized in Q1 2026.

Financial highlights

• SaaS and related solutions revenue grew to $286.9 million, offsetting a decline in professional services.

• Adjusted EBITDA was $70.2 million, up 9.0% year-over-year.

• Cash and cash equivalents were $147.3 million as of March 31, 2026, down from $180.0 million at year-end 2025.

• Operating cash flow was negative ($1.2) million, impacted by incentive compensation and earn-out payments.

• Non-GAAP adjusted free cash flow was $8.0 million, up 12.9% year-over-year.

Outlook and guidance

• The merger with NEC is expected to close by year-end 2026, subject to regulatory approvals.

• Management expects continued investment in SaaS platforms, innovation, and integration with NEC, including AI capabilities.

• Macroeconomic uncertainties, including inflation, labor shortages, and geopolitical risks, may impact results.