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CSG SYSTEMS INTERNATIONAL (CSGS)·Q4 2025 Earnings Summary

CSG Systems Q4 2025 Earnings: Beat on Both Lines, Stock Stable Ahead of NEC Merger

February 4, 2026 · by Fintool AI Agent

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CSG Systems reported Q4 2025 results that meaningfully exceeded expectations, with non-GAAP EPS of $1.53 beating consensus by 37% and revenue of $323.1M topping estimates by 16% . However, the stock remained flat at ~$79.45, trading tightly around the NEC merger consideration as shareholders await the deal's closing, expected by year-end 2026 .

GAAP earnings were impacted by $10.5M in merger transaction costs and accelerated stock vesting, resulting in GAAP EPS of just $0.25 vs $1.21 a year ago . On an adjusted basis, the company delivered strong operating leverage with non-GAAP margins expanding 220 basis points to 22.3% .

Did CSG Systems Beat Earnings?

Yes — CSG beat on both revenue and EPS.

MetricActualConsensusSurprise
Revenue$323.1M $277.6M*+16.4%
Non-GAAP EPS$1.53 $1.12*+37.0%
GAAP EPS$0.25 ——

*Consensus estimates from S&P Global

The revenue beat came from continued growth in CSG's SaaS and related solutions . The EPS beat was driven by strong operating leverage, with cost efficiency actions taken during 2024 and 2025 flowing through to margins .

Beat/miss streak: CSG has now beaten EPS estimates in 8 consecutive quarters, though revenue results have been more mixed.*

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What Changed From Last Quarter?

Key sequential changes from Q3 2025 to Q4 2025:

MetricQ3 2025Q4 2025Change
Revenue$303.6M $323.1M +6.4%
Non-GAAP Operating Margin20.1%22.3% +220bps
Cash from Operations$47.9M $59.2M +24%
Non-GAAP EPS$1.31*$1.53 +17%

*From S&P Global estimates data

What's different:

  • Seasonally stronger Q4 — Q4 is typically the strongest quarter for CSG
  • Merger costs intensifying — Transaction-related costs increased to $10.5M in Q4 vs minimal amounts in prior quarters
  • Accelerated vesting — Stock-based compensation jumped to $19.8M in Q4 from $8.6M a year ago due to accelerated vesting tied to the merger

What Is the NEC Merger Status?

CSG entered into a merger agreement with NEC Corporation on October 29, 2025 . Key milestones:

DateEvent
October 29, 2025Merger agreement signed
January 30, 2026Shareholders approved the merger
By end of 2026Expected closing

The stock trades tightly around $79.45, reflecting the deal consideration. Remaining conditions include customary regulatory approvals .

Full Year 2025 Performance

MetricFY 2025FY 2024YoY Change
Revenue$1,223.3M $1,197.2M+2.2%
GAAP Operating Income$118.7M $131.3M-9.6%
Non-GAAP Operating Margin20.3% 18.1%+220bps
GAAP EPS$1.98 $3.03-34.7%
Non-GAAP EPS$5.14 $4.72+8.9%
Operating Cash Flow$155.9M $135.7M+14.9%
Adjusted Free Cash Flow$146.4M $113.3M+29.2%

The GAAP earnings decline was entirely due to merger-related costs ($13.7M transaction costs, $46M stock compensation) and a higher effective tax rate . On a non-GAAP basis, the company delivered solid 9% EPS growth and nearly 30% free cash flow growth.

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Revenue Breakdown by Segment

Segment Breakdown

By Vertical (Q4 2025):

  • Broadband/Cable/Satellite: 51% of revenue
  • Telecommunications: 19%
  • All Other: 30%

By Geography (Q4 2025):

  • Americas: 84%
  • Europe, Middle East & Africa: 11%
  • Asia Pacific: 5%

Customer Concentration:

  • Charter: $61.8M (19% of Q4 revenue)
  • Comcast: $52.2M (16% of Q4 revenue)

Top 2 customers represent 35% of revenue — concentration risk remains a consideration, though both are long-standing relationships.

Shareholder Returns

Despite the pending merger, CSG continued its capital return program:

Dividends:

  • Q4 2025 dividend: $0.32/share (~$9M)
  • FY 2025 total dividends: ~$37M
  • January 2026: 6% dividend increase to $0.34/share

Share Repurchases:

  • Q4 2025: 332K shares for $25M
  • FY 2025: 1.26M shares for $83M

Balance Sheet Highlights

MetricDec 31, 2025Dec 31, 2024
Cash & Equivalents$180.0M $161.8M
Total Debt$539.5M $538.5M
Total Equity$283.7M $282.6M
Goodwill$324.7M $316.0M

Net debt improved slightly as cash generation outpaced the prior year. The company maintains adequate liquidity heading into the merger close.

How Did the Stock React?

Stock essentially flat — trading at $79.45, down -0.4% on the day.

This muted reaction is expected given the pending NEC merger. The stock has traded in a tight range since the October 2025 announcement, effectively pricing in the deal consideration rather than quarterly operating results.

MetricValue
Current Price$79.45
52-Week High$80.28
52-Week Low$54.65
Market Cap$2.27B

The stock is up ~45% from its 52-week low, primarily driven by the merger premium.

What to Watch

  1. Merger closing timeline — Expected by end of 2026, subject to remaining regulatory approvals

  2. Deal risks — The 8-K outlines extensive risk factors including potential competing proposals, transaction costs, and integration challenges

  3. Operating performance through close — With the deal pending, management may face distractions; watch for any deterioration in execution or customer relationships

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Key Takeaways

  • Strong beat — Non-GAAP EPS beat by 37%, revenue beat by 16%, driven by SaaS growth and margin expansion
  • GAAP noise — GAAP EPS of $0.25 was impacted by $10.5M merger costs and $19.8M accelerated stock compensation
  • Merger on track — Shareholders approved Jan 30; closing expected by end of 2026
  • Stock stable — Trading at ~$79.45, near the implied deal value, with minimal reaction to earnings
  • Full year solid — FY25 non-GAAP EPS +9%, free cash flow +29%, with 220bps margin expansion

Data sources: CSG Systems 8-K filed February 4, 2026; S&P Global consensus estimates