CSG’s second quarter results reflected solid execution on margin expansion and ongoing efforts to diversify revenue away from its legacy cable and telecom base. Management pointed to a notable improvement in non-GAAP operating margin, driven by higher-margin SaaS deal wins and continued cost discipline. CEO Brian Shepherd highlighted progress in expanding into financial services, insurance, and property management, emphasizing that “32% of total CSG revenue came from industries outside of cable and telecom, up from 31% in the prior year period.” The company also benefited from a nonrecurring, high-margin license arrangement recognized during the quarter.
Is now the time to buy CSGS? Find out in our full research report (it’s free).
CSG (CSGS) Q2 CY2025 Highlights:
- Revenue: $297.1 million vs analyst estimates of $291.7 million (2.3% year-on-year growth, 1.9% beat)
- Adjusted EPS: $1.16 vs analyst estimates of $1.05 (10.7% beat)
- Adjusted EBITDA: $67.98 million vs analyst estimates of $59.64 million (22.9% margin, 14% beat)
- The company reconfirmed its revenue guidance for the full year of $1.23 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $4.78 at the midpoint
- EBITDA guidance for the full year is $263.5 million at the midpoint, in line with analyst expectations
- Operating Margin: 10%, up from 8.8% in the same quarter last year
- Market Capitalization: $1.70 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From CSG’s Q2 Earnings Call
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Daniel Robert Bergstrom (RBC Capital Markets) asked about macro uncertainty and the impact on end markets. CEO Brian Shepherd responded that while there is slightly more cautiousness in discretionary spending, strategic technology investments are still moving forward, keeping growth in the 2% to 3% range.
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Gregory John Burns (Sidoti) inquired about success in the global telecom enterprise segment, referencing the Orange Business win. CFO Hai Tran explained that CSG’s differentiated CPQ (configure, price, quote) solution sets them apart, and cross-sell opportunities often follow initial wins in enterprise segments.
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Matthew Joseph Harrigan (Benchmark) probed the real-world impact of AI on CSG’s business. Shepherd acknowledged increasing confidence in AI’s ability to drive efficiency and profitability, with tangible effects already seen in product development and R&D.
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Unidentified Analyst (Cantor Fitzgerald) questioned the appetite for larger, transformative M&A. Shepherd said such deals are under consideration but stressed that discipline remains key, especially regarding integration and vertical focus.
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Nehal Sushil Chokshi (Northland Capital Markets) asked about the drivers of margin expansion and why increased EBITDA did not fully translate to EPS growth. Shepherd and Tran pointed to adverse currency impacts and reiterated that the underlying business remains strong.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) CSG’s ability to further penetrate new verticals and secure additional cross-industry customer wins, (2) the pace of adoption for AI and workflow automation within its product suite, and (3) continued progress on margin expansion and free cash flow conversion. Execution on disciplined M&A and resilience in customer spending patterns will also be important areas to watch.
CSG currently trades at $63.07, in line with $62.81 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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