CSG Systems International reported its third quarter 2024 financial results on November 6, 2024, with total revenue increasing 2.9% year-over-year to $295.1 million. This growth was primarily driven by SaaS and related solutions revenue, including approximately $6 million from businesses acquired in Q2 2024, offsetting lower software and services revenue.
GAAP operating income for the quarter decreased by 2.8% to $31.8 million, or 10.8% of revenue, mainly due to increased acquisition-related expenses. However, non-GAAP operating income rose 10.8% to $50.1 million, achieving an adjusted operating margin of 18.4%, reflecting underlying profitability improvements.
The company reported GAAP EPS of $0.67, an 8.1% increase, and non-GAAP EPS of $1.06, a 15.2% increase, benefiting from a lower effective income tax rate and reduced share count. Net cash provided by operations improved to $39.5 million, and non-GAAP free cash flow reached $32.0 million, up from $18.1 million in the prior year quarter.
CSG also announced a watershed contract renewal with Comcast through year-end 2030, securing a significant long-term customer relationship. For the full year 2024, CSG raised its non-GAAP adjusted operating margin guidance to 17.7% - 18.1% and non-GAAP EPS targets to $4.25 - $4.55, while reiterating its revenue and free cash flow guidance.
Despite missing Wall Street's average EPS estimate of $1.08 per share with its reported non-GAAP EPS of $1.06, the company's overall performance and raised profitability guidance indicate a positive trajectory. CSG also reaffirmed its commitment to return over $100 million to shareholders through dividends and buybacks in both 2024 and 2025.
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