CSG SYSTEMS INTERNATIONAL INC (Form: 10-Q, Received: 05/04/2023 11:04:28)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-27512

CSG SYSTEMS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)


Delaware	47-0783182
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

169 Inverness Dr W, Suite 300

Englewood, Colorado 80112

(Address of principal executive offices, including zip code)

(303) 200-2000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common Stock, Par Value $0.01 Per Share

CSGS

NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 1, 2023, there were 31,682,626 shares of the registrant’s common stock outstanding.

CSG SYSTEMS INTERNATIONAL, INC.

FORM 10-Q for the Quarter Ended March 31, 2023

INDEX


		Page No.

Part I - FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 (Unaudited)	3

	Condensed Consolidated Statements of Income for the Quarters ended March 31, 2023 and 2022 (Unaudited)	4

	Condensed Consolidated Statements of Comprehensive Income for the Quarters ended March 31, 2023 and 2022 (Unaudited)	5

	Condensed Consolidated Statements of Stockholders’ Equity for the Quarters ended March 31, 2023 and 2022 (Unaudited)	6

	Condensed Consolidated Statements of Cash Flows for the Quarters Ended March 31, 2023 and 2022 (Unaudited)	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25

Item 4.	Controls and Procedures	26

Part II - OTHER INFORMATION

Item 1.	Legal Proceedings	27

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 6.	Exhibits	27

	Index to Exhibits	28

	Signatures	29

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED

(in thousands)


	March 31, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	167,681		$	150,365
Short-term investments		-			71
Total cash, cash equivalents, and short-term investments		167,681			150,436
Settlement and merchant reserve assets		177,300			238,653
Trade accounts receivable:
Billed, net of allowance of $5,254 and $5,528		255,774			274,189
Unbilled		73,262			52,830
Income taxes receivable		2,236			1,270
Other current assets		55,285			48,577
Total current assets		731,538			765,955
Non-current assets:
Property and equipment, net of depreciation of $107,836 and $105,466		68,648			71,787
Operating lease right-of-use assets		42,470			49,687
Software, net of amortization of $152,074 and $150,337		20,935			22,774
Goodwill		305,104			304,036
Acquired customer contracts, net of amortization of $123,694 and $120,080		42,891			45,417
Customer contract costs, net of amortization of $33,191 and $30,601		54,437			54,735
Deferred income taxes		22,177			26,206
Other assets		7,808			7,956
Total non-current assets		564,470			582,598
Total assets	$	1,296,008		$	1,348,553
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	37,500		$	37,500
Operating lease liabilities		19,220			21,012
Customer deposits		34,429			40,472
Trade accounts payable		36,121			47,720
Accrued employee compensation		49,836			68,321
Settlement and merchant reserve liabilities		176,329			237,810
Deferred revenue		54,794			46,033
Income taxes payable		7,956			5,455
Other current liabilities		25,550			22,886
Total current liabilities		441,735			527,209
Non-current liabilities:
Long-term debt, net of unamortized discounts of $2,469 and $2,656		403,781			375,469
Operating lease liabilities		45,097			53,207
Deferred revenue		21,756			21,991
Income taxes payable		3,510			3,410
Deferred income taxes		120			117
Other non-current liabilities		11,786			11,901
Total non-current liabilities		486,050			466,095
Total liabilities		927,785			993,304
Stockholders' equity:
Preferred stock, par value $.01 per share; 10,000 shares authorized; zero shares issued and outstanding		-			-
Common stock, par value $.01 per share; 100,000 shares authorized; 31,678 and 31,269 shares outstanding		712			708
Additional paid-in capital		493,184			495,189
Treasury stock, at cost; 38,210 shares		(1,018,034	)		(1,018,034	)
Accumulated other comprehensive income (loss):
Unrealized gain on short-term investments, net of tax		1			1
Cumulative foreign currency translation adjustments		(55,987	)		(58,830	)
Accumulated earnings		948,347			936,215
Total stockholders' equity		368,223			355,249
Total liabilities and stockholders' equity	$	1,296,008		$	1,348,553

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(in thousands, except per share amounts)


	Quarter Ended
	March 31, 2023			March 31, 2022
Revenue	$	298,739		$	264,400

Cost of revenue (exclusive of depreciation, shown separately below)		155,021			138,418
Other operating expenses:
Research and development		35,464			32,981
Selling, general and administrative		59,147			57,342
Depreciation		5,720			6,138
Restructuring and reorganization charges		5,194			13,106
Total operating expenses		260,546			247,985
Operating income		38,193			16,415
Other income (expense):
Interest expense		(7,219	)		(3,272	)
Interest and investment income, net		569			130
Loss on derivative liability upon debt conversion		-			(7,456	)
Other, net		(2,432	)		812
Total other		(9,082	)		(9,786	)
Income before income taxes		29,111			6,629
Income tax provision		(8,183	)		(516	)
Net income	$	20,928		$	6,113

Weighted-average shares outstanding:
Basic		30,418			31,416
Diluted		30,609			31,810

Earnings per common share:
Basic	$	0.69		$	0.19
Diluted		0.68			0.19

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - UNAUDITED

(in thousands)



	Quarter Ended
	March 31, 2023		March 31, 2022
Net income	$	20,928	$	6,113
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		2,843		(1,182	)
Unrealized holding loss on short-term investments arising during period		-		(2	)
Other comprehensive income (loss), net of tax		2,843		(1,184	)
Total comprehensive income, net of tax	$	23,771	$	4,929

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - UNAUDITED

(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
For the Quarter Ended March 31, 2023:
BALANCE, January 1, 2023		31,269		$	708		$	495,189		$	(1,018,034	)	$	(58,829	)	$	936,215		$	-	$	355,249
Comprehensive income:
Net income		-			-			-			-			-			20,928			-
Unrealized gain on short-term investments, net of tax		-			-			-			-			-			-			-
Foreign currency translation adjustments		-			-			-			-			2,843			-			-
Total comprehensive income		-			-			-			-			-			-			-		23,771
Repurchase of common stock		(166	)		(2	)		(9,304	)		-			-			-			-		(9,306	)
Issuance of common stock pursuant to employee stock purchase plan		19			-			893			-			-			-			-		893
Issuance of restricted common stock pursuant to stock-based compensation plans		574			6			(6	)		-			-			-			-		-
Cancellation of restricted common stock issued pursuant to stock-based compensation plans		(18	)		-			-			-			-			-			-		-
Stock-based compensation expense		-			-			6,412			-			-			-			-		6,412
Dividends		-			-			-			-			-			(8,796	)		-		(8,796	)
BALANCE, March 31, 2023		31,678		$	712		$	493,184		$	(1,018,034	)	$	(55,986	)	$	948,347		$	-	$	368,223


	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
For the Quarter Ended March 31, 2022:
BALANCE, January 1, 2022		32,495		$	705		$	488,303		$	(930,106	)	$	(38,353	)	$	916,060		$	3,635	$	440,244
Comprehensive income:
Net income		-			-			-			-			-			6,113			-
Unrealized loss on short-term investments, net of tax		-			-			-			-			(2	)		-			-
Foreign currency translation adjustments		-			-			-			-			(1,182	)		-			-
Total comprehensive income																						4,929
Repurchase of common stock		(389	)		(1	)		(7,804	)		(15,996	)		-			-			-		(23,801	)
Issuance of common stock pursuant to employee stock purchase plan		12			-			650			-			-			-			-		650
Issuance of restricted common stock pursuant to stock-based compensation plans		476			5			(5	)		-			-			-			-		-
Cancellation of restricted common stock issued pursuant to stock-based compensation plans		(34	)		-			-			-			-			-			-		-
Stock-based compensation expense		-			-			5,581			-			-			-			-		5,581
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		-			-			-			-			-			(8,586	)		-		(8,586	)
BALANCE, March 31, 2022		32,560		$	709		$	472,078		$	(946,102	)	$	(39,537	)	$	923,389		$	3,635	$	414,172

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(in thousands)


	Quarter Ended
	March 31, 2023			March 31, 2022
Cash flows from operating activities:
Net income	$	20,928		$	6,113
Adjustments to reconcile net income to net cash provided by (used in) operating activities-
Depreciation		5,757			6,138
Amortization		11,471			13,870
Asset impairment		1,595			10,705
(Gain) loss on short-term investments and other		(125	)		15
Loss on derivative liability upon debt conversion		-			7,456
Unrealized foreign currency transactions (gain)/loss, net		41			(136	)
Deferred income taxes		4,079			(55	)
Stock-based compensation		6,412			5,581
Changes in operating assets and liabilities, net of acquired amounts:
Trade accounts receivable, net		(1,825	)		182
Other current and non-current assets and liabilities		(6,871	)		(6,069	)
Income taxes payable/receivable		1,647			(1,735	)
Trade accounts payable and accrued liabilities		(36,071	)		(42,550	)
Deferred revenue		8,359			(5,064	)
Net cash provided by (used in) operating activities		15,397			(5,549	)

Cash flows from investing activities:
Purchases of software, property and equipment		(8,700	)		(10,375	)
Proceeds from sale/maturity of short-term investments		71			21,887
Net cash provided by (used in) investing activities		(8,629	)		11,512

Cash flows from financing activities:
Proceeds from issuance of common stock		893			650
Payment of cash dividends		(9,088	)		(8,885	)
Repurchase of common stock		(9,306	)		(23,660	)
Deferred acquisition payments		(274	)		-
Proceeds from long-term debt		30,000			245,000
Payments on long-term debt		(1,875	)		(244,176	)
Settlement and merchant reserve activity		(61,482	)		(23,543	)
Net cash used in financing activities		(51,132	)		(54,614	)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash		327			1,351

Net decrease in cash, cash equivalents, and restricted cash		(44,037	)		(47,300	)

Cash, cash equivalents, and restricted cash, beginning of period		389,018			391,902
Cash, cash equivalents, and restricted cash, end of period	$	344,981		$	344,602

Supplemental disclosures of cash flow information:
Cash paid during the period for-
Interest	$	7,005		$	5,876
Income taxes		2,211			2,230

Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	167,681		$	181,457
Settlement and merchant reserve assets		177,300			163,145
Total cash, cash equivalents, and restricted cash	$	344,981		$	344,602

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CSG SYSTEMS INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. GENERAL

We have prepared the accompanying unaudited condensed consolidated financial statements as of March 31, 2023 and December 31, 2022, and for the quarters ended March 31, 2023 and 2022, in accordance with accounting principles generally accepted in the United States of America (“U.S.”) (“GAAP”) for interim financial information, and pursuant to the instructions to Form 10-Q and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of our management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position and operating results have been included. The unaudited Condensed Consolidated Financial Statements (the “Financial Statements”) should be read in conjunction with the Consolidated Financial Statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), contained in our Annual Report on Form 10-K for the year ended December 31, 2022 (our “2022 10-K”), filed with the SEC. The results of operations for the quarter ended March 31, 2023 are not necessarily indicative of the expected results for the entire year ending December 31, 2023.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates in Preparation of Financial Statements. 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 periods. Actual results could differ from those estimates.

Reclassifications. Certain amounts within our net cash provided by operating activities on our Statement of Cash Flows for the first quarter of 2022 have been reclassified to conform to the March 31, 2023 presentation.

Revenue. The majority of our future revenue is related to our revenue management solution customer contracts that include variable consideration dependent upon a series of monthly volumes and/or daily usage of services and have contractual terms ending from 2023 through 2036. Our customer contracts may include guaranteed minimums and fixed monthly or annual fees. As of March 31, 2023, our aggregate amount of the transaction price allocated to the remaining performance obligations is $1.6 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). We expect to recognize approximately 75% of this amount by the end of 2025, with the remaining amount recognized by the end of 2036. We have excluded variable consideration expected to be recognized in the future related to performance obligations that are unsatisfied from this amount.

The nature, amount, timing, and uncertainty of our revenue and how revenue and cash flows are affected by economic factors is most appropriately depicted by revenue type, geographic region, and customer vertical.

Revenue by type for the quarters ended March 31, 2023 and 2022 were as follows (in thousands):


	Quarter Ended
	March 31, 2023		March 31, 2022
SaaS and related solutions	$	257,876	$	234,977
Software and services		30,891		18,436
Maintenance		9,972		10,987
Total revenue	$	298,739	$	264,400

We use the location of the customer as the basis of attributing revenue to geographic regions. Revenue by geographic region for the quarters ended March 31, 2023 and 2022, as a percentage of our total revenue, were as follows:


	Quarter Ended
	March 31, 2023			March 31, 2022
Americas (principally the U.S.)		84	%		84	%
Europe, Middle East, and Africa		12	%		12	%
Asia Pacific		4	%		4	%
Total revenue		100	%		100	%

We generate our revenue primarily from the global communications markets; however, we serve an expanding group of customers in other industry markets including retail, healthcare, financial services, insurance, and government entities. Revenue by customer vertical for the quarters ended March 31, 2023 and 2022, as a percentage of our total revenue, were as follows:


	Quarter Ended
	March 31, 2023			March 31, 2022
Broadband/Cable/Satellite		52	%		54	%
Telecommunications		20	%		19	%
Other		28	%		27	%
Total revenue		100	%		100	%

Deferred revenue recognized during the quarters ended March 31, 2023 and 2022 was $20.2 million and $28.0 million, respectively.

Cash and Cash Equivalents. We consider all highly liquid investments with original maturities of three months or less at the date of the purchase to be cash equivalents. As of March 31, 2023 and December 31, 2022, our cash equivalents consist primarily of institutional money market funds, commercial paper, and time deposits held at major banks. For the cash and cash equivalents denominated in foreign currencies and/or located outside the U.S., we do not anticipate any material amounts being unavailable for use in running our business, but may face limitations on moving cash out of certain foreign jurisdictions due to currency controls and potential negative economic consequences.

Restricted Cash. Restricted cash includes cash that is legally or contractually restricted, as well as our settlement and merchant reserve assets (discussed below). The nature of the restrictions on our settlement and merchant reserve assets consists of contractual restrictions with the merchants and restrictions arising from our policy and intention. It has historically been our policy to segregate settlement and merchant reserve assets from our operating cash balances and our intention is to continue to do so. As of March 31, 2023 and December 31, 2022, we had $0.9 million and $1.0 million, respectively, of restricted cash that serves to collateralize bank guarantees and outstanding letters of credit included in cash and cash equivalents in our unaudited Condensed Consolidated Balance Sheets (“Balance Sheets” or “Balance Sheet”).

Short-term Investments. Our short-term investments as of March 31, 2023 and December 31, 2022 were zero and $0.1 million, respectively. Primarily all short-term investments held by us have contractual maturities of less than two years from the time of acquisition. Our short-term investments as of December 31, 2022 consisted of fixed income securities. Proceeds from the sale/maturity of short-term investments for the first quarters of 2023 and 2022 were $0.1 million and $21.9 million, respectively.

Settlement and Merchant Reserve Assets and Liabilities. Settlement assets and settlement liabilities represent cash collected on behalf of merchants via payment processing services which is held for an established holding period until settlement with the customer. The holding period is generally one to four business days depending on the payment model and contractual terms with the customer. During the holding period, cash is subject to restriction and segregation based on the nature of our custodial relationship with the merchants. Should we fail to remit these funds to our merchants, the merchant’s sole recourse would be against us, for payment. These rights and obligations are set forth in the contracts between us and the merchants. Settlement assets are held with various major financial institutions and a corresponding liability is recorded for the amounts owed to the customer. At any given time, there may be differences between the cash held and the corresponding liability due to the timing of operating-related cash transfers.

Merchant reserve assets/liabilities represent deposits collected from merchants to mitigate our risk of loss due to nonperformance of settlement obligations initiated by those merchants using our payment processing services, or non-payment by customers for services rendered by us. We perform a credit risk evaluation on each customer based on multiple criteria, which provide the basis for the deposit amount required for each merchant. For the duration of our relationship with each merchant, we hold their reserve deposits with major financial institutions. We hold these funds in separate accounts and are fully offset by corresponding liabilities.

The following table summarizes our settlement and merchant reserve assets and liabilities as of the indicated periods (in thousands):


	March 31, 2023				December 31, 2022
	Assets		Liabilities		Assets		Liabilities
Settlement assets/liabilities	$	155,418	$	154,444	$	219,368	$	218,525
Merchant reserve assets/liabilities		21,882		21,885		19,285		19,285
Total	$	177,300	$	176,329	$	238,653	$	237,810

Financial Instruments. Our financial instruments as of March 31, 2023 and December 31, 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 short-term investments and certain of our cash equivalents are considered “available-for-sale” and are reported at fair value in our Balance Sheets, with unrealized gains and losses, net of the related income tax effect, excluded from earnings and reported in a separate component of stockholders’ equity. Realized and unrealized gains and losses were not material in any period presented.

The following table represents the fair value hierarchy based upon three levels of inputs, of which Levels 1 and 2 are considered observable and Level 3 is unobservable, for our financial assets measured at fair value (in thousands):


	March 31, 2023						December 31, 2022
	Level 1		Level 2		Total		Level 1		Level 2		Total
Cash equivalents:
Money market funds	$	5,408	$	—	$	5,408	$	5,318	$	—	$	5,318
Short-term investments:
Asset-backed securities		—		—		—		—		71		71
Total	$	5,408	$	-	$	5,408	$	5,318	$	71	$	5,389

Valuation inputs used to measure the fair values of our money market funds were derived from quoted market prices. The fair values of all other financial instruments are based upon pricing provided by third-party pricing services. These prices were derived from observable market inputs.

We have chosen not to record our debt at fair value, with changes recognized in earnings each reporting period. The following table indicates the carrying value and estimated fair value of our debt as of the indicated periods (in thousands):


	March 31, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
2021 Credit Agreement (carrying value including current maturities) :
Term Loan	$	138,750	$	138,750	$	140,625	$	140,625
Revolver		305,000		305,000		275,000		275,000

The fair value for our credit agreement was estimated using a discounted cash flow methodology.

3. GOODWILL AND INTANGIBLE ASSETS

Goodwill. The changes in the carrying amount of goodwill for the first quarter of 2023 were as follows (in thousands):


January 1, 2023, balance	$	304,036
Adjustments related to prior acquisitions		(20	)
Impairment charge related to Keydok, LLC		(1,118	)
Effects of changes in foreign currency exchange rates		2,206
March 31, 2023, balance	$	305,104

See Notes 5 and 6 for further discussion of management's decision to shut down Keydok, LLC ("Keydok") resulting in the impairment charge recorded above.

Other Intangible Assets. Our other intangible assets subject to ongoing amortization consist primarily of acquired customer contracts and software. As of March 31, 2023 and December 31, 2022, the carrying values of these assets were as follows (in thousands):


	March 31, 2023							December 31, 2022
	Gross Carrying Amount		Accumulated Amortization			Net Amount		Gross Carrying Amount		Accumulated Amortization			Net Amount
Acquired customer contracts	$	166,585	$	(123,694	)	$	42,891	$	165,497	$	(120,080	)	$	45,417
Software		173,009		(152,074	)		20,935		173,111		(150,337	)		22,774
Total other intangible assets	$	339,594	$	(275,768	)	$	63,826	$	338,608	$	(270,417	)	$	68,191

The total amortization expense related to other intangible assets for the first quarters of 2023 and 2022 were $6.7 million and $7.1 million, respectively. Based on the March 31, 2023 net carrying value of our intangible assets, the estimated total amortization expense for each of the five succeeding fiscal years ending December 31 are: 2023 - $24.0 million; 2024 - $14.0 million; 2025 - $11.2 million; 2026 - $7.7 million; and 2027 - $3.1 million.

Customer Contract Costs. As of March 31, 2023 and December 31, 2022, the carrying values of our customer contract cost assets, related to those contracts with a contractual term greater than one year, were as follows (in thousands):


	March 31, 2023							December 31, 2022
	Gross Carrying Amount		Accumulated Amortization			Net Amount		Gross Carrying Amount		Accumulated Amortization			Net Amount
Customer contract costs	$	87,628	$	(33,191	)	$	54,437	$	85,336	$	(30,601	)	$	54,735

The total amortization expense related to customer contract costs for the first quarters of 2023 and 2022 were $4.6 million and $6.5 million, respectively.

4. DEBT

Our long-term debt, as of March 31, 2023 and December 31, 2022, was as follows (in thousands):


	March 31, 2023			December 31, 2022
2021 Credit Agreement:
2021 Term Loan, due September 2026, interest at adjusted LIBOR plus applicable margin (combined rate of 6.784% at March 31, 2023)	$	138,750		$	140,625
Less – deferred financing costs		(2,469	)		(2,656	)
2021 Term Loan, net of unamortized discounts		136,281			137,969
$450 million revolving loan facility, due September 2026, interest at adjusted LIBOR plus applicable margin (combined weighted-average rate of 6.756% at March 31, 2023)		305,000			275,000
Total debt, net of unamortized discounts		441,281			412,969
Current portion of long-term debt, net of unamortized discounts		(37,500	)		(37,500	)
Long-term debt, net of unamortized discounts	$	403,781		$	375,469

2021 Credit Agreement. During the quarter ended March 31, 2023, we made $1.9 million of principal repayments on our $150.0 million aggregate principal five-year term loan (the “2021 Term Loan”). As of March 31, 2023 we had borrowed $305.0 million from our $450.0 million aggregate principal five-year revolving loan facility (the “2021 Revolver”), leaving us with $145.0 million available.

As of March 31, 2023, the interest rate on our 2021 Term Loan was 6.784% (adjusted LIBOR plus 1.625% per annum), the interest rates on our 2021 Revolver range from 6.385% to 6.784% (adjusted LIBOR plus 1.625% per annum), and our commitment fee on the unused $145.0 million was 0.20%.

The interest rates under the 2021 Credit Agreement are based upon our choice of an adjusted LIBOR rate plus an applicable margin of 1.375% - 2.125%, or an alternate base rate (“ABR”) plus an applicable margin of 0.375% - 1.125%, with the applicable margin, depending on our then-net secured total leverage ratio. We pay a commitment fee of 0.150% - 0.325% of the average daily unused amount of the 2021 Revolver, with the commitment fee rate also dependent upon our then-net secured total leverage ratio.

In April 2023, we entered into the First Amendment to the 2021 Credit Agreement (the “First Amendment”). The First Amendment replaces the interest rate benchmark, from LIBOR to the Secured Overnight Financing Rate ("SOFR"), and all references to “Eurodollar Borrowing(s)” or “Eurodollar Loans” have been replaced with “Term SOFR Borrowing(s)” or “Term SOFR Loans”. Any loan amounts outstanding at the effective date of the First Amendment, will continue to bear interest at the LIBOR rate, discussed above, until the end of the current interest election period applicable to such loan.

5. ACQUISITIONS

Keydok, LLC. On September 14, 2021, we acquired Keydok, a digital identity and document management platform provider, headquartered in Mexico. In March 2023, we decided to dissolve the Keydok business. See Note 6 for additional discussion.

DGIT Systems Pty Ltd. On October 4, 2021, we acquired DGIT Systems Pty Ltd (“DGIT”), a provider of configure, price and quote (CPQ) and order management solutions for the telecommunications industry. We acquired 100% of the equity of DGIT for a purchase price of approximately $16 million, approximately $14 million paid upon close and the remaining escrowed funds of approximately $2 million to be paid through the first quarter of 2025, subject to certain reductions, as applicable. As of March 31, 2023, $0.3 million of the escrowed funds had been paid.

The DGIT acquisition includes provisions for up to approximately $13 million of potential future earn-out payments. The earn-out payments are tied to performance-based goals and a defined service period by the eligible recipients and are accounted for as post-acquisition compensation, as applicable. The earn-out period is through September 30, 2025. During 2022, $0.3 million of the earn-out had been achieved and was paid out in March 2023.

6. RESTRUCTURING AND REORGANIZATION CHARGES

During the first quarters of 2023 and 2022, we recorded restructuring and reorganization charges of $5.2 million and $13.1 million, respectively.

During the first quarter of 2023 we implemented the following restructuring and reorganizational activities:

•

In March 2023 we decided to dissolve the Keydok business, which we had acquired in September of 2021. As a result, we recorded net impairment charges of $1.2 million, to include the write-off of the acquired goodwill. We also subsequently terminated approximately 30 Mexico-based employees, which resulted in restructuring charges related to involuntary terminations of $1.6 million.

•

We reduced our workforce by approximately 30 employees, mainly in the U.S., as a result of organizational changes and efficiencies. As a result, we incurred restructuring charges related to involuntary terminations of $1.0 million.

•

We recorded $0.4 million of additional operating lease right-of-use asset impairments on three of our leased real estate locations.

The activity in the restructuring and reorganization reserves during the first quarter of 2023 was as follows (in thousands):


	Termination Benefits			Other			Total
January 1, 2023, balance	$	2,491		$	-		$	2,491
Charged to expense during period		2,557			2,637			5,194
Cash payments		(2,751	)		(1,006	)		(3,757	)
Adjustment for asset impairment		-			(1,595	)		(1,595	)
Adjustment for accelerated depreciation		-			(36	)		(36	)
Other		351			-			351
March 31, 2023, balance	$	2,648		$	-		$	2,648

As of March 31, 2023, all of the restructuring and reorganization reserves were included in current liabilities.

7. COMMITMENTS, GUARANTEES AND CONTINGENCIES

Guarantees. In the ordinary course of business, we may provide guarantees in the form of bid bonds, performance bonds, or standby letters of credit. As of March 31, 2023, we had $1.6 million of restricted assets used to collateralize these guarantees, with $0.9 million included in cash and cash equivalents and $0.7 million included in other non-current assets.

We have performance guarantees in the form of surety bonds and money transmitter bonds, both issued through a third-party that are not required to be on our Balance Sheet. As of March 31, 2023, we had performance guarantees of $3.5 million. We are ultimately liable for claims that may occur against these guarantees. We have no history of material claims or are aware of circumstances that would require us to pay under any of these arrangements. We also believe that the resolution of any claim that may arise in the future, either individually or in the aggregate, would not be material to our Financial Statements. As of March 31, 2023, we had total aggregate money transmitter bonds of $19.0 million outstanding. These money transmitter bonds are for the benefit of various states to comply with the states’ financial requirements and industry regulations for money transmitter licenses.

Warranties. We generally warrant that our solutions and related offerings will conform to published specifications, or to specifications provided in an individual customer arrangement, as applicable. The typical warranty period is 90 days from the date of acceptance of the solution or offering. For certain service offerings we provide a warranty for the duration of the services provided. We generally warrant that those services will be performed in a professional and skillful manner. The typical remedy for breach of warranty is to correct or replace any defective deliverable, and if not possible or practical, we will accept the return of the defective deliverable and refund the amount paid under the customer arrangement that is allocable to the defective deliverable. Our contracts also generally contain limitation of damages provisions in an effort to reduce our exposure to monetary damages arising from breach of warranty claims. Historically, we have incurred minimal warranty costs, and as a result, do not maintain a warranty reserve.

Solution and Services Indemnifications. Arrangements with our customers generally include an indemnification provision that will indemnify and defend a customer in actions brought against the customer that claim our products and/or services infringe upon a copyright, trade secret, or valid patent. Historically, we have not incurred any significant costs related to such indemnification claims, and as a result, do not maintain a reserve for such exposure.

Claims for Company Non-performance. Our arrangements with our customers typically limit our liability for breach to a specified amount of the direct damages incurred by the customer resulting from the breach. From time-to-time, these arrangements may also include provisions for possible liquidated damages or other financial remedies for our non-performance, or in the case of certain of our solutions, provisions for damages related to service level performance requirements. The service level performance requirements typically relate to platform availability and timeliness of service delivery. As of March 31, 2023, we believe we have adequate reserves, based on our historical experience, to cover any reasonably anticipated exposure as a result of our nonperformance for any past or current arrangements with our customers.

Indemnifications Related to Officers and the Board of Directors. Other guarantees include promises to indemnify, defend, and hold harmless our directors, and certain officers. Such indemnification covers any expenses and liabilities reasonably incurred by a person, by reason of the fact that such person is, was, or has agreed to be a director or officer, in connection with the investigation, defense, and settlement of any threatened, pending, or contemplated action, suit, proceeding, or claim. 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 a result, we have not recorded any liabilities related to such indemnifications as of March 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. From time-to-time, we are involved in litigation relating to claims arising out of our operations in the normal course of business.

8. EARNINGS PER COMMON SHARE

Basic and diluted earnings per common share (“EPS”) amounts are presented on the face of our unaudited Condensed Consolidated Statements of Income (the "Income Statements").

The reconciliation of the basic and diluted EPS denominators related to the common shares is included in the following table (in thousands):


	Quarter Ended
	March 31,
	2023		2022
Basic weighted-average common shares		30,418		31,416
Dilutive effect of restricted common stock		191		394
Diluted weighted-average common shares		30,609		31,810

Potentially dilutive common shares related to non-participating unvested restricted stock and stock warrants were excluded from the computation of diluted EPS, as the effect was antidilutive, and were not material in any period presented. Stock warrants (see Note 9) will only have a dilutive effect upon vesting in those periods in which our average stock price exceeds the exercise price of $26.68 per warrant.

9. STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION PLANS

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 did not make any share repurchases during the first quarter of 2023. During the first quarter of 2022 we repurchased approximately 266,000 shares of our common stock for $16.0 million (weighted-average price of $60.13 per share) under a SEC Rule 10b5-1 Plan.

As of March 31, 2023, the total remaining number of shares available for repurchase under the Stock Repurchase Program totaled 2.1 million shares.

Stock Repurchases for Tax Withholdings. In addition to the above-mentioned stock repurchases, during the first quarters of 2023 and 2022, we repurchased and then cancelled approximately 166,000 shares of common stock for $9.3 million and approximately 123,000 shares of common stock for $7.8 million, respectively, in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans.

Cash Dividends. During the first quarter of 2023, our Board approved a quarterly cash dividend of $0.28 per share of common stock, totaling $8.8 million. During the first quarter of 2022, our Board approved a quarterly cash dividend of $0.265 per share of common stock, totaling $8.6 million.

Warrants. In 2014, in conjunction with the execution of an amendment to our agreement with Comcast Corporation (“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. The Stock Warrants have a ten-year term and an exercise price of $26.68 per warrant.

As of March 31, 2023, 1.0 million Stock Warrants remain issued, none of which have vested. The remaining unvested Stock Warrants will be accounted for as a customer contract cost asset once the performance conditions necessary for vesting are considered probable.

Stock-Based Awards. A summary of our unvested restricted common stock activity during the quarter ended March 31, 2023 is as follows (shares in thousands):


	Quarter Ended
	March 31, 2023
	Shares			Weighted- Average Grant Date Fair Value
Unvested awards, beginning		1,147		$	53.34
Awards granted		600			52.01
Awards forfeited/cancelled		(19	)		54.51
Awards vested		(438	)		49.76
Unvested awards, ending		1,290		$	53.80

Included in the awards granted during the first quarter of 2023 are awards issued to members of executive management and certain key employees in the form of: (i) performance-based awards of approximately 134,000 restricted common stock shares, which vest in the first quarter of 2025 upon meeting certain pre-established financial performance objectives over a two-year performance period; and (ii) market-based awards of approximately 45,000 restricted common stock shares, which vest in the first quarter of 2026 upon meeting a relative total shareholder return performance achievement tier. Certain of these awards become fully vested upon a change in control, as defined, and the subsequent involuntary termination of employment.

The other restricted common stock shares granted during the first quarter of 2023 are primarily time-based awards, which vest annually over three years with no restrictions other than the passage of time. Certain shares of the restricted common stock become fully vested upon a change in control, as defined, involuntary terminations of employment, or death.

We recorded stock-based compensation expense for the first quarters of 2023 and 2022 of $6.4 million and $5.6 million, respectively.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information contained in this MD&A should be read in conjunction with the Financial Statements and Notes thereto included in this Form 10-Q and the audited consolidated financial statements and notes thereto in our 2022 10-K.

Forward-Looking Statements

This report contains a number of forward-looking statements relative to our future plans and our expectations concerning our business and the industries we serve. These forward-looking statements are based on assumptions about a number of important factors and involve risks and uncertainties that could cause actual results to differ materially from estimates contained in the forward-looking statements. Some of the risks that are foreseen by management are outlined within Part I Item 1A. Risk Factors of our 2022 10-K. Readers are strongly encouraged to review that section closely in conjunction with MD&A.

Company Overview

We are a purpose-driven SaaS platform company that enables large enterprise customers in a wide variety of industry verticals to tackle the ever-growing complexity of business in the digital age. Our industry leading revenue management and digital monetization, customer experience, and payments solutions make ordinary customer experiences extraordinary. Our cloud-first architecture and customer-centric approach help companies around the world acquire, monetize, engage, and retain the B2B (business-to-business), B2C (business-to-consumer), and B2B2X (business-to-business-to-consumer) customers. As brands reimagine their engagement strategies in an increasingly connected world, we sit at the center of a complex, multi-sided business model ensuring monetization and customer engagement is handled at all levels of the ecosystem.

We leverage 40 years of experience to deliver innovative customer engagement solutions for every stage of the customer lifecycle so our customers can deliver an outstanding customer experience that adapts to their customers’ rapidly changing demands. Our diverse, worldwide workforce draws from real-world knowledge and extensive expertise to design and implement business solutions that make our customers’ hardest decisions simpler so that they can focus on delivering differentiated and real-time experiences to their customers. As a global technology leader, we aspire to envision, invent, and shape a better, more future-ready world.

We focus our research and development (“R&D”) and acquisition investments on expanding our offerings in a timely and efficient manner to address the complex, transformative needs of our customers. Our scalable, modular, and flexible solutions combined with our domain expertise and our ability to effectively migrate customers to our solutions, provide the industry with proven solutions to improve their profitability and consumers’ experiences. We have specifically architected our solutions to offer a phased, incremental approach to transforming our customers' businesses, thereby reducing the business interruption risk associated with this evolution.

As discussed in Note 2 to our Financial Statements, we generate a majority of our revenue from the global communications markets; however, we serve an expanding group of customers in other markets including retail, healthcare, financial services, insurance, and government entities.

We are a member of the S&P Small Cap 600 and Russell 2000 indices.

Management Overview of Quarterly Results

First Quarter Highlights. A summary of our results of operations for the first quarter of 2023, when compared to the first quarter of 2022, is as follows (in thousands, except per share amounts and percentages):


	Quarter Ended
	March 31, 2023			March 31, 2022
Revenue	$	298,739		$	264,400
Transaction fees (1)		21,973			18,038
Operating Results:
Operating income	$	38,193		$	16,415
Operating income margin		12.8	%		6.2	%
Diluted EPS	$	0.68		$	0.19
Supplemental Data:
Restructuring and reorganization charges (2)	$	5,194		$	13,106
Executive transition costs		-			1,275
Acquisition-related costs:
Amortization of acquired intangible assets		3,209			3,656
Transaction-related costs		158			13
Stock-based compensation (2)		6,757			5,721
Loss on derivative liability upon debt conversion		-			7,456

(1)

Transaction fees are primarily comprised of fees paid to third-party payment processors and financial institutions and interchange fees under our payment services contracts. Transaction fees are included in revenue in our Income Statement (and not netted against revenue) because we maintain control and act as the principal over the integrated service provided under our payment services customer contracts.

(2)

Restructuring and reorganization charges include stock-based compensation, which is not included in the stock-based compensation line in the table above, and depreciation, which has not been recorded to the depreciation line on our Income Statement.

Revenue. Revenue for the first quarter of 2023 was $298.7 million, a 13.0% increase when compared to revenue of $264.4 million for the first quarter of 2022. The increase can be primarily attributed to an increase in software and services revenue, due mainly to the timing of the closure of deals, as well as increased payment volumes, conversion of customer accounts onto our solutions, and other ancillary services.

Operating Results. Operating income for the first quarter of 2023 was $38.2 million, or a 12.8% operating margin percentage, compared to $16.4 million, or a 6.2% operating margin percentage for the first quarter of 2022. The increase in operating income can be mainly attributed to the higher revenue generated in the first quarter of 2023, discussed above, and to a lesser extent, the $7.9 million decrease in restructuring and reorganization charges between years.

Diluted EPS. Diluted EPS for the first quarter of 2023 was $0.68 compared to $0.19 for the first quarter of 2022, with the increase mainly attributed to the higher operating income in the first quarter of 2023, discussed above, and a $7.5 million loss on a derivative liability incurred in the first quarter of 2022 upon conversion of our 2016 Convertible Notes.

Cash and Cash Flows. As of March 31, 2023, we had cash, cash equivalents, and short-term investments of $167.7 million, as compared to $150.4 million as of December 31, 2022. Our cash flows provided by operating activities for the first quarter of 2023 were $15.4 million. See the Liquidity section below for further discussion of our cash flows.

Significant Customer Relationships

Customer Concentration. A large percentage of our historical revenue has been generated from our two largest customers, which are Charter Communications Inc. (“Charter”) and Comcast.

Revenue from these customers for the indicated periods was as follows (in thousands, except percentages):


	Quarter Ended
	March 31, 2023					December 31, 2022					March 31, 2022
	Amount		% of Revenue			Amount		% of Revenue			Amount		% of Revenue
Charter	$	61,532		21	%	$	58,006		20	%	$	52,069		20	%
Comcast		53,415		18	%		55,383		19	%		52,524		20	%

During the first quarter of 2023 we completed the final conversions of Charter's customer accounts onto our platforms, completing the consolidation of their residential and small and medium business internet, video, and landline voice customers that began in late 2021.

The percentages of net billed accounts receivable balances attributable to our largest customers as of the indicated dates were as follows:


	As of
	March 31, 2023			December 31, 2022			March 31, 2022
Charter		22	%		22	%		20	%
Comcast		19	%		17	%		20	%

See our 2022 10-K for additional discussion of our business relationships and contractual terms with Charter and Comcast.

Charter. In April 2023, we entered into an Amended and Restated CSG Master Subscriber Management System Agreement (the “Agreement”) with Charter. The primary purpose of the Agreement was to consolidate the previous agreement and amendments into one document. The Agreement also formalizes the extension of the term through March 31, 2028, from December 31, 2027, as was contemplated in the previous agreement, in connection with the final conversion of Charter’s customer accounts, discussed above. The Agreement continues to provide that the term will automatically be extended for an additional one-year term, subject to Charter achieving certain conditional processing minimums on July 1, 2027, unless Charter provides us with written notice of non-renewal. All other material terms, provisions, and conditions of the previous agreement remain unchanged.

A copy of the Agreement, with confidential information redacted, will be filed with the SEC as an exhibit to our Form 10-Q for the period ended June 30, 2023.

Risk of Customer Concentration. We expect to continue to generate a significant percentage of our future revenue from our largest customers. There are inherent risks whenever a large percentage of total revenue is concentrated with a limited number of 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 services, or the scope of services that we provide; or (iii) experience significant financial or operating difficulties, it could have a material adverse effect on our financial condition and results of operations.

Critical Accounting Policies

The preparation of our Financial Statements in conformity with U.S. GAAP requires us to select appropriate accounting policies, and to make judgments and estimates affecting the application of those accounting policies. In applying our accounting policies, different business conditions or the use of different assumptions may result in materially different amounts reported in our Financial Statements.

We have identified the most critical accounting policies that affect our financial position and the results of our operations. Those critical accounting policies were determined by considering the accounting policies that involve the most complex or subjective decisions or assessments. The most critical accounting policies identified relate to the following items: (i) revenue recognition; (ii) impairment assessments of long-lived assets; (iii) income taxes; and (iv) loss contingencies. These critical accounting policies, as well as our other significant accounting policies, are discussed in our 2022 10-K.

Results of Operations

Revenue. Total revenue for the first quarter of 2023 was $298.7 million, a 13.0% increase when compared to $264.4 million for the first quarter of 2022. During the first quarter of 2023, our software and services revenue increased $12.5 million, or 67.6% over the first quarter of 2022, primarily due to the timing of the closure of software license upgrades. Additionally, we saw continued year-over-year growth in our SaaS and related solutions revenue driven mainly by increased payments volumes, conversion of customer accounts onto our solutions, and other ancillary services, to include a strong quarter from our communication design and delivery centers. In the first quarter of 2023, we completed the final conversions of Charter's customer accounts onto our platforms, converting over nine million customer accounts in the past twelve months and more than fourteen million in total.

We use the location of the customer as the basis of attributing revenue to individual countries. Revenue by geographic regions for the first quarters of 2023 and 2022 was as follows (in thousands):


	Quarter Ended
	March 31, 2023		March 31, 2022
Americas (principally the U.S.)	$	250,976	$	222,960
Europe, Middle East, and Africa		36,673		31,561
Asia Pacific		11,090		9,879
Total revenue	$	298,739	$	264,400

Total Operating Expenses. Total operating expenses for the first quarter of 2023 were $260.5 million, a 5.1% increase when compared to $248.0 million for the first quarter of 2022. The increase in total operating expenses is reflective of the higher revenue between periods, to include increased employee-related costs, offset to a certain degree by the $7.9 million decrease in restructuring and reorganization charges, discussed below.

The components of total operating expenses are discussed in more detail below.

Cost of Revenue (Exclusive of Depreciation). The cost of revenue for the first quarter of 2023 was $155.0 million, a 12.0% increase when compared to $138.4 million for the first quarter of 2022. The increase in cost of revenue between periods is reflective of the increase in revenue year-over-year. Total cost of revenue as a percentage of revenue for the first quarters of 2023 and 2022 was 51.9% and 52.4%, respectively.

R&D Expense (Exclusive of Depreciation). R&D expense for the first quarter of 2023 was $35.5 million, a 7.5% increase when compared to $33.0 million for the first quarter of 2022, with the increase mainly attributed to higher employee-related costs. As a percentage of total revenue, R&D expense for the first quarters of 2023 and 2022 was 11.9% and 12.5%, respectively.

Our R&D efforts are focused on the continued evolution of our solutions that enable our customers worldwide to provide a more personalized experience while introducing new digital solutions. This includes the continued investment in our products and integration of acquired assets into our solutions.

Selling, General, and Administrative ("SG&A") Expense (Exclusive of Depreciation). SG&A expense for the first quarter of 2023 was $59.1 million, a 3.1% increase when compared to $57.3 million for the first quarter of 2022. This increase in SG&A expense is primarily attributed to increases in employee-related costs, to include incentive compensation; offset to a certain degree by lower building related costs due to our office closures in 2022. Our SG&A costs as a percentage of total revenue for the first quarters of 2023 and 2022 were 19.8% and 21.7%, respectively.

Restructuring and Reorganization Charges. Restructuring and reorganization charges for the first quarter of 2023 were $5.2 million, a $7.9 million decrease when compared to $13.1 million for the first quarter of 2022. The restructuring and reorganization charges for the first quarter of 2023 relate mainly to the following:

•

net impairment charges of $1.2 million recorded related to the dissolution of the Keydok business;

•

reduction in workforce resulting in restructuring charges related to involuntary terminations of $2.6 million; and

•

real estate restructuring charges to include impairment charges of $0.4 million, as we continue to rationalize our real estate footprint to reflect our flexible work approach.

See Note 6 to our Financial Statements for additional discussion.

Operating Income. Operating income for the first quarter of 2023 was $38.2 million, or 12.8% of total revenue, compared to $16.4 million, or 6.2% of total revenue for the first quarter of 2022. The increase in operating income can be mainly attributed to the higher revenue generated in the first quarter of 2023, discussed above, and to a lesser extent, the $7.9 million decrease in restructuring and reorganization charges between years.

Interest Expense. Our interest expense relates primarily to our 2021 Credit Agreement. Interest expense for the first quarter of 2023 was $7.2 million, a $3.9 million increase when compared to $3.3 million for the first quarter of 2022, with the increase due to rising interest rates and a higher average outstanding debt balance during the first quarter of 2023.

See Note 4 to our Financial Statements for additional discussion of our long-term debt.

Loss on Derivative Liability Upon Debt Conversion. In March 2022, we settled our 2016 Convertible Notes for approximately $242 million in cash. As a result of the conversion of the 2016 Convertible Notes, we recognized a $7.5 million loss on a derivative liability related to the change in our stock price over the observation period prior to settlement.

Other, net. Other, net for the first quarter of 2023 was $2.4 million of other expense, a $3.2 million change when compared to $0.8 million of other income for the first quarter of 2022, with the change primarily attributed to foreign currency movements.

Income Tax Provision. The effective income tax rates for the first quarters of 2023 and 2022 were as follows:


Quarter Ended
March 31, 2023			March 31, 2022
	28	%		8	%

Our estimated full year 2023 effective income tax rate is approximately 29%, a slight increase when compared to our 2022 full year rate of approximately 28%.

The first quarter of 2022 effective income tax rate was impacted by the combination of lower net income for the quarter and a discrete tax benefit related to the vesting of restricted common stock during the quarter.

Liquidity

Cash and Liquidity. As of March 31, 2023, our principal sources of liquidity included cash, cash equivalents, and short-term investments of $167.7 million, compared to $150.4 million as of December 31, 2022. We generally invest our excess cash balances in low-risk, short-term investments to limit our exposure to market and credit risks.

As part of our 2021 Credit Agreement, we have a $450.0 million senior secured revolving loan facility with a syndicate of financial institutions that expires in September 2026. As of March 31, 2023, we had $305.0 million outstanding on the 2021 Revolver, leaving $145.0 million available to us. The 2021 Credit Agreement contains customary affirmative, negative, and financial covenants. As of March 31, 2023, and the date of this filing, we believe that we are in compliance with the provisions of the 2021 Credit Agreement.

Our cash, cash equivalents, and short-term investment balances as of the end of the indicated periods were located in the following geographical regions (in thousands):


	March 31, 2023		December 31, 2022
Americas (principally the U.S.)	$	110,319	$	91,569
Europe, Middle East and Africa		45,146		49,099
Asia Pacific		12,216		9,768
Total cash, equivalents, and short-term investments	$	167,681	$	150,436

We generally have ready access to substantially all of our cash, cash equivalents, and short-term investment balances, but may face limitations on moving cash out of certain foreign jurisdictions due to currency controls and potential negative economic consequences.

As of March 31, 2023, we had $0.9 million of cash restricted as to use primarily to collateralize guarantees and outstanding letters of credit included in our total cash, cash equivalents, and short-term investments balance. In addition, as of March 31, 2023, we had $177.3 million of settlement and merchant reserve assets which are deemed restricted due to contractual restrictions with the merchants and restrictions arising from our policy and intention. It has historically been our policy to segregate settlement and merchant reserve assets from our operating cash balances and we intend to continue to do so.

Cash Flows from Operating Activities. We calculate our cash flows from operating activities beginning with net income, adding back the impact of non-cash items or non-operating activity (e.g., depreciation, amortization, impairments, gains/losses on items such as investments and debt extinguishments/conversions, unrealized foreign currency gain/losses, deferred income taxes, stock-based compensation, etc.), and then factoring in the impact of changes in operating assets and liabilities. See our 2022 10-K for a description of the primary uses and sources of our cash flows from operating activities.

Our cash flows from operating activities, broken out between operations and changes in operating assets and liabilities, for the indicated quarterly periods are as follows (in thousands):


						Net Cash
			Changes in			Provided by
			Operating			(Used In) Operating
			Assets and			Activities –
	Operations		Liabilities			Totals
Cash Flows from Operating Activities:
2023:
March 31 (1)	$	50,158	$	(34,761	)		15,397

2022:
March 31 (1)	$	49,687	$	(55,236	)	$	(5,549	)

(1)

Cash flows from operating activities for the first quarters of 2023 and 2022 reflect the impact of the payment of the 2022 and 2021 year-end accrued employee incentive compensation in the first quarter subsequent to the year-end accrual for these items.

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.

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 billed accounts receivable is one of the primary factors in maintaining strong cash flows from operating activities. Our billed trade accounts receivable balance includes significant billings for several non-revenue items (primarily postage, sales tax, and deferred revenue items). As a result, we evaluate our performance in collecting our accounts receivable through our calculation of days billings outstanding (“DBO”) rather than a typical days sales outstanding (“DSO”) calculation.

Our gross and net billed trade accounts receivable and related allowance for doubtful accounts receivable (“Allowance”) as of the end of the indicated quarterly periods, and the related DBOs for the quarters then ended, are as follows (in thousands, except DBOs):


Quarter Ended	Gross		Allowance			Net Billed		DBOs
2023:
March 31	$	261,028	$	(5,254	)	$	255,774		68

2022:
March 31	$	243,292	$	(4,924	)	$	238,368		70

As of March 31, 2023 and 2022, approximately 95% and 94%, respectively, of our billed accounts receivable balance were less than 60 days past due.

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 any collectability concerns, as payment is generally received subsequent to quarter-end. 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 accounts receivable balance relates to international customers. This diversity in the geographic composition of our customer base may adversely impact our DBOs as longer billing cycles (i.e., billing terms and cash collection cycles) are an inherent characteristic of international transactions. For example, our ability to invoice and collect arrangement fees may be dependent upon, among other things: (i) the completion of various customer administrative matters, local country billing protocols and processes (including local cultural differences), and non-customer administrative matters; (ii) meeting certain contractual invoicing milestones; (iii) the overall project status in certain situations in which we act as a subcontractor to another vendor on a project; or (iv) due to currency controls in certain foreign jurisdictions.

Unbilled Trade Accounts Receivable

Unbilled trade accounts receivable increased $20.5 million to $73.3 million as of March 31, 2023, from $52.8 million as of December 31, 2022, due primarily to large implementation projects where various milestone and contractual billing dates have not yet been reached or delayed. Unbilled accounts receivable are an inherent characteristic of certain software and services transactions and may fluctuate between quarters, as these type of transactions typically have scheduled invoicing terms over several quarters, as well as certain milestone billing events.

Accrued Employee Compensation

Accrued employee compensation decreased $18.5 million to $49.8 million as of March 31, 2023, from $68.3 million as of December 31, 2022, due primarily to the payment of the 2022 employee incentive compensation during the first quarter of 2023 that was fully accrued at December 31, 2022.

Cash Flows from Investing Activities. Our typical investing activities consist of purchases/sales of short-term investments and purchases of software, property and equipment, which are discussed below.

Purchases/Sales of Short-Term Investments

During the first quarters of 2023 and 2022, we sold (or had mature) $0.1 million and $21.9 million, respectively, of short-term investments. We continually evaluate the appropriate mix of our investment of excess cash balances between cash equivalents and short-term investments in order to maximize our investment returns and liquidity.

Purchases of Software, Property and Equipment

Our capital expenditures for the first quarters of 2023 and 2022 for software, property and equipment were $8.7 million and $10.4 million, respectively, and consisted principally of investments in: (i) communication design and delivery center equipment and infrastructure; (ii) software and related equipment; and (iii) computer hardware.

Cash Flows from Financing Activities. Our financing activities typically consist of activities associated with our common stock, long-term debt, and settlement and merchant reserve activity.

Cash Dividends Paid on Common Stock

During the first quarters of 2023 and 2022, the Board approved dividends totaling $8.8 million and $8.6 million, respectively, and made dividend payments of $9.1 million and $8.9 million, respectively, through March 31, 2023 and 2022, with the differences between the amount approved and paid attributed to dividends on accrued unvested incentive shares that are paid upon vesting and previously approved.

Repurchase of Common Stock

During the first quarters of 2023 and 2022, we repurchased zero and approximately 266,000 shares of our common stock, respectively, under the guidelines of our Stock Repurchase Program for zero and $16.0 million, respectively.

Outside of our Stock Repurchase Program, during the first quarters of 2023 and 2022, we repurchased from our employees and then cancelled approximately 166,000 and 123,000 shares of our common stock, respectively, for $9.3 million and $7.8 million, respectively, in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans.

Through the first quarters of 2023 and 2022, we have paid $9.3 million and $23.7 million, respectively, for our total repurchases of common stock, with the differences when compared to the amounts purchased attributed to the timing of the settlement.

Long-term Debt

During the first quarters of 2023 and 2022, we made principal repayments on our 2021 Term Debt of $1.9 million for both periods. Additionally, during the first quarter of 2023, we borrowed $30.0 million from our 2021 Revolver for general corporate purposes and during the first quarter of 2022, we borrowed $245.0 million from our 2021 Revolver to settle our 2016 Convertible Notes for $242.3 million.

See Note 4 to our Financial Statements for additional discussion of our long-term debt.

Settlement and Merchant Reserve Activity

During the first quarters of 2023 and 2022, we had net settlement and merchant reserve activity of $61.5 million and $23.5 million, respectively, related to the cash collected, held on behalf, and paid to our merchants related to our payment processing services and the net change in deposits held on behalf of our merchants.

See Note 2 to our Financial Statements for additional discussion of our settlement and merchant reserves.

Off-Balance Sheet Arrangements

Our off-balance sheet arrangements are mainly limited to money transmitter bonds, bid bonds, and performance bonds. 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 7 to our Financial Statements for additional information on these guarantees.

Capital Resources

The following are the key items to consider in assessing our sources and uses of capital resources:

Current Sources of Capital Resources. Below are the key items to consider in assessing our current sources of capital resources:

•

Cash, Cash Equivalents, and Short-term Investments. As of March 31, 2023, we had cash, cash equivalents, and short-term investments of $167.7 million, of which approximately 61% is in U.S. dollars and held in the U.S. Included in cash and cash equivalents is $0.9 million of restricted cash. For the remainder of the monies denominated in foreign currencies and/or located outside the U.S., we do not anticipate any material amounts being unavailable for use in funding our business, but may face limitations on moving cash out of certain foreign jurisdictions due to currency controls and potential negative economic consequences.

•

Operating Cash Flows. As described in the Liquidity section above, we believe we have the ability to generate strong cash flows to fund our operating activities and act as a source of funds for our capital resource needs, although we may experience quarterly variations in our cash flows from operations related to the changes in our operating assets and liabilities.

•

Revolving Loan Facility. As part of our 2021 Credit Agreement, we have a $450.0 million revolving loan facility, our 2021 Revolver. As of March 31, 2023, we had $305.0 million outstanding on our 2021 Revolver and had the remaining $145.0 million available to us. Our long-term debt obligations are discussed in more detail in Note 4 to our Financial Statements.

Uses/Potential Uses of Capital Resources. Below are the key items to consider in assessing our uses/potential uses of capital resources:

•

Common Stock Repurchases. We have made repurchases of our common stock in the past under our Stock Repurchase Program. As of March 31, 2023, we had 2.1 million shares authorized for repurchase remaining under our Stock Repurchase Program. Our 2021 Credit Agreement places certain limitations on our ability to repurchase our common stock.

Under our Stock Repurchase Program, we may repurchase shares in the open market or in privately negotiated transactions, including through an accelerated stock repurchase plan or under a SEC Rule 10b5-1 plan. The actual timing and amount of share repurchases are dependent on the current market conditions and other business-related factors. Our common stock repurchases are discussed in more detail in Note 9 to our Financial Statements.

During the first quarter of 2023, we did not repurchase any of our common stock under our Stock Repurchase Program.

Outside of our Stock Repurchase Program, during the first quarter of 2023, we repurchased from our employees and then cancelled approximately 166,000 shares of our common stock for $9.3 million in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans.

•

Cash Dividends. During the first quarter of 2023, the Board declared dividends totaling $8.8 million. Going forward, we expect to pay cash dividends each year in March, June, September, and December, with the amount and timing subject to the Board’s approval.

•

Acquisitions. As a result of our acquisition activity, we have the following potential future obligations:

The 2021 Kitewheel, LLC purchase acquisition agreement includes deferred purchase price payments, with the remaining $4.0 million to be paid in equal annual amounts on July 1, 2023 and 2024.

The 2021 DGIT acquisition purchase price includes escrowed funds of approximately $2 million to be paid through the first quarter of 2025, subject to certain reductions, as applicable. In 2022 we made escrowed payments of $0.3 million.

Additionally, there are provisions for up to approximately $13 million of potential future earn-out payments through September 30, 2025. During the first quarter of 2023 we made an earn-out payment of $0.3 million.

As part of our growth strategy, we are continually evaluating potential business and/or asset acquisitions and investments in market share expansion with our existing and potential new customers and expansion into verticals outside the global communications market.

•

Capital Expenditures. During the first quarter of 2023, we spent $8.7 million on capital expenditures.

•

Stock Warrants. In 2014, we issued stock warrants with an exercise price of $26.68 per warrant to Comcast as an incentive for Comcast to convert new customer accounts onto our solutions. Once vested, Comcast may exercise the stock warrants and elect either physical delivery of common shares or net share settlement (cashless exercise). Alternatively, the exercise of the stock warrants may be settled with cash based solely on our approval, or if Comcast were to beneficially own or control in excess of 19.99% of the common stock or voting of the Company. As of March 31, 2023, 1.0 million stock warrants remain issued, none of which are vested.

The stock warrants are discussed in more detail in Note 9 to our Financial Statements.

•

Long-Term Debt. As of March 31, 2023, our long-term debt consisted of our 2021 Credit Agreement which includes: (i) outstanding 2021 Term Loan borrowings of $138.8 million; and (ii) outstanding 2021 Revolver borrowings of $305.0 million.

Our 2021 Credit Agreement mandatory repayments for the next twelve months are $7.5 million and the cash interest expense (based upon then-current interest rates) for the 2021 Term Loan and 2021 Revolver (assuming no further amounts are borrowed, and the amount is not voluntarily repaid) are $9.4 million and $21.0 million, respectively. We have the ability to make prepayments without penalties on our 2021 Credit Agreement.

Our long-term debt obligations are discussed in more detail in Note 4 to our Financial Statements.

In summary, we expect to continue to have material needs for capital resources going forward, as noted above. We believe that our current cash and cash equivalents balances and our 2021 Revolver, together with cash expected to be generated in the future from our current operating activities, will be sufficient to meet our anticipated capital resource requirements for at least the next twelve months. We also believe we could obtain additional capital through other debt sources which may be available to us if deemed appropriate.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the potential loss arising from adverse changes in market rates and prices. As of March 31, 2023, we are exposed to various market risks, including changes in interest rates, fluctuations and changes in the market value of our cash equivalents and short-term investments and settlement and merchant reserve assets, and changes in foreign currency exchange rates. We have not historically entered into derivatives or other financial instruments for trading or speculative purposes.

Interest Rate Risk

Long-Term Debt. The current interest rates on our 2021 Credit Agreement are based upon an adjusted LIBOR rate plus an applicable margin, or an ABR plus an applicable margin. In April 2023, we amended the 2021 Credit Agreement to replace the LIBOR rate with the SOFR rate for interest periods entered into after the effective date of amendment. See Note 4 to our Financial Statements for further details related to our long-term debt.

A hypothetical adverse change of 10% in the March 31, 2023 adjusted LIBOR rate would not have a material impact upon our results of operations.

Market Risk

Cash Equivalents and Short-Term Investments. Our cash and cash equivalents as of March 31, 2023 and December 31, 2022 were $167.7 million and $150.4 million, respectively. Certain of our cash balances are swept into overnight money market accounts on a daily basis, and at times, any excess funds are invested in low-risk, somewhat longer term, cash equivalent instruments and short-term investments. Our cash equivalents are invested primarily in institutional money market funds held at major banks. We have minimal market risk for our cash and cash equivalents due to the relatively short maturities of the instruments.

Our short-term investments as of March 31, 2023 and December 31, 2022 were zero and $0.1 million, respectively. Currently, we utilize short-term investments as a means to invest our excess cash only in the U.S. The day-to-day management of our short-term investments is performed by a large financial institution in the U.S., using strict and formal investment guidelines approved by our Board. Under these guidelines, short-term investments are limited to certain acceptable investments with: (i) a maximum maturity; (ii) a maximum concentration and diversification; and (iii) a minimum acceptable credit quality. At this time, we believe we have minimal liquidity risk associated with the short-term investments included in our portfolio.

Settlement and Merchant Reserve Assets. We are exposed to market risk associated with cash held on behalf of our merchants related to our payment processing services. As of March 31, 2023 and December 31, 2022, we had $177.3 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. These balances can significantly fluctuate between periods due to activity at the end of the period and the day in which the period ends.

Foreign Currency Exchange Rate Risk

Due to foreign operations around the world, our balance sheet and income statement are exposed to foreign currency exchange risk due to the fluctuations in the value of currencies in which we conduct business. While we attempt to maximize natural hedges by incurring expenses in the same currency in which we contract revenue, the related expenses for that revenue could be in one or more differing currencies than the revenue stream.

During the first quarter of 2023, we generated approximately 86% of our revenue in U.S. dollars. We expect that, in the foreseeable future, we will continue to generate a very large percentage of our revenue in U.S. dollars.

As of March 31, 2023 and December 31, 2022, the carrying amounts of our monetary assets and monetary liabilities on the books of our non-U.S. subsidiaries in currencies denominated in a currency other than the functional currency of those non-U.S. subsidiaries are as follows (in thousands, in U.S. dollar equivalents):


	March 31, 2023					December 31, 2022
	Monetary			Monetary		Monetary			Monetary
	Liabilities			Assets		Liabilities			Assets
Pounds sterling	$	(2	)	$	669	$	(119	)	$	601
Euro		(595	)		5,148		(425	)		1,992
U.S. Dollar		(1,312	)		33,312		(597	)		31,646
Other		(40	)		929		(72	)		503
Totals	$	(1,949	)	$	40,058	$	(1,213	)	$	34,742

A hypothetical adverse change of 10% in the March 31, 2023 exchange rates would not have had a material impact upon our results of operations.

Item 4. Controls and Procedures

(a) Disclosure Controls and Procedures

As required by Rule 13a-15(b), our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), conducted an evaluation as of the end of the period covered by this report of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e). Based on that evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

(b) Internal Control Over Financial Reporting

As required by Rule 13a-15(d), our management, including the CEO and CFO, also conducted an evaluation of our internal control over financial reporting, as defined by Rule 13a-15(f), to determine whether any changes occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, the CEO and CFO concluded that there has been no such change during the quarter covered by this report.

CSG SYSTEMS INTERNATIONAL, INC.

PART II. OTHER INFORMATION

Item 1. 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.

Item 1A. Risk Factors

A discussion of our risk factors can be found in Item 1A. Risk Factors in our 2022 Form 10-K. There were no material changes to the risk factors disclosed in our 2022 Form 10-K during the first quarter of 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table presents information with respect to purchases of our common stock made during the first 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.


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 Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan or Programs (2)
January 1 - January 31		10,821	$	58.15		-		2,107,047
February 1 - February 28		64,179		60.54		-		2,107,047
March 1 - March 31		91,266		52.75		-		2,107,047
Total		166,266	$	56.11		-

(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.

(2)

See Note 9 to our Financial Statements for additional information regarding our share repurchases.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

None

Item 5. Other Information

None

Item 6. Exhibits

The Exhibits filed or incorporated by reference herewith are as specified in the Exhibit Index.

CSG SYSTEMS INTERNATIONAL, INC.

INDEX TO EXHIBITS


Exhibit Number		Description

10.26BJ		Sixtieth Amendment to Consolidated CSG Master Subscriber Management System Agreement between CSG Systems, Inc. and Charter Communications Operating, LLC
10.60		CSG Systems International, Inc. Executive Severance Plan
10.61		CSG Systems International, Inc. Executive Severance Plan Participation Agreement with Brian A. Shepherd, dated March 28, 2023
10.62		CSG Systems International, Inc. Executive Severance Plan Participation Agreement with Kenneth M. Kennedy, dated March 28, 2023
10.63		CSG Systems International, Inc. Executive Severance Plan Participation Agreement with Elizabeth A. Bauer, dated March 28, 2023
31.01		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.02		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.01		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Portions of the exhibit have been omitted pursuant to SEC rules regarding confidential information.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: May 4, 2023

CSG SYSTEMS INTERNATIONAL, INC.

 
/s/ Brian A. Shepherd

Brian A. Shepherd

President and Chief Executive Officer 

(Principal Executive Officer)

 
/s/ Hai Tran

Hai Tran

Executive Vice President and Chief Financial Officer 

(Principal Financial Officer)

 
/s/ David N. Schaaf

David N. Schaaf

Chief Accounting Officer 

(Principal Accounting Officer)

Exhibit 10.60

CSG SYSTEMS INTERNATIONAL, INC.

EXECUTIVE SEVERANCE PLAN

INTRODUCTION

1.1

Effective Date. This CSG Systems International, Inc. Executive Severance Plan (this “Plan”), is effective as of March 28, 2023.

1.2

Participating Companies. This Plan provides severance benefits for the Eligible Employees of CSG Systems International, Inc. (“CSGS”) and its subsidiaries who execute a Participation Agreement (each, a “Participant”). For purposes of this Plan, CSGS and its subsidiaries are referred to as the “Company.”

1.3

Purpose; Controlling Document. This document serves as the plan document. With respect to the Participants, this Plan replaces and supersedes any other severance policy or plan in which a Participant might otherwise be entitled to participate. All such other severance policies and/or plans are hereby terminated with respect to the Participants.

1.4

Definitions. Any term used with an initial capital letter is defined in Appendix A to this Plan.

ELIGIBILITY

2.1

General Requirements. An “Eligible Employee” is any employee who is an active, full-time employee of the Company, who has the title of Chief Executive Officer or Executive Vice President; and does not fall within one of the following categories:

(i)

Employees With Written Employment or Severance Agreements – individuals who have written, individual employment or severance agreements with the Company that provide for severance pay and/or benefits (other than by reference to this Plan in a Participation Agreement).

(ii)

Non-Employee Service Providers – individuals who provide services to the Company and who the Company does not classify as employees (such as independent contractors, employees of contractors, and leased employees).

(iii)

Individuals on Indefinite Unpaid Leaves of Absence – individuals who are absent from work on indefinite unpaid leaves of absence, except to the extent eligibility is required by applicable law.

2.2

Participation and Participation Agreement. In order to participate in the Plan, each Eligible Employee must execute a participation agreement in a form required by the Plan Administrator in its sole discretion (“Participation Agreement”). Each Eligible Employee’s Participation Agreement will (i) acknowledge his or her understanding of the Plan provisions, (ii) where applicable, terminate or amend any employment agreement then in effect between the Participant and the Company, (iii) for an Eligible Employee of a non-U.S. subsidiary of CSGS, provide any provisions necessary to address any differences in his or her pay or benefit structures

from those of U.S. Eligible Employees, and (iv) include any other provisions determined by the Plan Administrator in its sole discretion.

2.3

Duration of Participation. Once an individual becomes a Participant in the Plan, he or she shall continue to be a Participant in the Plan until the soonest of (i) the date the Participant no longer satisfies the criteria for an Eligible Employee, (ii) the date the Participant terminates employment in a manner not entitling such Participant to payments or other benefits under the Plan, (iii) the date on which the Participant and the Company agree in writing that the individual shall no longer be a Participant in the Plan, or (iv) at any time after the 24-month anniversary of a Change in Control upon the earlier of (x) the termination of this Plan or (y) the amendment of this Plan such that Participant is no longer an Eligible Employee. For purposes of clarity, once a Participant incurs an Eligible Termination entitling the Participant to benefits under Section 4 or 5 below, such Participant shall remain entitled to such payments or benefits until they have been paid to the Participant in full.

ENTITLEMENT TO SEVERANCE PAY AND BENEFITS

A Participant shall be entitled to severance pay and benefits as set forth in Section 4 or 5 below (whichever is applicable) if the Participant incurs a termination of employment from the Company that constitutes a Separation from Service and that is (i) initiated by the Company for any reason other than Cause, death, or Disability, or (ii) initiated by the Participant for Good Reason (collectively, an “Eligible Termination”). In the event that the Separation from Service is initiated by the Participant for Good Reason following a Change in Control, the defined term “Good Reason” shall include the assignment to the Participant of duties significantly inconsistent with, or different from, the Participant’s duties and responsibilities existing at the time of the Change in Control. If the Participant incurs a Separation from Service for any other reason or dies while employed, the Participant shall not be entitled to any payments or benefits hereunder. An Eligible Employee who is not a Participant on his or her Termination Date shall not be entitled to any payments or benefits hereunder.

4. SEVERANCE PAY AND BENEFITS – UNRELATED TO CHANGE IN CONTROL

In the event the Participant’s Termination Date occurs prior to, or more than 18 months after, a Change in Control, and contingent upon the Participant timely executing, not revoking and complying with the terms of the Release and taking such other actions, as required by Section 6 below, the Company shall pay or provide to the Participant the following pay and other benefits:

4.1 Cash Severance Pay. A cash payment equal to the sum of (i) 100% of the Participant’s Base Salary as of the Participant’s Termination Date, plus (ii) 100% of the dollar amount of the Participant’s annual performance bonus for the year in which the Participant’s Termination Date occurs (with performance deemed to be at target). Such total amount will be payable in substantially equal installments (in accordance with his or her employer’s normal payroll practices) during the 12-month period immediately following the Participant’s Termination Date; provided, that (x) such payments will commence on the first regularly scheduled payroll date that is at least 60 days following the Participant’s Termination Date, and (y) the first such payment shall include all payments that otherwise would have been paid to the Participant pursuant to this subsection between his or her Termination Date and the date payments commence.

4.2 Prorated Annual Performance Bonus. A cash payment equal to the product of (i) the dollar amount of the Participant’s annual performance bonus for the year in which the Participant’s Termination Date occurs based on the actual performance of the Company for the year in which the Participant’s Termination Date occurs, and (ii) a fraction, the numerator of which is the number of days during the annual performance period for such bonus through and including the Participant’s Termination Date, and the denominator of which is 365. Any amount payable under this section will be paid in a lump sum to the Participant at the same time the annual bonus is paid to the Company’s employees who remained actively employed for the full year in which the Participant’s Termination Date occurs. Notwithstanding the foregoing, the Participant will not be eligible for any payment under this section unless the Participant’s Termination Date is on or after June 1 of the calendar year in which his or her Termination Date occurs.

4.3 Vesting of Time-Based Restricted Stock Awards. A number of shares of the Participant’s unvested time-based, restricted stock awards will vest on the Participant’s Termination Date. This number is determined separately for each outstanding, unvested award of time-based restricted stock as the product of (i) the total number of the shares of time-based restricted stock granted on the applicable grant date, and (ii) a fraction, the numerator of which is the number of full completed months as of the Participant’s Termination Date, which have elapsed since the grant date, and the denominator of which is the total number of months during the vesting period.

4.4 Vesting of Performance-Based Restricted Stock Awards. A number of shares of unvested performance-based, restricted stock awards (collectively, “PSAs”) will remain eligible to vest after the Participant’s Termination Date. The number of PSAs eligible to vest is determined separately for each outstanding, unvested award of PSAs as the product of (i) the total number of shares of PSAs granted on the applicable grant date, and (ii) a fraction, the numerator of which is the number of full completed months as of the Participant’s Termination Date which have elapsed since such grant date, and the denominator of which is the total number of months during the vesting period. Any PSAs that remain eligible to vest as determined in the immediately preceding sentence will remain subject to the applicable performance criteria.

4.5 COBRA Continuation Coverage Payment. A cash amount equal to the COBRA continuation coverage premiums that would be payable by the Participant for the first 18 months of the COBRA continuation period, determined as if (i) the Participant elected COBRA continuation coverage for the Participant and the Participant’s spouse and dependents, to the extent such individuals were covered under CSGS’s group medical, dental and/or vision coverage as of the Participant’s Termination Date, and (ii) the cost of such COBRA coverage is measured as of the Participant’s Termination Date assuming such cost remains constant during such 18-month period. The cash amount will be payable to the Participant in a single lump sum on the first regularly scheduled payroll date that is at least 60 days following the Participant’s Termination Date.

5. SEVERANCE PAY AND BENEFITS – IN CONNECTION WITH CHANGE IN CONTROL

In the event the Participant’s Termination Date occurs within 18 months after a Change in Control, and contingent upon the Participant timely executing, not revoking and complying with the terms of the Release and taking such other actions, as required by Section 6 below, the Company shall pay or provide to the Participant the following pay and other benefits:

5.1 Cash Severance Pay. A cash payment equal to the sum of (i) 200% of the Participant’s Base Salary as of the Participant’s Termination Date, and (ii) 200% of the dollar amount of the Participant’s annual performance bonus for the year in which the Participant’s Termination Date occurs (with performance deemed to be at target). Such total amount will be paid to the Participant on the first regularly scheduled payroll date that is at least 60 days following the Participant’s Termination Date.

5.2 Prorated Annual Performance Bonus. An amount equal to the product of (i) the dollar amount of the Participant’s annual performance bonus for the year in which the Participant’s Termination Date occurs with performance deemed to be at target, and (ii) a fraction, the numerator of which is the number of days during the annual performance period for the bonus through and including the Participant’s Termination Date, and the denominator of which is 365. Any amount payable under this section will be paid in a lump sum to the Participant on the first regularly scheduled payroll date that is at least 60 days following the Participant’s Termination Date.

5.3 Vesting of Time-Based Restricted Stock Awards. All of the Participant’s unvested time-based, restricted stock awards will vest on the Participant’s Termination Date.

5.4 Vesting of Performance-Based Restricted Stock Awards. All of the Participant’s unvested PSAs will vest on the Participant’s Termination Date, with the actual number of PSAs vesting determined based on the assumptions that the Company’s (and the Participant’s, if applicable) performance under such awards is achieved at target; provided, however, that in the event a PSA includes a stock price performance metric, the measurement period for such stock price performance metric will be deemed to have ended on the date of the Change in Control, and that metric will be measured on that date.

5.5 COBRA Continuation Coverage Payment. A cash amount equal to the COBRA continuation coverage premiums that would be payable by the Participant for the first 18 months of the COBRA continuation period, determined as if (i) the Participant were to elect COBRA continuation coverage for the Participant and the Participant’s spouse and dependents, to the extent such individuals were covered under CSGS’s group medical, dental and/or vision coverage as of the Participant’s Termination Date, and (ii) the cost of such COBRA coverage is measured as of the Participant’s Termination Date assuming such cost remains constant during such 18-month period. The cash amount will be payable to the Participant in a single lump sum on the first regularly scheduled payroll date that is at least 60 days following the Participant’s Termination Date.

5.6 Excess Parachute Payments.

(i)

If any payment or benefit the Participant will or may receive from the Company or otherwise, which is received or to be received by the Participant in connection with a Change in Control or the termination of the Participant’s employment (whether pursuant to the terms of this Plan or any other plan, arrangement or agreement with the Company, any person whose actions result in a Change in Control, or any person affiliated with the Company or such person) (“280G Payments”) would (i) constitute a “parachute payment” within the meaning of Code Section 280G, and (ii) but for this sentence, be subject to the excise tax imposed by Code Section 4999 (the “Excise Tax”), then any such 280G Payments (a “CiC Payment”) shall be equal to the Reduced Amount (as defined below).

(ii)

The “Reduced Amount” shall be either (x) the largest portion of the CiC Payment that would result in no portion of the CiC Payment (after reduction) being subject to the Excise Tax, or (y) the total of the CiC Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Participant’s receipt, on an after-tax basis, of the greater economic benefit. If a reduction in CiC Payment is required pursuant to the clause (x) of the preceding sentence the reduction shall be made (i) first by reducing the cash payments provided pursuant to Section 5 that are exempt from Section 409A (if necessary, to zero); (ii) then, if further reductions are necessary, benefits provided under Section 5.5, then Section 5.4, then Section 5.3, which are exempt from Section 409A, shall be reduced (if necessary, to zero); (iii) then, if still further reductions are necessary, the cash payments provided pursuant to Section 5 that are not exempt from Section 409A shall be reduced (if necessary, to zero); and (iv) finally, if still further reductions are necessary, the benefits provided under Section 5.5, then Section 5.4, then Section 5.3, which are not exempt from Section 409A shall be forfeited.

(iii)

For purposes of this limitation (w) no portion of the 280G Payments, the receipt or enjoyment of which the Participant will have effectively waived in writing prior to the Participant’s Termination Date, will be taken into account (provided that, in no event will any such waiver impermissibly affect any portion of the 280G Payments that is subject to Section 409A); (x) no portion of the 280G Payments will be taken into account, which in the opinion of the tax counsel selected by CSGS does not constitute a “parachute payment” within the meaning of Code Section 280G(b)(2), including by reason of Code Section 280G(b)(4)(A); (y) except as provided in clause (iv) above, the payments and benefits will be reduced only to the extent necessary so that the 280G Payments (other than those referred to in clauses (w) or (x)) in their entirety constitute reasonable compensation for services actually rendered within the meaning of Code Section 280G(b)(4)(B) or are otherwise not subject to disallowance as deductions, in the opinion of the tax counsel referred to in clause (x); and (z) the value of any non-cash benefit or any deferred payment or benefit included in the 280G Payments shall be determined by CSGS’s independent auditors in accordance with the principles of Code Sections 280G(d)(3) and (4).

CONDITIONS FOR SEVERANCE PAY AND BENEFITS.

The Participant will be eligible for severance pay and benefits under Section 4 or 5, as applicable, only if the Participant meets the conditions set forth in this Section, which shall serve, at least in part, as consideration for such severance pay and benefits.

6.1 Release. The Participant must sign and not revoke a written Release containing any terms specified by the Company in its sole discretion for (i) the Participant’s release of the Company, its affiliates and related persons from all claims arising from the Participant’s employment or termination; and (ii) to the extent required by the Company in its sole discretion, the Participant’s promise to comply with specified confidentiality, noncompetition, nonsolicitation and/or other restrictive covenants. The Company may terminate the Participant’s eligibility for severance pay and benefits if he or she fails to sign or comply with the terms of the Participant’s Release or if the Participant revokes his or her Release. In order to be eligible for any pay or benefits under this Plan, the Participant must sign the Release after his or her Termination Date (or execute a “bring-down” release after his or her Termination Date, if signed earlier) and within 45 days (or such longer or shorter period specified by the Plan Administrator) following the date the Company provides the Participant with a copy of the Release. No severance payments or benefits under this Plan shall be paid or provided unless and until the Release becomes effective following the revocation period. If the Participant has not executed the Release and/or the revocation period has not expired by the time any payment or benefit under this Plan is due, such payment will be forfeited and no longer due or payable.

6.2 Board Resignation. As a condition precedent to the payment or provision by the Company of the amounts or benefits due under Sections 4 and 5, as applicable, the Participant must tender his or her resignation from the Board, the board of directors of any of the Company’s affiliates, and any committees of the Board or such other boards of the Company, upon termination of the Participant’s employment with the Company.

7. SPECIAL RULES APPLICABLE TO SEVERANCE PAY AND BENEFITS

7.1 Coordination of Severance Pay with Various Benefits. The amount of any severance pay or benefits payable under Sections 4 or 5, as applicable, will be reduced on a dollar-for-dollar basis by any severance, separation or termination pay or benefits that the Company pays or is required to pay to the Participant through insurance or otherwise under any plan or contract of the Company or under any federal or state law, including the following:

(i)

Withholding. The Company will withhold from severance pay any amounts required to be withheld pursuant to applicable federal, state or local law; any applicable insurance premiums; and any other amounts authorized or required by Company policy including, but not limited to, withholding for garnishments, judgments or other court orders.

(ii)

WARN Benefits. The Worker Adjustment and Retraining Notification Act and similar state laws (collectively, “WARN”) generally require employers to provide certain pay and benefits to employees in the event that required notification procedures are not followed in advance of a plant closing or mass layoff. If the Company incurs any such

liability under WARN with respect to the Participant’s termination, the amount of severance pay otherwise payable to the Participant under this Plan will be reduced by the Company’s legally-required payments and benefits provided to the Participant.

7.2 Clawback Rights. The Participant understands that the Company has adopted a “clawback” policy (subject to amendment by the Company) pursuant to which the Company, in certain cases, may reduce or cancel, or require the recovery of, an executive officer’s annual bonus or long-term incentive compensation award, or portions thereof.

7.3 Death During Severance Payment Period. If the Participant dies after the Participant’s Termination Date and before all of the severance pay and benefits due to the Participant are paid, all such unpaid amounts will be paid to the Participant’s designated beneficiary(ies), if any. If the Participant has not designated a beneficiary, such amounts will be paid to the Participant’s estate.

8. ADMINISTRATION AND GENERAL TERMS

8.1 Type of Plan. This Plan is intended to be a welfare plan under Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), covering a select group of key management or highly compensated employees (which includes all of the executive officers covered by this Plan). As such, this Plan is exempt from most of the ERISA requirements that apply to ERISA employee benefit plans.

8.2 Plan Administrator. The Compensation Committee of the Board or its designee will serve as the “Plan Administrator” and will be responsible for and will control and manage the operation of the Plan. Upon a Change in Control (and thereafter to the extent the issue in question relates to a termination of employment, which occurs on or within 18 months following the Change in Control, of the Participants immediately prior to the Change in Control), the Compensation Committee of the Board of Directors of CSGS, as constituted immediately before the Change in Control, with such changes in the membership thereof as may be approved from time to time following the Change in Control by a majority of such Compensation Committee as constituted immediately before the Change in Control, will be the Plan Administrator. No party will have the right to appoint members to, or to remove members from, such Compensation Committee following, or otherwise in connection with, the Change in Control. All reasonable expenses of such Compensation Committee will be paid or reimbursed by CSGS. CSGS hereby agrees to indemnify members of such Compensation Committee against personal liability for actions taken in good faith in the discharge of their duties as a member of such Compensation Committee and will provide coverage to them under CSCG’s liability insurance programs for directors and officers. Following the Change in Control, the members of such Compensation Committee will be entitled to compensation in respect of their service on such committee at the rate determined by the Board prior to the Change in Control; provided, if the Board does not set any such compensation, the Compensation Committee members’ compensation will be equal to the amount they received as Board members immediately before the Change in Control.

8.3 Plan Interpretation. The Plan Administrator has the exclusive authority and sole discretion to interpret this Plan with respect to any question arising under this Plan, including eligibility for benefits and the amount, term and duration of benefits. The interpretations, decisions

and determinations of the Plan Administrator are conclusive and binding on the Company and all of its employees, including the applicable Eligible Employees.

8.4 Rights. This Plan does not create any vested rights in any individual. In addition, this Plan does not affect the right of the Company to conduct its business affairs, including laying off or terminating the employment of any employee.

8.5

Code Section 409A.

(i)

General. The Company intends that some or all of the severance pay and pay described above will be exempt from Code Section 409A under the short-term deferral exemption and/or the separation pay exemption to the full extent available under Code Section 409A, and such provisions will be interpreted accordingly. In no event will payment of any amount of severance pay that is exempt under the separation pay exemption be made after the last day of the second calendar year beginning after the date of the Participant’s Separation from Service. Notwithstanding the foregoing, to the extent that such exemptions do not apply to some or all severance pay, the Plan is intended to satisfy the requirements of Code Section 409A and will be interpreted accordingly. Each payment hereunder will be considered a separate payment for purposes of Code Section 409A. Notwithstanding the foregoing, neither CSGS nor any of its affiliates will be liable to the Participant or any other person if the Internal Revenue Service or any court determines for any reason that any payments under the Plan are subject to taxes or penalties under Code Section 409A.

(ii) 6-Month Delay in Certain Cases. Notwithstanding anything in Section 4 or 5 to the contrary, to the extent (i) any payments made under the Plan, which are payable within the first 6 months following the Participant’s date of Separation from Service, are not exempt from Code Section 409A, and (ii) the Participant is a specified employee (within the meaning of Code Section 409A) on the date of the Participant’s Separation from Service, then the non-exempt payments that would have been paid within such 6-month period will be delayed, accumulated without interest, and paid in a lump sum on the applicable pay date that coincides with or immediately follows the 6-month anniversary of the date of the Participant’s Separation from Service.

8.5 Amendment or Termination. The Board may amend or terminate this Plan for any reason prior to a Change in Control; provided, however, that no such amendment or termination may adversely affect the rights of any Participant in the Plan in any material way unless the Plan Administrator secures such Participant’s written consent. Notwithstanding the foregoing, the Board may amend or terminate this Plan in any way without securing Participant consent after the end of the 24-month period commencing on the date of a Change in Control.

9. SUPPLEMENTAL INFORMATION

9.1 Claims Procedures.

(i)

Claims. If the Participant does not receive severance pay or if the Participant disagrees with the amount or length of payments, the Participant may file a

claim in writing with the Plan Administrator. A response to the Participant’s claim will be provided to the Participant within 90 days (180 days if the Participant is notified of an extension). If the Participant’s claim is denied, the Plan Administrator will provide written notice to the Participant setting forth the specific reasons for denial and the provisions in this Plan or other documents used to arrive at the decision.

(ii)

Appeals. The Participant may appeal any denial of benefits, and the Participant may review pertinent Plan documents to help the Participant prepare for the appeal. The Participant’s appeal must be filed with the Plan Administrator in writing within 60 days after the Participant receives written notice of denial of the Participant’s claim. The Plan Administrator then will consider the Participant’s appeal and will notify the Participant of its decision within 60 days (120 days if the Participant is notified of an extension) after the filing of the Participant’s appeal for review. If the Plan Administrator’s decision is unfavorable, the notification the Participant receives will explain the reasons for the denial and the provisions in this Plan or other documents used to arrive at the decision. Only after exhausting the claims and appeals processes may the Participant file suit in federal court.

9.2 Governing Law. This Agreement shall be interpreted, construed and governed according to the laws of the State of Colorado to the extent not preempted by ERISA or other federal law. Any legal action brought in regard to this Plan shall be brought in the United States District Court of Colorado, and the Company and the Participant waive jurisdiction and venue in any other court.

9.3 Headings. Headings contained in this Plan are for convenience only and shall in no manner be construed as part of this Plan.

[SIGNATURE ON NEXT PAGE]

[SIGNATURE PAGE TO

CSG SYSTEMS INTERNATIONAL, INC.

EXECUTIVE SEVERANCE PLAN]

March 28, 2023
Date
 

CSG SYSTEMS INTERNATIONAL, INC.
 
 
By:/s/ Elizabeth Bauer
Title: Chief Experience Officer

APPENDIX A

DEFINITIONS

When capitalized in the Plan, the following words will have the meanings set forth below. All section references below refer to sections of the Plan document (and not this Appendix A).

“Base Salary” means the Participant’s annual base salary at the rate in effect on the Participant’s Termination Date; provided, if the Participant’s employment terminates due to Good Reason based on a reduction in the Participant’s base pay, the Participant’s annual base salary will be determined as the rate in effect immediately before such reduction.

“Board” means the Board of Directors of CSGS.

“Cause” means that one or more the following have occurred: (i) the Participant’s willful and deliberate failure to substantially perform his or her executive and management duties hereunder to the detriment of the Company for reasons other than his or her sickness, injury or disability; (ii) the Participant’s willful and deliberate misconduct, which is a material violation of the Company’s written policies and/or results in substantial injury or damage (whether reputational, financial or otherwise) to the Company; (iii) the Participant’s conviction of, or plea of guilty or nolo contendere to, a felony; (iv) the Participant’s breach of any restrictive covenant agreement with the Company, including but not limited to, confidentiality noncompete, nonsolicitation and/or nondisclosure covenants; and (v) the Participant’s certification of materially inaccurate financial or other information pertaining to the Company with actual knowledge of such inaccuracies on the Participant’s part. In no event will the results of operations of the Company or exercise of the Participant’s business judgment made in good faith constitute an independent basis for terminating the Participant’s employment for Cause.

“Change in Control” means a change in ownership or effective control of CSGS or a change in the ownership of a substantial portion of the assets of CSGS, all within the meaning of Code Section 409A. As a general overview, Code Section 409A’s definition of these terms, and the dates as of which they occur, are as follows:

The date any one person, or more than one person acting as a group, acquires ownership of stock of CSGS that, together with stock held by such person or group constitutes more than 50% of the total voting power of the stock of CSGS. However, if any one person, or more than one person acting as a group, is considered to own more than 50% of the total fair market value or total voting power of the stock of CSGS, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of CSGS or to cause a change in the effective control of CSGS.

The date any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of CSGS possessing 50% or more of the total voting power of the stock of CSGS.

The date that any one person, or more than one person acting as a group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from CSGS that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of CSGS immediately before such acquisition or acquisitions.

The date a majority of the members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election.

“Chief Executive Officer” means the Chief Executive Officer of CSGS.

“CiC Payment” has the meaning given to such term in Section 5.6.

“COBRA” means group medical, dental and vision continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” is defined in Section 1.2.

10.

“CSGS” means CSG Systems International, Inc., the sponsor of this Plan.

11.

“Eligible Employee” is defined in Section 2.1.

12.

“Eligible Termination” is defined in Section 3.

13.

“ERISA” is defined in Section 8.1.

14.

“Excise Tax” is defined in Section 5.6.

15.

“Good Reason” shall be deemed to exist if, without Participant’s consent, any of the following applies:

a material diminution in Participant's duties, responsibilities, or authority; or

a material reduction in Base Salary (other than a reduction effected on behalf of the Company as part of a general cost-saving strategy that affects similarly situated employees of the Company); or

following a Change in Control, as set forth in Section 3.

Participant may terminate his or her employment for Good Reason at any time after providing the Company thirty (30) days prior written notice setting forth in reasonable specificity the event(s) that constitute(s) Good Reason within 90 days of the condition first arising. During such 30-day notice period, the Company shall have a cure right, and if not cured within such period, Participant's termination will be effective upon the expiration of such cure period.

16.

“Participant” is defined in Section 1.2.

17.

“Participation Agreement” is defined in Section 2.2.

18.

“Plan” means this CSG Systems International, Inc. Executive Severance Plan.

19.

“Plan Administrator” means the person specified in Section 8.2.

20.

“PSAs” is defined in Section 4.4.

21.

“Release is defined in Section 6.1.

22.

“Separation from Service” means that a Participant separates from service with an entity that is part of the Company and all of the entity’s affiliates that are related by 50% or more ownership, as defined in Code Section 409A. As a general overview of Code Section 409A’s definition of “separation from service,” an employee separates from service if the employee has a termination of employment (other than due to death) with all affiliates, determined in accordance with the following:

Leaves of Absence. The employment relationship is treated as continuing intact while the Participant is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed 6 months, or, if longer, so long as the Participant retains a right to reemployment with an affiliate under an applicable statute or by contract. A leave of absence constitutes a bona fide leave of absence only while there is a reasonable expectation that the Participant will return to perform services for an affiliate. If the period of leave exceeds 6 months and the Participant does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such 6-month period. Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 6 months, where such impairment causes the Participant to be unable to perform the duties of his or his position of employment or any substantially similar position of employment, a 29-month period of absence shall be substituted for such 6-month period.

Status Change. Generally, if a Participant performs services both as an employee and an independent contractor, the Participant must separate from service both as an employee and as an independent contractor pursuant to standards set forth in Treasury Regulations to be treated as having a separation from service. However, if Participant provides services to affiliates as an employee and as a member of the Board, the services provided as a director are not taken into account in determining whether the Participant has a separation from service as an employee for purposes of this Agreement.

Termination of Employment. Whether a termination of employment has occurred is determined based on whether the facts and circumstances indicate that the

employer and the Participant reasonably anticipate that (A) no further services will be performed after a certain date, or (B) the level of bona fide services the Participant will perform after such date (whether as an employee or as an independent contractor) will permanently decrease to 20% or less of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period. Facts and circumstances to be considered in making this determination include, but are not limited to, whether the Participant continues to be treated as an employee for other purposes (such as continuation of salary and participation in employee benefit programs), whether similarly-situated service providers have been treated consistently, and whether the Participant is permitted, and realistically available, to perform services for other service recipients in the same line of business. For periods during which a Participant is on a paid bona fide leave of absence and has not otherwise terminated employment as described in subsection (i) above, for purposes of this subsection, the Participant is treated as providing bona fide services at a level equal to the level of services that the Participant would have been required to perform to receive the compensation paid with respect to such leave of absence. Periods during which a Participant is on an unpaid bona fide leave of absence and has not otherwise terminated employment are disregarded for purposes of this subsection (including for purposes of determining the applicable 36-month period).

23.

“Termination Date” means the date of a Participant’s Eligible Termination.

24.

“280G Payments” is defined in Section 5.6.

25.

“WARN” is defined in Section 7.1(ii).

Exhibit 10.61

CSG SYSTEMS INTERNATIONAL, INC. EXECUTIVE SEVERANCE PLAN

Participation Agreement

This Participation Agreement (this “Agreement”) is made and entered on the 28th day of March, 2023 (the “Effective Date”), by and between CSG Systems International, Inc. (“CSGS”) and Brian A. Shepherd, President and Chief Executive Officer of CSGS (“Executive”).

Background

CSGS and Executive entered into an employment agreement, dated August 26, 2020, (the “Employment Agreement”).

The Employment Agreement provided the terms of Executive’s employment with CSGS, including the severance pay and benefits to be provided upon Executive’s termination of employment under specified circumstances.

Effective April 1, 2022, CSGS adopted the CSG Systems International, Inc. Executive Severance Plan (the “2022 Plan”) and in connection therewith Executive entered into an Executive Severance Plan Participation Agreement (the “2022 Participation Agreement”) which (i) terminated the Employment Agreement; (ii) provided the terms pursuant to which Executive would participate in the 2022 Plan, and (iii) provided benefits that would have been available to Executive if the Employment Agreement had not been terminated.

Effective March 28, 2023, CSGS adopted and now maintains the CSG Systems International, Inc. Executive Severance Plan, a copy of which is attached hereto as Exhibit A (the “2023 Plan”).

The parties are entering into this Agreement in connection with the adoption of the 2023 Plan.

Statement of Agreement

For and in consideration of the promises made in this Agreement and for other good and valuable consideration, the parties hereto agree as follows:

Definitions. Unless otherwise specified in this Agreement, any term used with an initial capital letter shall have the meaning given to such term in the 2023 Plan.

Employment-At-Will. Executive shall remain an employee-at-will of CSGS.

Participation in the 2023 Plan. Executive acknowledges the terms of the 2023 Plan, including (i) the severance pay and benefits provided thereunder, (ii) the conditions

upon which such severance pay and benefits will be paid and provided, (iii) the conditions that Executive must satisfy to receive severance pay and benefits thereunder, and (iv) that the 2023 Plan provides the sole source of pay and benefits in connection with an Eligible Termination.

Application of Terms of the 2023 Plan. Executive agrees that, by entering into this Agreement, Executive will become a Participant in the 2023 Plan eligible to receive severance pay and benefits on, and upon satisfaction of, the terms and conditions set forth in the 2023 Plan; provided, the terms set forth below shall apply to Executive notwithstanding, or in addition to, the terms of the 2023 Plan:

Amount of Cash Severance Pay. In lieu of 100% of base salary and 100% of annual performance bonus provided in Section 4.1 of the 2023 Plan for an Eligible Termination, an amount equal to 200% of base salary and 100% of annual performance bonus will be payable to Executive for an Eligible Termination.

Amount of Cash Severance Pay Following a Change in Control. In lieu of 200% of base salary and 200% of annual performance bonus provided in Section 5.1 of the 2023 Plan for an Eligible Termination occurring within 18 months after a Change in Control, to match the amount payable in this situation under the Employment Agreement, an amount equal to 300% of base salary and 300% of annual performance bonus will be payable to Executive for an Eligible Termination occurring within 18 months after a Change in Control.

Death Benefits. If Executive’s employment with the Company terminates due to his death, CSGS will provide to his beneficiary(ies) the following pay and benefits:

Unpaid Base Salary. The amount of base salary that, as of the date his employment terminates, was earned but unpaid (“Unpaid Base Salary”). CSGS will pay this amount within 14 days after the date of Executive’s death;

Prorated Annual Performance Bonus. A cash payment equal to the product of (i) the dollar amount of Executive’s annual performance bonus for the year in which Executive’s death occurs (with performance deemed at target), and (ii) a fraction, the numerator of which is the number of days during the annual performance period for such bonus through and including the date of Executive’s death, and the denominator of which is 365 (“Prorated Bonus”). This amount will be paid in a lump sum no later than the end of the calendar year following the calendar year in which Executive dies; and

Other Earned but Unpaid Amounts. Any other amounts earned, accrued or owed to Executive by CSGS or under any employee benefit plan of the Company, to the extent not paid as of the date Executive dies (“Other Benefits”). Each of such amounts will be paid at the same time it is due under the program creating it.

Disability Benefits. If CSGS terminates Executive’s employment with the Company on account of his disability (as defined below) such that he has a Separation from Service, CSGS will provide to him the following pay and benefits:

Unpaid Base Salary. His Unpaid Base Salary within 14 days after the date the Company terminates Executive’s employment (“Disability Termination Date”);

Prorated Annual Performance Bonus. His Prorated Bonus on the first regularly scheduled payroll date that is at least 60 days following Executive’s Disability Termination Date;

Other Earned but Unpaid Amounts. Each of his Other Benefits at the same time it is due under the program creating it; and

COBRA Continuation Coverage Payment. A cash amount equal to the COBRA continuation coverage premiums that would be payable by Executive for the first 18 months of the COBRA continuation period, determined as if (i) Executive elected COBRA continuation coverage for Executive and Executive’s spouse and dependents, to the extent such individuals were covered under CSGS’s group medical, dental and/or vision coverage as of Executive’s Disability Termination Date, and (ii) the cost of such COBRA coverage is measured as of Executive’s Disability Termination Date assuming such cost remains constant during such 18-month period. The cash amount will be payable to Executive in a single lump sum on the first regularly scheduled payroll date that is at least 60 days following Executive’s Disability Termination Date.

For purposes hereof, “disability” means Executive becomes incapable by reason of physical injury, disease, or mental illness of substantially performing his duties and responsibilities for the Company, with or without a reasonable accommodation, for (i) a continuous period of 6 months or more, or (ii) 180 days in the aggregate (whether or not consecutive) during any 12-month period.

IN WITNESS WHEREOF, the CSGS has caused its duly authorized officer to execute this Agreement, and the Executive has executed this Agreement, on the dates set forth below.


EXECUTIVE	CSG SYSTEMS INTERNATIONAL, INC.

By: /s/ Brian A. Shepherd	By: /s/ Elizabeth A. Bauer
Name: Brian A. Shepherd	Name: Elizabeth A. Bauer
	Title: Chief Experience Officer

Exhibit A

Please see attached for the 2023 Executive Severance Plan *

* Note that the 2023 Executive Severance Plan is filed as Exhibit 10.60 to CSG’s Quarterly Report on Form 10-Q for the period ended March 31, 2023.

Exhibit 10.62

CSG SYSTEMS INTERNATIONAL, INC. EXECUTIVE SEVERANCE PLAN

Participation Agreement

This Participation Agreement (this “Agreement”) is made and entered on the 28th day of March, 2023 (the “Effective Date”), by and between CSG Systems International, Inc. (“CSGS”) and Kenneth Michael Kennedy, Chief Operating Officer and President – Revenue Management and Digital Monetization of CSGS (“Executive”).

Background

CSGS and Executive entered into an employment agreement, dated March 1, 2016, as amended (the “Employment Agreement”).

Effective April 1, 2022, CSGS adopted the CSG Systems International, Inc. Executive Severance Plan (the “2022 Plan”) and in connection therewith, the Executive entered into an Executive Severance Plan Participation Agreement which (i) terminated the Employment Agreement; (ii) provided the terms pursuant to which Executive would participate in the 2022 Plan, and (iii) provided benefits that would have been available to Executive if the Employment Agreement had not been terminated.

Effective March 28, 2023, CSGS adopted and now maintains the CSG Systems International, Inc. Executive Severance Plan, a copy of which is attached hereto as Exhibit A (the “2023 Plan”).

The parties are entering into this Agreement in connection with the adoption of the 2023 Plan.

Statement of Agreement

For and in consideration of the promises made in this Agreement and for other good and valuable consideration, the parties hereto agree as follows:

Definitions. Unless otherwise specified in this Agreement, any term used with an initial capital letter shall have the meaning given to such term in the 2023 Plan.

Employment-At-Will. Executive shall remain an employee-at-will of CSGS.

Participation in the 2023 Plan. Executive acknowledges the terms of the 2023 Plan, including (i) the severance pay and benefits provided thereunder, (ii) the conditions upon which such severance pay and benefits will be paid and provided, (iii) the conditions that

Executive must satisfy to receive severance pay and benefits thereunder, and (iv) that the 2023 Plan provides the sole source of pay and benefits in connection with an Eligible Termination.

Death Benefits. If Executive’s employment with the Company terminates due to his death, CSGS will provide to his beneficiary(ies) the following pay and benefits:

Unpaid Base Salary. His Unpaid Base Salary within 14 days after the date the Company terminates Executive’s employment (“Disability Termination Date”);

Prorated Annual Performance Bonus. His Prorated Bonus on the first regularly scheduled payroll date that is at least 60 days following Executive’s Disability Termination

Date;

Other Earned but Unpaid Amounts. Each of his Other Benefits at the same time it is due under the program creating it; and

IN WITNESS WHEREOF, the CSGS has caused its duly authorized officer to execute this Agreement, and the Executive has executed this Agreement, on the dates set forth below.


EXECUTIVE	CSG SYSTEMS INTERNATIONAL, INC.

By: /s/ Kenneth M. Kennedy	By:_/s/ Elizabeth A. Bauer
Name: Kenneth M. Kennedy	Name: Elizabeth A. Bauer
	Title: Chief Experience Officer

Exhibit A

Please see attached for the 2023 Executive Severance Plan *

* Note that the 2023 Executive Severance Plan is filed as Exhibit 10.60 to CSG’s Quarterly Report on Form 10-Q for the period ended March 31, 2023.

Exhibit 10.63

CSG SYSTEMS INTERNATIONAL, INC. EXECUTIVE SEVERANCE PLAN

Participation Agreement

This Participation Agreement (this “Agreement”) is made and entered on the 28th day of March, 2023 (the “Effective Date”), by and between CSG Systems International, Inc. (“CSGS”) and Elizabeth A. Bauer, Executive Vice President and Chief Experience Officer (“Executive”).

Background

CSGS and Executive entered into an employment agreement, dated May 20, 2021, as amended (the “Employment Agreement”).

Effective March 28, 2023, CSGS adopted and now maintains the CSG Systems International, Inc. Executive Severance Plan, a copy of which is attached hereto as Exhibit A (the “2023 Plan”).

The parties are entering into this Agreement in connection with the adoption of the 2023 Plan.

Statement of Agreement

For and in consideration of the promises made in this Agreement and for other good and valuable consideration, the parties hereto agree as follows:

Definitions. Unless otherwise specified in this Agreement, any term used with an initial capital letter shall have the meaning given to such term in the 2023 Plan.

Employment-At-Will. Executive shall remain an employee-at-will of CSGS.

2023 Plan provides the sole source of pay and benefits in connection with an Eligible Termination.

Death Benefits. If Executive’s employment with the Company terminates due to her death, CSGS will provide to her beneficiary(ies) the following pay and benefits:

Unpaid Base Salary. The amount of base salary that, as of the date her employment terminates, was earned but unpaid (“Unpaid Base Salary”). CSGS will pay this amount within 14 days after the date of Executive’s death;

Disability Benefits. If CSGS terminates Executive’s employment with the Company on account of his disability (as defined below) such that she has a Separation from Service, CSGS will provide to her the following pay and benefits:

Unpaid Base Salary. Her Unpaid Base Salary within 14 days after the date the Company terminates Executive’s employment (“Disability Termination Date”);

Prorated Annual Performance Bonus. Her Prorated Bonus on the first

regularly scheduled payroll date that is at least 60 days following Executive’s Disability Termination Date;

Other Earned but Unpaid Amounts. Each of her Other Benefits at the same time it is due under the program creating it; and

For purposes hereof, “disability” means Executive becomes incapable by reason of physical injury, disease, or mental illness of substantially performing her duties and responsibilities for the Company, with or without a reasonable accommodation, for (i) a continuous period of 6 months or more, or (ii) 180 days in the aggregate (whether or not consecutive) during any 12-month period.

IN WITNESS WHEREOF, the CSGS has caused its duly authorized officer to execute this Agreement, and the Executive has executed this Agreement, on the dates set forth below.


EXECUTIVE	CSG SYSTEMS INTERNATIONAL, INC.

By: /s/ Elizabeth A. Bauer	By: /s/ Brian A. Shepherd
Name: Elizabeth A. Bauer	Name: Brian A. Shepherd
	Title: CEO and President

Exhibit A

Please see attached for the 2023 Executive Severance Plan *

* Note that the 2023 Executive Severance Plan is filed as Exhibit 10.60 to CSG’s Quarterly Report on Form 10-Q for the period ended March 31, 2023.

EXHIBIT 10.26BJ

THIS DOCUMENT CONTAINS INFORMATION WHICH HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION IS IDENTIFIED BY BRACKETS AND MARKED WITH (***).

SIXTIETH AMENDMENT TO

CONSOLIDATED

CSG MASTER SUBSCRIBER MANAGEMENT SYSTEM AGREEMENT

BETWEEN CSG SYSTEMS, INC. AND

CHARTER COMMUNICATIONS OPERATING, LLC

SCHEDULE AMENDMENT

This Sixtieth Amendment (the “Amendment”) is made by and between CSG Systems, Inc., a Delaware corporation (“CSG”), and Charter Communications Operating, LLC, a Delaware limited liability company (“Customer”). CSG and Customer entered into that certain Consolidated CSG Master Subscriber Management System Agreement effective as of August 1, 2017 (CSG document no. 4114281), as amended (the “Agreement”), and now desire to further amend the Agreement in accordance with the terms and conditions set forth in this Amendment. If the terms and conditions set forth in this Amendment shall be in conflict with the Agreement, the terms and conditions of this Amendment shall control. Any terms in initial capital letters or all capital letters used as a defined term but not defined in this Amendment shall have the meaning set forth in the Agreement. Upon execution of this Amendment by the parties this Amendment shall be deemed effective on September 1, 2022, any subsequent reference to the Agreement between the parties shall mean the Agreement as amended by this Amendment. Except as amended by this Amendment, the terms and conditions set forth in the Agreement shall continue in full force and effect according to their terms.

WHEREAS, CSG provides and Customer consumes [*** ******* ************ ******* ************* *******]; and

WHEREAS, CSG provides and Customer consumes [*** ******* ************ ******** ***** *******]; and

WHEREAS, CSG and Customer executed a certain Statement of Work dated August 20, 2021 (CSG document no. 36036), to support a proof of concept (the “POC”) to allow Customer use of the [*** ********* ************ ***** ******/****** ****] (CSG document no. 36036) for the POC Period; and

WHEREAS, Customer desires to consume and CSG hereby agrees to provide [******* ************ ***** ******/****** **** as additional functionality of ******* ************ ******** ***** *******].

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, CSG and Customer agree to the following as of the Amendment Effective Date (defined below).

1. Customer desires to consume and CSG hereby agrees to provide [*** ******* ************ (“**”) ***** ******/****** ****]. Therefore, upon execution of this Amendment, the following change is hereby made to the Agreement:

a) Schedule [* of the Agreement, entitled “********* ********,” shall be amended to add the following under “********* ********] Description”:

“[*** ******* ************ (“**”) ***** ******/****** ****. The ** ***** ******/****** **** will (i) provide an end-to-end process for Customer to mass copy ***** configurations across multiple environments and (ii) minimize dual-entry of such ***** configurations across the multiple Customer environments. Requires *** ** ******** ***** ******* (“***”)].”

2. As a result, upon execution of this Amendment and pursuant to the terms and conditions of the Agreement, Schedule [*], “Fees, ” Section 1, "CSG Services," Section I, “Processing,” shall be amended to add a new subsection G, entitled [*** ******* ************ ***** ******/****** ****] as follows:

G. [***’* ******* ************ ***** ******/****** **** (Note *])


Description of Item/Unit of Measure	Frequency	Fee
1. [********* * ******* Fees (Note ) (Note ) (Note ) (Note )]	[*******]	[*********]

Note 1: [ ******* ************ (“**”) ******** ***** ******* (“***]”) is required.

Note 2: [*********** *** ******* Fees will be invoiced *******, commencing as of ********* *, ****, through ******** **, ****, as a **** (*) ***** event, by utilizing ****** (**) ***** per ***** of Customer’s **** ********* ******* ***** (“***”) referenced in Section ***, “********* ********,” of the Agreement, and will include up to ****** (**) ***** of support, *******, for the purposes of (i) answering ********** questions and resolving ******** ******** and (ii) ********** support regarding ********** issues. For the avoidance of doubt the *** ******* ****** (***) *** ***** from 2022 shall not be deemed to have expired on ******** **, ****, and shall apply to the first **** (*) ****** of this Amendment, despite its execution in 2023. Any ***** requested by Customer in excess of such ****** (**) ***** per ***** shall be billed to Customer on a **** *** ********* ***** at the then current ********* ******** ****] (or as otherwise mutually agreed by the parties) in a separate Statement of Work.

Note 3: Commencing as of [******* *, ****, *********** *** ******* Fees will be invoiced ******* at the rate prescribed in section ***, as specified in the fee table above and will include up to ****** (**) ***** of support, *******, for the purposes of (i) answering ********** questions and resolving ******** ******** and (ii) ********** support regarding ********** issues. Any ***** requested by Customer in excess of such ****** (**) ***** per ***** shall be billed to Customer on a **** *** ********* ***** at Customer’s then current ********* ******** ****] pursuant to a separate Statement of Work.

Note 4: Customer may discontinue [*********** *** ******* at any time; provided, however, Customer shall provide no less than ****** (**) days' written notice (email is sufficient) prior to discontinuing the *********** *** ******* services, effective as of the date on which the *********** *** ******* Fees are discontinued, Customer’s access to the ***** ******/****** **** will be terminated and will no longer be available in Customer’s environments for Customer’s use. The *********** *** ******* Fee for the final ***** of the *********** *** ******* services will be the date the notice of termination.

Note 5: For clarification purposes, the ******* *********** *** ******* Fees shall be subject to the ****** ********** ** ****, pursuant to Section ***] of the Agreement.

THIS AMENDMENT is executed on the days and year last signed below to be effective as of the date last signed below (the "Amendment Effective Date").


CHARTER COMMUNICATIONS OPERATING, LLC (“CUSTOMER”) By: Charter Communications, Inc., its Manager		CSG SYSTEMS, INC. (“CSG”)
By:	/s/ Julie Gorrell	By:	/s/ Rasmani Bhattacharya
Name:	Julie Gorrell	Name:	Rasmani Bhattacharya
Title:	Billing Configuration	Title:	EVP and General Counsel
Date:	Feb 14, 2023	Date:	Feb 13, 2023

EXHIBIT 31.01

CERTIFICATION PURSUANT TO

SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Brian A. Shepherd, certify that:

I have reviewed this report on Form 10-Q of CSG Systems International, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: May 4, 2023		/s/ Brian A. Shepherd
		Brian A. Shepherd
		President and Chief Executive Officer

EXHIBIT 31.02

CERTIFICATION PURSUANT TO

SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Hai Tran, certify that:

I have reviewed this report on Form 10-Q of CSG Systems International, Inc.;

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: May 4, 2023		/s/ Hai Tran
		Hai Tran
		Executive Vice President and Chief Financial Officer

EXHIBIT 32.01

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The certification set forth below is being submitted in connection with the Quarterly Report on Form 10-Q (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Brian A. Shepherd, the Chief Executive Officer and Hai Tran, the Chief Financial Officer of CSG Systems International Inc., each certifies that, to the best of his knowledge:

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of CSG Systems International, Inc.

May 4, 2023

/s/ Brian A. Shepherd

Brian A. Shepherd

President and Chief Executive Officer

May 4, 2023

/s/ Hai Tran

Hai Tran

Executive Vice President and Chief Financial Officer