CSG Systems International(CSGS) - 2022 Q4 - Annual Report

Revenue Performance - Revenue for 2022 was $1,089.8 million, a 4.1% increase from$ 1,046.5 million in 2021, primarily driven by organic growth in revenue management solutions [27]. - The company reported total revenue of $1,089,752,000 for the year ended December 31, 2022, representing a 4.6% increase from$ 1,046,487,000 in 2021 [87]. - Total revenue for 2022 was $1,089,752 thousand, an increase from$ 1,046,487 thousand in 2021, representing a growth of approximately 4.0% [128]. - Revenue from SaaS and related solutions was $956,995 thousand in 2022, up from$ 926,290 thousand in 2021, indicating a growth of about 3.3% [128]. - The company generated approximately 88% of its revenue in U.S. dollars during the year ended December 31, 2022 [96]. Expenses and Costs - Cost of revenue for 2022 increased 4.0% to $565.2 million, maintaining a cost of revenue as a percentage of revenue at 51.9% for both 2022 and 2021 [35]. - SG&A expense for 2022 rose 10.9% to$ 238.0 million, with SG&A as a percentage of total revenue increasing to 21.8% from 20.5% in 2021 [36]. - Total operating expenses increased by 9.6% to $1,011.0 million in 2022, up from$ 922.3 million in 2021, primarily due to restructuring costs and inflationary pressures [215]. - Research and development expenses for 2022 were $137,913,000, up from$ 134,691,000 in 2021, highlighting continued investment in innovation [87]. - The company incurred asset impairment costs of $31,761 in 2022, significantly higher than$ 1,270 in 2021 [142]. Profitability and Income - Diluted EPS for 2022 was $1.41, down from$ 2.26 in 2021, mainly due to increased restructuring and reorganization charges [49]. - Net income for 2022 was $44,060,000, a decrease of 39.2% compared to$ 72,331,000 in 2021 [88]. - Operating income decreased to $78,747,000 in 2022 from$ 124,186,000 in 2021, indicating challenges in maintaining profitability [87]. - The company reported total comprehensive income of $23,584,000 for 2022, down from$ 65,116,000 in 2021, reflecting adverse foreign currency translation adjustments [88]. - Cash flows from operating activities provided $63,597 in 2022, down from$ 140,223 in 2021, representing a decline of 54.7% [142]. Cash and Liquidity - Cash and liquidity as of December 31, 2022, amounted to $150.4 million, a decrease from$ 233.7 million in 2021 [59]. - Total cash, cash equivalents, and restricted cash at the end of 2022 was $389,018, slightly down from$ 391,902 at the end of 2021 [142]. - The company had $1.0 million in restricted cash as of December 31, 2022, down from$ 1.4 million in 2021, representing a decrease of 28.6% [132]. - Total current assets increased to $765,955,000 in 2022 from$ 748,199,000 in 2021, primarily driven by an increase in trade accounts receivable [86]. - Total liabilities rose to $993,304,000 in 2022, compared to$ 946,905,000 in 2021, reflecting an increase in both current and non-current liabilities [86]. Shareholder Returns and Stock Activity - The company expects to pay cash dividends totaling $33.7 million in 2022, with future dividends subject to Board approval [68]. - The company repurchased common stock totaling$ (96,604) thousand during the year ended December 31, 2022, compared to $(42,238) thousand in 2021, indicating an increase in repurchase activity [140]. - Stock-based compensation expense for the year ended December 31, 2022, was$ 27,243 thousand, an increase from $25,237 thousand in 2021, representing an increase of approximately 7.9% [140]. - The company’s stock-based compensation expense was$ 27,243 in 2022, an increase from $21,400 in 2021, reflecting a 27.3% rise [142]. Business Operations and Strategy - The company dissolved the MobileCard business in June 2022 due to unmet projected targets, impacting overall operating results [26]. - The company migrated approximately nine million customer accounts from a competitor's product onto its platforms in 2022, completing the consolidation of Charter's customer accounts [50]. - The company is continually evaluating potential business acquisitions and market share expansion strategies beyond the global communications market [69]. - The company generated 20% of its net billed accounts receivable from Charter and Comcast in both 2022 and 2021, indicating stable customer concentration [176]. - Revenue from Charter and Comcast represented 22% and 17% of total revenue, respectively, for 2022, down from 23% and 20% in 2021 [197]. Financial Reporting and Controls - The independent auditor, KPMG LLP, expressed an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2022 [106]. - The company assessed the effectiveness of its internal control over financial reporting as of December 31, 2022, using COSO criteria [102]. - The company adopted ASU No. 2020-06, resulting in a$ 9.8 million cumulative-effect adjustment to accumulated earnings as of January 1, 2022 [194]. Future Outlook - The company expects to continue generating a large percentage of its revenue in U.S. dollars in the foreseeable future [96]. - The company expects to continue generating a significant percentage of future revenue from major customers, highlighting the risks associated with customer concentration [196].