{"url_path":"/sec/csgs/10-k/2026/item-7a","section_key":"item-7a","section_title":"Item 7A Quantitative and Qualitative Disclosures About Market Risk","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-02-19","source_url":"https://www.sec.gov/Archives/edgar/data/1005757/0001193125-26-059632-index.html","accession_number":"0001193125-26-059632","cik":"0001005757","ticker":"CSGS","issuer_name":"CSG SYSTEMS INTERNATIONAL INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/1005757/0001193125-26-059632-index.html","primary_entity_key":"0001005757","primary_entity_name":"CSG SYSTEMS INTERNATIONAL INC"},"word_count":724,"has_tables":true,"body_markdown":"Item 7A. Quantitative and Qualitative Disclosures About Market Risk\n\nMarket risk is the potential loss arising from adverse changes in market rates and prices. As of December 31, 2025, we are exposed to various market risks, including changes in interest rates, fluctuations and changes in the market value of our cash equivalents 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.\n\nInterest Rate Risk\n\nLong-Term Debt. The interest rate on our 2023 Convertible Notes is fixed, and thus, as it relates to our convertible debt borrowings, we are not exposed to changes in interest rates.\n\nThe interest rates on our 2025 Credit Agreement are based upon an adjusted SOFR rate (including a 0.10% credit spread adjustment) plus an applicable margin, or an alternate base rate (\"ABR\") plus an applicable margin. See Note 6 to our Financial Statements for further details related to our long-term debt.\n\nA hypothetical adverse change of 10% in the December 31, 2025 adjusted SOFR rate would not have a material impact upon our results of operations.\n\nMarket Risk\n\nCash and Cash Equivalents. Our cash and cash equivalents as of December 31, 2025 and 2024 were $180.0 million and $161.8 million, respectively. Certain of our cash balances are swept into overnight money market accounts on a daily basis, and at times, excess funds may be invested in low-risk institutional instruments held at major banks. We have minimal market risk for our cash and cash equivalents due to the relatively short maturities of the instruments.\n\nSettlement 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 December 31, 2025 and 2024, we had $350.4 million and $343.2 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. Certain settlement assets are swept into overnight money market accounts on a daily basis.\n\nLong-Term Debt. The fair value of our convertible debt is exposed to market risk. We do not carry our convertible debt at fair value but present the fair value for disclosure purposes (see Note 3 to our Financial Statements). Generally, the fair value of our convertible debt is impacted by changes in interest rates and changes in the price and volatility of our common stock. As of December 31, 2025, the fair value of the 2023 Convertible Notes was estimated at $504.4 million, using quoted market prices.\n\nForeign Currency Exchange Rate Risk\n\nDue to foreign operations around the world, our financial statements are exposed to foreign currency exchange risk due to the fluctuations in the value of currencies in which we conduct business. Our principal currency exposures include the British Pound, Euro, Australian Dollar, Saudi Riyal, and South African Rand. 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. In particular, if the U.S. Dollar were to strengthen it would reduce the reported amount of our foreign-denominated cash, cash equivalents, trade receivables, revenue, and expenses that we translate into U.S. Dollars and report in our consolidated financial statements for, and as of the end of, each reporting period. Other than the U.S. Dollar, the carrying amounts of our monetary assets and monetary liabilities recorded for our non-U.S. subsidiaries in currencies denominated other than the functional currency of those non-U.S. subsidiaries were not material.\n\nDuring the year ended December 31, 2025, we generated approximately 87% 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.\n\n \n\nWe have analyzed our foreign currency exposure as of December 31, 2025. A hypothetical adverse change of 10% in the December 31, 2025 exchange rates would not have had a material impact upon our results of operations.\n\n39"}