{"url_path":"/sec/csgs/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 Financial Statements and Supplementary Data","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":19967,"has_tables":true,"body_markdown":"Item 8. Financial Statements and Supplementary Data\n\nCSG SYSTEMS INTERNATIONAL, INC.\n\nCONSOLIDATED FINANCIAL STATEMENTS\n\nINDEX\n\n[Management's Report on Internal Control Over Financial Reporting](#managements_report)\n\n41\n\n[Reports of Independent Registered Public Accounting Firm](#report_of_accounting_firm)(PCAOB: 185)\n\n42\n\n[Consolidated Balance Sheets as of December 31, 2025 and 2024](#consolidatedbalancesheets)\n\n45\n\n[Consolidated Statements of Income for the Years Ended December 31, 2025, 2024, and 2023](#statementsofincome)\n\n46\n\n[Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2025, 2024, and 2023](#comprehensiveincome)\n\n47\n\n[Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2025, 2024, and 2023](#csg_systems_international_inc)\n\n48\n\n[Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024, and 2023](#cashflows)\n\n49\n\n[Notes to Consolidated Financial Statements](#notes_to_financial_statements)\n\n50\n\n \n\n \n\n \n\n40\n\n \n\nManagement’s Report on Internal Control Over Financial Reporting\n\nManagement of CSG Systems International, Inc. and subsidiaries (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) or 15d-15(f) under the Securities Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:\n\n(i)\nPertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;\n\n(ii)\nProvide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and\n\n(iii)\nProvide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.\n\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.\n\nManagement assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013).\n\nBased on our assessment, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2025.\n\nThe Company’s independent registered public accounting firm, KPMG LLP, has issued an attestation report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025. That report appears immediately following.\n\n \n\n \n\n \n\n41\n\n \n\nReport of Independent Registered Public Accounting Firm\n\nTo the Stockholders and Board of Directors\nCSG Systems International, Inc.:\n\nOpinion on Internal Control Over Financial Reporting\n\nWe have audited CSG Systems International, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.\n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated February 19, 2026 expressed an unqualified opinion on those consolidated financial statements.\n\nBasis for Opinion\n\nThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.\n\nDefinition and Limitations of Internal Control Over Financial Reporting\n\nA company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.\n\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\n \n\n/s/ KPMG LLP\n\nOmaha, Nebraska\n\nFebruary 19, 2026\n\n42\n\n \n\nReport of Independent Registered Public Accounting Firm\n\nTo the Stockholders and Board of Directors\nCSG Systems International, Inc.:\n\nOpinion on the Consolidated Financial Statements\n\nWe have audited the accompanying consolidated balance sheets of CSG Systems International, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.\n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 19, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.\n\nBasis for Opinion\n\nThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\nCritical Audit Matter\n\nThe critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.\n\nAgreements with significant customers\n\nAs discussed in Note 4 to the consolidated financial statements, the Company generated 36% of its revenue from its two largest customers (significant customers). The agreements with these significant customers are complex and subject to modification in the form of amendments, change requests, or statements of work, which can occur frequently. The accounting for these agreements requires significant judgments to be made by the Company, specifically whether a new or revised agreement is treated as either a separate contract or modification of an existing contract. The judgments could significantly affect revenue recognized in any period.\n\nWe identified the evaluation of agreements with significant customers as a critical audit matter. Due to the subjectivity and complexity in the application of the portion of the accounting standard related to contract modifications, the assessment of the Company’s judgments regarding whether each new or revised agreement is treated as a separate contract or modification of an existing contract required a higher degree of auditor judgment.\n\n43\n\n \n\nThe following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s revenue recognition process. This included controls over monitoring and evaluating agreements with significant customers. For certain new or revised agreements with significant customers, we obtained and read the agreement, performed an independent analysis of the accounting treatment as a separate contract or modification of an existing contract, and compared our conclusions to those made by the Company.\n\n/s/ KPMG LLP\n\nWe have served as the Company’s auditor since 2002.\n\nOmaha, Nebraska\nFebruary 19, 2026\n\n \n\n44\n\n \n\nCSG SYSTEMS INTERNATIONAL, INC.\n\nCONSOLIDATED BALANCE SHEETS\n\n(in thousands, except per share amounts)\n\n \n\n \n\n \n\nDecember 31, 2025\n\n \n\n \n\nDecember 31, 2024\n\n \n\nASSETS\n\n \n\n \n\n \n\n \n\n \n\n \n\nCurrent assets:\n\n \n\n \n\n \n\n \n\n \n\n \n\nCash and cash equivalents\n\n \n\n$\n\n180,011\n\n \n\n \n\n$\n\n161,789\n\n \n\nSettlement and merchant reserve assets\n\n \n\n \n\n350,390\n\n \n\n \n\n \n\n343,235\n\n \n\nTrade accounts receivable:\n\n \n\n \n\n \n\n \n\n \n\n \n\nBilled, net of allowance of $3,277 and $3,041\n\n \n\n \n\n299,724\n\n \n\n \n\n \n\n266,903\n\n \n\nUnbilled\n\n \n\n \n\n67,888\n\n \n\n \n\n80,173\n\n \n\nIncome taxes receivable\n\n \n\n \n\n3,443\n\n \n\n \n\n \n\n2,600\n\n \n\nOther current assets\n\n \n\n \n\n36,227\n\n \n\n \n\n \n\n46,182\n\n \n\nTotal current assets\n\n \n\n \n\n937,683\n\n \n\n \n\n \n\n900,882\n\n \n\nNon-current assets:\n\n \n\n \n\n \n\n \n\n \n\n \n\nProperty and equipment, net of depreciation of $122,947 and $133,514\n\n \n\n \n\n42,505\n\n \n\n \n\n \n\n56,595\n\n \n\nOperating lease right-of-use assets\n\n \n\n \n\n16,278\n\n \n\n \n\n \n\n24,166\n\n \n\nSoftware, net of amortization of $154,240 and $154,648\n\n \n\n \n\n19,716\n\n \n\n \n\n \n\n19,927\n\n \n\nGoodwill\n\n \n\n \n\n324,706\n\n \n\n \n\n \n\n316,041\n\n \n\nAcquired customer contracts, net of amortization of $148,567 and $133,279\n\n \n\n \n\n28,589\n\n \n\n \n\n \n\n39,377\n\n \n\nCustomer contract costs, net of amortization of $50,245 and $44,587\n\n \n\n \n\n71,613\n\n \n\n \n\n \n\n60,809\n\n \n\nDeferred income taxes\n\n \n\n \n\n83,630\n\n \n\n \n\n \n\n73,295\n\n \n\nOther assets\n\n \n\n \n\n19,887\n\n \n\n \n\n \n\n9,595\n\n \n\nTotal non-current assets\n\n \n\n \n\n606,924\n\n \n\n \n\n \n\n599,805\n\n \n\nTotal assets\n\n \n\n$\n\n1,544,607\n\n \n\n \n\n$\n\n1,500,687\n\n \n\nLIABILITIES AND STOCKHOLDERS' EQUITY\n\n \n\n \n\n \n\n \n\n \n\n \n\nCurrent liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\nCurrent portion of long-term debt\n\n \n\n$\n\n-\n\n \n\n \n\n$\n\n7,500\n\n \n\nOperating lease liabilities\n\n \n\n \n\n4,837\n\n \n\n \n\n \n\n11,067\n\n \n\nCustomer deposits\n\n \n\n \n\n47,633\n\n \n\n \n\n \n\n41,448\n\n \n\nTrade accounts payable\n\n \n\n \n\n45,281\n\n \n\n \n\n \n\n36,370\n\n \n\nAccrued employee compensation\n\n \n\n \n\n81,001\n\n \n\n \n\n \n\n67,944\n\n \n\nSettlement and merchant reserve liabilities\n\n \n\n \n\n348,257\n\n \n\n \n\n \n\n341,924\n\n \n\nDeferred revenue\n\n \n\n \n\n50,738\n\n \n\n \n\n \n\n54,424\n\n \n\nIncome taxes payable\n\n \n\n \n\n1,116\n\n \n\n \n\n \n\n7,802\n\n \n\nOther current liabilities\n\n \n\n \n\n71,941\n\n \n\n \n\n \n\n46,730\n\n \n\nTotal current liabilities\n\n \n\n \n\n650,804\n\n \n\n \n\n \n\n615,209\n\n \n\nNon-current liabilities:\n\n \n\n \n\n \n\n \n\n \n\n \n\nLong-term debt, net of unamortized discounts of $10,548 and $12,128\n\n \n\n \n\n539,452\n\n \n\n \n\n \n\n530,997\n\n \n\nOperating lease liabilities\n\n \n\n \n\n21,152\n\n \n\n \n\n \n\n25,020\n\n \n\nDeferred revenue\n\n \n\n \n\n29,480\n\n \n\n \n\n \n\n26,469\n\n \n\nIncome taxes payable\n\n \n\n \n\n2,371\n\n \n\n \n\n \n\n2,732\n\n \n\nDeferred income taxes\n\n \n\n \n\n-\n\n \n\n \n\n \n\n94\n\n \n\nOther non-current liabilities\n\n \n\n \n\n17,649\n\n \n\n \n\n \n\n17,597\n\n \n\nTotal non-current liabilities\n\n \n\n \n\n610,104\n\n \n\n \n\n \n\n602,909\n\n \n\n    Total liabilities\n\n \n\n \n\n1,260,908\n\n \n\n \n\n \n\n1,218,118\n\n \n\nStockholders' equity:\n\n \n\n \n\n \n\n \n\n \n\n \n\nPreferred stock, par value $.01 per share; 10,000 shares authorized; zero shares issued and\n     outstanding\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\nCommon stock, par value $.01 per share; 100,000 shares authorized; 4,009 and 5,513 shares reserved for\n     employee stock purchase plan and stock incentive plans; 28,370 and 28,854 shares outstanding\n\n \n\n \n\n721\n\n \n\n \n\n \n\n718\n\n \n\nAdditional paid-in capital\n\n \n\n \n\n532,885\n\n \n\n \n\n \n\n518,215\n\n \n\nTreasury stock, at cost; 42,371 and 41,583 shares\n\n \n\n \n\n(1,243,972\n\n)\n\n \n\n \n\n(1,194,224\n\n)\n\nAccumulated other comprehensive income (loss):\n\n \n\n \n\n \n\n \n\n \n\n \n\nCumulative foreign currency translation adjustments\n\n \n\n \n\n(45,042\n\n)\n\n \n\n \n\n(62,290\n\n)\n\nAccumulated earnings\n\n \n\n \n\n1,039,107\n\n \n\n \n\n \n\n1,020,150\n\n \n\nTotal stockholders' equity\n\n \n\n \n\n283,699\n\n \n\n \n\n \n\n282,569\n\n \n\nTotal liabilities and stockholders' equity\n\n \n\n$\n\n1,544,607\n\n \n\n \n\n$\n\n1,500,687\n\n \n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n45\n\n \n\nCSG SYSTEMS INTERNATIONAL, INC.\n\nCONSOLIDATED STATEMENTS OF INCOME\n\n(in thousands, except per share amounts)\n\n \n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nRevenue\n\n \n\n$\n\n1,223,289\n\n \n\n \n\n$\n\n1,197,248\n\n \n\n \n\n$\n\n1,169,258\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCost of revenue (exclusive of depreciation, shown separately below)\n\n \n\n \n\n623,569\n\n \n\n \n\n \n\n614,463\n\n \n\n \n\n \n\n615,042\n\n \n\nOther operating expenses:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nResearch and development\n\n \n\n \n\n161,570\n\n \n\n \n\n \n\n158,194\n\n \n\n \n\n \n\n143,201\n\n \n\nSelling, general and administrative\n\n \n\n \n\n281,476\n\n \n\n \n\n \n\n258,313\n\n \n\n \n\n \n\n247,613\n\n \n\nDepreciation\n\n \n\n \n\n18,107\n\n \n\n \n\n \n\n21,622\n\n \n\n \n\n \n\n23,189\n\n \n\nRestructuring and reorganization charges\n\n \n\n \n\n19,818\n\n \n\n \n\n \n\n13,323\n\n \n\n \n\n \n\n16,336\n\n \n\nTotal operating expenses\n\n \n\n \n\n1,104,540\n\n \n\n \n\n \n\n1,065,915\n\n \n\n \n\n \n\n1,045,381\n\n \n\nOperating income\n\n \n\n \n\n118,749\n\n \n\n \n\n \n\n131,333\n\n \n\n \n\n \n\n123,877\n\n \n\nOther income (expense):\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nInterest expense\n\n \n\n \n\n(28,954\n\n)\n\n \n\n \n\n(30,469\n\n)\n\n \n\n \n\n(31,176\n\n)\n\nInterest income\n\n \n\n \n\n5,204\n\n \n\n \n\n \n\n8,685\n\n \n\n \n\n \n\n4,336\n\n \n\nLoss on debt extinguishment\n\n \n\n \n\n(453\n\n)\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\nOther, net\n\n \n\n \n\n(3,849\n\n)\n\n \n\n \n\n2,723\n\n \n\n \n\n \n\n(4,686\n\n)\n\nTotal other\n\n \n\n \n\n(28,052\n\n)\n\n \n\n \n\n(19,061\n\n)\n\n \n\n \n\n(31,526\n\n)\n\nIncome before income taxes\n\n \n\n \n\n90,697\n\n \n\n \n\n \n\n112,272\n\n \n\n \n\n \n\n92,351\n\n \n\nIncome tax provision\n\n \n\n \n\n(34,816\n\n)\n\n \n\n \n\n(25,420\n\n)\n\n \n\n \n\n(26,105\n\n)\n\nNet income\n\n \n\n$\n\n55,881\n\n \n\n \n\n$\n\n86,852\n\n \n\n \n\n$\n\n66,246\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nWeighted-average shares outstanding:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBasic\n\n \n\n \n\n27,694\n\n \n\n \n\n \n\n28,345\n\n \n\n \n\n \n\n29,938\n\n \n\nDiluted\n\n \n\n \n\n28,218\n\n \n\n \n\n \n\n28,665\n\n \n\n \n\n \n\n30,115\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nEarnings per common share:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBasic\n\n \n\n$\n\n2.02\n\n \n\n \n\n$\n\n3.06\n\n \n\n \n\n$\n\n2.21\n\n \n\nDiluted\n\n \n\n \n\n1.98\n\n \n\n \n\n \n\n3.03\n\n \n\n \n\n \n\n2.20\n\n \n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\n46\n\n \n\nCSG SYSTEMS INTERNATIONAL, INC.\n\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME\n\n(in thousands)\n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nNet income\n\n \n\n$\n\n55,881\n\n \n\n \n\n$\n\n86,852\n\n \n\n \n\n$\n\n66,246\n\n \n\nOther comprehensive income (loss), net of tax:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nForeign currency translation adjustments\n\n \n\n \n\n17,248\n\n \n\n \n\n \n\n(11,877\n\n)\n\n \n\n \n\n8,416\n\n \n\nOther comprehensive income (loss), net of tax\n\n \n\n \n\n17,248\n\n \n\n \n\n \n\n(11,877\n\n)\n\n \n\n \n\n8,416\n\n \n\nTotal comprehensive income, net of tax\n\n \n\n$\n\n73,129\n\n \n\n \n\n$\n\n74,975\n\n \n\n \n\n$\n\n74,662\n\n \n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\n47\n\n \n\nCSG SYSTEMS INTERNATIONAL, INC.\n\nCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY\n\n(in thousands)\n\n \n\n \n\nShares of\nCommon Stock\nOutstanding\n\n \n\nCommon\nStock\n\n \n\nAdditional\nPaid-in\nCapital\n\n \n\nTreasury\nStock\n\n \n\nAccumulated\nOther\nComprehensive\nIncome (Loss)\n\n \n\nAccumulated\nEarnings\n\n \n\nTotal\nStockholders'\nEquity\n\n \n\nBALANCE, January 1, 2023\n\n \n\n31,269\n\n \n\n$\n\n708\n\n \n\n$\n\n495,189\n\n \n\n$\n\n(1,018,034\n\n)\n\n$\n\n(58,829\n\n)\n\n$\n\n936,215\n\n \n\n$\n\n355,249\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nComprehensive income:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n66,246\n\n \n\n \n\n \n\nForeign currency translation adjustments\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n8,416\n\n \n\n \n\n-\n\n \n\n \n\n \n\nTotal comprehensive income\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n74,662\n\n \n\nRepurchase of common stock\n\n \n\n(2,369\n\n)\n\n \n\n(2\n\n)\n\n \n\n(10,156\n\n)\n\n \n\n(118,021\n\n)\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n(128,179\n\n)\n\nIssuance of common stock pursuant to employee stock\n    purchase plan\n\n \n\n74\n\n \n\n \n\n-\n\n \n\n \n\n3,284\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n3,284\n\n \n\nIssuance of restricted common stock pursuant to stock-\n    based compensation plans\n\n \n\n666\n\n \n\n \n\n7\n\n \n\n \n\n(7\n\n)\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\nCancellation of restricted common stock issued pursuant to\n    stock-based compensation plans\n\n \n\n(99\n\n)\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\nStock-based compensation\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n28,990\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n28,990\n\n \n\nPurchase of capped call transactions, net of tax\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n(26,353\n\n)\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n(26,353\n\n)\n\nDividends\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n(34,327\n\n)\n\n \n\n(34,327\n\n)\n\nBALANCE, December 31, 2023\n\n \n\n29,541\n\n \n\n \n\n713\n\n \n\n \n\n490,947\n\n \n\n \n\n(1,136,055\n\n)\n\n \n\n(50,413\n\n)\n\n \n\n968,134\n\n \n\n \n\n273,326\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nComprehensive income:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n86,852\n\n \n\n \n\n \n\nForeign currency translation adjustments\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n(11,877\n\n)\n\n \n\n-\n\n \n\n \n\n \n\nTotal comprehensive income\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n74,975\n\n \n\nRepurchase of common stock\n\n \n\n(1,362\n\n)\n\n \n\n(1\n\n)\n\n \n\n(9,361\n\n)\n\n \n\n(58,169\n\n)\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n(67,531\n\n)\n\nIssuance of common stock pursuant to employee stock\n    purchase plan\n\n \n\n73\n\n \n\n \n\n-\n\n \n\n \n\n3,072\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n3,072\n\n \n\nIssuance of restricted common stock pursuant to stock-\n    based compensation plans\n\n \n\n777\n\n \n\n \n\n8\n\n \n\n \n\n(9\n\n)\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n(1\n\n)\n\nCancellation of restricted common stock issued pursuant to\n    stock-based compensation plans\n\n \n\n(175\n\n)\n\n \n\n(2\n\n)\n\n \n\n2\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\nStock-based compensation\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n33,564\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n33,564\n\n \n\nDividends\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n(34,836\n\n)\n\n \n\n(34,836\n\n)\n\nBALANCE, December 31, 2024\n\n \n\n28,854\n\n \n\n \n\n718\n\n \n\n \n\n518,215\n\n \n\n \n\n(1,194,224\n\n)\n\n \n\n(62,290\n\n)\n\n \n\n1,020,150\n\n \n\n \n\n282,569\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nComprehensive income:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n55,881\n\n \n\n \n\n \n\nForeign currency translation adjustments\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n17,248\n\n \n\n \n\n-\n\n \n\n \n\n \n\nTotal comprehensive income\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n73,129\n\n \n\nRepurchase of common stock\n\n \n\n(1,258\n\n)\n\n \n\n(4\n\n)\n\n \n\n(33,060\n\n)\n\n \n\n(49,748\n\n)\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n(82,812\n\n)\n\nIssuance of common stock pursuant to employee stock\n    purchase plan\n\n \n\n46\n\n \n\n \n\n-\n\n \n\n \n\n2,473\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n2,473\n\n \n\nIssuance of restricted common stock pursuant to stock-\n    based compensation plans\n\n \n\n785\n\n \n\n \n\n8\n\n \n\n \n\n(8\n\n)\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\nCancellation of restricted common stock issued pursuant to\n    stock-based compensation plans\n\n \n\n(57\n\n)\n\n \n\n(1\n\n)\n\n \n\n1\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\nStock-based compensation\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n45,264\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n45,264\n\n \n\nDividends\n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n(36,924\n\n)\n\n \n\n(36,924\n\n)\n\nBALANCE, December 31, 2025\n\n \n\n28,370\n\n \n\n$\n\n721\n\n \n\n$\n\n532,885\n\n \n\n$\n\n(1,243,972\n\n)\n\n$\n\n(45,042\n\n)\n\n$\n\n1,039,107\n\n \n\n$\n\n283,699\n\n \n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\n48\n\n \n\nCSG SYSTEMS INTERNATIONAL, INC.\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\n(in thousands)\n\n \n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nCash flows from operating activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet income\n\n \n\n \n\n$\n\n55,881\n\n \n\n \n\n$\n\n86,852\n\n \n\n \n\n$\n\n66,246\n\n \n\nAdjustments to reconcile net income to net cash provided by operating activities-\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nDepreciation\n\n \n\n \n\n \n\n18,979\n\n \n\n \n\n \n\n22,061\n\n \n\n \n\n \n\n23,585\n\n \n\nAmortization\n\n \n\n \n\n \n\n53,480\n\n \n\n \n\n \n\n50,447\n\n \n\n \n\n \n\n47,667\n\n \n\nLoss on debt extinguishment\n\n \n\n \n\n \n\n453\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\nAsset impairments\n\n \n\n \n\n \n\n251\n\n \n\n \n\n \n\n717\n\n \n\n \n\n \n\n2,061\n\n \n\nGain on lease modifications\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n(174\n\n)\n\n \n\n \n\n(4,349\n\n)\n\n(Gain) loss on unrealized foreign currency transactions and other, net\n\n \n\n \n\n \n\n655\n\n \n\n \n\n \n\n(525\n\n)\n\n \n\n \n\n225\n\n \n\nDeferred income taxes\n\n \n\n \n\n \n\n(9,240\n\n)\n\n \n\n \n\n(16,503\n\n)\n\n \n\n \n\n(23,560\n\n)\n\nStock-based compensation\n\n \n\n \n\n \n\n45,264\n\n \n\n \n\n \n\n33,564\n\n \n\n \n\n \n\n28,990\n\n \n\nChanges in operating assets and liabilities, net of acquired amounts:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nTrade accounts receivable, net\n\n \n\n \n\n \n\n(24,798\n\n)\n\n \n\n \n\n4,134\n\n \n\n \n\n \n\n(22,401\n\n)\n\nOther current and non-current assets and liabilities\n\n \n\n \n\n \n\n(14,664\n\n)\n\n \n\n \n\n(13,042\n\n)\n\n \n\n \n\n(6,566\n\n)\n\nIncome taxes payable/receivable\n\n \n\n \n\n \n\n(7,839\n\n)\n\n \n\n \n\n2,126\n\n \n\n \n\n \n\n(1,849\n\n)\n\nTrade accounts payable and accrued liabilities\n\n \n\n \n\n \n\n41,438\n\n \n\n \n\n \n\n(38,486\n\n)\n\n \n\n \n\n12,541\n\n \n\nDeferred revenue\n\n \n\n \n\n \n\n(3,921\n\n)\n\n \n\n \n\n4,546\n\n \n\n \n\n \n\n9,306\n\n \n\nNet cash provided by operating activities\n\n \n\n \n\n \n\n155,939\n\n \n\n \n\n \n\n135,717\n\n \n\n \n\n \n\n131,896\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash flows from investing activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nPurchases of software, property, and equipment\n\n \n\n \n\n \n\n(14,548\n\n)\n\n \n\n \n\n(22,421\n\n)\n\n \n\n \n\n(27,977\n\n)\n\nProceeds from sale of software, property, and equipment\n\n \n\n \n\n \n\n412\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\nProceeds from sale/maturity of short-term investments\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n71\n\n \n\nBusiness combinations, net of cash and settlement assets acquired of $46,432 in 2024\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n17,293\n\n \n\n \n\n \n\n-\n\n \n\nNet cash used in investing activities\n\n \n\n \n\n \n\n(14,136\n\n)\n\n \n\n \n\n(5,128\n\n)\n\n \n\n \n\n(27,906\n\n)\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash flows from financing activities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nProceeds from issuance of common stock\n\n \n\n \n\n \n\n2,473\n\n \n\n \n\n \n\n3,072\n\n \n\n \n\n \n\n3,284\n\n \n\nPayments of cash dividends\n\n \n\n \n\n \n\n(37,396\n\n)\n\n \n\n \n\n(26,608\n\n)\n\n \n\n \n\n(33,930\n\n)\n\nRepurchases of common stock\n\n \n\n \n\n \n\n(83,177\n\n)\n\n \n\n \n\n(67,745\n\n)\n\n \n\n \n\n(127,065\n\n)\n\nDeferred acquisition payments\n\n \n\n \n\n \n\n(314\n\n)\n\n \n\n \n\n(2,488\n\n)\n\n \n\n \n\n(3,220\n\n)\n\nProceeds from long-term debt\n\n \n\n \n\n \n\n150,625\n\n \n\n \n\n \n\n15,000\n\n \n\n \n\n \n\n470,000\n\n \n\nPayments on long-term debt\n\n \n\n \n\n \n\n(151,250\n\n)\n\n \n\n \n\n(22,500\n\n)\n\n \n\n \n\n(327,500\n\n)\n\nPurchase of capped call transactions related to convertible notes\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n(34,298\n\n)\n\nPayments of debt financing costs\n\n \n\n \n\n \n\n(2,258\n\n)\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(14,539\n\n)\n\nPayments on financing obligations\n\n \n\n \n\n \n\n(6,194\n\n)\n\n \n\n \n\n(2,538\n\n)\n\n \n\n \n\n-\n\n \n\nSettlement and merchant reserve activity\n\n \n\n \n\n \n\n6,047\n\n \n\n \n\n \n\n23,884\n\n \n\n \n\n \n\n35,963\n\n \n\nNet cash used in financing activities\n\n \n\n \n\n \n\n(121,444\n\n)\n\n \n\n \n\n(79,923\n\n)\n\n \n\n \n\n(31,305\n\n)\n\nEffect of exchange rate fluctuations on cash, cash equivalents, and restricted cash\n\n \n\n \n\n \n\n5,064\n\n \n\n \n\n \n\n(7,779\n\n)\n\n \n\n \n\n2,173\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet increase in cash, cash equivalents, and restricted cash\n\n \n\n \n\n \n\n25,423\n\n \n\n \n\n \n\n42,887\n\n \n\n \n\n \n\n74,858\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash, cash equivalents, and restricted cash, beginning of period\n\n \n\n \n\n \n\n506,763\n\n \n\n \n\n \n\n463,876\n\n \n\n \n\n \n\n389,018\n\n \n\nCash, cash equivalents, and restricted cash, end of period\n\n \n\n \n\n$\n\n532,186\n\n \n\n \n\n$\n\n506,763\n\n \n\n \n\n$\n\n463,876\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nSupplemental disclosures of cash flow information:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash paid during the period for-\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nInterest\n\n \n\n \n\n$\n\n25,391\n\n \n\n \n\n$\n\n27,119\n\n \n\n \n\n$\n\n24,730\n\n \n\nIncome taxes\n\n \n\n \n\n \n\n52,212\n\n \n\n \n\n \n\n39,944\n\n \n\n \n\n \n\n51,675\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNon-cash investing and financing activities-\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nSoftware, property, and equipment included in current and non-current liabilities\n\n \n\n \n\n \n\n11,376\n\n \n\n \n\n \n\n8,469\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nReconciliation of cash, cash equivalents, and restricted cash:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash and cash equivalents\n\n \n\n \n\n$\n\n180,011\n\n \n\n \n\n$\n\n161,789\n\n \n\n \n\n$\n\n186,264\n\n \n\nSettlement and merchant reserve assets\n\n \n\n \n\n \n\n350,390\n\n \n\n \n\n \n\n343,235\n\n \n\n \n\n \n\n274,699\n\n \n\nRestricted cash included in non-current assets\n\n \n\n \n\n \n\n1,785\n\n \n\n \n\n \n\n1,739\n\n \n\n \n\n \n\n2,913\n\n \n\nTotal cash, cash equivalents, and restricted cash\n\n \n\n \n\n$\n\n532,186\n\n \n\n \n\n$\n\n506,763\n\n \n\n \n\n$\n\n463,876\n\n \n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n49\n\n \n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\n1. General\n\nCSG Systems International, Inc. (the “Company”, “CSG”, or forms of the pronoun “we”), a Delaware corporation, was formed in October 1994 and is based in Denver, Colorado. We are a purpose-driven, SaaS platform company with revenue management and digital monetization, customer experience, and payments solutions serving a wide variety of industry verticals. Our cloud-first architecture and customer-centric approach help companies around the world acquire, monetize, engage, and retain their B2B (business-to-business), B2C (business-to-consumer), and B2B2X (business-to-business-to-consumer) customers. Over the years, we have focused our research and development (“R&D”) and acquisition investments on expanding our solution set to address the complex, transformative needs of our customers. We are a member of the S&P SmallCap 600 and Russell 2000 indices.\n\nThe accompanying Consolidated Financial Statements (“Financial Statements”) are prepared in conformity with generally accepted accounting principles (“GAAP”) in the United States of America (“U.S.”).\n\n2. Plan of Merger\n\nOn October 29, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with NEC Corporation, a company incorporated under the laws of Japan (“NEC”) and Canvas Transaction Company, Inc., a Delaware corporation and a direct or indirect wholly owned subsidiary of NEC (“Merger Sub”). Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into CSG (the “Merger”), with CSG continuing as the surviving corporation as a wholly owned subsidiary of NEC. Our Board of Directors (the “Board”) unanimously approved the Merger Agreement and the transactions contemplated thereby, including the Merger, and, subject to the terms of the Merger Agreement, recommended that our stockholders adopt the Merger Agreement.\n\nPer the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of CSG common stock that is issued and outstanding immediately prior to the Effective Time (other than the Cancelled Shares and Dissenting Shares, as they are defined in the Merger Agreement), will be converted into the right to receive $80.70 per share in cash (the “Merger Consideration”).\n\nIn addition, the Merger Agreement provides for the following treatment of our equity awards:\n\n•\nEach outstanding time-based restricted stock award that is vested as of immediately prior to the Effective Time (or that will vest solely as a result of the consummation of the transactions contemplated by the Merger Agreement, including, if the Effective Time occurs in 2026, restricted stock awards granted in 2024 that would have completed their full vesting period and been settled in accordance with their terms in 2027) will be converted into the right to receive an amount in cash equal to the number of CSG shares underlying such award multiplied by the Merger Consideration, plus any applicable accrued and unpaid dividends, and become payable shortly following the Effective Time, and each other outstanding time-based restricted stock award will be converted into a deferred cash award based on the number of CSG shares underlying such award multiplied by the Merger Consideration, plus any applicable accrued and unpaid dividends, and will vest and become payable on the original time-based vesting schedule, subject to substantially the same terms and conditions as the corresponding restricted stock award.\n\n•\nEach outstanding performance-based or market-based restricted stock award (other than the Chief Executive Officer (“CEO”) Award (as defined below)) that is vested as of immediately prior to the Effective Time (or that will vest solely as a result of the consummation of the transactions contemplated by the Merger Agreement, including, if the Effective Time occurs in 2026, restricted stock awards that would have completed their full vesting period and been settled in accordance with their terms in 2027) will be converted into the right to receive an amount in cash equal to the number of CSG shares underlying such award (with applicable performance metrics generally deemed achieved at the greater of target and actual performance as of the latest practicable date prior to the Effective Time) multiplied by the Merger Consideration, plus any applicable accrued and unpaid dividends, and become payable shortly following the Effective Time, and each other outstanding performance-based or market-based restricted stock award (other than the CEO Award) will be converted into a deferred cash award based on the number of CSG shares underlying such award multiplied by the Merger Consideration (with applicable performance metrics deemed achieved at the greater of target and actual performance as of the latest practicable date prior to the Effective Time), plus any applicable accrued and unpaid dividends, and will vest and become payable on the original time-based vesting schedule, subject to substantially the same terms and conditions as the corresponding performance-based or market-based restricted stock award.\n\n•\nThe market-based restricted stock award granted to our CEO on December 10, 2024 (the “CEO Award”) will be converted into a deferred cash award based on the number of CSG shares underlying such award (with applicable performance metrics deemed achieved based on the Merger Consideration) multiplied by the Merger Consideration, plus any applicable accrued and unpaid dividends, and will vest and become payable on the original time-based vesting schedule, subject to substantially the same terms and conditions as the CEO Award.\n\n50\n\n \n\n•\nEach restricted stock award that would have fully vested and settled in accordance with its terms in 2026 vested in December 2025, with any applicable performance-based and market-based vesting conditions deemed achieved based on actual performance as of the latest practicable date.\n\n•\nIn addition to the acceleration provided for above, and in consultation with NEC, in December 2025 we accelerated the vesting of certain restricted stock awards for seven individuals to mitigate the tax impacts under Section 280G, Golden Parachute Payments, of the Internal Revenue Code (“IRC”). For any performance-based and market-based restricted stock awards that were accelerated, the applicable performance metrics were deemed achieved at the greater of target and actual performance as of the latest practicable date.\n\nOn January 30, 2026, our stockholders approved the adoption of the Merger Agreement at the special meeting of our stockholders convened for such purpose. The closing of the Merger is expected to occur by the end of 2026, subject to the satisfaction of the remaining customary closing conditions and required regulatory approvals. If the Merger is consummated, CSG shares will be delisted from the Nasdaq Global Select Market and deregistered under the Securities Exchange Act of 1934, as amended.\n\nIf the Merger Agreement is terminated under certain specified circumstances, CSG will be required to pay NEC a termination fee of $82.0 million. If the Merger Agreement is terminated under other certain specified circumstances, NEC will be required to pay CSG a termination fee of $135.0 million.\n\nThe foregoing summary of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, which is filed as Exhibit 2.01 to this Form 10-K. Additional information about the Merger Agreement and the Merger is set forth in our Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission (“SEC”) on December 16, 2025, as supplemented.\n\nAs of December 31, 2025, in connection with the proposed Merger, we have recognized $13.7 million of transaction-related costs primarily within Selling, General and Administrative expenses (\"SG&A\") in our Income Statement, of which approximately $10 million will be paid upon closing. We expect to incur additional costs relating to the proposed Merger, such as financial advisory, legal, accounting, retention bonuses, and other professional services fees.\n\n3. Summary of Significant Accounting Policies\n\nPrinciples of Consolidation. Our Financial Statements include all of our accounts and our subsidiaries’ accounts. All material intercompany accounts and transactions have been eliminated.\n\nTranslation of Foreign Currency. Our foreign subsidiaries generally use the local currency of the countries in which they operate as their functional currency. Their assets and liabilities are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. Revenue, expenses, and cash flows are translated at the average exchange rates prevailing during the period. Foreign currency translation adjustments are included in comprehensive income in stockholders’ equity. Foreign currency transaction gains and losses are included in the determination of net income.\n\nUse of Estimates in Preparation of Our Financial Statements. The preparation of our Financial Statements requires management to make estimates and use 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 period. Actual results could differ from those estimates. The more critical accounting estimates and related assumptions that may affect our financial position and results of operations are in the areas of: (i) revenue recognition; (ii) income taxes; and (iii) loss contingencies.\n\nRevenue Recognition. We recognize revenue from our customer contracts when we satisfy our performance obligations by transferring control of a particular product or service, or group of products or services, to our customers, as described in more detail below. Taxes assessed on our products and services based on governmental authorities at the time of invoicing are generally excluded from our revenue.\n\nSaaS and Related Solutions\n\nOur SaaS and related solutions include: (i) our revenue management platform solutions; (ii) our managed services offering in which we operate software solutions (primarily our software solutions) on behalf of our customers; and (iii) our SaaS payments platform solutions.\n\nWe contract for our revenue management platform solutions using long-term arrangements whose terms have typically ranged from three to five years. These arrangements consist of a series of multiple services delivered daily or monthly, to include: (i) revenue management platforms; (ii) related products and services (e.g., field service management tools, consumer credit verifications, etc.); (iii) digital enablement and delivery functions; and (iv) customer statement invoice printing and mailing services. The fees for these services typically are billed to our customers monthly based upon actual monthly volumes and/or usage of services (e.g., the number of customer accounts maintained on our solutions, the number of transactions processed on our solutions, and/or the quantity and content of the monthly statements and mailings processed through our solutions).\n\n51\n\n \n\nFor revenue management platform arrangements, the total contract consideration (including impacts of discounts, incentives, and/or service level agreements) is primarily variable dependent upon actual monthly volumes and/or usage of services; however, these contracts can also include ancillary fixed consideration in the form of one-time, monthly, or annual fees. The pricing of products and services in these contracts is generally at stand-alone selling price, with no allocation of value between the individual performance obligations. In situations where we do an allocation, we determine stand-alone selling price based on established pricing and/or cost, plus an applicable margin. Revenue is generally recognized based on activities performed over a series of daily or monthly periods.\n\nWe contract for managed services using long-term arrangements whose terms have typically ranged from three to five years. Under managed services arrangements, we operate software products (primarily our software solutions) on behalf of our customers: (i) out of a customer’s data center; (ii) out of our data center; or (iii) out of a third-party data center. Managed services can also include us providing other services, such as transitional services, fulfillment, remittance processing, operational consulting, back office, and end-user billing services.\n\nFor managed services arrangements, the total contract consideration is typically a fixed monthly fee, but these contracts may also have variable fee components. The fees for these services typically are billed to our customers on a monthly basis. Unless managed services are included with a software license contract (as discussed further below), there is generally only one performance obligation and revenue is recognized for these arrangements on a ratable basis as the services are performed.\n\nOur contracts for SaaS payments platform solutions are generally month-to-month or fixed term with automatic renewals. Services provided under these arrangements primarily include Automated Clearing House (“ACH”) transaction processing, credit/debit card processing, web-based and telephone payment processing, and real-time check verification and authentication services. The fees for these services typically are billed on a monthly basis.\n\nOur SaaS payments platform arrangements are comprised of one performance obligation. Revenue for these services is based primarily on a fee per transaction or a percentage of the transaction principal, and is recognized as delivered over a series of daily service periods. Transaction fees collected from merchants are recognized as revenue on a gross basis when we are the principal in completing the payment processing transaction. As a principal to the transaction, we control the service of processing payments on our platform. We bear primary responsibility for the fulfillment of the payment service, contract directly with the merchant, and have full discretion in determining the fee charged to our customers which is independent of the costs we incur when we utilize payment processors or other financial institutions to perform services on our behalf. We therefore bear full margin risk when completing a payment processing transaction. Transaction fees are primarily comprised of fees paid to third-party payment processors and other financial institutions and interchange fees paid in conjunction with the delivery of service to customers under our payments services contracts. These fees are recognized in cost of revenue.\n\nFees related to set-up or implementation activities for both SaaS and related solutions and managed services contracts are generally deferred and recognized ratably over the related service period to which the activities relate.\n\nDepending on the significance of variable consideration, number of products/services, complex pricing structures, and long-term nature of these types of contracts, the judgments and estimates made in this area could have a significant effect on the amount and timing of revenue recognized in any period.\n\nSoftware and Services\n\nOur software and services revenue relates primarily to: (i) software license sales on either a perpetual or term license basis; and (ii) professional services to implement the software. Our software and services contracts are often contracted in bundled arrangements that include the software license and related implementation services, and may also include maintenance, managed services, and/or additional professional services.\n\nFor our software arrangements, total contract consideration is allocated between the separate performance obligations based on stand-alone selling prices for software licenses, cost plus applicable margin for third-party licenses and/or services, and established pricing for maintenance. The initial sale of our software products generally requires significant production, modification, or customization, such that the delivery of the software license and related professional services required to implement the software represent one combined performance obligation that is satisfied over time based on hours worked (i.e., hours-based method). We are using hours worked on the project, compared against total expected hours to complete the project, as the measure to determine progress toward completion as we believe it is the most appropriate metric to measure such progress. The software and services fees are generally fixed fees billed to our customers on a milestone or date basis.\n\n52\n\n \n\nThe determination of the performance obligations and allocation of value for software license arrangements require significant judgment. We generally determine stand-alone selling prices using pricing calculations (which include regional market factors) for our software license fees and maintenance, and cost-plus margins for services. Additionally, our use of an hours-based method of accounting for software license and other professional services performance obligations that are satisfied over time requires estimates of the total expected hours necessary to complete a project. Changes in estimates as a result of additional information or experience on a project as work progresses are inherent characteristics of this method of revenue recognition as we are exposed to business risks in completing these types of performance obligations. The estimation process to support our hours-based recognition method is more difficult for projects of greater length and/or complexity. The judgments and estimates made for these types of obligations could: (i) have a significant effect on revenue recognized in any period by changing the amount and/or the timing of the revenue recognized; and/or (ii) impact the expected profitability of a project, including whether an overall loss on an arrangement has occurred. To mitigate the inherent risks in using this hours-based method, we track our current hours expended against our estimates on a periodic basis and continually reevaluate the appropriateness of our estimates.\n\nIn certain instances, we sell software license volume upgrades, which provide our customers with the right to use our software to process higher transaction volume levels. In these instances, we analyze the contract to determine if the volume upgrade is a separate performance obligation and if so, we recognize the value associated with the software license as revenue on the effective date of the volume upgrade.\n\nA portion of our professional services revenue is contracted separately (e.g., business consulting services, etc.). Such contracts can either be on a fixed-price or time-and-materials basis. Revenue from fixed-price professional service contracts is recognized using an estimated hours-based method (discussed above), as these professional services represent a performance obligation that is satisfied over time. Revenue from professional services contracts billed on a time-and-materials basis is recognized as the services are performed.\n\nMaintenance\n\nOur maintenance revenue relates primarily to support of our software once it has been implemented and placed in service. Maintenance revenue is recognized ratably over the software maintenance period as services are provided. Our maintenance consists primarily of customer and product support, technical updates (e.g., bug fixes, etc.), and unspecified upgrades or enhancements to our software products. If specified upgrades or enhancements are offered in a contract, they are accounted for as a separate performance obligation. Maintenance may be invoiced to our customers on a monthly, quarterly, or annual basis.\n\nTransaction Price Allocated to Remaining Performance Obligations\n\nAs of December 31, 2025, our aggregate amount of the transaction price allocated to the remaining performance obligations was approximately $2.2 billion, which is made up of fixed fee consideration and guaranteed minimums expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied). We expect to recognize over 65% of this amount by the end of 2028, with the remaining amount recognized by the end of 2036. We have excluded from this amount variable consideration expected to be recognized in the future related to performance obligations that are unsatisfied. The majority of our future revenue is related to our SaaS and related solutions customer contracts that includes variable consideration dependent upon a series of monthly volumes and/or daily usage of services and have contractual terms ending from 2026 through 2036.\n\nDisaggregation of Revenue\n\nThe nature, amount, timing, and uncertainty of our revenue and how revenue and cash flows are affected by economic factors is most appropriately depicted by revenue type, geographic region, and customer vertical.\n\nRevenue by type for 2025, 2024, and 2023 was as follows (in thousands):\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nRevenue:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nSaaS and related solutions\n\n \n\n$\n\n1,101,700\n\n \n\n \n\n$\n\n1,069,325\n\n \n\n \n\n$\n\n1,024,572\n\n \n\nSoftware and services\n\n \n\n \n\n74,305\n\n \n\n \n\n \n\n80,935\n\n \n\n \n\n \n\n98,078\n\n \n\nMaintenance\n\n \n\n \n\n47,284\n\n \n\n \n\n \n\n46,988\n\n \n\n \n\n \n\n46,608\n\n \n\nTotal revenue\n\n \n\n$\n\n1,223,289\n\n \n\n \n\n$\n\n1,197,248\n\n \n\n \n\n$\n\n1,169,258\n\n \n\nWe use the location of the customer as the basis of attributing revenue to geographic regions. Revenue by geographic region for 2025, 2024, and 2023, as a percentage of our total revenue, was as follows:\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nAmericas (principally the U.S.)\n\n \n\n \n\n85\n\n%\n\n \n\n \n\n87\n\n%\n\n \n\n \n\n86\n\n%\n\nEurope, Middle East, and Africa\n\n \n\n \n\n10\n\n%\n\n \n\n \n\n9\n\n%\n\n \n\n \n\n10\n\n%\n\nAsia Pacific\n\n \n\n \n\n5\n\n%\n\n \n\n \n\n4\n\n%\n\n \n\n \n\n4\n\n%\n\nTotal revenue\n\n \n\n \n\n100\n\n%\n\n \n\n \n\n100\n\n%\n\n \n\n \n\n100\n\n%\n\n \n\n53\n\n \n\nWe generate our revenue primarily from the global communications markets; however, we serve an expanding group of customers in markets including retail, financial services, healthcare, insurance, and government entities. Revenue by customer vertical for 2025, 2024, and 2023, as a percentage of our total revenue, was as follows:\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nBroadband/Cable/Satellite\n\n \n\n \n\n51\n\n%\n\n \n\n \n\n52\n\n%\n\n \n\n \n\n52\n\n%\n\nTelecommunications\n\n \n\n \n\n18\n\n%\n\n \n\n \n\n18\n\n%\n\n \n\n \n\n20\n\n%\n\nOther\n\n \n\n \n\n31\n\n%\n\n \n\n \n\n30\n\n%\n\n \n\n \n\n28\n\n%\n\nTotal revenue\n\n \n\n \n\n100\n\n%\n\n \n\n \n\n100\n\n%\n\n \n\n \n\n100\n\n%\n\nBilled and Unbilled Accounts Receivable. Billed accounts receivable represents our unconditional rights to consideration. Once invoiced, our payment terms are generally between 30-60 days. Unbilled accounts receivable represents our rights to consideration for work completed but not billed. Unbilled accounts receivable is transferred to billed accounts receivable when the rights become unconditional, which is generally at the time of invoicing. Unbilled accounts receivable that are expected to be billed beyond the next twelve months are considered long-term unbilled accounts receivable and are included in other non-current assets. As of December 31, 2025 and 2024 our long-term unbilled accounts receivable were $8.9 million and zero, respectively.\n\nThe following table rolls forward our unbilled accounts receivable from January 1, 2024 to December 31, 2025 (in thousands):\n\n \n\n \n\nUnbilled Receivables\n\n \n\nBeginning Balance, January 1, 2024\n\n \n\n$\n\n82,163\n\n \n\nRecognized during the period\n\n \n\n \n\n267,879\n\n \n\nReclassified to receivables\n\n \n\n \n\n(268,855\n\n)\n\nOther\n\n \n\n \n\n(1,014\n\n)\n\nEnding Balance, December 31, 2024\n\n \n\n \n\n80,173\n\n \n\nRecognized during the period\n\n \n\n \n\n248,294\n\n \n\nReclassified to receivables\n\n \n\n \n\n(253,647\n\n)\n\nOther\n\n \n\n \n\n1,918\n\n \n\nEnding Balance, December 31, 2025\n\n \n\n$\n\n76,738\n\n \n\nDeferred Revenue. Deferred revenue represents consideration received from customers in advance of services being performed.\n\nThe following table rolls forward our deferred revenue from January 1, 2024 to December 31, 2025 (in thousands):\n\n \n\n \n\nDeferred Revenue\n\n \n\nBeginning Balance, January 1, 2024\n\n \n\n$\n\n77,646\n\n \n\nRevenue recognized that was included in deferred revenue at the\n    beginning of the period\n\n \n\n \n\n(55,359\n\n)\n\nConsideration received in advance of services performed, net of\n    revenue recognized in the current period\n\n \n\n \n\n59,917\n\n \n\nOther\n\n \n\n \n\n(1,311\n\n)\n\nEnding Balance, December 31, 2024\n\n \n\n \n\n80,893\n\n \n\nRevenue recognized that was included in deferred revenue at the\n    beginning of the period\n\n \n\n \n\n(54,181\n\n)\n\nConsideration received in advance of services performed, net of\n    revenue recognized in the current period\n\n \n\n \n\n50,233\n\n \n\nOther\n\n \n\n \n\n3,273\n\n \n\nEnding Balance, December 31, 2025\n\n \n\n$\n\n80,218\n\n \n\nOn July 5, 2025, we terminated a Master Services Agreement (the “MSA”) for one of our implementation projects in the Latin America region on the basis that the customer unlawfully renounced its obligations under the MSA. During 2025, we stopped implementation work on the project. Through the termination date, we recognized $1.4 million in revenue during 2025 related to this project. As of December 31, 2025, we had accounts receivable of $18.1 million ($1.3 million billed and $16.8 million unbilled) related to this implementation project and we are pursuing any and all available remedies to recover the amounts outstanding. As of the date of this filing, we do not believe there has been an impairment to the carrying values of the assets and believe such amounts are recoverable per the terms of the MSA or as a matter of common law.\n\nPostage. We pass through to our customers the cost of postage that is incurred on behalf of those customers, and typically require an advance payment on expected postage costs. These advance payments are included in customer deposits in the accompanying Consolidated Balance Sheets (“Balance Sheets” or “Balance Sheet”) and are classified as current liabilities regardless of the contract period. We net the cost of postage against the postage reimbursements and include the net amount (which is not material) in SaaS and related solutions revenue.\n\n54\n\n \n\nCash and Cash Equivalents. We consider all highly liquid investments with original maturities of three months or less as of the date of purchase to be cash equivalents. As of December 31, 2025 and 2024, our cash equivalents consist primarily of institutional money market funds 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.\n\nRestricted 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. Our restricted cash mainly serves to collateralize bank and performance guarantees. As of December 31, 2025 and 2024, we had $1.8 million and $1.7 million, respectively, of restricted cash included in non-current assets in our Balance Sheets.\n\nFinancial Instruments. Our financial instruments as of December 31, 2025 and 2024 include cash and cash equivalents, settlement and merchant reserve assets and liabilities, accounts receivable, accounts payable, and debt. Due to their short maturities, the carrying amounts of cash equivalents, settlement and merchant reserve assets and liabilities, accounts receivable, and accounts payable approximate their fair value. Valuation inputs used to measure the fair value of our cash equivalents held in money market funds were derived from quoted market prices, which are considered Level 1 inputs.\n\nWe have chosen not to record our debt at fair value, with changes recognized in earnings each reporting period. The following table indicates the carrying value and estimated fair value of our debt as of the indicated periods (in thousands):\n\n \n\n \n\n \n\nDecember 31, 2025\n\n \n\n \n\nDecember 31, 2024\n\n \n\n \n\n \n\nCarrying Value\n\n \n\n \n\nFair Value\n\n \n\n \n\nCarrying Value\n\n \n\n \n\nFair Value\n\n \n\n2025 Credit Agreement (carrying value)\n\n \n\n$\n\n125,000\n\n \n\n \n\n$\n\n125,000\n\n \n\n \n\n$\n\n-\n\n \n\n \n\n$\n\n-\n\n \n\n2023 Convertible Notes (par value)\n\n \n\n \n\n425,000\n\n \n\n \n\n \n\n504,422\n\n \n\n \n\n \n\n425,000\n\n \n\n \n\n \n\n429,144\n\n \n\n2021 Credit Agreement (carrying value\n    including current maturities)\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n125,625\n\n \n\n \n\n \n\n125,625\n\n \n\nThe fair value of our convertible notes was estimated based upon quoted market prices or recent sales activity, while the fair value of our credit agreements were estimated using a discounted cash flow methodology, both of which are considered Level 2 inputs. See Note 6 for discussion regarding our debt.\n\nSettlement and Merchant Reserve Assets and Liabilities. Settlement assets and settlement liabilities represent cash collected on behalf of merchants via payments 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.\n\nMerchant 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 payments 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 provides 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 offset by corresponding liabilities.\n\n \n\nThe following table summarizes our settlement and merchant reserve assets and liabilities as of the indicated periods (in thousands):\n\n \n\n \n\n \n\nDecember 31, 2025\n\n \n\n \n\nDecember 31, 2024\n\n \n\n \n\n \n\nAssets\n\n \n\n \n\nLiabilities\n\n \n\n \n\nAssets\n\n \n\n \n\nLiabilities\n\n \n\nSettlement assets/liabilities\n\n \n\n$\n\n312,424\n\n \n\n \n\n$\n\n310,291\n\n \n\n \n\n$\n\n330,769\n\n \n\n \n\n$\n\n329,458\n\n \n\nMerchant reserve assets/liabilities\n\n \n\n \n\n37,966\n\n \n\n \n\n \n\n37,966\n\n \n\n \n\n \n\n12,466\n\n \n\n \n\n \n\n12,466\n\n \n\nTotal\n\n \n\n$\n\n350,390\n\n \n\n \n\n$\n\n348,257\n\n \n\n \n\n$\n\n343,235\n\n \n\n \n\n$\n\n341,924\n\n \n\nConcentrations of Credit Risk. In the normal course of business, we are exposed to credit risk. The principal concentrations of credit risk relate to cash deposits, cash equivalents, and accounts receivable. We regularly monitor credit risk exposures and take steps to mitigate the likelihood of these exposures resulting in a loss. We hold our cash deposits and cash equivalents with financial institutions we believe to be of sound financial condition.\n\n55\n\n \n\nWe generally do not require collateral or other security to support accounts receivable. We evaluate the creditworthiness of our customers in conjunction with our revenue recognition process, as well as through our ongoing collectability assessment process for accounts receivable. We maintain an allowance for expected losses based upon factors surrounding the credit risk of specific customers, historical trends, and other information. We use various judgments and estimates in determining the adequacy of the allowance for expected losses. See Note 4 for additional details of our concentration of accounts receivable.\n\nThe activity in our allowance for expected losses is as follows (in thousands):\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nBalance, beginning of year\n\n \n\n$\n\n3,041\n\n \n\n \n\n$\n\n5,432\n\n \n\n \n\n$\n\n5,528\n\n \n\n     Additions to/(reversals of) expense\n\n \n\n \n\n2,157\n\n \n\n \n\n \n\n(951\n\n)\n\n \n\n \n\n1,765\n\n \n\n     Write-offs\n\n \n\n \n\n(1,966\n\n)\n\n \n\n \n\n(1,419\n\n)\n\n \n\n \n\n(1,767\n\n)\n\n     Other\n\n \n\n \n\n45\n\n \n\n \n\n \n\n(21\n\n)\n\n \n\n \n\n(94\n\n)\n\nBalance, end of year\n\n \n\n$\n\n3,277\n\n \n\n \n\n$\n\n3,041\n\n \n\n \n\n$\n\n5,432\n\n \n\nProperty and Equipment. Property and equipment are recorded at cost (or at estimated fair value if acquired in a business combination) and are depreciated over their estimated useful lives ranging from three to ten years. Leasehold improvements are depreciated over the shorter of their economic life or the lease term. Depreciation expense is computed using the straight-line method for financial reporting purposes. Depreciation expense for property and equipment is reflected in our Consolidated Statements of Income (\"Income Statement\" or \"Income Statements\") separately in the aggregate and is not included in the cost of revenue or the other components of operating expenses, except for accelerated depreciation expense that is included in our restructuring and reorganization charges (see Note 9).\n\nSoftware. We spend substantial amounts on R&D, particularly for new solutions and enhancements of existing products and services. For development of software solutions that are to be licensed by us, we expense all costs related to the development of the software until technological feasibility is established. For development of software to be used internally (e.g., cloud-based systems software), we expense all costs prior to the application development stage.\n\nDuring 2025, 2024, and 2023, we spent $161.6 million, $158.2 million, and $143.2 million, respectively, on R&D projects. We did not capitalize any R&D costs in 2025, 2024, and 2023, as the costs subject to capitalization during these periods were not material. We did not have any capitalized R&D costs included in our December 31, 2025 and 2024 Balance Sheets.\n\nRealizability of Long-Lived Assets. We evaluate our long-lived assets, other than goodwill, for possible impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. A long-lived asset is impaired if estimated future undiscounted cash flows associated with that asset are insufficient to recover the carrying amount of the long-lived asset. If deemed impaired, the long-lived asset is written down to its estimated fair value.\n\nGoodwill. We evaluate our goodwill for impairment on an annual basis, as well as we may evaluate our goodwill on a more periodic basis (e.g., quarterly) if events occur or circumstances change that could indicate a potential impairment may have occurred. Goodwill is considered impaired if the carrying value of the reporting unit which includes the goodwill is greater than the estimated fair value of the reporting unit.\n\nContingencies. We accrue for a loss contingency when: (i) it is probable that an asset has been impaired, or a liability has been incurred; and (ii) the amount of the loss can be reasonably estimated. The determination of loss contingencies is subject to various judgments and estimates. We do not record the benefit from a gain contingency until the benefit is realized.\n\nEarnings Per Common Share (“EPS”). Basic and diluted EPS amounts are presented on our Income Statements. The reconciliation of the basic and diluted EPS denominators related to the common shares is included in the following table (in thousands):\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nBasic weighted-average common shares\n\n \n\n \n\n \n\n27,694\n\n \n\n \n\n \n\n28,345\n\n \n\n \n\n \n\n29,938\n\n \n\nDilutive effect of restricted common stock\n\n \n\n \n\n \n\n462\n\n \n\n \n\n \n\n320\n\n \n\n \n\n177\n\n \n\nDilutive effect of the 2023 Convertible Notes\n\n \n\n \n\n \n\n62\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\nDiluted weighted-average common shares\n\n \n\n \n\n \n\n28,218\n\n \n\n \n\n \n\n28,665\n\n \n\n \n\n \n\n30,115\n\n \n\nThe dilutive effect of time-based awards is computed using the treasury stock method. The dilutive effect of performance-based and market-based awards is computed based on the number of shares that would be issued as if the end of the reporting period was the end of the performance period. The dilutive effect of the 2023 Convertible Notes is computed using the if-converted method and only has an effect in those quarterly periods in which our average stock price exceeds the current effective conversion price.\n\n56\n\n \n\nPotentially dilutive common shares related to non-participating unvested restricted stock were excluded from the computation of diluted EPS, as the effect was anti-dilutive, and were not material in any period presented. The capped call transactions (the “Capped Call Transactions”) entered into in connection with the pricing of the 2023 Convertible Notes were excluded from the computation of diluted EPS, as the effect was anti-dilutive.\n\nStock-Based Compensation. Stock-based compensation represents the cost related to stock-based awards granted to employees and non-employee directors. We measure stock-based compensation cost at the grant date of the award, based on the estimated fair value of the award, and recognize the cost (net of estimated forfeitures) over the requisite service period.\n\nIncome Taxes. We account for income taxes using the asset and liability method. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. Deferred tax assets and liabilities are recognized for expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.\n\nAccounting Pronouncements Adopted. Effective for the year ended December 31, 2025, we adopted ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), on a retrospective basis. ASU 2023-09 requires entities to disclose more detailed information about their effective tax rate reconciliation as well as information on income taxes paid. The adoption of this standard only impacts disclosures and did not have a material impact on our Financial Statements.\n\nAccounting Pronouncements Issued but Not Yet Effective. In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”), which requires entities to disclose disaggregated information about certain income statement expense line items in the notes to their financial statements on an annual and interim basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently in the process of evaluating the impact of this ASU on our Financial Statements and related disclosures.\n\nIn September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software Topic 350-40: Targeted Improvements to the Accounting for Internal-Use Software, which will update the requirements around the capitalization and disclosure of internal-use software. ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and for interim periods within those fiscal years, with early adoption permitted. We are currently in the process of evaluating the impact of this ASU on our Financial Statements and related disclosures.\n\n4. Segment Reporting and Significant Concentration\n\nSegment Information. Our Chief Operating Decision Maker (“CODM”) is our President and Chief Executive Officer. We have evaluated how our CODM has organized our Company for purposes of making operating decisions, preparing budgets and forecasts, setting targets, allocating resources, and assessing performance. Our CODM manages all business activities on a consolidated basis, and as a result, we have concluded that as of December 31, 2025, there is one reportable segment.\n\nOur one segment provides solutions and services that help companies around the world monetize and digitally enable the customer experience by accurately capturing, managing, generating, and optimizing the interactions and revenue associated with their customers. We generate a substantial percentage of our revenue from customers utilizing Advanced Convergent Platform (“ACP”), a private SaaS platform, and related solutions (e.g., service technician management, analytics, electronic bill presentment, etc.) within the North American communications markets. In addition, a smaller portion of our revenue is generated from our public SaaS revenue management and payments platforms, serving customers globally. In addition, we license certain solutions (e.g., mediation, partner management, rating, and charging) and provide our professional services to implement, configure, and maintain these solutions. These solutions are sometimes provided under a managed services arrangement, where we assume long-term responsibility for delivering and maintaining our solutions and related operations under a defined scope and specified service levels.\n\nThe accounting policies of our one segment are the same as those described in the summary of significant accounting policies (see Note 3). As our one segment is managed on a consolidated basis, our measure of segment profit or loss is consolidated net income. Our CODM uses consolidated net income to assess the performance of our one segment and decide how and where to allocate resources and reinvest profits into the business in areas such as R&D, business and/or asset acquisitions, investments in market share expansion with our existing and potential new customers, talent, technology, the repurchase of our common stock, and/or the payment of dividends. Net income, and components of net income, are used to monitor actual performance and are compared to budgeted and forecasted results to assess the performance of our one segment, set targets, and establish management’s incentive compensation. The measure of consolidated segment assets is reported in our Balance Sheets as total assets. We do not have intra-entity sales or transfers.\n\n57\n\n \n\nWe regularly provide our CODM a reporting package that shows our results by functional expenses, similar to our Income Statements. However, for purposes of this reporting package, depreciation is included in these functional expense categories, rather than broken out separately. Additionally, certain expenses such as restructuring and reorganization charges, executive transition costs, and acquisition-related costs, along with non-cash charges such as stock-based compensation and amortization of acquired intangibles, are excluded. The table below provides the significant expenses that are regularly provided to our CODM for our one segment, the required disclosable amounts that are included in consolidated net income, and a reconciliation to consolidated net income. In 2025, we have broken out acquisition-related costs as a separate line item, rather than including them in 'Other segment items'. Prior period amounts have been reclassified to conform with the current year presentation.\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\n \n\nRevenue\n\n \n\n$\n\n1,223,289\n\n \n\n \n\n$\n\n1,197,248\n\n \n\n \n\n$\n\n1,169,258\n\n \n\n \n\nLess:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCost of revenue:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nTransaction fees\n\n \n\n \n\n106,275\n\n \n\n \n\n \n\n97,857\n\n \n\n \n\n \n\n87,430\n\n \n\n \n\nAll other (1)\n\n \n\n \n\n510,189\n\n \n\n \n\n \n\n513,237\n\n \n\n \n\n \n\n530,109\n\n \n\n \n\nTotal cost of revenue\n\n \n\n \n\n616,464\n\n \n\n \n\n \n\n611,094\n\n \n\n \n\n \n\n617,539\n\n \n\n \n\nResearch and development (1)\n\n \n\n \n\n157,795\n\n \n\n \n\n \n\n155,638\n\n \n\n \n\n \n\n142,962\n\n \n\n \n\nSelling and marketing (1)\n\n \n\n \n\n111,955\n\n \n\n \n\n \n\n114,323\n\n \n\n \n\n \n\n114,207\n\n \n\n \n\nGeneral and administrative (1)\n\n \n\n \n\n110,841\n\n \n\n \n\n \n\n116,761\n\n \n\n \n\n \n\n108,823\n\n \n\n \n\nRestructuring and reorganization charges (1)\n\n \n\n \n\n19,818\n\n \n\n \n\n \n\n13,323\n\n \n\n \n\n \n\n16,336\n\n \n\n \n\nStock-based compensation\n\n \n\n \n\n46,126\n\n \n\n \n\n \n\n34,385\n\n \n\n \n\n \n\n29,480\n\n \n\n \n\nAcquisition-related costs (2)\n\n \n\n \n\n41,541\n\n \n\n \n\n \n\n20,039\n\n \n\n \n\n \n\n14,280\n\n \n\n \n\nOther segment items (3)\n\n \n\n \n\n(902\n\n)\n\n \n\n \n\n(11,056\n\n)\n\n \n\n \n\n2,104\n\n \n\n \n\nInterest expense\n\n \n\n \n\n28,954\n\n \n\n \n\n \n\n30,469\n\n \n\n \n\n \n\n31,176\n\n \n\n \n\nIncome tax provision\n\n \n\n \n\n34,816\n\n \n\n \n\n \n\n25,420\n\n \n\n \n\n \n\n26,105\n\n \n\n \n\nSegment net income\n\n \n\n \n\n55,881\n\n \n\n \n\n \n\n86,852\n\n \n\n \n\n \n\n66,246\n\n \n\n \n\nReconciliation of profit or loss:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAdjustments and reconciling items\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\nConsolidated net income\n\n \n\n$\n\n55,881\n\n \n\n \n\n$\n\n86,852\n\n \n\n \n\n$\n\n66,246\n\n \n\n \n\n(1)\nThese functional expense lines include depreciation expense, which is presented separately on our Income Statements.\n\n(2)\nAcquisition-related costs include amortization of acquired intangible assets, earn-out compensation, and transaction-related costs.\n\n(3)\nOther segment items include executive transition costs, interest income, loss on debt extinguishment, and foreign currency gains/losses.\n\nDepreciation expense and interest income are separately disclosed on our Income Statements. Amortization expense is separately disclosed on our Consolidated Statements of Cash Flows (\"Statements of Cash Flows\") and is discussed in Note 5.\n\nGeographic Concentration. We use the location of the customer as the basis of attributing revenue to geographic location. Revenue from countries exceeding 10% of our total revenue for the following years were as follows:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\n \n\nUnited States\n\n \n\n$\n\n991,564\n\n \n\n \n\n$\n\n978,308\n\n \n\n \n\n$\n\n935,391\n\n \n\n \n\nAll other\n\n \n\n \n\n231,725\n\n \n\n \n\n \n\n218,940\n\n \n\n \n\n \n\n233,867\n\n \n\n \n\nTotal revenue\n\n \n\n$\n\n1,223,289\n\n \n\n \n\n$\n\n1,197,248\n\n \n\n \n\n$\n\n1,169,258\n\n \n\n \n\nLong-lived assets (principally, property and equipment, operating lease right-of-use assets, software, acquired customer contracts, and customer contract costs) classified by the location of the controlling statutory company for countries exceeding 10% of the total long-lived asset balance for the following years were as follows:\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\n \n\nUnited States\n\n \n\n$\n\n143,189\n\n \n\n \n\n$\n\n172,412\n\n \n\n \n\n$\n\n175,997\n\n \n\n \n\nAll other\n\n \n\n \n\n35,512\n\n \n\n \n\n \n\n28,462\n\n \n\n \n\n \n\n28,355\n\n \n\n \n\nTotal long-lived assets\n\n \n\n$\n\n178,701\n\n \n\n \n\n$\n\n200,874\n\n \n\n \n\n$\n\n204,352\n\n \n\n \n\n \n\n58\n\n \n\nCustomer Concentration. A large percentage of our revenue is generated from a limited number of customers in the global communications industry, with our three largest customers being Charter Communications, Inc. (“Charter”), Comcast Corporation (“Comcast”), and DISH Network L.L.C.\n\nRevenue from customers exceeding 10% of our total revenue for the following years were as follows:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\n \n\nCharter\n\n \n\n \n\n19\n\n%\n\n \n\n \n\n20\n\n%\n\n \n\n \n\n21\n\n%\n\n \n\nComcast\n\n \n\n \n\n17\n\n%\n\n \n\n \n\n19\n\n%\n\n \n\n \n\n18\n\n%\n\n \n\nAs of December 31, 2025 and 2024, the percentage of net billed accounts receivable balances attributable to these customers were as follows:\n\n \n\n \n\n \n\nAs of December 31,\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nCharter\n\n \n\n \n\n18\n\n%\n\n \n\n \n\n20\n\n%\n\nComcast\n\n \n\n \n\n15\n\n%\n\n \n\n \n\n17\n\n%\n\nWe expect to continue to generate a large percentage of our future revenue from our significant 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 financial or operating difficulties, it could have a material adverse effect on our financial position and results of operations.\n\n5. Goodwill and Long-Lived Assets\n\nProperty and Equipment. Property and equipment as of December 31, 2025 and 2024 consisted of the following (in thousands, except years):\n\n \n\n \n\n \n\nUseful Lives (Years)\n\n \n\n \n\nDecember 31, 2025\n\n \n\n \n\nDecember 31, 2024\n\n \n\nComputer equipment\n\n \n\n3-6\n\n \n\n \n\n$\n\n87,930\n\n \n\n \n\n$\n\n94,574\n\n \n\nLeasehold improvements\n\n \n\n \n\n10\n\n \n\n \n\n \n\n21,379\n\n \n\n \n\n \n\n25,415\n\n \n\nOperating equipment\n\n \n\n3-8\n\n \n\n \n\n \n\n53,957\n\n \n\n \n\n \n\n67,651\n\n \n\nFurniture and fixtures\n\n \n\n \n\n8\n\n \n\n \n\n \n\n2,186\n\n \n\n \n\n \n\n2,469\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n165,452\n\n \n\n \n\n \n\n190,109\n\n \n\nLess – accumulated depreciation\n\n \n\n \n\n \n\n \n\n \n\n(122,947\n\n)\n\n \n\n \n\n(133,514\n\n)\n\nProperty and equipment, net\n\n \n\n \n\n \n\n \n\n$\n\n42,505\n\n \n\n \n\n$\n\n56,595\n\n \n\nGoodwill. We do not have any intangible assets with indefinite lives other than goodwill. A rollforward of goodwill for 2024 and 2025 is as follows (in thousands):\n\n \n\nJanuary 1, 2024 balance\n\n \n\n$\n\n308,596\n\n \n\nGoodwill acquired during the period\n\n \n\n \n\n10,662\n\n \n\nEffects of changes in foreign currency exchange rates\n\n \n\n \n\n(3,217\n\n)\n\nDecember 31, 2024 balance\n\n \n\n \n\n316,041\n\n \n\nEffects of changes in foreign currency exchange rates\n\n \n\n \n\n8,665\n\n \n\nDecember 31, 2025 balance\n\n \n\n$\n\n324,706\n\n \n\nOther Intangible Assets. Our other intangible assets subject to ongoing amortization consist of acquired customer contracts and software.\n\nAcquired Customer Contracts. As of December 31, 2025 and 2024, the carrying values of our acquired customer contracts were as follows (in thousands):\n\n \n\n \n\n \n\nDecember 31, 2025\n\n \n\n \n\nDecember 31, 2024\n\n \n\n \n\n \n\nGross\nCarrying\nAmount\n\n \n\n \n\nAccumulated Amortization\n\n \n\n \n\nNet Amount\n\n \n\n \n\nGross\nCarrying\nAmount\n\n \n\n \n\nAccumulated Amortization\n\n \n\n \n\nNet Amount\n\n \n\nAcquired customer contracts (1)\n\n \n\n$\n\n177,156\n\n \n\n \n\n$\n\n(148,567\n\n)\n\n \n\n$\n\n28,589\n\n \n\n \n\n$\n\n172,656\n\n \n\n \n\n$\n\n(133,279\n\n)\n\n \n\n$\n\n39,377\n\n \n\n \n\n59\n\n \n\nThe aggregate amortization related to acquired customer contracts included in our operations for 2025, 2024, and 2023 was as follows (in thousands):\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nAcquired customer contracts amortization (1)\n\n \n\n$\n\n11,082\n\n \n\n \n\n$\n\n11,346\n\n \n\n \n\n$\n\n9,775\n\n \n\n(1)\nAcquired customer contracts represent assets acquired in our business acquisitions. Acquired customer contracts are amortized over their estimated useful lives ranging from five to twenty years based on the approximate pattern in which the economic benefits of the intangible assets are expected to be realized, with the amortization expense included as cost of revenue in our Income Statements.\n\n \n\nThe remaining weighted-average amortization period of the acquired customer contracts as of December 31, 2025 was approximately 66 months. Based on the net carrying value of these acquired customer contracts, the estimated amortization for each of the five succeeding fiscal years ending December 31 will be: 2026 – $8.6 million; 2027 – $5.3 million; 2028 – $4.2 million; 2029 – $3.2 million; and 2030 – $2.8 million.\n\n \n\nSoftware. As of December 31, 2025 and 2024, the carrying values of our software assets were as follows (in thousands):\n\n \n\n \n\n \n\nDecember 31, 2025\n\n \n\n \n\nDecember 31, 2024\n\n \n\n \n\n \n\nGross\nCarrying\nAmount\n\n \n\n \n\nAccumulated Amortization\n\n \n\n \n\nNet Amount\n\n \n\n \n\nGross\nCarrying\nAmount\n\n \n\n \n\nAccumulated Amortization\n\n \n\n \n\nNet Amount\n\n \n\nAcquired software (2)\n\n \n\n$\n\n85,208\n\n \n\n \n\n$\n\n(83,665\n\n)\n\n \n\n$\n\n1,543\n\n \n\n \n\n$\n\n84,283\n\n \n\n \n\n$\n\n(79,843\n\n)\n\n \n\n$\n\n4,440\n\n \n\nInternal use software (3)\n\n \n\n \n\n88,748\n\n \n\n \n\n \n\n(70,575\n\n)\n\n \n\n \n\n18,173\n\n \n\n \n\n \n\n90,292\n\n \n\n \n\n \n\n(74,805\n\n)\n\n \n\n \n\n15,487\n\n \n\nTotal software\n\n \n\n$\n\n173,956\n\n \n\n \n\n$\n\n(154,240\n\n)\n\n \n\n$\n\n19,716\n\n \n\n \n\n$\n\n174,575\n\n \n\n \n\n$\n\n(154,648\n\n)\n\n \n\n$\n\n19,927\n\n \n\nThe aggregate amortization related to software included in our operations for 2025, 2024, and 2023 was as follows (in thousands):\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nAcquired software amortization (2)\n\n \n\n$\n\n2,723\n\n \n\n \n\n$\n\n2,668\n\n \n\n \n\n$\n\n2,410\n\n \n\nInternal use software amortization (3)\n\n \n\n \n\n13,072\n\n \n\n \n\n \n\n11,671\n\n \n\n \n\n \n\n13,624\n\n \n\nTotal software amortization\n\n \n\n$\n\n15,795\n\n \n\n \n\n$\n\n14,339\n\n \n\n \n\n$\n\n16,034\n\n \n\n \n\n(2)\nAcquired software represents software and similar intellectual property rights acquired in our business acquisitions, which are amortized over their estimated useful lives ranging from two to eight years. The amortization of acquired software is reflected as a cost of revenue in our Income Statements.\n\n(3)\nInternal use software represents: (i) third-party software licenses; and (ii) the internal and external costs related to the implementation of third-party software licenses. Internal use software is amortized over its estimated useful life ranging from one to five years.\n\nThe remaining weighted-average amortization period of the software intangible assets as of December 31, 2025 was approximately 18 months. Based on the net carrying value of these intangible assets, the estimated amortization for each of the five succeeding fiscal years ending December 31 will be: 2026 – $12.0 million; 2027 – $4.9 million; 2028 – $1.7 million; 2029 – $0.9 million; and 2030 – $0.2 million.\n\nCustomer Contract Costs. As of December 31, 2025 and 2024, the carrying values of our customer contract cost assets, related to those contracts with a contractual term greater than one year, were as follows (in thousands):\n\n \n\n \n\n \n\nDecember 31, 2025\n\n \n\n \n\nDecember 31, 2024\n\n \n\n \n\n \n\nGross\nCarrying\nAmount\n\n \n\n \n\nAccumulated Amortization\n\n \n\n \n\nNet Amount\n\n \n\n \n\nGross\nCarrying\nAmount\n\n \n\n \n\nAccumulated Amortization\n\n \n\n \n\nNet Amount\n\n \n\nCustomer contract incentives (4)\n\n \n\n$\n\n11,067\n\n \n\n \n\n$\n\n(3,577\n\n)\n\n \n\n$\n\n7,490\n\n \n\n \n\n$\n\n5,035\n\n \n\n \n\n$\n\n(3,183\n\n)\n\n \n\n$\n\n1,852\n\n \n\nCapitalized costs (5)\n\n \n\n \n\n92,418\n\n \n\n \n\n \n\n(38,638\n\n)\n\n \n\n \n\n53,780\n\n \n\n \n\n \n\n82,363\n\n \n\n \n\n \n\n(33,836\n\n)\n\n \n\n \n\n48,527\n\n \n\nCapitalized commission fees (6)\n\n \n\n \n\n18,373\n\n \n\n \n\n \n\n(8,030\n\n)\n\n \n\n \n\n10,343\n\n \n\n \n\n \n\n17,998\n\n \n\n \n\n \n\n(7,568\n\n)\n\n \n\n \n\n10,430\n\n \n\nTotal customer contract costs\n\n \n\n$\n\n121,858\n\n \n\n \n\n$\n\n(50,245\n\n)\n\n \n\n$\n\n71,613\n\n \n\n \n\n$\n\n105,396\n\n \n\n \n\n$\n\n(44,587\n\n)\n\n \n\n$\n\n60,809\n\n \n\n \n\n60\n\n \n\nThe aggregate amortization related to our customer contract costs included in our operations for 2025, 2024, and 2023 was as follows (in thousands):\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nCustomer contract incentives amortization (4)\n\n \n\n$\n\n1,409\n\n \n\n \n\n$\n\n748\n\n \n\n \n\n$\n\n1,136\n\n \n\nCapitalized costs amortization (5)\n\n \n\n \n\n16,151\n\n \n\n \n\n \n\n17,216\n\n \n\n \n\n \n\n15,422\n\n \n\nCapitalized commission fees amortization (6)\n\n \n\n \n\n3,723\n\n \n\n \n\n \n\n3,298\n\n \n\n \n\n \n\n3,733\n\n \n\nTotal customer contract costs amortization\n\n \n\n$\n\n21,283\n\n \n\n \n\n$\n\n21,262\n\n \n\n \n\n$\n\n20,291\n\n \n\n(4)\nCustomer contract incentives consist principally of incentives provided to new or existing customers to convert their customer accounts to, or retain their customer accounts on, our solutions. Customer contract incentives are amortized ratably over the contract period to include renewal periods, if applicable, which as of December 31, 2025, range from 2026 to 2031. The amortization of customer contract incentives is reflected as a reduction of revenue in our Income Statements.\n\n(5)\nCapitalized costs are related to: (i) customer conversion/set-up activities; and (ii) direct material costs to fulfill long-term revenue management solutions and managed services arrangements. These costs are amortized over the contract period based on the transfer of goods or services to which the assets relate, which as of December 31, 2025, range from 2026 to 2036, and are included in cost of revenue in our Income Statements.\n\n(6)\nCapitalized commission fees are incremental commissions paid as a result of obtaining a customer contract. These fees are amortized over the contract period based on the transfer of goods or services to which the assets relate, which as of December 31, 2025, range from 2026 to 2033, and are included in SG&A expenses in our Income Statements. Incremental commission fees incurred as a result of obtaining a customer contract are expensed when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less.\n\n6. Debt\n\nAs of December 31, 2025 and 2024, our long-term debt was as follows (in thousands):\n\n \n\n \n\n \n\nDecember 31,\n2025\n\n \n\n \n\nDecember 31,\n2024\n\n \n\n2025 Credit Agreement:\n\n \n\n \n\n \n\n \n\n \n\n \n\n$600 million revolving loan facility, due March 2030, interest at adjusted\n    SOFR plus applicable margin (combined rate of 5.181% at December 31,\n    2025)\n\n \n\n$\n\n125,000\n\n \n\n \n\n$\n\n-\n\n \n\nLess – deferred financing costs\n\n \n\n \n\n(2,650\n\n)\n\n \n\n \n\n-\n\n \n\n 2025 Term Loan, net of unamortized discounts\n\n \n\n \n\n122,350\n\n \n\n \n\n \n\n-\n\n \n\n2023 Convertible Notes:\n\n \n\n \n\n \n\n \n\n \n\n \n\n2023 Convertible Notes – senior unsecured convertible notes, due\n    September 2028, cash interest at 3.875%\n\n \n\n \n\n425,000\n\n \n\n \n\n \n\n425,000\n\n \n\nLess – deferred financing costs\n\n \n\n \n\n(7,898\n\n)\n\n \n\n \n\n(10,618\n\n)\n\n 2023 Convertible Notes, net of unamortized discounts\n\n \n\n \n\n417,102\n\n \n\n \n\n \n\n414,382\n\n \n\n2021 Credit Agreement:\n\n \n\n \n\n \n\n \n\n \n\n \n\n2021 Term Loan, due September 2026, interest at adjusted SOFR plus\n    applicable margin\n\n \n\n \n\n-\n\n \n\n \n\n \n\n125,625\n\n \n\nLess – deferred financing costs\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(1,510\n\n)\n\n 2021 Term Loan, net of unamortized discounts\n\n \n\n \n\n-\n\n \n\n \n\n \n\n124,115\n\n \n\n$450 million revolving loan facility, due September 2026, interest at\n    adjusted SOFR plus applicable margin\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\nTotal debt, net of unamortized discounts\n\n \n\n \n\n539,452\n\n \n\n \n\n \n\n538,497\n\n \n\nCurrent portion of long-term debt\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(7,500\n\n)\n\nLong-term debt, net of unamortized discounts\n\n \n\n$\n\n539,452\n\n \n\n \n\n$\n\n530,997\n\n \n\n2025 Credit Agreement. In March 2025, we entered into a $600.0 million five-year debt arrangement (the \"2025 Credit Agreement\") with a consortium of banks. The 2025 Credit Agreement consists of a $600.0 million aggregate principal five-year revolving loan facility (the \"2025 Revolver\") due March 2030 (subject to a springing maturity of 91 days prior to the maturity date of certain of our long-term indebtedness if, on such date, the aggregate principal amount of such indebtedness equals or exceeds $127.0 million and 50% of consolidated EBITDA (subject to certain exceptions as defined in the 2025 Credit Agreement)). The 2025 Credit Agreement replaced our $600.0 million five-year credit agreement entered into in September 2021 (the “2021 Credit Agreement”), which consisted of: (i) $150.0 million aggregate principal five-year term loan (the \"2021 Term Loan\"); and (ii) $450.0 million revolving loan facility (the \"2021 Revolver\").\n\n61\n\n \n\nUpon execution of the 2025 Credit Agreement, we withdrew $140.6 million from the 2025 Revolver. These funds were used to repay: (i) the outstanding $125.6 million balance of 2021 Term Loan; (ii) the outstanding $10.0 million balance of 2021 Revolver that we withdrew during the first quarter of 2025; and (iii) certain fees and expenses in connection with the new debt arrangement, with the remainder used for general corporate purposes.\n\nThe interest rates under the 2025 Credit Agreement are based upon our choice of an adjusted Secured Overnight Financing Rate (\"SOFR\") 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 dependent upon 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 2025 Revolver, with the commitment fee rate also dependent upon our then-net secured total leverage ratio.\n\nThe 2025 Credit Agreement requires quarterly commitment fee payments and interest payments based on the interest election period. The 2025 Credit Agreement contains certain customary prepayment or repayment provisions. As specified in the 2025 Credit Agreement, if certain customary events were to occur, we may be required to pay all amounts outstanding under the 2025 Credit Agreement, together with interest payable thereon.\n\nThe 2025 Credit Agreement contains customary affirmative covenants. In addition, the 2025 Credit Agreement has customary negative covenants that places limits on our ability to: (i) incur additional indebtedness; (ii) create liens on its property; (iii) make investments; (iv) enter into mergers and consolidations; (v) sell assets; (vi) declare dividends or repurchase shares; (vii) engage in certain transactions with affiliates; (viii) prepay certain indebtedness; and (ix) issue capital stock of subsidiaries. We must also meet a total net leverage ratio financial covenant.\n\nDuring 2025, we repaid $0.6 million on the 2025 Revolver. As of December 31, 2025, we had $125.0 million outstanding on the 2025 Revolver, and had issued a standby letter of credit of $0.2 million that counts against our available 2025 Revolver balance, leaving $474.8 million available to us.\n\nIn conjunction with the closing of the 2025 Credit Agreement, we incurred total debt financing costs of $2.3 million. As certain lenders from the 2021 Credit Agreement chose not to participate in the 2025 Credit Agreement, we recognized a loss on extinguishment of $0.5 million, which related to the write-off of unamortized debt issuance costs. The remaining $0.9 million of unamortized debt issuance costs related to the 2021 Credit Agreement, when combined with the $2.3 million of debt financing costs related to 2025 Credit Agreement, totaled $3.2 million and are being amortized to interest expense over the term of the 2025 Credit Agreement.\n\nIf the Merger, discussed in Note 2, is consummated, this will result in the outstanding loans under the 2025 Credit Agreement being repaid and commitments thereunder being terminated at the closing.\n\n2023 Convertible Notes. In September 2023, we completed an offering of $425.0 million of 3.875% senior convertible notes due September 15, 2028 (the “2023 Convertible Notes”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2023 Convertible Notes are unsecured obligations and pay 3.875% annual cash interest, payable semiannually in arrears on March 15 and September 15 of each year.\n\nThe 2023 Convertible Notes will be convertible at the option of the noteholders before June 15, 2028, upon the occurrence of certain events. On or after June 15, 2028, and until the close of business on the second scheduled trading day immediately preceding September 15, 2028, the maturity date, noteholders may convert all or any portion of their notes at any time regardless of these conditions. The 2023 Convertible Notes will be convertible at a conversion rate of 14.0753 shares of our common stock per $1,000 principal amount of the 2023 Convertible Notes, which is equivalent to a conversion price of $71.05 per share of our common stock and the conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events, in accordance with the terms of the Indenture related to the 2023 Convertible Notes (“2023 Notes Indenture”). Under the terms of the 2023 Convertible Notes, the conversion rate is adjusted for any quarterly dividends exceeding $0.28 per share. We are required to satisfy our conversion obligation as follows: (i) paying cash up to the aggregate principal amount of notes to be converted; and (ii) to the extent the value of our conversion obligation exceeds the par value, we will satisfy the remaining conversion obligation in our common stock, cash, or a combination thereof, at our election. As of December 31, 2025, none of the conditions to early convert have been met.\n\nWe may not redeem the 2023 Convertible Notes prior to September 21, 2026. On or after September 21, 2026, we may redeem for cash all or part of the 2023 Convertible Notes, subject to a partial redemption limitation that requires at least $100.0 million of the principal amount of the 2023 Convertible Notes to remain outstanding if the last reported sales price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption. The redemption price will equal the principal amount of the 2023 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund has been established for the 2023 Convertible Notes.\n\nThe 2023 Notes Indenture includes customary terms, including certain events of default after which the 2023 Convertible Notes may be due and payable immediately. The 2023 Notes Indenture contains customary affirmative covenants, including a reporting covenant.\n\n62\n\n \n\nIf the Merger, discussed in Note 2, is consummated, this would result in a conversion trigger for the note holders.\n\nIn September 2023, in connection with the pricing of the 2023 Convertible Notes, we entered into privately negotiated Capped Call Transactions with certain of the initial purchasers of the 2023 Convertible Notes and other financial institutions (collectively, the “Option Counterparties”). We used $34.3 million of the net proceeds from the offering of the 2023 Convertible Notes to pay the premiums of the Capped Call Transactions.\n\nThe Capped Call Transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2023 Convertible Notes, 5.98 million shares of our common stock, the same number of shares of common stock underlying the 2023 Convertible Notes. The Capped Call Transactions will expire upon the maturity of the 2023 Convertible Notes.\n\nThe Capped Call Transactions are expected generally to reduce the potential dilution to our common stock upon conversion of the 2023 Convertible Notes and/or offset any cash payments we are required to make in excess of the principal amount of the 2023 Convertible Notes, in the event that the market price per share of common stock (as measured under the terms of the Capped Call Transactions) is greater than the strike price of the Capped Call Transactions. The strike price of the Capped Call Transactions initially corresponds to the initial conversion price of the 2023 Convertible Notes, or $71.05 per share of our common stock, plus any carryforward adjustments not yet effected. The Capped Call Transactions have an initial cap price of $96.52 per share of our common stock, which represents a premium of 80% over the last reported sale price of our common stock on the date the 2023 Convertible Notes were issued, subject to certain adjustments under the terms of the Capped Call Transactions.\n\nThe Capped Call Transactions are separate transactions entered into by us with the Option Counterparties. They are not part of the terms of the 2023 Convertible Notes and do not change the holders’ rights under the 2023 Convertible Notes. The Capped Call Transactions do not meet the criteria for separate accounting as a derivative as they meet the criteria for equity classification. The premiums paid for the Capped Call Transactions of $34.3 million have been included as a reduction to additional paid-in capital, net of $7.9 million of deferred income taxes.\n\nThe proceeds from the sale of the 2023 Convertible Notes, net of financing costs, were $411.0 million. We used the net proceeds to: (i) repay the principal amount of $275.0 million of outstanding borrowings under our $450.0 million, five-year revolving loan facility; (ii) repurchase 1.7 million shares of our common stock for $90.1 million in privately negotiated transactions, concurrently with the pricing of the offering of the 2023 Convertible Notes; and (iii) pay the $34.3 million premium for the Capped Call Transactions. The remaining net proceeds were used for general corporate purposes.\n\nIn conjunction with the closing of the 2023 Convertible Notes, we incurred financing costs of $14.0 million which are being amortized to interest expense using the effective interest method through maturity.\n\nEstimated Maturities on Long-Term Debt. As of December 31, 2025, the maturities of our long-term debt, based upon: (i) the maturity date of the 2025 Revolver; and (ii) the maturity date of the 2023 Convertible Notes, were as follows (in thousands):\n\n \n\n \n\n2026\n\n \n\n \n\n2027\n\n \n\n \n\n2028\n\n \n\n \n\n2029\n\n \n\n \n\n2030\n\n \n\n \n\nTotal\n\n \n\n2025 Revolver\n\n \n\n$\n\n-\n\n \n\n \n\n$\n\n-\n\n \n\n \n\n$\n\n-\n\n \n\n \n\n$\n\n-\n\n \n\n \n\n$\n\n125,000\n\n \n\n \n\n$\n\n125,000\n\n \n\n2023 Convertible Notes\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n425,000\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n425,000\n\n \n\nTotal long-term debt repayments\n\n \n\n$\n\n-\n\n \n\n \n\n$\n\n-\n\n \n\n \n\n$\n\n425,000\n\n \n\n \n\n$\n\n-\n\n \n\n \n\n$\n\n125,000\n\n \n\n \n\n$\n\n550,000\n\n \n\nDeferred Financing Costs. As of December 31, 2025, net deferred financing costs related to the 2025 Credit Agreement were $2.7 million and are being amortized to interest expense over the related term of the 2025 Credit Agreement (through March 2030). As of December 31, 2025, net deferred financing costs related to the 2023 Convertible Notes were $7.9 million and are being amortized to interest expense through the maturity date of the 2023 Convertible Notes (September 2028). The net deferred financing costs are presented as a reduction from the carrying amount of the corresponding debt liability in our Balance Sheets. Interest expense for 2025, 2024, and 2023 includes amortization of deferred financing costs of $3.5 million, $3.7 million, and $1.7 million, respectively. The weighted-average interest rate on our debt borrowings, amortization of deferred financing costs, and commitment fees on the revolving loan facility, for 2025, 2024, and 2023, was approximately 5%, 5%, and 7%, respectively.\n\nOther. We finance certain of our internal use software. During 2025, we entered into financing agreements at a total cost of $8.6 million with payments through 2030. As of December 31, 2025 and December 31, 2024, we had $11.4 million and $8.5 million, respectively, outstanding under these agreements, of which $7.1 million and $4.2 million, respectively, were included in other current liabilities with the remaining included in other non-current liabilities in our Balance Sheets. These arrangements are treated as non-cash investing and financing activities for purposes of our Statements of Cash Flows.\n\n63\n\n \n\n7. Leases\n\nWe have operating leases for: (i) real estate which includes office space and our design and delivery centers; and (ii) our outsourced data center environment, as discussed further in Note 12. Our leases have remaining terms through 2033, some of which include options to extend the leases for up to an additional ten years. The exercise of lease renewal options is at our sole discretion.\n\nWe have made an accounting policy election not to recognize in our Balance Sheets leases with an initial term of twelve months or less, for any class of underlying asset. We have also made an election for real estate leases not to separate the lease and non-lease components, but rather account for the entire arrangement as a single lease component. For our outsourced data center environment agreement, we have concluded that there are lease and non-lease components and have allocated the consideration in the agreement on a relative stand-alone price basis. Due to the significant assumptions and judgments required in accounting for leases (to include whether a contract contains a lease, the allocation of the consideration, and the determination of the discount rate), the judgments and estimates made could have a significant effect on the amount of assets and liabilities recognized.\n\nWe sublease certain of our leased real estate to third parties. These subleases have remaining lease terms through 2031.\n\nThe components of lease expense for 2025, 2024, and 2023 were as follows (in thousands):\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nOperating lease expense\n\n \n\n$\n\n7,691\n\n \n\n \n\n$\n\n13,222\n\n \n\n \n\n$\n\n16,073\n\n \n\nFinance lease expense:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAmortization of leased assets\n\n \n\n \n\n1,935\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\nInterest on leased liabilities\n\n \n\n \n\n271\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\nVariable lease expense\n\n \n\n \n\n2,344\n\n \n\n \n\n \n\n2,847\n\n \n\n \n\n \n\n3,299\n\n \n\nShort-term lease expense\n\n \n\n \n\n1,277\n\n \n\n \n\n \n\n944\n\n \n\n \n\n \n\n1,115\n\n \n\nSublease income\n\n \n\n \n\n(1,729\n\n)\n\n \n\n \n\n(1,746\n\n)\n\n \n\n \n\n(2,691\n\n)\n\nTotal net lease expense\n\n \n\n$\n\n11,789\n\n \n\n \n\n$\n\n15,267\n\n \n\n \n\n$\n\n17,796\n\n \n\nThe decrease in lease expense is due to our flexible work approach that began in 2022 and has resulted in the consolidation and closure of office space at numerous of our leased real estate locations.\n\nOther information related to leases for 2025, 2024, and 2023 was as follows (in thousands, except term and discount rate):\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nSupplemental Cash Flows Information:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCash paid for amounts included in the\n    measurement of operating lease liabilities\n\n \n\n$\n\n8,835\n\n \n\n \n\n$\n\n15,285\n\n \n\n \n\n$\n\n20,559\n\n \n\nCash paid for amounts included in the\n    measurement of finance leases\n\n \n\n \n\n1,775\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\nRight-of-use assets obtained in exchange for\n    new operating lease liabilities\n\n \n\n \n\n1,212\n\n \n\n \n\n \n\n2,348\n\n \n\n \n\n \n\n2,787\n\n \n\nWeighted-average remaining lease term - operating leases\n\n \n\n67 months\n\n \n\n \n\n65 months\n\n \n\n \n\n58 months\n\n \n\nWeighted-average discount rate - operating leases\n\n \n\n \n\n4.31\n\n%\n\n \n\n \n\n4.08\n\n%\n\n \n\n \n\n3.95\n\n%\n\n \n\nFuture minimum lease payments under non-cancelable leases as of December 31, 2025 were as follows (in thousands):\n\n \n\n2026\n\n \n\n$\n\n5,846\n\n \n\n2027\n\n \n\n \n\n5,507\n\n \n\n2028\n\n \n\n \n\n5,342\n\n \n\n2029\n\n \n\n \n\n4,331\n\n \n\n2030\n\n \n\n \n\n3,663\n\n \n\nThereafter\n\n \n\n \n\n4,829\n\n \n\nTotal future minimum lease payments\n\n \n\n \n\n29,518\n\n \n\nLess: Interest (1)\n\n \n\n \n\n(3,529\n\n)\n\nTotal\n\n \n\n$\n\n25,989\n\n \n\n \n\n \n\n \n\n \n\nCurrent operating lease liabilities\n\n \n\n$\n\n4,837\n\n \n\nNon-current operating lease liabilities\n\n \n\n \n\n21,152\n\n \n\nTotal\n\n \n\n$\n\n25,989\n\n \n\n \n\n(1)\nWe use our functional currency adjusted incremental borrowing rate for the discount rate.\n\n64\n\n \n\nIn March 2025, we extended our agreement with our outsourced data center environment provider to provide us with outsourced computing services through December 31, 2032 (see Note 12). As part of this extension, our mainframe hardware refresh for our outsourced data center environment is now scheduled to be completed during 2026. Upon completion of the mainframe hardware refresh, we will evaluate the lease and non-lease components and allocate the consideration between them.\n\n8. Acquisitions\n\niCheckGateway.com, LLC. On June 3, 2024, we acquired 100% of the equity of iCheckGateway.com, LLC (“iCG”), an ACH and credit card payment processing company. The acquisition date fair value of the consideration transferred was $17.6 million in cash paid upon close.\n\nThe iCG acquisition includes provisions for up to $15.0 million of potential future earn-out payments. The earn-out payments are tied to performance-based goals and a defined service period and are accounted for as post-acquisition compensation, as applicable. The earn-out period is through June 3, 2027. During 2025, we made earn-out payments of $5.0 million. As of December 31, 2025, we have accrued $4.8 million related to potential future earn-out payments, included in other current liabilities on our Balance Sheet.\n\nDGIT Systems Pty Ltd. On October 4, 2021, we acquired 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, with approximately $14 million paid upon close. We made the remaining $2.0 million of deferred purchase price payments in 2025, 2024, and 2023 of $0.3 million, $0.5 million, and $1.2 million, respectively.\n\nThe DGIT acquisition includes provisions for up to approximately $12 million of potential future earn-out payments. The earn-out payments are tied to performance-based goals and a defined service period and are accounted for as post-acquisition compensation, as applicable. The earn-out period is through December 31, 2026. During 2022, $0.3 million of the earn-out had been achieved and was paid in 2023. During 2024, $0.4 million of the earn-out had been achieved and was paid in 2025. As of December 31, 2025, we have accrued $10.9 million related to future earn-out payments, included in other current liabilities on our Balance Sheet.\n\n9. Restructuring and Reorganization Charges\n\nRestructuring and reorganization charges are expenses that generally result from cost reduction initiatives and/or significant changes to our business, to include such things as involuntary employee terminations, changes in management structure or skillset, divestitures of businesses, facility consolidations and abandonments, modifications of leases, impairment of acquired intangible assets, and fundamental reorganizations impacting operational focus and direction. The following are the key restructuring and reorganizational activities we incurred over the last three years that have impacted our results from operations.\n\nDuring 2025 we implemented the following restructuring and reorganizational activities:\n\n•\nWe reduced our global workforce by approximately 280 employees, as part of reorganization activities focused on cost efficiency actions to optimize our capacity and better align our resources. As a result, we incurred restructuring and reorganization charges related to involuntary terminations of $13.6 million.\n\n•\nIn August 2025, we closed our design and delivery center in Crawfordville, Florida. All processing volumes done at this location were transitioned to our two other design and delivery facilities. The closing of this facility resulted in the elimination of approximately 90 employees in Florida, but did result in new hires being made at the other locations to absorb the additional volumes. The total cost of this facility closure, to include involuntary termination benefits, relocation costs, accelerated depreciation, and decommissioning work was $5.0 million.\n\nDuring 2024 we implemented the following restructuring and reorganizational activities:\n\n•\nWe reduced our global workforce by approximately 300 employees, as part of initiatives to better align and allocate resources to areas of the business where we have identified growth opportunities. As a result, we incurred restructuring charges related to involuntary terminations of $10.1 million.\n\n•\nWe modified a real estate lease in India, resulting in an earlier termination date and the recognition of a $0.2 million gain. We also recorded $0.7 million of leasehold improvements and computer equipment impairments.\n\n65\n\n \n\nDuring 2023 we implemented the following restructuring and reorganizational activities:\n\n•\nWe decided to dissolve the Keydok business which we had acquired in 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.\n\n•\nWe reduced our workforce by approximately 110 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 $3.5 million.\n\n•\nWe modified three of our real estate leases, at previously closed locations in India and the U.S., resulting in earlier termination dates and the recognition of a $4.3 million gain. We also recorded $0.5 million of operating lease right-of-use asset impairments.\n\n•\nWe exited two reseller agreements that were acquired with the acquisition of Forte Payment Systems, Inc. in 2018. As a result, we incurred expenses of $9.9 million, of which $1.8 million was paid in 2023, $5.6 million was paid in 2024, and $1.3 million was paid in 2025, leaving $1.2 million accrued as of December 31, 2025.\n\nThe activities discussed above resulted in total restructuring and reorganizational charges for 2025, 2024, and 2023 of $19.8 million, $13.3 million, and $16.3 million, respectively, which have been reflected as a separate line item in our Income Statements.\n\nThe activity in the business restructuring and reorganization reserves during 2025, 2024, and 2023 is as follows (in thousands):\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nTermination Benefits\n\n \n\n \n\nOther\n\n \n\n \n\nTotal\n\n \n\nJanuary 1, 2023, balance\n\n \n\n$\n\n2,491\n\n \n\n \n\n$\n\n-\n\n \n\n \n\n$\n\n2,491\n\n \n\nCharged to expense during period\n\n \n\n \n\n5,128\n\n \n\n \n\n \n\n11,208\n\n \n\n \n\n \n\n16,336\n\n \n\nCash payments\n\n \n\n \n\n(7,027\n\n)\n\n \n\n \n\n(5,386\n\n)\n\n \n\n \n\n(12,413\n\n)\n\nAdjustment for accelerated depreciation\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(396\n\n)\n\n \n\n \n\n(396\n\n)\n\nAdjustment for asset impairments\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(1,675\n\n)\n\n \n\n \n\n(1,675\n\n)\n\nAdjustment for gain on lease modifications\n\n \n\n \n\n-\n\n \n\n \n\n \n\n4,349\n\n \n\n \n\n \n\n4,349\n\n \n\nOther\n\n \n\n \n\n842\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n842\n\n \n\nDecember 31, 2023, balance\n\n \n\n \n\n1,434\n\n \n\n \n\n \n\n8,100\n\n \n\n \n\n \n\n9,534\n\n \n\nCharged to expense during period\n\n \n\n \n\n10,065\n\n \n\n \n\n \n\n3,258\n\n \n\n \n\n \n\n13,323\n\n \n\nCash payments\n\n \n\n \n\n(11,265\n\n)\n\n \n\n \n\n(7,855\n\n)\n\n \n\n \n\n(19,120\n\n)\n\nAdjustment for accelerated depreciation\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(440\n\n)\n\n \n\n \n\n(440\n\n)\n\nAdjustment for asset impairments\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(717\n\n)\n\n \n\n \n\n(717\n\n)\n\nAdjustment for gain on lease modification\n\n \n\n \n\n-\n\n \n\n \n\n \n\n174\n\n \n\n \n\n \n\n174\n\n \n\nOther\n\n \n\n \n\n968\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n968\n\n \n\nDecember 31, 2024, balance\n\n \n\n \n\n1,202\n\n \n\n \n\n \n\n2,520\n\n \n\n \n\n \n\n3,722\n\n \n\nCharged to expense during period\n\n \n\n \n\n15,792\n\n \n\n \n\n \n\n4,026\n\n \n\n \n\n \n\n19,818\n\n \n\nCash payments\n\n \n\n \n\n(14,256\n\n)\n\n \n\n \n\n(4,163\n\n)\n\n \n\n \n\n(18,419\n\n)\n\nAdjustment for accelerated depreciation\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(872\n\n)\n\n \n\n \n\n(872\n\n)\n\nAdjustment for asset impairments\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(251\n\n)\n\n \n\n \n\n(251\n\n)\n\nOther\n\n \n\n \n\n(826\n\n)\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(826\n\n)\n\nDecember 31, 2025, balance\n\n \n\n$\n\n1,912\n\n \n\n \n\n$\n\n1,260\n\n \n\n \n\n$\n\n3,172\n\n \n\nAs of December 31, 2025, all restructuring and reorganization reserves were included in current liabilities.\n\n10. Income Taxes\n\nIncome Tax Provision. The components of net income (loss) before income taxes are as follows (in thousands):\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nDomestic\n\n \n\n$\n\n81,374\n\n \n\n \n\n$\n\n89,166\n\n \n\n \n\n$\n\n72,769\n\n \n\nAustralia\n\n \n\n \n\n(13,560\n\n)\n\n \n\n \n\n(5,722\n\n)\n\n \n\n \n\n854\n\n \n\nIndia\n\n \n\n \n\n11,092\n\n \n\n \n\n \n\n12,537\n\n \n\n \n\n \n\n10,008\n\n \n\nUnited Kingdom\n\n \n\n \n\n4,093\n\n \n\n \n\n \n\n7,105\n\n \n\n \n\n \n\n2,029\n\n \n\nForeign other\n\n \n\n \n\n7,698\n\n \n\n \n\n \n\n9,186\n\n \n\n \n\n \n\n6,691\n\n \n\nTotal income before income taxes\n\n \n\n$\n\n90,697\n\n \n\n \n\n$\n\n112,272\n\n \n\n \n\n$\n\n92,351\n\n \n\n \n\n66\n\n \n\nThe income tax provision consists of the following (in thousands):\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nCurrent:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFederal\n\n \n\n$\n\n27,929\n\n \n\n \n\n$\n\n28,602\n\n \n\n \n\n$\n\n34,438\n\n \n\nState\n\n \n\n \n\n5,571\n\n \n\n \n\n \n\n6,483\n\n \n\n \n\n \n\n8,230\n\n \n\nAustralia\n\n \n\n \n\n(229\n\n)\n\n \n\n \n\n(474\n\n)\n\n \n\n \n\n(333\n\n)\n\nIndia\n\n \n\n \n\n3,220\n\n \n\n \n\n \n\n2,977\n\n \n\n \n\n \n\n3,601\n\n \n\nUnited Kingdom\n\n \n\n \n\n1,111\n\n \n\n \n\n \n\n867\n\n \n\n \n\n \n\n1,002\n\n \n\nForeign other\n\n \n\n \n\n6,454\n\n \n\n \n\n \n\n3,468\n\n \n\n \n\n \n\n2,727\n\n \n\n \n\n \n\n \n\n44,056\n\n \n\n \n\n \n\n41,923\n\n \n\n \n\n \n\n49,665\n\n \n\nDeferred:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nFederal\n\n \n\n \n\n(9,004\n\n)\n\n \n\n \n\n(2,596\n\n)\n\n \n\n \n\n(19,687\n\n)\n\nState\n\n \n\n \n\n(112\n\n)\n\n \n\n \n\n(10,741\n\n)\n\n \n\n \n\n(1,982\n\n)\n\nAustralia\n\n \n\n \n\n(823\n\n)\n\n \n\n \n\n(1,629\n\n)\n\n \n\n \n\n(896\n\n)\n\nIndia\n\n \n\n \n\n(328\n\n)\n\n \n\n \n\n655\n\n \n\n \n\n \n\n(1,231\n\n)\n\nUnited Kingdom\n\n \n\n \n\n426\n\n \n\n \n\n \n\n(2,774\n\n)\n\n \n\n \n\n(233\n\n)\n\nForeign other\n\n \n\n \n\n601\n\n \n\n \n\n \n\n582\n\n \n\n \n\n \n\n469\n\n \n\n \n\n \n\n \n\n(9,240\n\n)\n\n \n\n \n\n(16,503\n\n)\n\n \n\n \n\n(23,560\n\n)\n\nTotal income tax provision\n\n \n\n$\n\n34,816\n\n \n\n \n\n$\n\n25,420\n\n \n\n \n\n$\n\n26,105\n\n \n\nThe effective tax rates in the various foreign jurisdictions differ from the statutory rates due primarily to changes in valuation allowances on deferred tax assets, withholding taxes incurred, foreign tax credit utilization, and the impact of foreign exchange recognition on certain intercompany loans.\n\nThe difference between our income tax provision computed at the statutory Federal income tax rate and our financial statement income tax provision is summarized as follows (in thousands):\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\n \n\n \n\nAmount\n\n \n\n%\n\n \n\n \n\nAmount\n\n \n\n%\n\n \n\n \n\nAmount\n\n \n\n%\n\n \n\nU.S. Federal statutory tax rate of 21%\n\n \n\n$\n\n19,046\n\n \n\n \n\n21.0\n\n%\n\n \n\n$\n\n23,577\n\n \n\n \n\n21.0\n\n%\n\n \n\n$\n\n19,394\n\n \n\n \n\n21.0\n\n%\n\nState and local income taxes, net of federal impact (1)\n\n \n\n \n\n4,289\n\n \n\n \n\n4.7\n\n%\n\n \n\n \n\n2,526\n\n \n\n \n\n2.2\n\n%\n\n \n\n \n\n4,485\n\n \n\n \n\n4.9\n\n%\n\nForeign tax effects:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nAustralia\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nStatutory tax rate difference\n\n \n\n \n\n(1,244\n\n)\n\n \n\n-1.4\n\n%\n\n \n\n \n\n(500\n\n)\n\n \n\n-0.4\n\n%\n\n \n\n \n\n87\n\n \n\n \n\n0.1\n\n%\n\nValuation allowance\n\n \n\n \n\n3,293\n\n \n\n \n\n3.6\n\n%\n\n \n\n \n\n10\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(1,277\n\n)\n\n \n\n-1.4\n\n%\n\nOther\n\n \n\n \n\n31\n\n \n\n \n\n-\n\n \n\n \n\n \n\n75\n\n \n\n \n\n0.1\n\n%\n\n \n\n \n\n212\n\n \n\n \n\n0.2\n\n%\n\nUnited Kingdom:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nForeign tax credit\n\n \n\n \n\n(1,058\n\n)\n\n \n\n-1.2\n\n%\n\n \n\n \n\n(1,651\n\n)\n\n \n\n-1.5\n\n%\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\nValuation allowance\n\n \n\n \n\n325\n\n \n\n \n\n0.4\n\n%\n\n \n\n \n\n(2,344\n\n)\n\n \n\n-2.1\n\n%\n\n \n\n \n\n(487\n\n)\n\n \n\n-0.5\n\n%\n\nOther\n\n \n\n \n\n345\n\n \n\n \n\n0.4\n\n%\n\n \n\n \n\n(203\n\n)\n\n \n\n-0.2\n\n%\n\n \n\n \n\n(277\n\n)\n\n \n\n-0.3\n\n%\n\nOther foreign jurisdictions\n\n \n\n \n\n6,776\n\n \n\n \n\n7.5\n\n%\n\n \n\n \n\n3,699\n\n \n\n \n\n3.3\n\n%\n\n \n\n \n\n4,284\n\n \n\n \n\n4.6\n\n%\n\nTax credits:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nResearch and development tax credit\n\n \n\n \n\n(2,727\n\n)\n\n \n\n-3.0\n\n%\n\n \n\n \n\n(1,327\n\n)\n\n \n\n-1.2\n\n%\n\n \n\n \n\n(907\n\n)\n\n \n\n-1.0\n\n%\n\nForeign tax credit\n\n \n\n \n\n(2,446\n\n)\n\n \n\n-2.7\n\n%\n\n \n\n \n\n(1,060\n\n)\n\n \n\n-0.9\n\n%\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\nOther credits\n\n \n\n \n\n(190\n\n)\n\n \n\n-0.2\n\n%\n\n \n\n \n\n(174\n\n)\n\n \n\n-0.2\n\n%\n\n \n\n \n\n(112\n\n)\n\n \n\n-0.1\n\n%\n\nNontaxable or nondeductible items:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nSection 162(m) compensation limitation\n\n \n\n \n\n9,548\n\n \n\n \n\n10.5\n\n%\n\n \n\n \n\n2,389\n\n \n\n \n\n2.1\n\n%\n\n \n\n \n\n2,955\n\n \n\n \n\n3.2\n\n%\n\nStock award vesting\n\n \n\n \n\n(3,624\n\n)\n\n \n\n-4.0\n\n%\n\n \n\n \n\n332\n\n \n\n \n\n0.3\n\n%\n\n \n\n \n\n(372\n\n)\n\n \n\n-0.4\n\n%\n\nAcquisition-related costs\n\n \n\n \n\n2,491\n\n \n\n \n\n2.7\n\n%\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\nLoss on investment\n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n \n\n-\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(1,283\n\n)\n\n \n\n-1.4\n\n%\n\nOther\n\n \n\n \n\n(233\n\n)\n\n \n\n-0.3\n\n%\n\n \n\n \n\n123\n\n \n\n \n\n0.1\n\n%\n\n \n\n \n\n(246\n\n)\n\n \n\n-0.3\n\n%\n\nChanges in unrecognized tax benefits\n\n \n\n \n\n59\n\n \n\n \n\n0.1\n\n%\n\n \n\n \n\n(323\n\n)\n\n \n\n-0.3\n\n%\n\n \n\n \n\n(289\n\n)\n\n \n\n-0.3\n\n%\n\nOther adjustments\n\n \n\n \n\n135\n\n \n\n \n\n0.2\n\n%\n\n \n\n \n\n271\n\n \n\n \n\n0.2\n\n%\n\n \n\n \n\n(62\n\n)\n\n \n\n-0.1\n\n%\n\nTotal tax provision and effective tax rate\n\n \n\n$\n\n34,816\n\n \n\n \n\n38.3\n\n%\n\n \n\n$\n\n25,420\n\n \n\n \n\n22.5\n\n%\n\n \n\n$\n\n26,105\n\n \n\n \n\n28.2\n\n%\n\n(1)\nState taxes in California, Pennsylvania, Illinois, New York, and Florida make up the majority (greater than 50%) of the tax effect in the State and local income taxes category.\n\nThe 2025 effective income tax rate increase was primarily driven by the following permanent and non-cash expense items: (i) the tax impact of the accelerated vesting of certain stock awards; (ii) the disallowance of transaction-related costs associated with the Merger; and (iii) the impact of the DGIT earn-out compensation recognized in 2025, for which a valuation allowance has been established for income tax purposes.\n\n67\n\n \n\nWe have undistributed earnings of approximately $88 million from certain foreign subsidiaries. We intend to indefinitely reinvest these foreign earnings; therefore, a provision has not been made for foreign withholding taxes that might be payable upon remittance of such earnings. Determination of the amount of unrecognized deferred tax liability on unremitted foreign earnings is not practicable because of the complexities of the hypothetical calculation.\n\nIncome Taxes Paid. Net cash paid for income taxes consisted of the following (in thousands):\n\n \n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nFederal\n\n \n\n$\n\n34,001\n\n \n\n \n\n$\n\n24,003\n\n \n\n \n\n$\n\n36,736\n\n \n\nState and local jurisdictions\n\n \n\n \n\n7,999\n\n \n\n \n\n \n\n6,568\n\n \n\n \n\n \n\n7,016\n\n \n\nAggregated foreign jurisdictions\n\n \n\n \n\n6,986\n\n \n\n \n\n \n\n5,939\n\n \n\n \n\n \n\n4,410\n\n \n\nDisaggregated foreign jurisdictions:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nIndia\n\n \n\n \n\n3,226\n\n \n\n \n\n \n\n3,434\n\n \n\n \n\n \n\n3,513\n\n \n\nNet cash paid for income taxes\n\n \n\n$\n\n52,212\n\n \n\n \n\n$\n\n39,944\n\n \n\n \n\n$\n\n51,675\n\n \n\nDeferred Income Taxes. Net deferred income tax assets as of December 31, 2025 and 2024 are as follows (in thousands):\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nDeferred income tax assets\n\n \n\n$\n\n131,682\n\n \n\n \n\n$\n\n125,057\n\n \n\nDeferred income tax liabilities\n\n \n\n \n\n(19,076\n\n)\n\n \n\n \n\n(28,889\n\n)\n\nValuation allowance\n\n \n\n \n\n(28,976\n\n)\n\n \n\n \n\n(22,967\n\n)\n\nNet deferred income tax assets\n\n \n\n$\n\n83,630\n\n \n\n \n\n$\n\n73,201\n\n \n\nThe components of our net deferred income tax assets (liabilities) as of December 31, 2025 and 2024 are as follows (in thousands):\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\nNet deferred income tax assets (liabilities):\n\n \n\n \n\n \n\n \n\n \n\n \n\nAccrued expenses and reserves\n\n \n\n$\n\n12,597\n\n \n\n \n\n$\n\n9,472\n\n \n\nStock-based compensation\n\n \n\n \n\n1,662\n\n \n\n \n\n \n\n6,753\n\n \n\nSoftware\n\n \n\n \n\n(1,219\n\n)\n\n \n\n \n\n(509\n\n)\n\nClient contracts and related intangibles\n\n \n\n \n\n(4,060\n\n)\n\n \n\n \n\n(10,419\n\n)\n\nGoodwill\n\n \n\n \n\n(13,797\n\n)\n\n \n\n \n\n(16,638\n\n)\n\nNet operating loss carryforwards\n\n \n\n \n\n23,665\n\n \n\n \n\n \n\n23,668\n\n \n\nProperty and equipment\n\n \n\n \n\n1,277\n\n \n\n \n\n \n\n(1,323\n\n)\n\nDeferred revenue\n\n \n\n \n\n6,597\n\n \n\n \n\n \n\n6,373\n\n \n\nDebt financing\n\n \n\n \n\n4,511\n\n \n\n \n\n \n\n6,010\n\n \n\nForeign exchange gain/loss\n\n \n\n \n\n1,547\n\n \n\n \n\n \n\n1,512\n\n \n\nOperating lease right-of-use assets and lease liabilities\n\n \n\n \n\n2,104\n\n \n\n \n\n \n\n2,763\n\n \n\nResearch and Development\n\n \n\n \n\n75,719\n\n \n\n \n\n \n\n66,178\n\n \n\nUnrecognized tax benefit\n\n \n\n \n\n55\n\n \n\n \n\n \n\n413\n\n \n\nCredits and incentives\n\n \n\n \n\n1,763\n\n \n\n \n\n \n\n1,672\n\n \n\nOther\n\n \n\n \n\n185\n\n \n\n \n\n \n\n243\n\n \n\nTotal net deferred income tax assets\n\n \n\n \n\n112,606\n\n \n\n \n\n \n\n96,168\n\n \n\nLess: valuation allowance\n\n \n\n \n\n(28,976\n\n)\n\n \n\n \n\n(22,967\n\n)\n\nNet deferred income tax assets\n\n \n\n$\n\n83,630\n\n \n\n \n\n$\n\n73,201\n\n \n\nBeginning January 1, 2022, certain R&D expenditures are required to be capitalized in accordance with Section 174 of the Internal Revenue Code, as amended by the Tax Cuts and Jobs Act of 2017, and amortized over a 5-year period if incurred domestically or a 15-year period if incurred outside the U.S. Of the total R&D related deferred income tax assets as of December 31, 2025, $75.3 million is attributable to capitalized R&D (net of applicable amortization) with the remaining amount attributable to foreign and state R&D credits.\n\n68\n\n \n\nOn July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. Among the provisions, OBBBA added Section 174A to the Internal Revenue Code, which allows taxpayers to immediately deduct domestic research or experimental expenditures paid or incurred during taxable years beginning after December 31, 2024, or to elect capitalization and amortization over a period of not less than 60 months, beginning with the month in which the taxpayer first realizes benefit from the expenditures. The election must be made no later than the due date of the taxpayer’s federal income tax return (including extensions) and would apply to the tax year for which the election is made and all subsequent tax years unless the taxpayer receives consent to change to a different method or period. We are currently evaluating the impact of Section 174A and the related transition elections, and we anticipate making the election to continue capitalizing and amortizing domestic R&D expenditures over a period of 60 months. Other provisions of this legislation that were effective and adopted in 2025 did not have a significant impact on our consolidated financial statements.\n\nWe regularly assess the likelihood of the future realization of our deferred income tax assets. To the extent we believe that it is more likely than not that a deferred income tax asset will not be realized, a valuation allowance is established. As of December 31, 2025, we have federal deferred tax assets of $71.0 million and a federal valuation allowance of $1.4 million against those assets. As of December 31, 2025, we also have net foreign deferred tax assets of $41.6 million and a foreign valuation allowance of $27.4 million against those assets.\n\nAs of December 31, 2025 and 2024, we have an acquired U.S. Federal net operating loss (“NOL”) carryforward of approximately $0.1 million and $2.0 million, respectively, which will begin to expire in 2029 and can be utilized through 2033. The acquired U.S. Federal NOL carryforward is attributable to the pre-acquisition periods of acquired businesses. The annual utilization of this U.S. Federal NOL carryforward is limited pursuant to Section 382 of the Internal Revenue Code of 1986, as amended. In addition, as of December 31, 2025 and 2024, we have: (i) state NOL carryforwards of approximately $11 million and $31 million, respectively, which will expire beginning in 2032 with a portion of the losses available over an indefinite period of time; and (ii) foreign subsidiary NOL carryforwards of approximately $107 million and $98 million, respectively, which will expire beginning in 2031, with a portion of the losses available over an indefinite period of time.\n\nPillar Two. Numerous foreign jurisdictions have enacted or are in the process of enacting legislation to adopt a minimum effective tax rate. Pillar Two, which was established by the Organization for Economic Co-operation and Development (OECD), generally provides for a 15 percent minimum effective tax rate for multinational enterprises in every jurisdiction in which they operate. The U.S. has not yet adopted Pillar Two, however, various governments around the world have adopted, some of which are effective for tax periods beginning on or after December 31, 2023. We considered the applicable tax law changes on Pillar Two implementation in the relevant countries, and there is no material impact to our tax provision for the year ended December 31, 2025. We will continue to evaluate the impact of these tax law changes on future reporting periods.\n\nAccounting for Uncertainty in Income Taxes. We are required to estimate our income tax liability in each jurisdiction in which we operate, including U.S. Federal, state, and foreign income tax jurisdictions. Various judgments and estimates are required in evaluating our tax positions and determining our provisions for income taxes. There are certain transactions and calculations for which the ultimate income tax determination may be uncertain. In addition, we may be subject to examination of our income tax returns by various foreign, federal, state, or local tax authorities, which could result in adverse outcomes. For these reasons, we establish a liability associated with unrecognized tax benefits based on estimates of whether additional taxes and interest may be due. This liability is adjusted based upon changing facts and circumstances, such as the closing of a tax audit, the expiration of a statute of limitations or the refinement of an estimate.\n\nA reconciliation of the beginning and ending balances of our liability for unrecognized tax benefits is as follows (in thousands):\n\n \n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\n2023\n\n \n\nBalance, beginning of year\n\n \n\n$\n\n1,112\n\n \n\n \n\n$\n\n1,858\n\n \n\n \n\n$\n\n2,562\n\n \n\nLapse of statute of limitations\n\n \n\n \n\n-\n\n \n\n \n\n \n\n(692\n\n)\n\n \n\n \n\n(409\n\n)\n\nAdditions for tax positions of prior years\n\n \n\n \n\n171\n\n \n\n \n\n \n\n-\n\n \n\n \n\n \n\n100\n\n \n\nReductions for tax positions of prior years\n\n \n\n \n\n(600\n\n)\n\n \n\n \n\n(54\n\n)\n\n \n\n \n\n(395\n\n)\n\nBalance, end of year\n\n \n\n$\n\n683\n\n \n\n \n\n$\n\n1,112\n\n \n\n \n\n$\n\n1,858\n\n \n\nWe recognize interest and penalty expense associated with our liability for unrecognized tax benefits as a component of income tax expense in our Income Statements. In addition to the $0.7 million, $1.1 million, and $1.9 million of liability for unrecognized tax benefits as of December 31, 2025, 2024, and 2023, we had $1.7 million, $1.3 million, and $0.9 million, respectively, of income tax-related accrued interest, net of any federal benefit of deduction. If recognized, the $0.7 million of unrecognized tax benefits as of December 31, 2025, would favorably impact our effective tax rate in future periods.\n\nWe file income tax returns in the U.S. Federal jurisdiction, various U.S. state and local jurisdictions, and many foreign jurisdictions. The U.S., U.K., India, and Australia are the primary taxing jurisdictions in which we operate. The years open for audit vary depending on the taxing jurisdiction. During the fourth quarter of 2025, the Company was notified by the Internal Revenue Service that its 2023 federal income tax return had been selected for audit. The audit is in its initial stages, and no adjustments have been proposed.\n\n69\n\n \n\n11. Employee Retirement Benefit Plans\n\nWe sponsor a defined contribution plan covering substantially all of our U.S.-based employees. Eligible participants may defer up to 100% of their eligible pay, subject to certain limitations, as pre-tax, Roth, or traditional after-tax contributions. We make certain matching, and at our discretion, non-elective employer contributions to the plan. All contributions are subject to certain IRS limits. The expense related to these contributions for 2025, 2024, and 2023 was $11.9 million, $12.9 million, and $12.8 million, respectively. We also have defined contribution-type plans for certain of our non-U.S.-based employees. The total contributions made to these plans in 2025, 2024, and 2023 were $9.6 million, $9.5 million, and $7.7 million, respectively.\n\n12. Commitments, Guarantees and Contingencies\n\nService Agreements. During 2025, we extended our agreement with Ensono, Inc. (“Ensono”) to provide us with outsourced computing services through December 31, 2032. We outsource the computer processing and related services required for the operation of our SaaS platforms. Our proprietary software and other software applications are run in an outsourced data center environment in order to obtain the necessary computer processing capacity and other computer support services without us having to make the substantial capital and infrastructure investments that would be necessary for us to provide these services internally. Our customers are connected to the outsourced data center environment through a combination of private and commercially provided networks. Our SaaS platforms are generally considered to be mission critical customer management systems by our customers. As a result, we are highly dependent upon Ensono for system availability, security, and response time.\n\nGuarantees. In the ordinary course of business, we may provide guarantees in the form of bid bonds or performance bonds. As of December 31, 2025, we had $1.8 million of restricted assets used to collateralize these guarantees, which are included in other non-current assets in our Balance Sheet.\n\nWe have performance guarantees in the form of surety bonds and a standby letter of credit, along with money transmitter bonds, issued through third-parties that are not required to be in our Balance Sheets. As of December 31, 2025, we had performance guarantees of $3.9 million, which includes $0.2 million in a standby letter of credit. 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 December 31, 2025, we had total aggregate money transmitter bonds of $25.4 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.\n\nWarranties. 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.\n\nSolution 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.\n\nClaims 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 system availability and timeliness of service delivery. As of December 31, 2025, 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.\n\nSales and Use Tax. In the ordinary course of business, we are, from time to time, subject to audits performed by state taxing authorities. We continually assess our sales and use tax exposure and as of December 31, 2025, we believe that we have adequate reserves to cover any taxes owed and related penalties and interest. While we believe that the assumptions and estimates used to determine these liabilities are reasonable, the ultimate outcome of these matters cannot be certain, and we will adjust these estimated liabilities as new information becomes available.\n\n70\n\n \n\nIndemnifications 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 actions or claims against any officer or member of our Board. As a result, we have not recorded any liabilities related to such indemnifications as of December 31, 2025. In addition, as a result of the insurance policy coverage, we believe these indemnification agreements are not significant to our results of operations.\n\nLegal Proceedings. From time-to-time, we are involved in litigation relating to claims arising out of our operations in the normal course of business.\n\n13. Stockholders’ Equity\n\nStock 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”). Upon the announcement of the Merger Agreement, we have ceased any further repurchases.\n\nDuring 2025, we repurchased approximately 788,000 shares of our common stock for $49.7 million (weighted–average price of $63.17 per share) under a SEC Rule 10b5-1 Plan. During 2024, we repurchased approximately 1,185,000 shares of our common stock for $57.8 million (weighted-average price of $48.79 per share) under a SEC Rule 10b5-1 Plan. During 2023, we repurchased approximately 508,000 shares of our common stock for $27.0 million (weighted-average price of $53.15 per share) under a SEC Rule 10b5-1 Plan, and approximately 1,680,000 shares of our common stock for $90.1 million (weighted-average price of $53.62 per share) concurrent with the pricing of the offering of the 2023 Convertible Notes. The excise tax imposed on share repurchases, which is included as a cost of treasury stock, is not reflected in these amounts.\n\nStock Repurchases for Tax Withholdings. In addition to the above-mentioned stock repurchases, during 2025, 2024, and 2023, we repurchased and then cancelled approximately 470,000 shares, 177,000 shares, and 182,000 shares for $33.1 million, $9.4 million, and $10.2 million, respectively, of common stock from our employees in connection with minimum tax withholding requirements resulting from the vesting of restricted stock under our stock incentive plans. The increase in 2025 is primarily due to the accelerated stock vesting per the terms of the Merger Agreement (see Notes 2 and 14).\n\nCash Dividends. During 2025, 2024, and 2023 our Board approved total cash dividends of $1.28 per share, $1.20 per share, and $1.12 per share of common stock, totaling $36.9 million, $34.8 million, and $34.3 million, respectively. As of December 31, 2025 and 2024, we had $9.3 million and $9.5 million, respectively, of dividends accrued, which are included in other current liabilities in our Balance Sheets, and we had $0.5 million and $0.8 million, respectively, of dividends accrued, which are included in other non-current liabilities in our Balance Sheets.\n\n14. Equity Compensation Plans\n\nStock Incentive Plan. Our stockholders have approved the issuance of up to 27.9 million shares under the Amended and Restated 2005 Stock Incentive Plan (the “2005 Plan”). Shares reserved under the 2005 Plan can be granted to officers and other key employees of our Company and its subsidiaries and to non-employee directors of our Company in the form of stock options, stock appreciation rights, performance unit awards, restricted stock awards, or stock bonus awards. Shares granted in the form of a performance unit award, restricted stock award, or stock bonus award are counted toward the aggregate number of shares of common stock available for issuance under the 2005 Plan as two shares for every one share granted or issued in payment of such award. As of December 31, 2025, 3.0 million shares were available for issuance, with 2.6 million shares available for grant.\n\nRestricted Stock. We generally issue new shares (versus treasury shares) to fulfill restricted stock award grants. Restricted stock awards are granted at no cost to the recipient.\n\nPer the terms of the Merger Agreement (see Note 2), the vesting of certain restricted stock awards were accelerated and vested in December 2025. This resulted in approximately 582,000 shares vesting in December 2025 that were originally scheduled to vest at a later period.\n\n71\n\n \n\nTime-Based Awards\n\nWe issue restricted stock awards that vest annually over a period of time (generally over three years) with no restrictions other than the passage of time (i.e., the shares are released upon calendar vesting with no further restrictions) (“Time-Based Awards”). Unvested Time-Based Awards are typically forfeited and cancelled upon termination of employment with our Company. Certain Time-Based Awards may vest (i.e., vesting accelerates) upon the involuntary termination of employment, a change in control (as defined) and the subsequent involuntary termination of employment, or death. The fair value of the Time-Based Awards (determined by using the closing market price of our common stock on the grant date) is charged to expense on a straight-line basis over the requisite service period for the entire award.\n\nA summary of our unvested Time-Based Awards activity during 2025 is as follows (shares in thousands):\n\n \n\n \n\nShares\n\n \n\n \n\nWeighted-Average Grant Date Fair Value\n\n \n\nUnvested awards, beginning\n\n \n\n \n\n886\n\n \n\n \n\n$\n\n51.44\n\n \n\nAwards granted\n\n \n\n \n\n445\n\n \n\n \n\n \n\n62.03\n\n \n\nAwards forfeited/cancelled\n\n \n\n \n\n(68\n\n)\n\n \n\n \n\n54.49\n\n \n\nAwards vested\n\n \n\n \n\n(684\n\n)\n\n \n\n \n\n52.91\n\n \n\nUnvested awards, ending\n\n \n\n \n\n579\n\n \n\n \n\n$\n\n57.50\n\n \n\nIn January of 2026, we also granted restricted stock awards to members of management in the form of time-based awards of approximately 171,000 restricted common stock shares, which vest in the first quarter of 2027 with no restrictions other than the passage of time. Certain of these awards may vest (i.e., vesting accelerates) upon the involuntary termination of employment, a change in control (as defined) and the subsequent involuntary termination of employment, or death.\n\nPerformance-Based Awards\n\nWe also issue restricted stock awards to key members of management that vest upon meeting pre-established financial and operational performance objectives (“Performance-Based Awards”) over a defined measurement period. The structure of the performance goals for the Performance-Based Awards has been approved by our stockholders. Certain Performance-Based Awards may vest (i.e., vesting accelerates) upon the involuntary termination of employment or a change in control (as defined) and the subsequent involuntary termination of employment. The fair value of the Performance-Based Awards (determined by using the closing market price of our common stock on the grant date) is charged to expense on a straight-line basis over the performance period (generally two years), based on the probability of achievement of the performance condition.\n\nA summary of our unvested Performance-Based Awards activity during 2025 is as follows (shares in thousands):\n\n \n\n \n\nShares\n\n \n\n \n\nWeighted-Average Grant Date Fair Value\n\n \n\nUnvested awards, beginning\n\n \n\n \n\n280\n\n \n\n \n\n$\n\n52.81\n\n \n\nAwards granted\n\n \n\n \n\n203\n\n \n\n \n\n \n\n62.13\n\n \n\nAwards forfeited/cancelled\n\n \n\n \n\n(8\n\n)\n\n \n\n \n\n55.05\n\n \n\nAwards vested\n\n \n\n \n\n(378\n\n)\n\n \n\n \n\n54.51\n\n \n\nUnvested awards, ending\n\n \n\n \n\n97\n\n \n\n \n\n$\n\n62.20\n\n \n\nMarket-Based Awards\n\nWe also issue restricted stock awards to key members of management which vest upon the achievement of specified Company market valuations and conditions (\"Market-Based Awards\"). The majority of our outstanding Market-Based Awards vest upon meeting a relative total shareholder return performance achievement tier over a three-year measurement period. Additionally, during 2024, we issued an award of approximately 74,000 shares to our President and CEO, which vests contingent upon the achievement of predetermined share price thresholds over a five-year period, subject to time-based service vesting conditions. Certain Market-Based Awards may vest (i.e., vesting accelerates) upon the involuntary termination of employment or a change in control (as defined) and the subsequent involuntary termination of employment. The fair value of the Market-Based Awards (determined using a Monte Carlo valuation method) is charged to expense on a straight-line basis over the performance period or the estimated service period, if applicable.\n\nA summary of our unvested Market-Based Awards activity during 2025 is as follows (shares in thousands):\n\n \n\n \n\nShares\n\n \n\n \n\nWeighted-Average Grant Date Fair Value\n\n \n\nUnvested awards, beginning\n\n \n\n \n\n190\n\n \n\n \n\n$\n\n50.17\n\n \n\nAwards granted\n\n \n\n \n\n115\n\n \n\n \n\n \n\n51.79\n\n \n\nAwards forfeited/cancelled\n\n \n\n \n\n(3\n\n)\n\n \n\n \n\n56.13\n\n \n\nAwards vested\n\n \n\n \n\n(172\n\n)\n\n \n\n \n\n57.31\n\n \n\nUnvested awards, ending\n\n \n\n \n\n130\n\n \n\n \n\n$\n\n44.49\n\n \n\n \n\n72\n\n \n\nThe weighted-average grant date fair value per share of restricted stock shares granted during 2025, 2024, and 2023 was $61.20, $49.94, and $52.09, respectively. The total market value of restricted stock shares vesting during 2025, 2024, and 2023 was $86.1 million, $26.6 million, and $28.0 million, respectively, with the increase in 2025 related to the accelerated vestings discussed above.\n\n1996 Employee Stock Purchase Plan. As of December 31, 2025, we have an employee stock purchase plan whereby 2.9 million shares of our common stock have been reserved for sale to our U.S. employees through payroll deductions. The price for shares purchased under the plan is 85% of the market value on the last day of the purchase period. Purchases are made at the end of each month. During 2025, 2024, and 2023, 45,543 shares, 74,615 shares, and 73,982 shares, respectively, were purchased under the plan for $2.5 million ($49.97 to $66.53 per share), $3.1 million ($34.99 to $46.59 per share), and $3.3 million ($39.83 to $50.72 per share), respectively. As of December 31, 2025, 1.0 million shares remain eligible for purchase under the plan. Effective November 1, 2025 and as a result of the Merger announcement, we ceased stock purchases through the employee stock purchase plan.\n\nStock-Based Compensation. We recorded stock-based compensation of $45.3 million, $33.6 million, and $29.0 million, respectively, for 2025, 2024, and 2023, with the increase in 2025 due to approximately $11 million of expense related to the accelerated vestings discussed above. As of December 31, 2025, there was $33.8 million of total compensation cost related to unvested awards not yet recognized. This amount, excluding the impact of forfeitures, is expected to be recognized over a weighted-average period of 2.1 years.\n\nWe recorded a deferred income tax benefit related to stock-based compensation during 2025, 2024, and 2023, of $10.1 million, $6.9 million, and $6.0 million, respectively. The actual income tax benefit realized for the tax deductions from the vesting of restricted stock for 2025, 2024, and 2023, totaled $9.9 million, $5.3 million, and $4.8 million, respectively.\n\n \n\n73"}