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

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

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

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

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

As of ~~May 1,~~July 31, 2023, there were ~~31,682,626~~31,748,796 shares of the registrant’s common stock outstanding.


	March 31, 2023			December 31, 2022			June 30, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	167,681		$	150,365		$	146,212		$	150,365
Short-term investments		-			71			-			71
Total cash, cash equivalents, and short-term investments		167,681			150,436			146,212			150,436
Settlement and merchant reserve assets		177,300			238,653			176,397			238,653
Trade accounts receivable:
Billed, net of allowance of $5,254 and $5,528		255,774			274,189
Billed, net of allowance of $4,618 and $5,528								256,310			274,189
Unbilled		73,262			52,830			78,510			52,830
Income taxes receivable		2,236			1,270			3,770			1,270
Other current assets		55,285			48,577			64,216			48,577
Total current assets		731,538			765,955			725,415			765,955
Non-current assets:
Property and equipment, net of depreciation of $107,836 and $105,466		68,648			71,787
Property and equipment, net of depreciation of $113,196 and $105,466								70,457			71,787
Operating lease right-of-use assets		42,470			49,687			38,810			49,687
Software, net of amortization of $152,074 and $150,337		20,935			22,774
Software, net of amortization of $156,240 and $150,337								18,890			22,774
Goodwill		305,104			304,036			306,641			304,036
Acquired customer contracts, net of amortization of $123,694 and $120,080		42,891			45,417
Customer contract costs, net of amortization of $33,191 and $30,601		54,437			54,735
Acquired customer contracts, net of amortization of $126,757 and $120,080								40,486			45,417
Customer contract costs, net of amortization of $34,594 and $30,601								54,114			54,735
Deferred income taxes		22,177			26,206			30,698			26,206
Other assets		7,808			7,956			7,558			7,956
Total non-current assets		564,470			582,598			567,654			582,598
Total assets	$	1,296,008		$	1,348,553		$	1,293,069		$	1,348,553
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	37,500		$	37,500		$	22,500		$	37,500
Operating lease liabilities		19,220			21,012			16,624			21,012
Customer deposits		34,429			40,472			32,713			40,472
Trade accounts payable		36,121			47,720			37,961			47,720
Accrued employee compensation		49,836			68,321			62,789			68,321
Settlement and merchant reserve liabilities		176,329			237,810			174,777			237,810
Deferred revenue		54,794			46,033			56,468			46,033
Income taxes payable		7,956			5,455			500			5,455
Other current liabilities		25,550			22,886			26,770			22,886
Total current liabilities		441,735			527,209			431,102			527,209
Non-current liabilities:
Long-term debt, net of unamortized discounts of $2,469 and $2,656		403,781			375,469
Long-term debt, net of unamortized discounts of $2,283 and $2,656								402,092			375,469
Operating lease liabilities		45,097			53,207			38,560			53,207
Deferred revenue		21,756			21,991			20,792			21,991
Income taxes payable		3,510			3,410			3,605			3,410
Deferred income taxes		120			117			131			117
Other non-current liabilities		11,786			11,901			13,476			11,901
Total non-current liabilities		486,050			466,095			478,656			466,095
Total liabilities		927,785			993,304			909,758			993,304
Stockholders' equity:
Preferred stock, par value $.01 per share; 10,000 shares authorized; zero shares issued and outstanding		-			-			-			-
Common stock, par value $.01 per share; 100,000 shares authorized; 31,678 and 31,269 shares outstanding		712			708
Common stock, par value $.01 per share; 100,000 shares authorized; 31,751 and 31,269 shares outstanding								713			708
Additional paid-in capital		493,184			495,189			501,486			495,189
Treasury stock, at cost; 38,210 shares		(1,018,034	)		(1,018,034	)		(1,018,034	)		(1,018,034	)
Accumulated other comprehensive income (loss):
Unrealized gain on short-term investments, net of tax		1			1			1			1
Cumulative foreign currency translation adjustments		(55,987	)		(58,830	)		(54,278	)		(58,830	)
Accumulated earnings		948,347			936,215			953,423			936,215
Total stockholders' equity		368,223			355,249			383,311			355,249
Total liabilities and stockholders' equity	$	1,296,008		$	1,348,553		$	1,293,069		$	1,348,553

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


	Quarter Ended						Quarter Ended						Six Months Ended
	March 31, 2023			March 31, 2022			June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022
Revenue	$	298,739		$	264,400		$	286,327		$	262,168		$	585,066		$	526,568

Cost of revenue (exclusive of depreciation, shown separately below)		155,021			138,418			151,142			138,134			306,163			276,552
Other operating expenses:
Research and development		35,464			32,981			36,645			34,630			72,109			67,611
Selling, general and administrative		59,147			57,342			62,686			57,465			121,833			114,807
Depreciation		5,720			6,138			5,573			5,651			11,293			11,789
Restructuring and reorganization charges		5,194			13,106			2,075			19,005			7,269			32,111
Total operating expenses		260,546			247,985			258,121			254,885			518,667			502,870
Operating income		38,193			16,415			28,206			7,283			66,399			23,698
Other income (expense):
Interest expense		(7,219	)		(3,272	)		(7,837	)		(2,686	)		(15,056	)		(5,958	)
Interest and investment income, net		569			130			772			126			1,341			256
Loss on derivative liability upon debt conversion		-			(7,456	)		-			-			-			(7,456	)
Other, net		(2,432	)		812			(1,428	)		2,442			(3,860	)		3,254
Total other		(9,082	)		(9,786	)		(8,493	)		(118	)		(17,575	)		(9,904	)
Income before income taxes		29,111			6,629			19,713			7,165			48,824			13,794
Income tax provision		(8,183	)		(516	)		(5,759	)		(1,848	)		(13,942	)		(2,364	)
Net income	$	20,928		$	6,113		$	13,954		$	5,317		$	34,882		$	11,430

Weighted-average shares outstanding:
Basic		30,418			31,416			30,629			31,301			30,524			31,358
Diluted		30,609			31,810			30,726			31,492			30,668			31,651

Earnings per common share:
Basic	$	0.69		$	0.19		$	0.46		$	0.17		$	1.14		$	0.36
Diluted		0.68			0.19			0.45			0.17			1.14			0.36

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


	Shares of Common Stock Outstanding			Common Stock			Additional Paid-in Capital			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Accumulated Earnings			Noncontrolling Interest		Total Stockholders' Equity			Shares of Common Stock Outstanding			Common Stock			Additional Paid-in Capital			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Accumulated Earnings			Total Stockholders' Equity
For the Quarter Ended March 31, 2023:
For the Six Months Ended June 30, 2023:																								For the Six Months Ended June 30, 2023:
BALANCE, January 1, 2023		31,269		$	708		$	495,189		$	(1,018,034	)	$	(58,829	)	$	936,215		$	-	$	355,249			31,269		$	708		$	495,189		$	(1,018,034	)	$	(58,829	)	$	936,215		$	355,249
Comprehensive income:
Net income		-			-			-			-			-			20,928			-					-			-			-			-			-			20,928
Unrealized gain on short-term investments, net of tax		-			-			-			-			-			-			-
Foreign currency translation adjustments		-			-			-			-			2,843			-			-					-			-			-			-			2,843			-
Total comprehensive income		-			-			-			-			-			-			-		23,771			-			-			-			-			-			-			23,771
Repurchase of common stock		(166	)		(2	)		(9,304	)		-			-			-			-		(9,306	)		(166	)		(2	)		(9,304	)		-			-			-			(9,306	)
Issuance of common stock pursuant to employee stock purchase plan		19			-			893			-			-			-			-		893			19			-			893			-			-			-			893
Issuance of restricted common stock pursuant to stock-based compensation plans		574			6			(6	)		-			-			-			-		-			574			6			(6	)		-			-			-			-
Cancellation of restricted common stock issued pursuant to stock-based compensation plans		(18	)		-			-			-			-			-			-		-			(18	)		-			-			-			-			-			-
Stock-based compensation expense		-			-			6,412			-			-			-			-		6,412			-			-			6,412			-			-			-			6,412
Dividends		-			-			-			-			-			(8,796	)		-		(8,796	)		-			-			-			-			-			(8,796	)		(8,796	)
BALANCE, March 31, 2023		31,678		$	712		$	493,184		$	(1,018,034	)	$	(55,986	)	$	948,347		$	-	$	368,223			31,678			712			493,184			(1,018,034	)		(55,986	)		948,347			368,223
Comprehensive income:
Net income																									-			-			-			-			-			13,954
Foreign currency translation adjustments																									-			-			-			-			1,709			-
Total comprehensive income																																											15,663
Repurchase of common stock																									(2	)		-			(112	)		-			-			-			(112	)
Issuance of common stock pursuant to employee stock purchase plan																									18			-			771			-			-			-			771
Issuance of restricted common stock pursuant to stock-based compensation plans																									64			1			(1	)		-			-			-			-
Cancellation of restricted common stock issued pursuant to stock-based compensation plans																									(7	)		-			-			-			-			-			-
Stock-based compensation expense																									-			-			7,644			-			-			-			7,644
Dividends																									-			-			-			-			-			(8,878	)		(8,878	)
BALANCE, June 30, 2023																									31,751		$	713		$	501,486		$	(1,018,034	)	$	(54,277	)	$	953,423		$	383,311


	Shares of Common Stock Outstanding			Common Stock			Additional Paid-in Capital			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Accumulated Earnings			Noncontrolling Interest		Total Stockholders' Equity			Shares of Common Stock Outstanding			Common Stock			Additional Paid-in Capital			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Accumulated Earnings			Noncontrolling Interest			Total Stockholders' Equity
For the Quarter Ended March 31, 2022:
For the Six Months Ended June 30, 2022:
BALANCE, January 1, 2022		32,495		$	705		$	488,303		$	(930,106	)	$	(38,353	)	$	916,060		$	3,635	$	440,244			32,495		$	705		$	488,303		$	(930,106	)	$	(38,353	)	$	916,060		$	3,635		$	440,244
Comprehensive income:
Net income		-			-			-			-			-			6,113			-					-			-			-			-			-			6,113			-
Unrealized loss on short-term investments, net of tax		-			-			-			-			(2	)		-			-					-			-			-			-			(2	)		-			-
Foreign currency translation adjustments		-			-			-			-			(1,182	)		-			-					-			-			-			-			(1,182	)		-			-
Total comprehensive income																						4,929																								4,929
Repurchase of common stock		(389	)		(1	)		(7,804	)		(15,996	)		-			-			-		(23,801	)		(389	)		(1	)		(7,804	)		(15,996	)		-			-			-			(23,801	)
Issuance of common stock pursuant to employee stock purchase plan		12			-			650			-			-			-			-		650			12			-			650			-			-			-			-			650
Issuance of restricted common stock pursuant to stock-based compensation plans		476			5			(5	)		-			-			-			-		-			476			5			(5	)		-			-			-			-			-
Cancellation of restricted common stock issued pursuant to stock-based compensation plans		(34	)		-			-			-			-			-			-		-			(34	)		-			-			-			-			-			-			-
Stock-based compensation expense		-			-			5,581			-			-			-			-		5,581			-			-			5,581			-			-			-			-			5,581
Settlement of convertible debt securities, net of tax		-			-			(4,845	)		-			-			-			-		(4,845	)		-			-			(4,845	)		-			-			-			-			(4,845	)
Adjustments due to adoption of new accounting standard		-			-			(9,802	)		-			-			9,802			-		-			-			-			(9,802	)		-			-			9,802			-			-
Dividends		-			-			-			-			-			(8,586	)		-		(8,586	)		-			-			-			-			-			(8,586	)		-			(8,586	)
BALANCE, March 31, 2022		32,560		$	709		$	472,078		$	(946,102	)	$	(39,537	)	$	923,389		$	3,635	$	414,172			32,560			709			472,078			(946,102	)		(39,537	)		923,389			3,635			414,172
Comprehensive income:
Net income																									-			-			-			-			-			5,317			-
Unrealized gain on short-term investments, net of tax																									-			-			-			-			5			-			-
Foreign currency translation adjustments																									-			-			-			-			(16,000	)		-			-
Total comprehensive loss																																														(10,678	)
Repurchase of common stock																									(362	)		-			(116	)		(21,557	)		-			-			-			(21,673	)
Issuance of common stock pursuant to employee stock purchase plan																									15			-			773			-			-			-			-			773
Issuance of restricted common stock pursuant to stock-based compensation plans																									42			1			(1	)		-			-			-			-			-
Cancellation of restricted common stock issued pursuant to stock-based compensation plans																									(60	)		(1	)		1			-			-			-			-			-
Stock-based compensation expense																									-			-			6,536			-			-			-			-			6,536
Dividends																									-			-			-			-			-			(8,473	)		-			(8,473	)
Write-off of noncontrolling interest																												-			-			-			-			-			(3,635	)		(3,635	)
BALANCE, June 30, 2022																									32,195		$	709		$	479,271		$	(967,659	)	$	(55,532	)	$	920,233		$	-		$	377,022

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


	Quarter Ended						Six Months Ended
	March 31, 2023			March 31, 2022			June 30, 2023			June 30, 2022
Cash flows from operating activities:
Net income	$	20,928		$	6,113		$	34,882		$	11,430
Adjustments to reconcile net income to net cash provided by (used in) operating activities-
Depreciation		5,757			6,138			11,506			14,210
Amortization		11,471			13,870			22,808			25,520
Asset impairment		1,595			10,705			1,689			24,436
(Gain) loss on short-term investments and other		(125	)		15
Gain on lease modifications								(3,812	)		-
Loss on short-term investments and other								-			20
Loss on derivative liability upon debt conversion		-			7,456			-			7,456
Unrealized foreign currency transactions (gain)/loss, net		41			(136	)		241			(805	)
Deferred income taxes		4,079			(55	)		(4,673	)		(7,816	)
Stock-based compensation		6,412			5,581			14,056			12,117
Changes in operating assets and liabilities, net of acquired amounts:
Trade accounts receivable, net		(1,825	)		182			(7,789	)		(7,833	)
Other current and non-current assets and liabilities		(6,871	)		(6,069	)		(16,083	)		(16,098	)
Income taxes payable/receivable		1,647			(1,735	)		(7,235	)		(13,157	)
Trade accounts payable and accrued liabilities		(36,071	)		(42,550	)		(26,853	)		(65,537	)
Deferred revenue		8,359			(5,064	)		9,046			2,792
Net cash provided by (used in) operating activities		15,397			(5,549	)		27,783			(13,265	)

Cash flows from investing activities:
Purchases of software, property and equipment		(8,700	)		(10,375	)		(16,428	)		(19,647	)
Proceeds from sale/maturity of short-term investments		71			21,887			71			26,755
Net cash provided by (used in) investing activities		(8,629	)		11,512			(16,357	)		7,108

Cash flows from financing activities:
Proceeds from issuance of common stock		893			650			1,664			1,423
Payment of cash dividends		(9,088	)		(8,885	)		(17,712	)		(17,200	)
Repurchase of common stock		(9,306	)		(23,660	)		(9,418	)		(45,113	)
Deferred acquisition payments		(274	)		-			(1,220	)		-
Proceeds from long-term debt		30,000			245,000			30,000			245,000
Payments on long-term debt		(1,875	)		(244,176	)		(18,750	)		(246,051	)
Settlement and merchant reserve activity		(61,482	)		(23,543	)		(63,107	)		26,754
Net cash used in financing activities		(51,132	)		(54,614	)		(78,543	)		(35,187	)
Effect of exchange rate fluctuations on cash, cash equivalents, and restricted cash		327			1,351			708			(3,328	)

Net decrease in cash, cash equivalents, and restricted cash		(44,037	)		(47,300	)		(66,409	)		(44,672	)

Cash, cash equivalents, and restricted cash, beginning of period		389,018			391,902			389,018			391,902
Cash, cash equivalents, and restricted cash, end of period	$	344,981		$	344,602		$	322,609		$	347,230

Supplemental disclosures of cash flow information:
Cash paid during the period for-
Interest	$	7,005		$	5,876		$	14,672		$	8,323
Income taxes		2,211			2,230			23,720			23,324

Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	167,681		$	181,457		$	146,212		$	133,770
Settlement and merchant reserve assets		177,300			163,145			176,397			213,460
Total cash, cash equivalents, and restricted cash	$	344,981		$	344,602		$	322,609		$	347,230

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

1. GENERAL

We have prepared the accompanying unaudited condensed consolidated financial statements as of ~~March 31,~~June 30, 2023 and December 31, 2022, and for the quarters and six months ended ~~March 31,~~June 30, 2023 and 2022, in accordance with accounting principles generally accepted in the United States of America (“U.S.”) (“GAAP”) for interim financial information, and pursuant to the instructions to Form 10-Q and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of our management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position and operating results have been included. The unaudited Condensed Consolidated Financial Statements (the “Financial Statements”) should be read in conjunction with the Consolidated Financial Statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), contained in our Annual Report on Form 10-K for the year ended December 31, 2022 (our “2022 10-K”), filed with the SEC. The results of operations for the quarter and six months ended ~~March 31,~~June 30, 2023 are not necessarily indicative of the expected results for the entire year ending December 31, 2023.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates in Preparation of Financial Statements. The preparation of our Financial Statements requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our Financial Statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

Reclassifications. Certain amounts within our net cash ~~provided by~~used in operating activities on our Condensed Consolidated Statement of Cash Flows for the ~~first quarter of~~six months ended June 30, 2022 have been reclassified to conform to the ~~March 31,~~June 30, 2023 presentation.

Revenue. The majority of our future revenue is related to our revenue management solution customer contracts that include variable consideration dependent upon a series of monthly volumes and/or daily usage of services and have contractual terms ending from 2023through 2036. Our customer contracts may include guaranteed minimums and fixed monthly or annual fees. As of ~~March 31,~~June 30, 2023, our aggregate amount of the transaction price allocated to the remaining performance obligations is $1.6 billion, which is made up of fixed fee consideration and guaranteed minimums expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied). We expect to recognize approximately 7570% of this amount by the end of 2025, with the remaining amount recognized by the end of 2036. We have excluded variable consideration expected to be recognized in the future related to performance obligations that are unsatisfied from this amount.

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

Revenue by type for the quarters and six months ended ~~March 31,~~June 30, 2023 and 2022 were as follows (in thousands):


	Quarter Ended				Quarter Ended				Six Months Ended
	March 31, 2023		March 31, 2022		June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
SaaS and related solutions	$	257,876	$	234,977	$	255,600	$	230,712	$	513,476	$	465,689
Software and services		30,891		18,436		18,766		20,068		49,657		38,504
Maintenance		9,972		10,987		11,961		11,388		21,933		22,375
Total revenue	$	298,739	$	264,400	$	286,327	$	262,168	$	585,066	$	526,568

We use the location of the customer as the basis of attributing revenue to geographic regions. Revenue by geographic region for the quarters and six months ended ~~March 31,~~June 30, 2023 and 2022, as a percentage of our total revenue, were as follows:


	Quarter Ended						Quarter Ended						Six Months Ended
	March 31, 2023			March 31, 2022			June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022
Americas (principally the U.S.)		84	%		84	%		87	%		85	%		85	%		85	%
Europe, Middle East, and Africa		12	%		12	%		9	%		11	%		11	%		11	%
Asia Pacific		4	%		4	%		4	%		4	%		4	%		4	%
Total revenue		100	%		100	%		100	%		100	%		100	%		100	%

We generate our revenue primarily from the global communications markets; however, we serve an expanding group of customers in other industry markets including retail, healthcare, financial services, insurance, and government entities. Revenue by customer vertical for the quarters and six months ended ~~March 31,~~June 30, 2023 and 2022, as a percentage of our total revenue, were as follows:


	Quarter Ended						Quarter Ended						Six Months Ended
	March 31, 2023			March 31, 2022			June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022
Broadband/Cable/Satellite		52	%		54	%		54	%		55	%		53	%		54	%
Telecommunications		20	%		19	%		18	%		19	%		19	%		20	%
Other		28	%		27	%		28	%		26	%		28	%		26	%
Total revenue		100	%		100	%		100	%		100	%		100	%		100	%

Deferred revenue recognized during the quarters ended ~~March 31,~~June 30, 2023 and 2022 was $~~20.2~~11.3 million and $~~28.0~~12.3 million, respectively, and during the six months ended June 30, 2023 and 2022 was $31.5 million and $40.3 million, respectively.

Cash and Cash Equivalents. We consider all highly liquid investments with original maturities of three months or less at the date of the purchase to be cash equivalents. As of ~~March 31,~~June 30, 2023 and December 31, 2022, our cash equivalents consist primarily of institutional money market funds, commercial paper, and time deposits held at major banks. For the cash and cash equivalents denominated in foreign currencies and/or located outside the U.S., we do not anticipate any material amounts being unavailable for use in running our business, but may face limitations on moving cash out of certain foreign jurisdictions due to currency controls and potential negative economic consequences.

Restricted Cash. Restricted cash includes cash that is legally or contractually restricted, as well as our settlement and merchant reserve assets (discussed below). The nature of the restrictions on our settlement and merchant reserve assets consists of contractual restrictions with the merchants and restrictions arising from our policy and intention. It has historically been our policy to segregate settlement and merchant reserve assets from our operating cash balances and our intention is to continue to do so. As of ~~March 31,~~June 30, 2023 and December 31, 2022, we had $0.9 million and $1.0 million, respectively, of restricted cash that serves to collateralize bank guarantees and outstanding letters of credit included in cash and cash equivalents in our unaudited Condensed Consolidated Balance Sheets (“Balance Sheets” or “Balance Sheet”).

Short-term Investments. Our short-term investments as of ~~March 31,~~June 30, 2023 and December 31, 2022 were zero and $0.1 million, respectively. Primarily all short-term investments held by us have contractual maturities of less than two years from the time of acquisition. Our short-term investments as of June 30, 2023 and December 31, 2022 consisted of fixed income securities. Proceeds from the sale/maturity of short-term investments for the ~~first quarters of~~six months ended June 30, 2023 and 2022 were $0.1 million and $~~21.9~~26.8 million, respectively.

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

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

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


	March 31, 2023				December 31, 2022				June 30, 2023				December 31, 2022
	Assets		Liabilities		Assets		Liabilities		Assets		Liabilities		Assets		Liabilities
Settlement assets/liabilities	$	155,418	$	154,444	$	219,368	$	218,525	$	159,161	$	157,541	$	219,368	$	218,525
Merchant reserve assets/liabilities		21,882		21,885		19,285		19,285		17,236		17,236		19,285		19,285
Total	$	177,300	$	176,329	$	238,653	$	237,810	$	176,397	$	174,777	$	238,653	$	237,810

Financial Instruments. Our financial instruments as of ~~March 31,~~June 30, 2023 and December 31, 2022 include cash and cash equivalents, short-term investments, settlement and merchant reserve assets and liabilities, accounts receivable, accounts payable, and debt. Due to their short maturities, the carrying amounts of cash equivalents, settlement and merchant reserve assets and liabilities, accounts receivable, and accounts payable approximate their fair value.

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

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


	March 31, 2023						December 31, 2022						June 30, 2023						December 31, 2022
	Level 1		Level 2		Total		Level 1		Level 2		Total		Level 1		Level 2		Total		Level 1		Level 2		Total
Cash equivalents:
Money market funds	$	5,408	$	—	$	5,408	$	5,318	$	—	$	5,318	$	5,431	$	-	$	5,431	$	5,318	$	-	$	5,318
Short-term investments:
Asset-backed securities		—		—		—		—		71		71		-		-		-		-		71		71
Total	$	5,408	$	-	$	5,408	$	5,318	$	71	$	5,389	$	5,431	$	-	$	5,431	$	5,318	$	71	$	5,389

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

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


	March 31, 2023				December 31, 2022				June 30, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
2021 Credit Agreement (carrying value including current maturities) :
Term Loan	$	138,750	$	138,750	$	140,625	$	140,625	$	136,875	$	136,875	$	140,625	$	140,625
Revolver		305,000		305,000		275,000		275,000		290,000		290,000		275,000		275,000

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

3. GOODWILL AND INTANGIBLE ASSETS

Goodwill. The changes in the carrying amount of goodwill for the ~~first quarter of~~six months ended June 30, 2023 were as follows (in thousands):


January 1, 2023, balance	$	304,036		$	304,036
Adjustments related to prior acquisitions		(20	)		(20	)
Impairment charge related to Keydok, LLC		(1,118	)		(1,118	)
Effects of changes in foreign currency exchange rates		2,206			3,743
March 31, 2023, balance	$	305,104
June 30, 2023, balance				$	306,641

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

Other Intangible Assets. Our other intangible assets subject to ongoing amortization consist primarily of acquired customer contracts and software. As of ~~March 31,~~June 30, 2023 and December 31, 2022, the carrying values of these assets were as follows (in thousands):


	March 31, 2023							December 31, 2022							June 30, 2023							December 31, 2022
	Gross Carrying Amount		Accumulated Amortization			Net Amount		Gross Carrying Amount		Accumulated Amortization			Net Amount		Gross Carrying Amount		Accumulated Amortization			Net Amount		Gross Carrying Amount		Accumulated Amortization			Net Amount
Acquired customer contracts	$	166,585	$	(123,694	)	$	42,891	$	165,497	$	(120,080	)	$	45,417	$	167,243	$	(126,757	)	$	40,486	$	165,497	$	(120,080	)	$	45,417
Software		173,009		(152,074	)		20,935		173,111		(150,337	)		22,774		175,130		(156,240	)		18,890		173,111		(150,337	)		22,774
Total other intangible assets	$	339,594	$	(275,768	)	$	63,826	$	338,608	$	(270,417	)	$	68,191	$	342,373	$	(282,997	)	$	59,376	$	338,608	$	(270,417	)	$	68,191

The total amortization expense related to other intangible assets for the ~~first~~second quarters of 2023 and 2022 were $~~6.7~~6.4 million and $~~7.1~~7.7 million, respectively, and for the six months ended June 30, 2023 and 2022 were $13.0 million and $14.8 million, respectively. Based on the ~~March 31,~~June 30, 2023 net carrying value of our intangible assets, the estimated total amortization expense for each of the five succeeding fiscal years ending December 31 are: 2023 - $~~24.0~~25.1 million; 2024 - $~~14.0~~14.7 million; 2025 - $~~11.2~~11.3 million; 2026 - $7.7 million; and 2027 - $3.1 million.

Customer Contract Costs. As of ~~March 31,~~June 30, 2023 and December 31, 2022, the carrying values of our customer contract cost assets, related to those contracts with a contractual term greater than one year, were as follows (in thousands):

March 31, 2023

December 31, 2022

Gross Carrying Amount

Accumulated Amortization

Net Amount

Gross Carrying Amount

Accumulated Amortization

Net Amount

Customer contract costs

$
87,628

$
(33,191
)

$
54,437

$
85,336

$
(30,601
)

$
54,735


	June 30, 2023							December 31, 2022
	Gross Carrying Amount		Accumulated Amortization			Net Amount		Gross Carrying Amount		Accumulated Amortization			Net Amount
Customer contract costs	$	88,708	$	(34,594	)	$	54,114	$	85,336	$	(30,601	)	$	54,735

The total amortization expense related to customer contract costs for the ~~first~~second quarters of 2023 and 2022 were $~~4.6~~4.8 million and $~~6.5~~3.8 million, respectively, and for the six months ended June 30, 2023 and 2022 were $9.4 million and $10.3 million, respectively.

4. DEBT

Our long-term debt, as of ~~March 31,~~June 30, 2023 and December 31, 2022, was as follows (in thousands):


	March 31, 2023			December 31, 2022			June 30, 2023			December 31, 2022
2021 Credit Agreement:
2021 Term Loan, due September 2026, interest at adjusted LIBOR plus applicable margin (combined rate of 6.784% at March 31, 2023)	$	138,750		$	140,625
2021 Term Loan, due September 2026, interest at adjusted SOFR plus applicable margin (combined rate of 6.967% at June 30, 2023)							$	136,875		$	140,625
Less – deferred financing costs		(2,469	)		(2,656	)		(2,283	)		(2,656	)
2021 Term Loan, net of unamortized discounts		136,281			137,969			134,592			137,969
$450 million revolving loan facility, due September 2026, interest at adjusted LIBOR plus applicable margin (combined weighted-average rate of 6.756% at March 31, 2023)		305,000			275,000
$450 million revolving loan facility, due September 2026, interest at adjusted SOFR plus applicable margin (combined rate of 6.967% at June 30, 2023)								290,000			275,000
Total debt, net of unamortized discounts		441,281			412,969			424,592			412,969
Current portion of long-term debt, net of unamortized discounts		(37,500	)		(37,500	)		(22,500	)		(37,500	)
Long-term debt, net of unamortized discounts	$	403,781		$	375,469		$	402,092		$	375,469

2021 Credit Agreement. During the ~~quarter~~six months ended ~~March 31,~~June 30, 2023, we made $~~1.9~~3.8 million of principal repayments on our $150.0 million aggregate principal five-year term loan (the “2021 Term Loan”). As of ~~March 31,~~June 30, 2023 we had borrowed $~~305.0~~290.0 million from our $450.0 million aggregate principalfive-year revolving loan facility (the “2021 Revolver”),. In July 2023, we borrowed an additional $15.0 million on the 2021 Revolver, currently leaving ~~us with~~ $145.0 million ~~available.~~available to us.

As of ~~March 31,~~June 30, 2023, the interest rate on our 2021 Term Loan and our 2021 Revolver was ~~6.784~~6.967% (adjusted ~~LIBOR~~SOFR, spread adjustment of 0.10%, plus 1.625% per annum)~~, the interest rates on our 2021 Revolver range from~~ ~~6.385% to~~ ~~6.784% (adjusted LIBOR plus 1.625% per annum),~~ and our commitment fee on the unused $~~145.0~~160.0 million was 0.20%.

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

In April 2023, we entered into the First Amendment to the 2021 Credit Agreement (the “First Amendment”). The First Amendment replaces the interest rate benchmark, from LIBOR to the Secured Overnight Financing Rate ("SOFR"), and all references to “Eurodollar Borrowing(s)” or “Eurodollar Loans” have been replaced with “Term SOFR Borrowing(s)” or “Term SOFR Loans”. Any loan amounts outstanding at the effective date of the First Amendment, ~~will continue~~continued to bear interest at the applicable LIBOR rate, discussed above, until the end of the ~~current~~ interest election period applicable to such loan. All Term SOFR Loans are subject to a 0.10% spread adjustment.

5. ACQUISITIONS

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

DGIT Systems Pty Ltd. On October 4, 2021, we acquired DGIT Systems Pty Ltd (“DGIT”), a provider of configure, price and quote (CPQ) and order management solutions for the telecommunications industry. We acquired 100% of the equity of DGIT for a purchase price of approximately $16 million, approximately $14 million paid upon close and the remaining escrowed funds of approximately $2 million to be paid through the first quarter of 2025, subject to certain reductions, as applicable. As of ~~March 31,~~June 30, 2023, $~~0.3~~1.3 million of the escrowed funds had been paid.

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

6. RESTRUCTURING AND REORGANIZATION CHARGES

During the ~~first~~second quarters of 2023 and 2022, we recorded restructuring and reorganization charges of $~~5.2~~2.1 million and $~~13.1~~19.0 million, respectively, and for the six months ended June 30, 2023 and 2022, we recorded restructuring and reorganization charges of $7.3 million and $32.1 million, respectively.

During the ~~first quarter of~~six months ended June 30, 2023 we implemented the following restructuring and reorganizational activities:

•

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

•

We reduced our workforce by approximately 3060 employees, mainly in the U.S., as a result of organizational changes and efficiencies. As a result, we incurred restructuring charges related to involuntary terminations of $~~1.0~~1.8 million.

•

We modified two of our real estate leases, at previously closed locations in India and the United States, resulting in earlier termination dates and the recognition of a $3.8 million gain. We also recorded $~~0.4~~0.5 million of additional operating lease right-of-use asset impairments on three of our leased real estate locations.

•

During the second quarter of 2023 we exited a reseller agreement that was acquired with the acquisition of Forte Payment Systems, Inc. in 2018. As a result, we incurred expense of $3.6 million, of which $1.8 million has been paid and $1.8 million was accrued as of June 30, 2023.

The activity in the restructuring and reorganization reserves during the ~~first quarter of~~six months ended June 30, 2023 was as follows (in thousands):


	Termination Benefits			Other			Total			Termination Benefits			Other			Total
January 1, 2023, balance	$	2,491		$	-		$	2,491		$	2,491		$	-		$	2,491
Charged to expense during period		2,557			2,637			5,194			3,410			3,859			7,269
Cash payments		(2,751	)		(1,006	)		(3,757	)		(4,943	)		(3,240	)		(8,183	)
Adjustment for asset impairment		-			(1,595	)		(1,595	)		-			(1,675	)		(1,675	)
Adjustment for gain on lease modifications											-			3,812			3,812
Adjustment for accelerated depreciation		-			(36	)		(36	)		-			(213	)		(213	)
Other		351			-			351			400			-			400
March 31, 2023, balance	$	2,648		$	-		$	2,648
June 30, 2023, balance										$	1,358		$	2,543		$	3,901

As of ~~March 31,~~June 30, 2023, all of the restructuring and reorganization reserves were included in current liabilities.

8. EARNINGS PER COMMON SHARE

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

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


	Quarter Ended
	March 31,				Quarter Ended				Six Months Ended
	2023		2022		June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Basic weighted-average common shares		30,418		31,416		30,629		31,301		30,524		31,358
Dilutive effect of restricted common stock		191		394		97		191		144	293
Diluted weighted-average common shares		30,609		31,810		30,726		31,492		30,668		31,651

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

9. STOCKHOLDERS’ EQUITY AND EQUITY COMPENSATION PLANS

Stock Repurchase Program. We currently have a stock repurchase program, approved by our Board, authorizing us to repurchase shares of our common stock from time-to-time as market and business conditions warrant (the “Stock Repurchase Program”). We did not make any share repurchases during the ~~first~~second quarter ofand six months ended June 30, 2023. During the ~~first~~second quarter ofand six months ended June 30, 2022, we repurchased approximately ~~266,000~~360,000 shares of our common stock for $~~16.0~~21.6 million (weighted-average price of $~~60.13~~59.88 per share), and approximately 626,000 shares of our common stock for $37.6 million (weighted-average price of $59.99 per share), respectively, under a SEC Rule 10b5-1 Plan.

As of ~~March 31,~~June 30, 2023, the total remaining number of shares available for repurchase under the Stock Repurchase Program totaled 2.1 million shares.

Stock Repurchases for Tax Withholdings. In addition to the above-mentioned stock repurchases, during the ~~first~~second quarters of 2023 and 2022, we repurchased and then cancelled approximately ~~166,000~~2,000 shares of common stock for $~~9.3~~0.1 million for both periods, and during the six months ended June 30, 2023 and 2022 we repurchased and then cancelled approximately ~~123,000~~168,000 shares of common stock for $~~7.8~~9.4 million and approximately 125,000 shares of common stock for $7.9 million, respectively, in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans.

Cash Dividends. During the ~~first~~second quarter of 2023, our Board approved a quarterly cash dividend of $0.28 per share of common stock, totaling $~~8.8~~8.9 million. During the ~~first~~second quarter of 2022, our Board approved a quarterly cash dividend of $0.265 per share of common stock, totaling $~~8.6~~8.5 million. Dividends declared for the six months ended June 30, 2023 and 2022 totaled $17.7 million and $17.1 million, respectively.

Warrants. In 2014, in conjunction with the execution of an amendment to our agreement with Comcast Corporation (“Comcast”), we issued stock warrants (the “Warrant Agreement”) for the right to purchase up to 2.9 million shares of our common stock (the “Stock Warrants”) as an additional incentive for Comcast to convert customer accounts onto our solutions based on various milestones. The Stock Warrants have a ten-year term and an exercise price of $26.68 per warrant.

As of ~~March 31,~~June 30, 2023, 1.0 million Stock Warrants remain issued, none of which have vested. The remaining unvested Stock Warrants will be accounted for as a customer contract cost asset once the performance conditions necessary for vesting are considered probable.

Stock-Based Awards. A summary of our unvested restricted common stock activity during the quarter and six months ended ~~March 31,~~June 30, 2023 is as follows (shares in thousands):


	Quarter Ended					Quarter Ended					Six Months Ended
	March 31, 2023					June 30, 2023					June 30, 2023
	Shares			Weighted- Average Grant Date Fair Value		Shares			Weighted- Average Grant Date Fair Value		Shares			Weighted- Average Grant Date Fair Value
Unvested awards, beginning		1,147		$	53.34		1,290		$	53.80		1,147		$	53.34
Awards granted		600			52.01		88			49.44		688			51.66
Awards forfeited/cancelled		(19	)		54.51		(10	)		53.75		(29	)		54.03
Awards vested		(438	)		49.76		(34	)		56.72		(472	)		50.25
Unvested awards, ending		1,290		$	53.80		1,334		$	53.44		1,334		$	53.44

Included in the awards granted during the ~~first quarter of~~six months ended June 30, 2023 are awards issued to members of executive management and certain key employees in the form of: (i) performance-based awards of approximately 134,000 restricted common stock shares, which vest in the first quarter of 2025 upon meeting certain pre-established financial performance objectives over a two-year performance period; and (ii) market-based awards of approximately 45,000 restricted common stock shares, which vest in the first quarter of 2026 upon meeting a relative total shareholder return performance achievement tier. Certain of these awards become fully vested upon a change in control, as defined, and the subsequent involuntary termination of employment.

The other restricted common stock shares granted during the ~~first quarter of~~six months ended June 30, 2023 are primarily time-based awards, which vest annually overtwo to three years with no restrictions other than the passage of time. Certain shares of the restricted common stock become fully vested upon a change in control, as defined, involuntary terminations of employment, or death.

We recorded stock-based compensation expense for the ~~first~~second quarters of 2023 and 2022 of $~~6.4~~7.6 million and $~~5.6~~6.5 million, respectively, and for the six months ended June 30, 2023 and 2022 of $14.1 million and $12.1 million, respectively.

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

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

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

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

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

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

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

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

Revenue. Revenue for the ~~first~~second quarter of 2023 was ~~$298.7~~$286.3 million, a ~~13.0%~~9.2% increase when compared to revenue of ~~$264.4~~$262.2 million for the ~~first~~second quarter of 2022. The increase can be ~~primarily~~mainly attributed to ~~an increase in software and services~~the continued growth of our revenue ~~due mainly to the timing of the closure of deals, as well as increased payment volumes, conversion of customer accounts onto our solutions, and other ancillary services.~~management solutions.

Operating Results. Operating income for the ~~first~~second quarter of 2023 was ~~$38.2~~$28.2 million, or a ~~12.8%~~9.9% operating margin percentage, compared to ~~$16.4~~$7.3 million, or a ~~6.2%~~2.8% operating margin percentage for the ~~first~~second quarter of 2022. The increase in operating income can be mainly attributed to the ~~higher revenue generated in the first quarter of 2023, discussed above, and to a lesser extent, the $7.9~~$16.9 million decrease in restructuring and reorganization charges between years.

Diluted EPS. Diluted EPS for the ~~first~~second quarter of 2023 was ~~$0.68~~$0.45 compared to ~~$0.19~~$0.17 for the ~~first~~second quarter of 2022, with the increase mainly attributed to the higher operating income in the ~~first~~second quarter of 2023, discussed ~~above, and a $7.5 million loss on a derivative liability incurred in the first quarter of 2022 upon conversion of our 2016 Convertible Notes.~~above.

Cash and Cash Flows. As of ~~March 31,~~June 30, 2023, we had cash, cash equivalents, and short-term investments of ~~$167.7~~$146.2 million, as compared to $167.7 million as of March 31, 2023, and $150.4 million as of December 31, 2022. Our cash flows provided by operating activities for the ~~first~~second quarter of 2023 were ~~$15.4~~$12.4 million. See the Liquidity section below for further discussion of our cash flows.

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

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

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

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

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

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

A copy of the Agreement, with confidential information redacted, ~~will be~~is filed as Exhibit 10.25 to this Form 10-Q.

Comcast. On June 29, 2023, Comcast exercised their option to extend the term of their processing and other related solutions agreement through December 31, 2025, which aligns with the ~~SEC as an exhibit~~term of their print and mail services agreement. Terms of the processing agreement extension remain consistent with the financial terms and obligations under the original agreement.

A copy of the Comcast agreement and related amendments, with confidential information redacted, is included in the exhibits to our ~~Form 10-Q for~~periodic filings with the ~~period ended June 30, 2023.~~SEC.

Risk of Customer Concentration. We expect to continue to generate a significant percentage of our future revenue from our largest customers. There are inherent risks whenever a large percentage of total revenue is concentrated with a limited number of customers. Should a significant customer: (i) terminate or fail to renew their contracts with us, in whole or in part, for any reason; (ii) significantly reduce the number of customer accounts processed on our solutions, the price paid for our services, or the scope of services that we provide; or (iii) experience significant financial or operating difficulties, it could have a material adverse effect on our financial condition and results of operations.

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

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

Revenue. Total revenue for ~~the first~~the: (i) second quarter of 2023 was ~~$298.7~~$286.3 million, a ~~13.0%~~9.2% increase when compared to ~~$264.4~~$262.2 million for the ~~first~~second quarter of 2022; and (ii) six months ended June 30, 2023 was $585.1 million, an 11.1% increase when compared to $526.6 million for the six months ended June 30, 2022. ~~During the first quarter of 2023, our software and services~~These increases in revenue ~~increased $12.5 million, or 67.6% over the first quarter of 2022,~~are primarily ~~due~~attributed to the ~~timing~~continued growth of ~~the closure of software license upgrades. Additionally,~~our revenue management solutions as we ~~saw~~generated continued year-over-year growth in our SaaS and related solutions revenue driven mainly by ~~increased payments volumes,~~ conversion of customer accounts onto our solutions, ~~and~~increased usage of our other ancillary services, and higher payment volumes. Additionally, the first quarter of 2023 saw strong software and services revenue due to ~~include a strong quarter~~the timing of the closure of software license upgrades and from our communication design and delivery centers. In the first quarter of 2023, we also completed the final conversions of Charter's customer accounts onto our platforms, converting over nine million customer accounts ~~in the past twelve months~~since June 2022 and more than fourteen million in total.

We use the location of the customer as the basis of attributing revenue to individual countries. Revenue by geographic regions for the ~~first~~second quarters ofand six months ended June 30, 2023 and 2022 was as follows (in thousands):

Total Operating Expenses. Total operating expenses for ~~the first~~the: (i) second quarter of 2023 were ~~$260.5~~$258.1 million, a ~~5.1%~~1.3% increase when compared to ~~$248.0~~$254.9 million for the ~~first~~second quarter of 2022; and (ii) six months ended June 30, 2023 were $518.7 million, a 3.1% increase when compared to $502.9 million for the six months ended June 30, 2022. The ~~increase~~increases in total operating expenses isare reflective of the higher revenue between periods, to include increased employee-related costs, offset to a certain degree by the ~~$7.9 million decrease~~decreases in restructuring and reorganization charges, discussed below.

Cost of Revenue (Exclusive of Depreciation). The cost of revenue for ~~the first~~the: (i) second quarter of 2023 was ~~$155.0~~$151.1 million, a ~~12.0%~~9.4% increase when compared to ~~$138.4~~$138.1 million for the ~~first~~second quarter of 2022; and (ii) six months ended June 30, 2023 was $306.2 million, a 10.7% increase when compared to $276.6 million for the six months ended June 30, 2022. The increase in cost of revenue between periods is reflective of the increase in revenue ~~year-over-year.~~year-over-year, to include increased employee-related costs. Total cost of revenue as a percentage of revenue for ~~the first~~the: (i) second quarters of 2023 and 2022 was ~~51.9%~~52.8% and ~~52.4%~~52.7%, respectively; and (ii) six months ended June 30, 2023 and 2022 was 52.3% and 52.5%, respectively.

R&D Expense (Exclusive of Depreciation). R&D expense for ~~the first~~the: (i) second quarter of 2023 was ~~$35.5~~$36.6 million, a ~~7.5%~~5.8% increase when compared to ~~$33.0~~$34.6 million for the ~~first~~second quarter of 2022; and (ii) six months ended June 30, 2023 was $72.1 million, a 6.7% increase when compared to $67.6 million for the six months ended June 30, 2022, with the increase mainly attributed to higher employee-related costs. As a percentage of total revenue, R&D expense for ~~the first~~the: (i) second quarters of 2023 and 2022 was ~~11.9%~~12.8% and ~~12.5%~~13.2%, respectively; and (ii) six months ended June 30, 2023 and 2022 was 12.3% and 12.8%, respectively.

Our R&D efforts are focused on the ~~continued~~ evolution of our solutions ~~that~~which enable our customers ~~worldwide~~ to ~~provide a more personalized experience while introducing~~launch, monetize, and scale new digital ~~solutions. This includes the continued investment in our products~~services quickly and ~~integration of acquired assets into our solutions.~~across any channel, while delivering an exceptional customer experience.

Selling, General, and Administrative ("SG&A") Expense (Exclusive of Depreciation). SG&A expense for ~~the first~~the: (i) second quarter of 2023 was ~~$59.1~~$62.7 million, a ~~3.1%~~9.1% increase when compared to ~~$57.3~~$57.5 million for the ~~first~~second quarter of 2022; and (ii) six months ended June 30, 2023 was $121.8 million, a 6.1% increase when compared to $114.8 million for the six months ended June 30, 2022. This increase in SG&A expense is primarily attributed to increases in employee-related costs, to include incentive ~~compensation;~~compensation, offset to a certain degree by lower building related costs due to our office closures in 2022. Our SG&A costs as a percentage of total revenue for ~~the first~~the: second quarters of 2023 and 2022 were ~~19.8%~~21.9% for both periods; and ~~21.7%~~(ii) six months ended June 30, 2023 and 2022 were 20.8% and 21.8%, respectively.

Restructuring and Reorganization Charges. Restructuring and reorganization charges for ~~the first~~the: (i) second quarter of 2023 were ~~$5.2~~$2.1 million, a ~~$7.9~~$16.9 million decrease when compared to ~~$13.1~~$19.0 million for the ~~first~~second quarter of 2022; and (ii) six months ended June 30, 2023 were $7.3 million, a $24.8 million decrease when compared to $32.1 million for the six months ended June 30, 2022. The restructuring and reorganization charges for the ~~first~~second quarter ofand six months ended June 30, 2023 relate mainly to the following:

Operating Income. Operating income for ~~the first~~the: (i) second quarter of 2023 was ~~$38.2~~$28.2 million, or ~~12.8%~~9.9% of total revenue, compared to ~~$16.4~~$7.3 million, or ~~6.2%~~2.8% of total revenue for the ~~first~~second quarter of 2022; and (ii) six months ended June 30, 2023 was $66.4 million, or 11.3% of total revenue, compared to $23.7 million, or 4.5% of total revenue, for the six months ended June 30, 2022. The increase in operating income can be mainly attributed to ~~the higher revenue generated in the first quarter of 2023,~~lower restructuring and reorganization charges, discussed above, and to a lesser ~~extent, the $7.9 million decrease in restructuring~~degree, higher revenue and ~~reorganization charges between years.~~improved profitability.

Interest Expense. Interest expense for the: (i) second quarter of 2023 was $7.8 million, a $5.1 million increase when compared to $2.7 million for the second quarter of 2022; and (ii) six months ended June 30, 2023 was $15.1 million, a $9.1 million increase when compared to $6.0 million for the six months ended June 30, 2022. Our interest expense relates primarily to our 2021 Credit Agreement. ~~Interest~~The increase in interest expense ~~for the first quarter of 2023 was $7.2 million, a $3.9 million increase when compared to $3.3 million for the first quarter of 2022, with the increase due~~between periods can be attributed to rising interest rates and a higher average outstanding debt balance during ~~the first quarter of~~ 2023.

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

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

Other, net. Other, net for ~~the first~~the: (i) second quarter of 2023 was ~~$2.4~~$1.4 million of other expense, a ~~$3.2~~$3.8 million change when compared to ~~$0.8~~$2.4 million of other income for the ~~first~~second quarter of 2022; and (ii) six months ended June 30, 2023 was $3.9 million of other expense, a $7.2 million change when compared to $3.3 million of other income for the six months ended June 30, 2022, with the ~~change~~changes primarily attributed to foreign currency movements.

Income Tax Provision. The effective income tax rates for the ~~first~~second quarters ofand six months ended June 30, 2023 and 2022 were as follows:

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

The ~~first quarter of 2022~~ effective income tax rate for the six months ended June 30, 2022 was impacted by the combination of lower net income for the ~~quarter~~period and a discrete tax benefit related to the vesting of restricted common stock during the ~~quarter.~~first quarter of 2022. The full year 2022 effective income tax rate was 28%.

Cash and Liquidity. As of ~~March 31,~~June 30, 2023, our principal sources of liquidity included cash, cash equivalents, and short-term investments of ~~$167.7~~$146.2 million, compared to $167.7 million as of March 31, 2023, and $150.4 million as of December 31, 2022. We generally invest our excess cash balances in low-risk, short-term investments to limit our exposure to market and credit risks.

As part of our 2021 Credit Agreement, we have a $450.0 million senior secured revolving loan facility with a syndicate of financial institutions that expires in September 2026. As of ~~March 31,~~June 30, 2023, we had ~~$305.0~~$290.0 million outstanding on the 2021 ~~Revolver,~~Revolver. In July 2023, we borrowed an additional $15.0 million, currently leaving $145.0 million available to us. The 2021 Credit Agreement contains customary affirmative, negative, and financial covenants. As of ~~March 31,~~June 30, 2023, and the date of this filing, we believe that we are in compliance with the provisions of the 2021 Credit Agreement.

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

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

As of ~~March~~June 30, 2023 and December 31, ~~2023,~~2022, we had $0.9 million and $1.0 million, respectively, of cash restricted as to use primarily to collateralize guarantees and outstanding letters of credit included in our total cash, cash equivalents, and short-term investments balance. In addition, as of ~~March~~June 30, 2023 and December 31, ~~2023,~~2022, we had ~~$177.3~~$176.4 million and $238.7 million, respectively, of settlement and merchant reserve assets which are deemed restricted due to contractual restrictions with the merchants and restrictions arising from our policy and intention. It has historically been our policy to segregate settlement and merchant reserve assets from our operating cash balances and we intend to continue to do so.

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

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

Variations in our net cash provided by/(used in) operating activities are generally related to the changes in our operating assets and liabilities (related mostly to fluctuations in timing at quarter-end of customer payments and changes in accrued expenses), and generally over longer periods of time, do not significantly impact our cash flows from operations.

Significant fluctuations in key operating assets and liabilities between 2023 and 2022 that impacted our cash flows from operating activities are as follows:

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

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

As of ~~March 31,~~June 30, 2023 and 2022, approximately ~~95%~~93% and 94%, respectively, of our billed accounts receivable balance were less than 60 days past due.

We may experience adverse impacts to our DBOs if and when customer payment delays occur. However, these recurring monthly payments that cross a reporting period-end do not raise any collectability concerns, as payment is generally received subsequent to quarter-end. All other changes in our gross and net billed accounts receivable reflect the normal fluctuations in the timing of customer payments at quarter-end, as evidenced by our relatively consistent DBO metric.

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

Unbilled trade accounts receivable increased ~~$20.5~~$25.7 million to ~~$73.3~~$78.5 million as of ~~March 31,~~June 30, 2023, from $52.8 million as of December 31, 2022, due primarily to large implementation projects where various milestone and contractual billing dates have not yet been reached or delayed. Unbilled accounts receivable are an inherent characteristic of certain software and services transactions and may fluctuate between quarters, as these ~~type~~types of transactions typically have scheduled invoicing terms over several quarters, as well as certain milestone billing events.

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

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

During the ~~first quarters of~~six months ended June 30, 2023 and 2022, we sold (or had mature) $0.1 million and ~~$21.9~~$26.8 million, respectively, of short-term investments. We continually evaluate the appropriate mix of our investment of excess cash balances between cash equivalents and short-term investments in order to maximize our investment returns and liquidity.

Our capital expenditures for the ~~first quarters of~~six months ended June 30, 2023 and 2022 for software, property and equipment were ~~$8.7~~$16.4 million and ~~$10.4~~$19.6 million, respectively, and consisted principally of investments in: (i) communication design and delivery center equipment and infrastructure; (ii) software and related equipment; and (iii) computer hardware.

Cash Flows from Financing Activities. Our financing activities typically consist of activities associated with our common stock, long-term debt, and settlement and merchant reserve ~~activity.~~activity, discussed below. Additionally, during the six months ended June 30, 2023, we made deferred acquisition payments of $1.2 million related to DGIT earn-out and escrowed payments.

During the ~~first quarters of~~six months ended June 30, 2023 and 2022, the Board approved dividends totaling ~~$8.8~~$17.7 million and ~~$8.6~~$17.1 million, respectively, and made dividend payments of ~~$9.1~~$17.7 million and ~~$8.9~~$17.2 million, respectively, through ~~March 31,~~June 30, 2023 and 2022, with the differences between the amount approved and paid attributed to dividends on accrued unvested incentive shares that are paid upon vesting and previously approved.

During the ~~first quarters~~six months ended June 30, 2023, we did not make any stock repurchases under the guidelines of ~~2023 and~~our Stock Repurchase Program. During the six months ended June 30, 2022, we repurchased ~~zero and~~ approximately ~~266,000~~626,000 shares of our common stock ~~respectively,~~ under the guidelines of our Stock Repurchase Program for ~~zero and $16.0 million, respectively.~~$37.6 million.

Outside of our Stock Repurchase Program, during the ~~first quarters of~~six months ended June 30, 2023 and 2022, we repurchased from our employees and then cancelled approximately ~~166,000~~168,000 and ~~123,000~~125,000 shares of our common stock, respectively, for ~~$9.3~~$9.4 million and ~~$7.8~~$7.9 million, respectively, in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans.

Through the ~~first quarters of~~six months ended June 30, 2023 and 2022, we have paid ~~$9.3~~$9.4 million and ~~$23.7~~$45.1 million, respectively, for our total repurchases of common stock, with the differences when compared to the amounts purchased attributed to the timing of the settlement.

During the ~~first quarters of~~six months ended June 30, 2023 and 2022, we made principal repayments on our 2021 Term ~~Debt~~Loan of ~~$1.9~~$3.8 million ~~for both periods.~~during each period. Additionally, during the ~~first quarter of~~six months ended June 30, 2023, we borrowed $30.0 million from our 2021 Revolver for general corporate purposes and ~~during~~repaid $15.0 million. During the ~~first quarter of~~six months ended June 30, 2022, we borrowed $245.0 million from our 2021 Revolver to settle our 2016 Convertible Notes for $242.3 million.

In July 2023, we borrowed an additional $15.0 million on the 2021 Revolver, currently leaving $145.0 million available to us.

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

During the ~~first quarters of~~six months ended June 30, 2023 and 2022, we had net settlement and merchant reserve activity of ~~$61.5~~($63.1) million and ~~$23.5~~$26.8 million, respectively, related to the cash collected, held on behalf, and paid to our merchants related to our payment processing services and the net change in deposits held on behalf of our merchants. These balances can significantly fluctuate between periods due to activity at the end of the period and the day in which the period ends.

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

Our off-balance sheet arrangements are mainly limited to money transmitter bonds, bid bonds, and performance bonds. These arrangements do not have a material impact and are not reasonably likely to have a material future impact to our financial condition, results of operation, liquidity, capital expenditures, or capital resources. See Note 7 to our Financial Statements for additional information on these guarantees.

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

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

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

Under our Stock Repurchase Program, we may repurchase shares in the open market or in privately negotiated transactions, including through an accelerated stock repurchase plan or under a SEC Rule 10b5-1 plan. The actual timing and amount of share repurchases are dependent on the current market conditions and other business-related factors. In August 2023, we announced our intention to enter into an approximately $100 million share repurchase plan through the end of 2024. Our common stock repurchases are discussed in more detail in Note 9 to our Financial Statements.

During the ~~first quarter of~~six months ended June 30, 2023, we did not repurchase any of our common stock under our Stock Repurchase Program.

Outside of our Stock Repurchase Program, during the ~~first quarter of~~six months ended June 30, 2023, we repurchased from our employees and then cancelled approximately ~~166,000~~168,000 shares of our common stock for ~~$9.3~~$9.4 million in connection with minimum tax withholding requirements resulting from the vesting of restricted common stock under our stock incentive plans.

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

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

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

~~Our 2021 Credit Agreement~~The mandatory repayments for the next twelve months under our 2021 Credit Agreement are $7.5 million and the cash interest expense (based upon then-current interest rates) for the 2021 Term Loan and 2021 Revolver (assuming the current amount outstanding, no further amounts are borrowed, and the amount is not voluntarily repaid) are ~~$9.4~~$9.5 million and ~~$21.0~~$21.3 million, respectively. We have the ability to make prepayments without penalties on our 2021 Credit Agreement.

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

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

Market risk is the potential loss arising from adverse changes in market rates and prices. As of ~~March 31,~~June 30, 2023, we are exposed to various market risks, including changes in interest rates, fluctuations and changes in the market value of our cash equivalents, ~~and~~ short-term investments and settlement and merchant reserve assets, and changes in foreign currency exchange rates. We have not historically entered into derivatives or other financial instruments for trading or speculative purposes.

Long-Term Debt. The current interest rates on our 2021 Credit Agreement are based upon an adjusted ~~LIBOR~~SOFR rate (including 0.10% spread adjustment) plus an applicable margin, or an ABR plus an applicable margin. In April 2023, we amended the 2021 Credit Agreement to replace the LIBOR rate with the SOFR rate for interest periods entered into after the effective date of amendment. See Note 4 to our Financial Statements for further details related to our long-term debt.

A hypothetical adverse change of 10% in the ~~March 31,~~June 30, 2023 adjusted ~~LIBOR~~SOFR rate would not have a material impact upon our results of operations.

Cash Equivalents and Short-Term Investments. Our cash and cash equivalents as of ~~March 31,~~June 30, 2023 and December 31, 2022 were ~~$167.7~~$146.2 million and $150.4 million, respectively. Certain of our cash balances are swept into overnight money market accounts on a daily basis, and at times, any excess funds are invested in low-risk, somewhat longer term, cash equivalent instruments and short-term investments. Our cash equivalents are invested primarily in institutional money market funds held at major banks. We have minimal market risk for our cash and cash equivalents due to the relatively short maturities of the instruments.

Our short-term investments as of ~~March 31,~~June 30, 2023 and December 31, 2022 were zero and $0.1 million, respectively. Currently, we utilize short-term investments as a means to invest our excess cash only in the U.S. The day-to-day management of our short-term investments is performed by a large financial institution in the U.S., using strict and formal investment guidelines approved by our Board. Under these guidelines, short-term investments are limited to certain acceptable investments ~~with:~~with a: (i) a maximum maturity; (ii) a maximum concentration and diversification; and (iii) a minimum acceptable credit quality. At this time, we believe we have minimal liquidity risk associated with the short-term investments included in our portfolio.

Settlement and Merchant Reserve Assets. We are exposed to market risk associated with cash held on behalf of our merchants related to our payment processing services. As of ~~March 31,~~June 30, 2023 and December 31, 2022, we had ~~$177.3~~$176.4 million and $238.7 million, respectively, of cash collected on behalf of our merchants. The cash is held in accounts with various major financial institutions in the U.S. and Canada in an amount equal to at least 100% of the aggregate amount owed to our merchants. These balances can significantly fluctuate between periods due to activity at the end of the period and the day in which the period ends.

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

During the ~~first quarter of~~six months ended June 30, 2023, we generated approximately ~~86%~~88% of our revenue in U.S. dollars. We expect that, in the foreseeable future, we will continue to generate a very large percentage of our revenue in U.S. dollars.

As of ~~March 31,~~June 30, 2023 and December 31, 2022, the carrying amounts of our monetary assets and monetary liabilities on the books of our non-U.S. subsidiaries in currencies denominated in a currency other than the functional currency of those non-U.S. subsidiaries are as follows (in thousands, in U.S. dollar equivalents):

A hypothetical adverse change of 10% in the ~~March 31,~~June 30, 2023 exchange rates would not have had a material impact upon our results of operations.

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

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

From ~~time-to-time,~~time to time, we are involved in litigation relating to claims arising out of our operations in the normal course of business. In the opinion of our management, we are not presently a party to any material pending or threatened legal proceedings.

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

The following table presents information with respect to purchases of our common stock made during the ~~first~~second quarter of 2023 by CSG Systems International, Inc. or any “affiliated purchaser” of CSG Systems International, Inc., as defined in Rule 10b-18(a)(3) under the Exchange Act.

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

(1) Incorporated by reference to the exhibit of the same number to the Registrant's Current Report on Form 8-K for the event dated April 12, 2023.

(2) Incorporated by reference to the exhibit of the same number to the Registrant's Current Report on Form 8-K for the event dated May 17, 2023.

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

** Certain of the schedules (or similar attachments) to this Exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K under the Securities Act because they do not contain information material to an investment or voting decision and that information is not otherwise disclosed in the Exhibit or the disclosure document. The registrant hereby agrees to furnish a copy of all omitted schedules (or similar attachments) to the SEC upon its request.

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


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


		Page No.

Part I - FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Balance Sheets as of ~~March 31,~~June 30, 2023 and December 31, 2022 (Unaudited)	3

	Condensed Consolidated Statements of Income for the Quarters ~~ended March 31,~~and Six Months Ended June 30, 2023 and 2022 (Unaudited)	4

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Quarters ~~ended March 31,~~and Six Months Ended June 30, 2023 and 2022 (Unaudited)	5

	Condensed Consolidated Statements of Stockholders’ Equity for the Quarters ~~ended March 31,~~and Six Months Ended June 30, 2023 and 2022 (Unaudited)	6

	Condensed Consolidated Statements of Cash Flows for the ~~Quarters~~Six Months Ended ~~March 31,~~June 30, 2023 and 2022 (Unaudited)	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	8

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

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2526

Item 4.	Controls and Procedures	2627

Part II - OTHER INFORMATION

Item 1.	Legal Proceedings	2728

Item 1A.	Risk Factors	2728

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2728

Item 6.	Exhibits	2728

	Exhibit Index ~~to Exhibits~~	2829

	Signatures	2930


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


	June 30, 2023		December 31, 2022
Americas (principally the U.S.)	$	101,355	$	91,569
Europe, Middle East and Africa		34,390		49,099
Asia Pacific		10,467		9,768
Total cash, equivalents, and short-term investments	$	146,212	$	150,436


						Net Cash								Net Cash
			Changes in			Provided by					Changes in			Provided by
			Operating			(Used In) Operating					Operating			(Used In) Operating
			Assets and			Activities –					Assets and			Activities –
	Operations		Liabilities			Totals			Operations		Liabilities			Totals
Cash Flows from Operating Activities:
2023:
March 31 (1)	$	50,158	$	(34,761	)		15,397		$	50,158	$	(34,761	)	$	15,397
June 30										26,539		(14,153	)		12,386
Total									$	76,697	$	(48,914	)	$	27,783

2022:
March 31 (1)	$	49,687	$	(55,236	)	$	(5,549	)	$	49,687	$	(55,236	)	$	(5,549	)
June 30 (2)										36,881		(44,597	)		(7,716	)
Total									$	86,568	$	(99,833	)	$	(13,265	)


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


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


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


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


Quarter Ended	Gross		Allowance			Net Billed		DBOs		Gross		Allowance			Net Billed		DBOs
2023:
March 31	$	261,028	$	(5,254	)	$	255,774		68	$	261,028	$	(5,254	)	$	255,774		68
June 30											260,928	$	(4,618	)		256,310		65

2022:
March 31	$	243,292	$	(4,924	)	$	238,368		70	$	243,292	$	(4,924	)	$	238,368		70
June 30											241,682		(5,105	)		236,577		66


Period	Total Number of Shares Purchased (1) (2)		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plan or Programs (2)
January 1 - January 31		10,821	$	58.15		-		2,107,047
February 1 - February 28		64,179		60.54		-		2,107,047
March 1 - March 31		91,266		52.75		-		2,107,047
Total		166,266	$	56.11		-


Exhibit Number		Description

~~10.26BJ~~3.04		~~Sixtieth~~Certificate of Amendment of Restated Certificate of Incorporation of CSG Systems International, Inc.
4.60A (1)		First Amendment to ~~Consolidated~~Amended and Restated Credit Agreement
10.04 (2)		CSG Systems International, Inc. Amended and Restated 2005 Stock Incentive Plan, as amended on May 17, 2023
10.25**		Amended and Restated CSG Master Subscriber Management System Agreement between CSG Systems, Inc. and Charter Communications Operating, LLC
~~10.60~~10.27U*		Twentieth Amendment to the CSG Master Subscriber Management System Agreement between CSG Systems, ~~International,~~ Inc. ~~Executive Severance Plan~~and Comcast Cable Communications Management, LLC
~~10.61~~10.27V*		Twenty-First Amendment to the CSG Master Subscriber Management System Agreement between CSG Systems, ~~International,~~ Inc. ~~Executive Severance Plan Participation Agreement with Brian A. Shepherd, dated March 28, 2023~~and Comcast Cable Communications Management, LLC
~~10.62~~10.27W*		Twenty-Second Amendment to the CSG Master Subscriber Management System Agreement between CSG Systems, ~~International,~~ Inc. ~~Executive Severance Plan Participation Agreement with Kenneth M. Kennedy, dated March 28, 2023~~
~~10.63~~		~~CSG Systems International, Inc. Executive Severance Plan Participation Agreement with Elizabeth A. Bauer, dated March 28, 2023~~and Comcast Cable Communications Management, LLC
31.01		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.02		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.01		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)


	March 31, 2023					December 31, 2022					June 30, 2023					December 31, 2022
	Monetary			Monetary		Monetary			Monetary		Monetary			Monetary		Monetary			Monetary
	Liabilities			Assets		Liabilities			Assets		Liabilities			Assets		Liabilities			Assets
Pounds sterling	$	(2	)	$	669	$	(119	)	$	601	$	(54	)	$	1,418	$	(119	)	$	601
Euro		(595	)		5,148		(425	)		1,992		(398	)		3,398		(425	)		1,992
U.S. Dollar		(1,312	)		33,312		(597	)		31,646		(257	)		29,324		(597	)		31,646
Other		(40	)		929		(72	)		503		(24	)		1,194		(72	)		503
Totals	$	(1,949	)	$	40,058	$	(1,213	)	$	34,742	$	(733	)	$	35,334	$	(1,213	)	$	34,742