CSG Systems International (CSGS) 8-K Results of Operations and Financial Condition

Exhibit 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE

For more information, contact:

Liz Bauer, Senior Vice President

(303) 804-4065

E-mail:liz_bauer@csgsystems.com

CSG SYSTEMS INTERNATIONAL, INC. REPORTS

SECOND QUARTER 2005 RESULTS

Strong Execution Provides Solid Revenue and Earnings Growth;

Operating Cash Flow Exceeds Expectations

ENGLEWOOD, COLO. (July 26, 2005) — CSG Systems International, Inc. (Nasdaq: CSGS), a leading provider of customer care and billing solutions, today reported results for the quarter ended June 30, 2005.

Second Quarter 2005 Highlights:

• CSG exceeded its financial expectations for the second quarter of 2005.GAAP results were as follows:total revenues were $141.7 million;operating income was $13.7million; andnet incomewas $8.5 million, or $0.17perdiluted share. Net income was reduced by approximately $4.3 million, or $0.05 per diluted share, for the accrual of benefits related to Neal Hansen’s retirement, and approximately $6.1million, or $0.08 per diluted share, for restructuring charges.

• Cash flows from operations for the quarter ended June 30, 2005 were $43.3 million, which were higher than expectations as a result of CSG’s strong operating performance for the quarter and favorable changes in working capital.

• For the quarter, CSG repurchased 1,081,000 shares of its common stock for approximately $20 million (weighted-average price of $18.49 per share) under its stock repurchase program.

• On April 1, Ed Nafus replaced Neal Hansen as chief executive officer and president of the company. Don Reed and James Unruh were recently added to CSG’s Board of Directors and Bernard Reznicek was named non-executive chairman. As of June 30, Neal Hansen retired from the board.

• CSG’s customers continued to migrate to its enhanced solutions, CSG Advanced Convergent Platform (ACP) and CSG Kenan FX. To date, over 16 million video customers have migrated to ACP and 37 telecommunications providers have chosen Kenan FX to help them meet their business objectives.

“We are very pleased with both our financial and operational results for the quarter,” Ed Nafus, chief executive officer and president of CSG Systems International, Inc., said. “We continue to execute on our short-term opportunities while solidifying the foundation for long-term, sustainable growth. We will continue to focus our attention on helping our clients grow their businesses effectively and efficiently. At the end of the day, we believe that providing our customers with the best tools, technology and expertise will result in long-term sustainable growth for both them and us.”

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CSG Systems International, Inc.

July 26, 2005

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Summary GAAP Results of Operations Information (unaudited)

(in thousands, except per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2005		2004		Percent Change		2005		2004		Percent Change
Total revenues	$	141,719	$	129,663	9	%	$	278,625	$	260,027	7	%
Operating income		13,688		21,980	(38	)%		28,925		43,264	(33	)%
Net income		8,547		7,756	10	%		17,128		18,589	(8	)%
Net income per diluted share		0.17		0.15	13	%		0.35		0.36	(3	)%

Second Quarter 2005 Results

Processing revenues for the second quarter of 2005 were $88.7 million, up ten percent when compared to $80.9 million for the same period last year, and up six percent when compared to $83.4 million for the first quarter of 2005. Processing revenues for the second quarter of 2005 include approximately $2.3 million of one-time, nonrecurring revenues related to contract termination and client bankruptcy settlements. Software revenues were $9.8 million for the current quarter, a 20 percent year-over-year increase, however a decrease of 12 percent when compared to $11.1 million for the first quarter of 2005. Maintenance revenues for the second quarter of 2005 were $25.1 million, up six percent when compared to $23.7 million for the same period last year, and up two percent when compared to $24.5 million for the first quarter of 2005. Professional services revenues generated $18.1 million of revenue in the quarter, a seven percent increase when compared to the same period last year, and a one percent increase when compared to the first quarter of 2005.

Net income presented under generally accepted accounting principles (“GAAP”) for the second quarter of 2005 was $8.5 million, or $0.17 per diluted share. Net income was reduced by approximately $4.3 million, or $0.05 per diluted share, for the accrual of benefits related to Neal Hansen’s retirement, and approximately $6.1 million, or $0.08 per diluted share, for restructuring charges. GAAP net income for the second quarter of 2004 was $7.8 million, or $0.15 per diluted share. The second quarter 2004 results were reduced by the write-off of deferred financing costs of $6.6 million and restructuring charges of approximately $0.1 million, or $0.08 per diluted share in total.

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CSG Systems International, Inc.

July 26, 2005

Page 3

Supplemental Data (unaudited)

The following information is provided to assist readers in further evaluating CSG’s performance (in thousands, except per share amounts):

	Three Months Ended June 30, 2005				Three Months Ended June 30, 2004
	Amount (2)		Per Diluted Share Impact (3)		Amount (2)		Per Diluted Share Impact (3)
Certain key expense items:
Neal Hansen retirement benefits	$	4,268	$	0.05	$	—	$	—
Write-off of deferred financing costs		—		—		6,569		0.08
Restructuring charges		6,129		0.08		145		0.00
Total	$	10,397	$	0.13	$	6,714	$	0.08
Certain non-cash expenses (1):
Depreciation	$	3,751	$	0.05	$	3,517	$	0.04
Amortization		7,229		0.09		7,251		0.09
Stock-based employee compensation		4,313		0.05		3,800		0.04
Total	$	15,293	$	0.19	$	14,568	$	0.17

	Six Months Ended June 30, 2005				Six Months Ended June 30, 2004
	Amount (2)		Per Diluted Share Impact (3)		Amount (2)		Per Diluted Share Impact (3)
Certain key expense items:
Neal Hansen retirement benefits	$	8,489	$	0.11	$	—	$	—
Write-off of deferred financing costs		—		—		6,569		0.08
Restructuring charges		6,844		0.08		2,296		0.03
Total	$	15,333	$	0.19	$	8,865	$	0.11
Certain non-cash expenses (1):
Depreciation	$	7,518	$	0.09	$	7,153	$	0.09
Amortization		14,372		0.18		13,572		0.16
Stock-based employee compensation		8,650		0.11		7,945		0.09
Total	$	30,540	$	0.38	$	28,670	$	0.34

(1) These items are calculated in accordance with GAAP, and are reflected in the accompanying Condensed Consolidated Statements of Income and Cash Flows.

(2) These items (on a pretax basis) are included in CSG’s determination of GAAP financial results.

(3) This represents the after tax impact to net income on a per diluted share basis using CSG’s effective income tax rate of 39% and 38% for the three and six months ended June 30, 2005 and 2004, respectively.

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CSG Systems International, Inc.

July 26, 2005

Page 4

Divisional Results

CSG is organized into two operating segments: the Broadband Division and the GSS Division. CSG excludes restructuring charges in the determination of its GAAP segment results.

During the first quarter of 2005, CSG reorganized certain components of its operating segments. The reorganization consisted primarily of moving CSG’s plaNet Consulting division (which includes the ICMS assets acquired from IBM in 2002) from the GSS Division to the Broadband Division. The results of operations reflecting this reorganization for the two divisions are shown below (in thousands, except percentages). Segment financial information for 2004 has been restated, as required by GAAP, in order to conform to the new reporting structure:

	Three Months Ended June 30, 2005
	Broadband Division			GSS Division			Corporate			Total
Processing revenues	$	88,717		$	—		$	—		$	88,717
Software revenues		3,026			6,736			—			9,762
Maintenance revenues		6,539			18,564			—			25,103
Professional services revenues		3,554			14,583			—			18,137
Total revenues		101,836			39,883			—			141,719
Segment operating expenses (4)		64,669			36,597			20,636			121,902
Contribution margin (loss) (4)	$	37,167		$	3,286		$	(20,636	)	$	19,817
Contribution margin percentage		36.5	%		8.2	%		N/A			14.0	%

	Three Months Ended June 30, 2004
	Broadband Division			GSS Division			Corporate			Total
Processing revenues	$	80,895		$	—		$	—		$	80,895
Software revenues		1,202			6,907			—			8,109
Maintenance revenues		6,516			17,137			—			23,653
Professional services revenues		4,082			12,924			—			17,006
Total revenues		92,695			36,968			—			129,663
Segment operating expenses (4)		57,064			34,113			16,361			107,538
Contribution margin (loss) (4)	$	35,631		$	2,855		$	(16,361	)	$	22,125
Contribution margin percentage		38.4	%		7.7	%		N/A			17.1	%

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CSG Systems International, Inc.

July 26, 2005

Page 5

	Six Months Ended June 30, 2005
	Broadband Division			GSS Division			Corporate			Total
Processing revenues	$	172,083		$	—		$	—		$	172,083
Software revenues		7,605			13,259			—			20,864
Maintenance revenues		12,950			36,699			—			49,649
Professional services revenues		7,817			28,212			—			36,029
Total revenues		200,455			78,170			—			278,625
Segment operating expenses (4)		129,697			72,548			40,611			242,856
Contribution margin (loss) (4)	$	70,758		$	5,622		$	(40,611	)	$	35,769
Contribution margin percentage		35.3	%		7.2	%		N/A			12.8	%

	Six Months Ended June 30, 2004
	Broadband Division			GSS Division			Corporate			Total
Processing revenues	$	162,027		$	—		$	—		$	162,027
Software revenues		2,152			13,594			—			15,746
Maintenance revenues		13,407			35,297			—			48,704
Professional services revenues		7,098			26,452			—			33,550
Total revenues		184,684			75,343			—			260,027
Segment operating expenses (4)		114,220			68,563			31,684			214,467
Contribution margin (loss) (4)	$	70,464		$	6,780		$	(31,684	)	$	45,560
Contribution margin percentage		38.2	%		9.0	%		N/A			17.5	%

(4) CSG’s segment operating expenses and contribution margin (loss), determined in accordance with GAAP, exclude restructuring charges of $6.1 million and $0.1 million, respectively, for the three months ended June 30, 2005 and 2004, and $6.8 million and $2.3 million, respectively, for the six months ended June 30, 2005 and 2004.

Broadband Division

Total domestic customer accounts processed on CSG’s system as of June 30, 2005 were 44.4 million, compared to 43.9 million as of March 31, 2005. Of these, approximately 16 million subscribers have migrated to the Advanced Convergent Platform. The annualized revenue per processing unit (“ARPU”) for the second quarter of 2005 was $8.02 compared to $7.63 for the first quarter of 2005. The ARPU for the second quarter of 2005 includes $0.21 related to the $2.3 million of revenues for the one-time, nonrecurring contract termination and bankruptcy settlements mentioned above.

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CSG Systems International, Inc.

July 26, 2005

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GSS Division

The GSS Division signed several new clients this quarter, including Autotrader, the world’s #1 online automotive classified advertising company; Hawaiian Telcom, the leading provider of telecommunications services in Hawaii; and Instituto Costarriecense de Electrificacion, Costa Rica’s largest telecommunications provider. CSG Kenan FX is now live with nine different providers, representing every telecommunications vertical and geographic region. There are now 37 telecommunications companies who have signed up for the next generation business framework.

Financial Condition

As of June 30, 2005, CSG had cash and short-term investments of $164.9 million, compared to $146.8 million as of March 31, 2005 and $157.5 million as of December 31, 2004. Net billed accounts receivable were $134.0 million as of June 30, 2005 as compared to $143.3 million as of March 31, 2005 and $142.1 million as of December 31, 2004.

Cash flows from operations for the quarter ended June 30, 2005 were $43.3 million, compared to $40.2 million for the same period in 2004, an increase of $3.1 million. Cash flows from operations for the quarter ended March 31, 2005 were $18.9 million, an increase of $24.4 million sequentially between quarters. The second quarter 2005 cash flows from operations of $43.3 million were higher than our expectations as a result of CSG’s strong operating performance for the quarter and favorable changes in working capital. This included the impact of a key domestic client making payment on certain invoices which had been delayed during the first quarter of 2005, which resulted in the payment of four monthly invoices by this client in the second quarter of 2005.

Stock Repurchase Program

In April 2005, CSG established a Rule 10b5-1 Plan to repurchase shares of CSG common stock on the open market. Any shares repurchased under the Rule 10b5-1 Plan are counted towards the 15 million share limit authorized under the terms of CSG’s stock repurchase program. The Rule 10b5-1 Plan supplements any stock repurchases that CSG may decide to purchase under the existing terms of the stock repurchase program. The maximum quarterly repurchase limitation established under the Rule 10b5-1 Plan is $15 million.

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CSG Systems International, Inc.

July 26, 2005

Page 7

During the second quarter of 2005, CSG repurchased 1,081,000 shares of its common stock at a total purchase price of $20.0 million (a weighted-average price of $18.49 per share). Including these shares, the total shares repurchased under CSG’s stock repurchase program since its inception in August 1999 is 11.7 million shares, at a total repurchase price of $295.6 million (a weighted-average price of $25.29 per share.) As of June 30, 2005, the remaining number of shares authorized for repurchase under the program is 3.3 million shares.

Third Quarter 2005 Financial Guidance

“For the third quarter of 2005, we are expecting revenues of between $135 million and $142 million and GAAP earnings per diluted share of between 22 and 27 cents,” Peter Kalan, chief financial officer, said. “Our guidance does not include any restructuring charges that may be incurred during the third quarter of 2005 as they are not expected to be significant at this time.”

“We are projecting that our operating expenses for the third quarter will total between $117 million and $120 million. There are approximately $15 million of non-cash items included in our third quarter expenses, reducing results by approximately 19 cents per diluted share.” Kalan said. “These non-cash items include amortization of approximately $7 million, depreciation expense of approximately $4 million, and stock-based employee compensation expense of approximately $4 million.”

Conference Call

CSG will host a one-hour conference call on Tuesday, July 26, at 5 p.m. EDT, to discuss CSG’s second quarter results. The call will be carried live and archived on the Internet. A link to the conference call is available atwww.csgsystems.com.

Additional Information

For additional information about CSG, please visit CSG’s web site atwww.csgsystems.com. Additional information can be found in the Investor Relations section of the web site.

About CSG Systems International

Headquartered in Englewood, Colorado, CSG Systems International (NASDAQ: CSGS) is a leader in next-generation billing and customer care solutions for the cable television, direct broadcast satellite, advanced IP services, next generation mobile, and fixed wireline markets. CSG’s unique combination of proven and future-ready solutions, delivered in both outsourced and licensed formats, empowers its clients to deliver unparalleled customer service, improve operational efficiencies and rapidly bring new revenue-generating products to market. CSG is an S&P Midcap 400 company. For more information, visit CSG’s Web site atwww.csgsystems.com.

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CSG Systems International, Inc.

July 26, 2005

Page 8

This news release contains forward-looking statements as defined under the Securities Act of 1933, as amended, that are based on assumptions about a number of important factors and involve risks and uncertainties that could cause actual results to differ materially from what appears in this news release. These factors include, but are not limited to: 1) CSG’s ability to continue to perform satisfactorily and maintain good customer relations with its two largest customers, Comcast Corporation and Echostar Communications, which combined represent approximately one-third of CSG’s revenue; 2) the continued acceptance of CSG ACP, CSG Kenan FX and their related products and services; 3) CSG’s ability to enhance current products and develop new technology that will retain existing clients and capture new market share; 4) significant forays into new markets, which may prove costly and unprofitable; 5) the degree to which CSG’s expectations of market penetration and consumer acceptance of broadband, wireline and wireless services prove true — and even if realized, CSG’s ability to meet the billing and customer care needs of those markets; 6) client consolidation, which has decreased the number of potential buyers for many of CSG’s products and services; 7) CSG’s ability to expand and effectively operate its business internationally, which is much more complex and carries a higher collections and currency risk; 8) CSG’s ability to renew software maintenance contracts and sell additional software products and services to existing and new clients, both domestically and internationally; and 9) CSG’s ability to successfully deliver on lengthy and/or complex implementation projects, which by their nature, carry much more risk.This list is not exhaustive and readers are encouraged to review the additional risks and important factors described in CSG’s reports on Forms 10-K and 10-Q and other filings made with the SEC.

FINANCIALS TO FOLLOW

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS-UNAUDITED

(in thousands, except share and per share amounts)

	June 30, 2005			December 31, 2004
ASSETS
Current assets:
Cash and cash equivalents	$	130,787		$	133,551
Short-term investments		34,090			23,927
Total cash, cash equivalents and short-term investments		164,877			157,478
Trade accounts receivable-
Billed, net of allowance of $3,576 and $4,818		133,950			142,056
Unbilled and other		14,195			14,030
Deferred income taxes		7,093			5,336
Income taxes receivable		28			4,064
Other current assets		14,190			11,723
Total current assets		334,333			334,687
Property and equipment, net of depreciation of $93,851 and $87,068		33,124			34,476
Software, net of amortization of $84,105 and $77,086		17,840			24,695
Goodwill		217,899			218,346
Client contracts, net of amortization of $69,253 and $62,898		47,878			50,197
Deferred income taxes		33,736			39,478
Other assets		7,891			8,528
Total assets	$	692,701		$	710,407
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Client deposits	$	19,378		$	19,497
Trade accounts payable		18,870			22,412
Accrued employee compensation		39,725			31,859
Deferred revenue		50,177			53,250
Income taxes payable		10,174			15,085
Other current liabilities		20,831			19,909
Total current liabilities		159,155			162,012
Non-current liabilities:
Long-term debt		230,000			230,000
Deferred revenue		8,872			6,844
Other non-current liabilities		6,033			3,481
Total non-current liabilities		244,905			240,325
Total liabilities		404,060			402,337
Stockholders’ equity:
Preferred stock, par value $.01 per share; 10,000,000 shares authorized; zero shares issued and outstanding		—			—
Common stock, par value $.01 per share; 100,000,000 shares authorized; 49,413,881 shares and 51,016,326 shares outstanding		603			595
Additional paid-in capital		305,841			298,767
Deferred employee compensation		(65	)		(1,320	)
Treasury stock, at cost, 10,848,992 shares and 8,482,496 shares		(266,978	)		(224,008	)
Accumulated other comprehensive income (loss):
Unrealized loss on short-term investments, net of tax		(9	)		(5	)
Cumulative translation adjustments		7,480			9,400
Accumulated earnings		241,769			224,641
Total stockholders’ equity		288,641			308,070
Total liabilities and stockholders’ equity	$	692,701		$	710,407

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME-UNAUDITED

(in thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	June 30, 2005			June 30, 2004			June 30, 2005			June 30, 2004
Revenues:
Processing and related services	$	88,717		$	80,895		$	172,083		$	162,027
Software		9,762			8,109			20,864			15,746
Maintenance		25,103			23,653			49,649			48,704
Professional services		18,137			17,006			36,029			33,550
Total revenues		141,719			129,663			278,625			260,027
Cost of revenues:
Cost of processing and related services		41,975			34,619			84,433			68,425
Cost of software and maintenance		15,655			17,162			31,260			33,436
Cost of professional services		15,811			15,616			31,248			29,766
Total cost of revenues		73,441			67,397			146,941			131,627
Gross margin (exclusive of depreciation)		68,278			62,266			131,684			128,400
Operating expenses:
Research and development		15,667			14,382			31,116			30,222
Selling, general and administrative		29,043			22,242			57,281			45,465
Depreciation		3,751			3,517			7,518			7,153
Restructuring charges		6,129			145			6,844			2,296
Total operating expenses		54,590			40,286			102,759			85,136
Operating income		13,688			21,980			28,925			43,264
Other income (expense):
Interest expense		(1,850	)		(2,684	)		(3,765	)		(6,238	)
Write-off of deferred financing costs		—			(6,569	)		—			(6,569	)
Interest and investment income, net		1,306			273			2,275			556
Other, net		868			(537	)		644			(1,050	)
Total other		324			(9,517	)		(846	)		(13,301	)
Income before income taxes		14,012			12,463			28,079			29,963
Income tax provision		(5,465	)		(4,707	)		(10,951	)		(11,374	)
Net income	$	8,547		$	7,756		$	17,128		$	18,589
Basic net income per common share:
Net income available to common stockholders	$	0.18		$	0.15		$	0.35		$	0.36
Weighted-average common shares		48,151			51,285			48,598			51,483
Diluted net income per common share:
Net income available to common stockholders	$	0.17		$	0.15		$	0.35		$	0.36
Weighted-average common shares		48,881			52,096			49,233			52,175

CSG SYSTEMS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS-UNAUDITED

(in thousands)

	Six Months Ended
	June 30, 2005			June 30, 2004
Cash flows from operating activities:
Net income	$	17,128		$	18,589
Adjustments to reconcile net income to net cash provided by operating activities -
Depreciation		7,518			7,153
Amortization		14,372			13,572
Restructuring charge for abandonment of facilities		3,492			595
(Gain) loss on short-term investments		(170	)		3
Write-off of deferred financing costs		—			6,569
Deferred income taxes		3,788			7,046
Tax benefit of stock-based compensation awards		1,073			423
Stock-based employee compensation		8,650			7,945
Changes in operating assets and liabilities:
Trade accounts and other receivables, net		5,787			11,654
Other current and non-current assets		(2,692	)		(401	)
Arbitration charge payable		—			(25,181	)
Income taxes payable/receivable		(398	)		27,454
Accounts payable and accrued liabilities		2,916			(9,064	)
Deferred revenues		684			5,794
Net cash provided by operating activities		62,148			72,151
Cash flows from investing activities:
Purchases of property and equipment		(6,458	)		(2,785	)
Purchases of short-term investments		(31,535	)		(15,013	)
Proceeds from sale of short-term investments		21,538			11,310
Acquisition of and investments in assets		(297	)		(852	)
Acquisition of and investments in client contracts		(3,964	)		(1,185	)
Net cash used in investing activities		(20,716	)		(8,525	)
Cash flows from financing activities:
Proceeds from issuance of common stock		1,683			4,833
Repurchase of common stock		(43,816	)		(40,448	)
Proceeds from long-term debt		—			230,000
Payments on long-term debt		—			(228,925	)
Payments of deferred financing costs		(87	)		(7,158	)
Net cash used in financing activities		(42,220	)		(41,698	)
Effect of exchange rate fluctuations on cash		(1,976	)		179
Net increase (decrease) in cash and cash equivalents		(2,764	)		22,107
Cash and cash equivalents, beginning of period		133,551			100,397
Cash and cash equivalents, end of period	$	130,787		$	122,504
Supplemental disclosures of cash flow information:
Cash paid (received) during the period for -
Interest	$	3,063		$	5,009
Income taxes		9,405			(25,172	)