LOS ANGELES--(BUSINESS WIRE)--Consensus Cloud Solutions, Inc., (NASDAQ: CCSI), invites the public, members of the press, the financial community, and other interested parties to listen to a live audio Webcast of its Q4 and 2025 Year End earnings call at 8:30 AM ET on Tuesday, February 10, 2026. Consensus Cloud Solutions' Chief Executive Officer, Scott Turicchi, Chief Revenue Officer, Johnny Hecker, and Chief Financial Officer, Jim Malone will host the call to discuss Q4 and 2025 Year End financ. ...

Core Viewpoint - Consensus Cloud Solutions, Inc. (CCSI) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Ratings - The Zacks rating system is based on the Zacks Consensus Estimate, which aggregates EPS estimates from sell-side analysts for the current and following years [2]. - Changes in earnings estimates are strongly correlated with near-term stock price movements, making the Zacks rating system valuable for investors [3][5]. Impact of Institutional Investors - Institutional investors utilize earnings estimates to determine the fair value of a company's shares, leading to buying or selling actions that affect stock prices [5]. Business Improvement Indicators - The upgrade in ratings for Consensus Cloud Solutions reflects an improvement in the company's underlying business, which is expected to drive stock prices higher [6]. Importance of Earnings Estimate Revisions - Empirical research supports a strong correlation between earnings estimate revisions and stock movements, highlighting the importance of tracking these revisions for investment decisions [7]. Zacks Rank System Performance - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. Current Earnings Estimates for CCSI - For the fiscal year ending December 2025, Consensus Cloud Solutions is projected to earn $5.52 per share, with a 1.7% increase in the Zacks Consensus Estimate over the past three months [9]. Overall Market Position - The Zacks rating system maintains a balanced distribution of "buy" and "sell" ratings, with only the top 20% of stocks receiving a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions [10][11].

Core Insights - The Meridian Small Cap Growth Fund reported a 4.20% net return in Q3 2025, underperforming the Russell 2000 Growth Index which returned 12.19% [1] - U.S. small caps outperformed large caps in Q3 2025, with small caps gaining 12.4% compared to large caps' 5.3% [1] - Value stocks slightly outperformed growth stocks among small caps, returning 12.6% and 12.2% respectively [1] Company Analysis: Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) - Consensus Cloud Solutions, Inc. is a leading provider of secure data delivery for enterprise healthcare and cloud fax solutions, with a market capitalization of $427.25 million [2][3] - The stock experienced a one-month return of -24.36% and a 52-week loss of 9.83%, closing at $22.48 per share on December 02, 2025 [2] - The company reported Q3 2025 revenue of $87.8 million, consistent with Q3 2024, and maintained strong margins in the mid-50% range [4] - Consensus Cloud Solutions has a high percentage of recurring revenues and low churn in the enterprise segment, which supports its growth potential [3] - The stock is trading at around five times earnings with a ~20% free cash flow yield, indicating limited downside potential [3] Hedge Fund Interest - Consensus Cloud Solutions was held by 14 hedge fund portfolios at the end of Q3 2025, a decrease from 15 in the previous quarter [4] - Despite its potential, certain AI stocks are viewed as offering greater upside potential and less downside risk compared to Consensus Cloud Solutions [4]

Core Insights - Consensus Cloud Solutions, Inc. (CCSI) specializes in secure digital document exchange solutions and operates in a competitive landscape with peers such as Ziff Davis, Sterling Check, PC Connection, N-able, and Enfusion [1] - CCSI has a strong Return on Invested Capital (ROIC) of 18.90% compared to a Weighted Average Cost of Capital (WACC) of 8.04%, resulting in a ROIC to WACC ratio of 2.35, indicating effective capital utilization and potential for value creation [2][5] Peer Comparison - Ziff Davis, Inc. has a ROIC of 5.70% and a WACC of 7.37%, leading to a ROIC to WACC ratio of 0.77, suggesting less efficient capital use compared to CCSI [3][5] - Sterling Check Corp. and N-able, Inc. exhibit negative ROIC to WACC ratios of -0.01 and -0.34, respectively, highlighting their inability to generate returns above their cost of capital [3] - PC Connection, Inc. has the highest ROIC to WACC ratio among CCSI's peers at 1.27, but still falls short of CCSI's 2.35 ratio, emphasizing CCSI's superior capital efficiency [4] - Enfusion, Inc. has a ROIC to WACC ratio of 0.40, further underscoring CCSI's leading position in capital utilization [4]

Core Insights - Jet.AI Inc. and Consensus Core Technologies Inc. have completed the second milestone for their hyperscale data center projects in Midwestern and Maritime Canada, indicating significant progress in their development plans [1][2] Project Milestones - The second milestone completion includes the assumption of $1.8 million in unsecured debt and accrued interest from Consensus Core related to the Midwestern Project [2] - The next milestone involves a $2 million contribution from Jet.AI for the submission of a Transmission Power Load Study application for the Midwest data center project [3] - The Maritime Project requires confirmation from a natural gas utility or other supplier to supply sufficient flow for the operation of proposed turbines [3] Financial Contributions - Jet.AI has contributed $1.7 million to the joint venture and executed a letter of intent to acquire 350 acres adjacent to the existing Midwestern Project property, significantly larger than the previously anticipated 100 acres [6]

Core Insights - Consensus Cloud Solutions, Inc. reported a solid Q3 2025 with a revenue increase of 6.1% year-over-year, reaching $56.3 million, driven by strong performance in the corporate channel and record usage of the eFax Protect service [8][20][21] - The company achieved an adjusted EBITDA margin of 52.8%, slightly above expectations, and free cash flow increased by 32% to $44.4 million [5][22][23] - The corporate customer base expanded to approximately 65,000, reflecting a 12% increase from the previous year, while the trailing twelve-month revenue retention rate remained stable at 101.9% [10][20] Financial Performance - Total revenue for Q3 2025 was $87.8 million, consistent with the prior year, while adjusted EBITDA was $46.4 million, a decrease of 1.2% from Q3 2024 [22][21] - Adjusted net income for the quarter was $26.6 million, with adjusted EPS remaining unchanged at $1.38 [22] - The company expects Q4 2025 revenues to range between $84.9 million and $88.9 million, with adjusted EBITDA between $43.1 million and $46 million [26] Operational Highlights - The corporate channel's growth was attributed to increased usage within enterprise accounts and strong performance in public sector business, particularly with the VA [9][12] - The eFax Protect service added approximately 6,700 new customers in Q3 2025, contributing to the growth of the SMB cohort [10][11] - The Zoho business recorded a planned revenue decline of 9.2% year-over-year, reflecting a strategic focus on optimizing profitability [13][21] Debt Management - The company reduced total indebtedness from $805 million to $569 million through debt retirement, with a new interest rate of 5.65% on the refinanced debt [7][24] - Free cash flow for the year is expected to exceed $95 million, ahead of original expectations, despite a lower expected free cash flow in Q4 due to seasonal costs [6][5] Strategic Outlook - The company remains confident in its growth strategy, focusing on healthcare and expanding efforts in corporate SMB and upper enterprise markets [18] - The VA's continued high usage rates indicate potential for future revenue growth, with expectations of reaching $10 million to $20 million in revenue over the next few years [30][34] - The company is actively navigating changes in the digital marketing environment to recover from recent impacts on customer acquisition [15][44]

Core Insights - Consensus Cloud Solutions, Inc. (CCSI) reported quarterly earnings of $1.38 per share, exceeding the Zacks Consensus Estimate of $1.36 per share, and showing an increase from $1.31 per share a year ago, resulting in an earnings surprise of +1.47% [1] - The company posted revenues of $87.77 million for the quarter ended September 2025, slightly missing the Zacks Consensus Estimate by 0.07%, and showing a marginal increase from $87.75 million year-over-year [2] - The stock has gained approximately 20.3% since the beginning of the year, outperforming the S&P 500's gain of 15.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.32 on revenues of $87.33 million, while for the current fiscal year, the estimate is $5.52 on revenues of $350.04 million [7] - The estimate revisions trend for Consensus Cloud Solutions was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Internet - Software industry, to which Consensus Cloud Solutions belongs, is currently ranked in the top 34% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - The company reported a slight increase in revenue for Q3 2025 compared to Q3 2024, with adjusted EBITDA slightly ahead of expectations, resulting in a 52.8% adjusted EBITDA margin [4][19] - Free cash flow for Q3 2025 was $44.4 million, up 32% from $33.6 million in Q3 2024, driven by strong adjusted EBITDA conversion and outstanding collections [5][19] - The company expects free cash flow for the year to exceed $95 million, ahead of original expectations [5] Business Line Data and Key Metrics Changes - Corporate channel revenue reached a record $56.3 million, a 6.1% increase from $53.1 million in Q3 2024, driven by strong performance in upper enterprise accounts and public sector business [8][17] - SOHO business revenue was $31.5 million, representing a strategic planned decline of 9.2% from $34.7 million in Q3 2024, reflecting a focus on optimizing profitability [12][18] - Corporate ARPA was $293 for the quarter, down from $301 in Q2 2025 and $310 in Q3 2024, influenced by the expansion of the SMB cohort [10][18] Market Data and Key Metrics Changes - The corporate customer base expanded to approximately 65,000, up over 12% from 58,000 in Q3 2024 [9][17] - The VA segment saw record high usage and revenue, unaffected by the government shutdown, indicating strong adoption [11][12] - SOHO cancellation rate improved to 3.71% from 3.84% in the previous quarter, reflecting better customer retention [13][18] Company Strategy and Development Direction - The company is focused on expanding its corporate SMB and upper enterprise markets while maintaining a strong emphasis on healthcare [15] - A brand refresh for eFax aims to unify the company's advanced solutions under a familiar name, enhancing market trust [14][15] - The company plans to continue opportunistic repurchases of both debt and equity as part of its capital allocation strategy [6][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory of the VA segment, anticipating continued expansion and increased adoption [28] - The company acknowledged potential near-term headwinds in the SOHO segment due to changes in the search environment, but is executing a recovery plan [13][50] - Management expects to provide full-year 2026 guidance in early 2026, indicating a positive outlook for future performance [53] Other Important Information - The company drew approximately $200 million from its credit facility to retire a like amount of 6% notes, reducing total indebtedness significantly [6][22] - The company ended Q3 2025 with cash of approximately $98 million, sufficient to fund operations and repurchases [21] Q&A Session Summary Question: Can you talk about the VA and corporate sales? - Management noted that the VA continues to expand, with increased usage and ongoing rollout to new facilities, expecting growth to continue into 2026 [28] Question: What is the current penetration of VA sites? - The company is more than 50% deployed in terms of raw numbers, but not all sites are fully utilized yet, indicating potential for future growth [30] Question: What is the expected deceleration rate for SOHO revenue? - Management indicated it is difficult to predict, but expects the decline to continue into 2028 or later, with a focus on stabilizing the customer base [34] Question: Can you discuss advanced product upsells into corporate? - Management highlighted strong performance in AI product adoption and integration services, which are key drivers of revenue growth [37] Question: What factors influenced the decline in SOHO paid ads? - The decline was attributed to a spike in customer acquisition costs and changes in the search environment, with recovery measures already in place [40] Question: Can the VA revenue grow from $10 million to $20 million? - Management indicated that while the current focus is on the eFax platform, there is potential for upselling additional solutions into the VA in the future [42]

Revenue Performance - Total revenue for the three months ended September 30, 2025, was $87,767 thousand, consistent with the prior year, while revenue for the nine months was $262,626 thousand, a slight decrease of $0.8 million compared to the previous year[113][114]. - Corporate revenue increased by $3.2 million or 6% for the three months ended September 30, 2025, while SoHo revenue decreased by $3.2 million or 9%[114]. - Total revenues for the three months ended September 30, 2025, were $87.767 million, consistent with $87.753 million in 2024, while revenues for the nine months ended September 30, 2025, decreased slightly to $262.626 million from $263.399 million in 2024[113]. Customer Metrics - Average Revenue per Customer Account (ARPA) for Corporate was $293.12 for the three months ended September 30, 2025, down from $310.13 in 2024, while consolidated ARPA increased to $39.79 from $36.19[109]. - The total number of customer accounts decreased to 726 thousand as of September 30, 2025, down from 799 thousand in the prior year[109]. - Monthly churn rate for Corporate customers increased to 3.47% for the three months ended September 30, 2025, compared to 2.61% in 2024[109]. - The company serves approximately 726 thousand customers across 41 countries, with top 10 customers contributing about 9% of total revenues[105]. Expenses and Costs - Cost of revenues for the three months ended September 30, 2025, was $17,520 thousand, a decrease of 1% from the prior year, while for the nine months, it increased by 3% to $53,214 thousand[115][116]. - Sales and marketing expenses for the three months ended September 30, 2025, were $13,006 thousand, a 4% increase from the prior year, and for the nine months, they rose to $38,246 thousand, also a 4% increase[118][120]. - Research, development, and engineering costs for Q3 2025 were $1,950,000, a decrease of 4% compared to Q3 2024, and for the nine months ended September 30, 2025, costs were $5,406,000, down 3% year-over-year[121][122]. - General and administrative expenses for Q3 2025 were $17,361,000, an increase of 1% from Q3 2024, while for the nine months ended September 30, 2025, expenses decreased by 4% to $51,284,000[123][125]. - Share-based compensation for Q3 2025 totaled $3,966,000, up from $3,422,000 in Q3 2024, and for the nine months ended September 30, 2025, it was $12,437,000 compared to $11,610,000 in the prior year[126]. Financial Position - Cash and cash equivalents as of September 30, 2025, were $97,600,000, significantly up from $33,500,000 as of December 31, 2024[135]. - The company entered into a $75,000,000 revolving credit facility and a $150,000,000 delayed-draw term loan facility as part of the 2025 Credit Agreement[136]. - As of September 30, 2025, the company had $582,400,000 in outstanding debt and total minimum lease payments of $15,200,000[137]. Cash Flow - Net cash provided by operating activities for the nine months ended September 30, 2025, was $120,900,000, an increase from $110,600,000 in the prior year[142]. - Net cash used in investing activities increased to $27.3 million for the nine months ended September 30, 2025, compared to $25.5 million in 2024, primarily due to investments made in the current period[143]. - Net cash used in financing activities decreased significantly to $33.1 million for the nine months ended September 30, 2025, from $116.8 million in 2024, mainly due to reduced cash outflows related to debt repurchases[144]. Taxation - The effective tax rate for Q3 2025 was 26.3%, up from 22.5% in Q3 2024, primarily due to changes in the geographical mix of income and an increase in the officer's compensation limitation[133]. - The provision for income taxes was $7.9 million for the three months ended September 30, 2025, compared to $6.1 million for the same period in 2024[132].

Financial Performance - Corporate revenue increased by 6.1% to $56.3 million in Q3 2025, compared to $53.1 million in Q3 2024[11] - SoHo revenue was $31.5 million in Q3 2025, compared to $34.7 million in the previous year, showing a slowing rate of decline[14] - Q3 2025 free cash flow was $44.4 million, a 32% increase compared to $33.6 million in Q3 2024[30] - The company's cash balance was approximately $98 million in Q3 2025, with interest income on excess cash invested of approximately $0.8 million[28] - Adjusted EBITDA margin was 52.8% in Q3 2025[27] Customer Metrics - Corporate customer count increased to 65,000 in Q3 2025, compared to 58,000 in Q3 2024[11] - Corporate revenue retention rate was 102% in Q3 2025, compared to 100% in Q3 2024[11] - SoHo account base was 661,000 in Q3 2025, compared to 682,000 in Q2 2025[14] - SoHo churn rate was 3.71% in Q3 2025, compared to 3.84% in Q2 2025[14] Capital Allocation - The company repurchased 121,000 shares for approximately $2.7 million in Q3 2025, with program-to-date equity repurchases of 1.8 million shares for approximately $47.1 million[30] - $200 million of 6.0% Notes were called at par on October 15, 2025[30]