Core Viewpoint - Consensus Cloud Solutions, Inc. (CCSI) shows potential for upside with a mean price target of $27.4, indicating a 25.1% increase from the current price of $21.91 [1] Price Targets - The average price target consists of five estimates ranging from a low of $20.00 to a high of $37.00, with a standard deviation of $7.06, suggesting variability in analyst predictions [2] - The lowest estimate indicates a potential decline of 8.7%, while the highest suggests a 68.9% upside [2] Analyst Sentiment - Analysts are optimistic about CCSI's earnings prospects, as indicated by a positive trend in earnings estimate revisions, which historically correlates with stock price movements [4][11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 0.4%, with one estimate moving higher and no negative revisions [12] Zacks Rank - CCSI holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for upside [13] Caution on Price Targets - While price targets are a common metric, they should be approached with skepticism as they can mislead investors; analysts often set overly optimistic targets due to business incentives [7][8][10]

Group 1 - Consensus Cloud Solutions, Inc. (CCSI) closed at $21.37, with a 10.2% gain over the past four weeks, and a mean price target of $27.40 indicating a 28.2% upside potential [1] - The average price targets range from a low of $20 to a high of $37, with a standard deviation of $7.06, suggesting variability in analyst estimates [2] - Analysts show strong agreement in revising earnings estimates higher, which correlates with potential stock price movements [4][11] Group 2 - The Zacks Consensus Estimate for the current year has increased by 0.4% over the past month, with two estimates going higher and no negative revisions [12] - CCSI holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] - While the consensus price target may not be a reliable indicator of potential gains, the implied direction of price movement appears to be a good guide [13]

Core Insights - Consensus Cloud Solutions, Inc. reported its Q1 2025 earnings, focusing on modernizing the fax technology, which is considered outdated in the current business environment [1] Company Overview - The company aims to reengineer fax technology to make it more relevant and efficient for modern business needs [1] Market Position - Consensus Cloud Solutions operates in the small- to mid-cap segment, which is often overlooked by many investors, but also occasionally examines large-cap companies for a broader market perspective [1]

Group 1: Earnings Performance - Consensus Cloud Solutions, Inc. (CCSI) reported quarterly earnings of $1.37 per share, exceeding the Zacks Consensus Estimate of $1.30 per share, but down from $1.55 per share a year ago, representing an earnings surprise of 5.38% [1] - The company has surpassed consensus EPS estimates in all four of the last quarters [2] - The revenue for the quarter ended March 2025 was $87.14 million, slightly missing the Zacks Consensus Estimate by 0.55%, and down from $88.15 million year-over-year [2] Group 2: Stock Performance and Outlook - Consensus Cloud Solutions shares have declined approximately 9.1% since the beginning of the year, compared to a decline of 4.7% for the S&P 500 [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is $1.34 on revenues of $86.83 million, and for the current fiscal year, it is $5.26 on revenues of $348.88 million [7] Group 3: Industry Context - The Internet - Software industry, to which Consensus Cloud Solutions belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5] - Another company in the same industry, Phunware (PHUN), is expected to report a quarterly loss of $0.12 per share, with a year-over-year change of +70.7% [9]

Part I. Financial Information [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company presents unaudited Q1 2025 financials, reporting $87.1 million in revenue and a reduced stockholders' deficit Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $53,399 | $33,545 | | Total current assets | $91,461 | $74,525 | | TOTAL ASSETS | $629,647 | $602,201 | | Total current liabilities | $73,345 | $79,311 | | Long-term debt, net | $577,590 | $574,080 | | TOTAL LIABILITIES | $679,005 | $681,664 | | TOTAL STOCKHOLDERS' DEFICIT | $(49,358) | $(79,463) | Condensed Consolidated Statement of Income Highlights (in thousands, except per share data) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $87,138 | $88,146 | | Gross profit | $69,068 | $71,098 | | Income from operations | $37,497 | $37,667 | | Net income | $21,152 | $26,370 | | Diluted EPS | $1.07 | $1.37 | Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $40,943 | $44,689 | | Net cash used in investing activities | $(12,196) | $(8,923) | | Net cash used in financing activities | $(10,122) | $(58,829) | | Net change in cash and cash equivalents | $19,854 | $(27,204) | - The company provides secure information delivery services via a scalable Software-as-a-Service (SaaS) platform[22](index=22&type=chunk) - The company operates as a **single reportable segment, Cloud Fax**, as the CEO reviews financial information on a consolidated basis[29](index=29&type=chunk) Revenues by Source (in thousands) | Revenue Source | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Corporate | $54,289 | $51,390 | | SoHo | $32,849 | $36,754 | | Total | $87,138 | $88,146 | - The majority of revenue (**$86.5 million in Q1 2025**) is recognized over time, consistent with its subscription-based services[35](index=35&type=chunk) Long-Term Debt Composition (in thousands) | Debt Instrument | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 2026 Senior Notes | $240,139 | $248,980 | | 2028 Senior Notes | $348,247 | $349,137 | | **Total** | **$588,386** | **$598,117** | - The company has a Debt Repurchase Program to reduce up to **$300 million** in principal, with **$216.6 million retired** as of March 31, 2025[67](index=67&type=chunk)[68](index=68&type=chunk) - A **$25.0 million** senior secured revolving credit facility remained undrawn as of March 31, 2025[65](index=65&type=chunk) - The **effective tax rate decreased to 24.1%** in Q1 2025 from 27.3% in Q1 2024, mainly due to a change in the geographical mix of income[75](index=75&type=chunk) - As of March 31, 2025, the company had **$13.6 million in liabilities** for uncertain income tax positions[77](index=77&type=chunk) - The Board of Directors extended the **$100.0 million share repurchase program** through February 2028, with $32.4 million used to date[79](index=79&type=chunk) - The company does not currently pay dividends, and future distributions are subject to Board approval and debt agreement restrictions[81](index=81&type=chunk) Revenues by Geographic Region (in thousands) | Region | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | United States | $68,756 | $69,712 | | Foreign countries | $18,382 | $18,434 | | **Total** | **$87,138** | **$88,146** | - Long-lived assets are predominantly located in the United States, totaling **$109.3 million** as of March 31, 2025[89](index=89&type=chunk) - Subsequent to quarter-end, the company repurchased an additional **$6.0 million in principal** of its senior notes[90](index=90&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes a 1% revenue decline to $87.1 million, stable operating income, and a strong liquidity position - The company's strategic focus is on secure information exchange, with growth expected organically and through acquisitions[100](index=100&type=chunk)[101](index=101&type=chunk) - **Total revenues for Q1 2025 decreased by 1%** year-over-year, as an 11% decline in SoHo revenue was partially offset by a 6% increase in Corporate revenue[103](index=103&type=chunk) - The company anticipates existing cash and operating cash flow will be sufficient to fund operations and repurchases for at least the next 12 months[122](index=122&type=chunk) Key Performance Metrics (Q1 2025 vs Q1 2024) | Metric | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | :--- | | **Customer Accounts (thousands)** | Corporate | 60 | 55 | | | SoHo | 730 | 808 | | | **Consolidated** | **790** | **863** | | **Monthly ARPA ($)** | Corporate | $306.54 | $316.07 | | | SoHo | $14.83 | $14.95 | | | **Consolidated** | **$36.42** | **$33.63** | | **Monthly Churn %** | Corporate | 2.49% | 1.92% | | | SoHo | 3.26% | 3.42% | | | **Consolidated** | **3.21%** | **3.32%** | - **Cost of revenues increased by 6%** in Q1 2025, primarily due to higher network operations costs and depreciation[104](index=104&type=chunk)[105](index=105&type=chunk) - **General and administrative expenses decreased by 10%** in Q1 2025, driven by lower personnel costs and professional fees[110](index=110&type=chunk)[111](index=111&type=chunk) - **Interest expense increased to $9.0 million** from $6.2 million, as a prior year gain on debt extinguishment was replaced by a small loss[113](index=113&type=chunk) - **Cash and cash equivalents increased to $53.4 million** as of March 31, 2025, from $33.5 million at year-end 2024[119](index=119&type=chunk) - Under its Debt Repurchase Program, the company has retired an aggregate of **$216.6 million in principal** of its senior notes as of March 31, 2025[123](index=123&type=chunk) - **Net cash used in financing activities decreased significantly to $10.1 million** in Q1 2025 from $58.8 million in Q1 2024 due to lower debt repurchases[128](index=128&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are low interest rate risk due to fixed-rate debt and foreign currency risk - The company does not have significant interest rate risk on its outstanding long-term debt because the arrangements have **fixed interest rates**[131](index=131&type=chunk) - The principal exposure to foreign currency risk relates to investments and intercompany debt in subsidiaries using the **Euro and Japanese Yen**[133](index=133&type=chunk) - For Q1 2025, the company recorded a **foreign exchange loss of $1.1 million**, compared to a gain of $3.9 million in Q1 2024[137](index=137&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal controls over financial reporting were effective as of Q1 2025 - Based on an evaluation, the CEO and CFO concluded that the company's **disclosure controls and procedures were effective** as of March 31, 2025[139](index=139&type=chunk) - **No material changes** occurred during the first quarter of 2025 that are reasonably likely to materially affect internal control over financial reporting[141](index=141&type=chunk) Part II. Other Information [Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company faces no material legal proceedings that would adversely affect its financial position or results - Information regarding legal proceedings is detailed in Note 8 of the Notes to the Condensed Consolidated Financial Statements[142](index=142&type=chunk) - The company does not believe that any current legal proceedings are likely to have a **material adverse effect** on its financial position or results[71](index=71&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's previously disclosed risk factors were reported during the quarter - **No material changes** have been made to the risk factors previously described in the Annual Report on Form 10-K[143](index=143&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company continued its share repurchase program, buying back 1,471 shares in Q1 2025 under its extended plan Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | Approx. Dollar Value Remaining (in thousands) | | :--- | :--- | :--- | :--- | | Jan 1 - 31, 2025 | 0 | $— | $67,887 | | Feb 1 - 28, 2025 | 1,471 | $22.97 | $67,853 | | Mar 1 - 31, 2025 | 0 | $— | $67,853 | - The company's Board of Directors approved an **extension of the share buyback program** through February 2028[145](index=145&type=chunk) [Defaults Upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities during the period - Not applicable[147](index=147&type=chunk) [Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable as the company has no mine safety-related operations or disclosures - Not applicable[148](index=148&type=chunk) [Other Information](index=34&type=section&id=Item%205.%20Other%20Information) No other material information or trading plans were reported for the period - No trading plans were reported[149](index=149&type=chunk) [Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including officer certifications and XBRL data - The report includes **CEO and CFO certifications** pursuant to Sarbanes-Oxley Act Sections 302 and 906, as well as XBRL financial data[151](index=151&type=chunk)

Financial Data and Key Metrics Changes - Corporate revenue for Q1 2025 reached $54.3 million, representing a 5.6% increase compared to $51.4 million in Q1 2024, marking the best growth in eight quarters on a normalized basis [6][24] - Adjusted EBITDA for Q1 2025 was $47.3 million, a decrease of 1.7% year over year, with a margin of 54.2%, exceeding expectations by 100 basis points [27][29] - Free cash flow for the quarter was $33.7 million, slightly down from $35.8 million in Q1 2024 due to increased receivables [9][30] Business Line Data and Key Metrics Changes - The SOHO channel revenue was $32.8 million, down 10.6% from $36.8 million in Q1 2024, reflecting a strategic focus on profitability [20][25] - Corporate customer base grew to approximately 60,000, a 9% increase year over year, with a revenue retention rate of 101% [15][24] - ARPA for corporate customers was $307, down $10 year over year, while SOHO ARPA was $14.83, showing a minor decrease [17][26] Market Data and Key Metrics Changes - The company noted a positive trend in corporate ARPA, increasing by almost $3 sequentially, while SOHO customer count decreased from 747,000 to 730,000 [21][29] - The VA deployment continues to gain momentum, with significant usage increases and new deployments proceeding as planned [18] Company Strategy and Development Direction - The company aims to acquire customers primarily in the healthcare space and drive revenue growth to 6.25% for the year [7] - Focus on managing cost structures while making modest investments in go-to-market operations for future benefits [7] - Continued emphasis on the core fax business, which contributes over 90% to corporate revenue, while also enhancing advanced solutions like Unite and Clarity [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit growth for the corporate channel, despite potential economic slowdowns [14][11] - The company is not currently seeing impacts from tariffs and is closely monitoring the economic environment [10][11] - Guidance for full-year revenue is set between $343 million and $357 million, with adjusted EBITDA between $179 million and $190 million [31] Other Important Information - The company repurchased approximately $10 million of debt in Q1 2025, with a total of $223 million repurchased since the program's launch [9][28] - Cash at the end of Q1 2025 was approximately $53 million, sufficient to fund operations and debt repurchases [29] Q&A Session Summary Question: Can you talk about growth in corporate revenue and VA deployment? - Corporate growth was supported by strong usage across fax brands and good adoption of advanced solutions, with the VA's FedRAMP high certification unlocking new opportunities [36][39] Question: When would you expect the decline in SOHO revenue to moderate? - The decline is influenced by advertising spend and profitability; the company is monitoring these closely to determine future actions [42][45] Question: Are there notable ads for larger enterprise accounts? - The company is adding customers across the board, including large enterprises, and has a robust pipeline for new customers [78][81]

Financial Performance - Q1 2025 consolidated revenue declined by $1 million, a 1.1% decrease year-over-year[29] - Adjusted EBITDA decreased by $0.8 million, a 1.7% decrease year-over-year, with an adjusted EBITDA margin of 54.2%[31] - Adjusted EPS decreased by $0.03, a 2.1% decrease year-over-year[31] - Q1 2025 free cash flow was $33.7 million, compared to $35.8 million in Q1 2024[33] Corporate Business - Corporate revenue for Q1 2025 increased by 5.6% to $54.3 million, compared to $51.4 million in Q1 2024[13] - Corporate revenue retention rate was 101% in Q1 2025, compared to 97.9% in Q1 2024[13] - Total corporate customer count reached 60,000 in Q1 2025, compared to 55,000 in Q1 2024[13] SoHo Business - SoHo revenue for Q1 2025 was $32.8 million, compared to $36.8 million in the previous year, indicating a slowing rate of decline[16] - SoHo account base was 730,000 in Q1 2025, compared to 747,000 in Q4 2024[16] - SoHo churn rate was 3.26% in Q1 2025, compared to 3.38% in Q4 2024, representing the lowest churn rate in 14 quarters[16] Capital Allocation - Bond repurchases in Q1 2025 amounted to approximately $10 million face value, with an additional $6 million repurchased to date in Q2 2025[33] - Total bond repurchases to date reached $223 million for a cash outlay of $209 million[33] - The company's cash balance was approximately $53 million in Q1 2025[33] Financial Guidance - The company reaffirmed its full-year 2025 revenue guidance, projecting between $343 million and $357 million[35] - The company provided Q2 2025 revenue guidance, projecting between $85 million and $89 million[36]

[Consensus Cloud Solutions, Inc. Q1 2025 Earnings Release](index=1&type=section&id=Consensus%20Cloud%20Solutions%2C%20Inc.%20Reports%20First%20Quarter%202025%20Results) The company reports Q1 2025 results, showing stable performance with a slight revenue decline but strong margins and debt reduction [Financial Highlights](index=1&type=section&id=FIRST%20QUARTER%20UNAUDITED%202025%20HIGHLIGHTS) Q1 2025 revenue slightly decreased to $87.1 million, with stable Adjusted EBITDA and a decline in GAAP Net Income - CEO Scott Turicchi expressed satisfaction with the start of fiscal 2025, highlighting **continued improvement in Corporate revenue growth**, **robust operating margins**, and **debt reduction** fueled by strong cash flows[2](index=2&type=chunk) Q1 2025 vs. Q1 2024 Key Financial Results | (Unaudited, in thousands except per share amounts and percentages) | Q1 2025 | Q1 2024 | Favorable / (Unfavorable) Change | | :--- | :--- | :--- | :--- | | Revenues | $ 87,138 | $ 88,146 | (1.1)% | | Net income | $ 21,152 | $ 26,370 | (19.8)% | | Earnings per diluted share | $ 1.07 | $ 1.37 | (21.9)% | | Adjusted net income | $ 26,968 | $ 26,903 | 0.2% | | Adjusted earnings per diluted share | $ 1.37 | $ 1.40 | (2.1)% | | Adjusted EBITDA | $ 47,250 | $ 48,066 | (1.7)% | | Adjusted EBITDA margin | 54.2 % | 54.5 % | (0.3) pts | | Net cash provided by operating activities | $ 40,943 | $ 44,689 | (8.4)% | | Free cash flow | $ 33,747 | $ 35,766 | (5.6)% | - The **1.1% revenue decrease** was primarily due to a planned **$3.9 million (10.6%) decline in the SoHo business**, partially offset by a **$2.9 million (5.6%) increase in the Corporate business**[3](index=3&type=chunk) - The decrease in Net Income to **$21.2 million** was mainly caused by a **debt extinguishment loss** and changes in foreign exchange revaluation[4](index=4&type=chunk) - Free cash flow decreased to **$33.7 million** from $35.8 million, primarily due to lower net cash inflows from working capital and decreased income[4](index=4&type=chunk)[46](index=46&type=chunk) [Capital Allocation](index=3&type=section&id=CAPITAL%20ALLOCATION%20STRATEGIC%20INITIATIVES) The company continued its capital allocation strategy in Q1 2025 by repurchasing debt and common stock Q1 2025 Capital Allocation (in thousands) | Capital Allocation: | Q1 2025 | Cumulative Total | Remaining Under the Plan | | :--- | :--- | :--- | :--- | | Debt repurchase program | $ 9,731 | $ 216,614 | $ 83,386 | | Common stock repurchase program | $ 34 | $ 32,147 | $ 67,853 | - The company has a debt repurchase program authorizing up to **$300 million** in principal reduction, which expires in November 2026[11](index=11&type=chunk) - The Board of Directors approved a three-year extension of the **$100 million share repurchase program**, now running through February 2028[11](index=11&type=chunk) [Business Outlook](index=4&type=section&id=FY%202025%20GUIDANCE) The company reaffirmed its full-year 2025 guidance and provided specific projections for Q2 2025 Full-Year 2025 Guidance (in millions, except per share) | | Low | Midpoint | High | | :--- | :--- | :--- | :--- | | Revenue | $ 343 | $ 350 | $ 357 | | Adjusted EBITDA | $ 179 | $ 185 | $ 190 | | Adjusted earnings per diluted share | $ 5.03 | $ 5.22 | $ 5.42 | Q2 2025 Guidance (in millions, except per share) | | Low | Midpoint | High | | :--- | :--- | :--- | :--- | | Revenue | $ 85.0 | $ 87.0 | | | Adjusted EBITDA | $ 45.0 | $ 46.5 | | | Adjusted earnings per diluted share | $ 1.31 | $ 1.37 | | - Guidance is provided on a non-GAAP basis (except for revenue) due to difficulty in predicting certain items for a GAAP reconciliation[14](index=14&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the three months ended March 31, 2025 [Condensed Consolidated Balance Sheets](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Total assets increased to $629.6 million while total liabilities decreased, improving the stockholders' deficit Balance Sheet Highlights (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $ 53,399 | $ 33,545 | | Total current assets | $ 91,461 | $ 74,525 | | TOTAL ASSETS | $ 629,647 | $ 602,201 | | Total current liabilities | $ 73,345 | $ 79,311 | | Long-term debt, net of current portion | $ 577,590 | $ 574,080 | | TOTAL LIABILITIES | $ 679,005 | $ 681,664 | | TOTAL STOCKHOLDERS' DEFICIT | $ (49,358) | $ (79,463) | [Condensed Consolidated Statements of Income](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) Q1 2025 revenue was $87.1 million, with net income declining to $21.2 million from the prior-year quarter Income Statement Highlights (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $ 87,138 | $ 88,146 | | Gross profit | $ 69,068 | $ 71,098 | | Income from operations | $ 37,497 | $ 37,667 | | Net income | $ 21,152 | $ 26,370 | | Diluted EPS | $ 1.07 | $ 1.37 | - A key factor in the net income decline was the 'Other (expense) income, net' line, which shifted from a **$3.9 million income in Q1 2024 to a $1.1 million expense in Q1 2025**[26](index=26&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash from operating activities decreased to $40.9 million, resulting in a net cash increase of $19.9 million Cash Flow Highlights (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $ 40,943 | $ 44,689 | | Net cash used in investing activities | $ (12,196) | $ (8,923) | | Net cash used in financing activities | $ (10,122) | $ (58,829) | | Net change in cash and cash equivalents | $ 19,854 | $ (27,204) | - Major cash uses in Q1 2025 included **$9.7 million for debt repurchase** and **$7.2 million for purchases of property and equipment**[29](index=29&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Measures](index=9&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20FINANCIAL%20MEASURES_parent) This section reconciles GAAP metrics to non-GAAP measures like Adjusted Net Income, EBITDA, and Free Cash Flow - The company uses non-GAAP measures like Adjusted Net Income, Adjusted EBITDA, and Free Cash Flow for internal decision-making and believes they provide meaningful supplemental information by excluding items not indicative of recurring core business operations[19](index=19&type=chunk)[20](index=20&type=chunk) [Reconciliation of Net Income to Adjusted Net Income](index=9&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20FINANCIAL%20MEASURES) Q1 2025 GAAP Net Income of $21.2 million is reconciled to Adjusted Net Income of $27.0 million Net Income to Adjusted Net Income Reconciliation (in thousands) | | 2025 | 2024 | | :--- | :--- | :--- | | Net income | $ 21,152 | $ 26,370 | | Plus: Share-based compensation | 4,264 | 4,450 | | Plus: Foreign exchange loss (gain) | 1,099 | (3,888) | | Plus: Amortization | 615 | 833 | | Plus: Debt extinguishment loss (gain) | 77 | (4,865) | | Plus: Other adjustments & tax impact | (239) | 3,945 | | **Adjusted net income** | **$ 26,968** | **$ 26,903** | - Beginning in 2025, the company **excludes foreign exchange gains or losses** from Adjusted Net Income, with prior periods adjusted for consistency[30](index=30&type=chunk)[35](index=35&type=chunk) [Reconciliation of Net Income to Adjusted EBITDA](index=11&type=section&id=NET%20INCOME%20TO%20ADJUSTED%20EBITDA%20RECONCILIATION) Q1 2025 GAAP Net Income of $21.2 million is reconciled to Adjusted EBITDA of $47.3 million Net Income to Adjusted EBITDA Reconciliation (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income | $ 21,152 | $ 26,370 | | Plus: Interest expense, net | 8,525 | 5,276 | | Plus: Other expense (income), net | 1,097 | (3,902) | | Plus: Income tax expense | 6,723 | 9,923 | | Plus: Depreciation and amortization | 5,178 | 4,767 | | Plus: Share-based compensation | 4,264 | 4,450 | | Plus: Other | 311 | 1,182 | | **Adjusted EBITDA** | **$ 47,250** | **$ 48,066** | [Reconciliation to Free Cash Flow](index=12&type=section&id=NET%20CASH%20PROVIDED%20BY%20OPERATING%20ACTIVITIES%20TO%20FREE%20CASH%20FLOW%20RECONCILIATION) Q1 2025 Net Cash from Operations of $40.9 million is reconciled to Free Cash Flow of $33.7 million Free Cash Flow Reconciliation (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $ 40,943 | $ 44,689 | | Less: Purchases of property and equipment | (7,196) | (8,923) | | **Free cash flow** | **$ 33,747** | **$ 35,766** | [Key Performance Metrics](index=13&type=section&id=Key%20Performance%20Metrics%20(Unaudited)) Corporate segment revenue grew while SoHo revenue declined, with mixed trends in customer accounts and churn rates Q1 2025 vs Q1 2024 Key Performance Metrics (in thousands, except percentages/ARPA) | | 2025 | 2024 | | :--- | :--- | :--- | | **Corporate** | | | | Revenue | $ 54,289 | $ 51,390 | | Customer accounts | 60 | 55 | | Monthly account churn | 2.49 % | 1.92 % | | **SoHo** | | | | Revenue | $ 32,849 | $ 36,754 | | Customer accounts | 730 | 808 | | Monthly account churn | 3.26 % | 3.42 % | - **Corporate revenue grew 5.6% YoY**, while **SoHo revenue declined 10.6% YoY**[3](index=3&type=chunk)[50](index=50&type=chunk) - A notable trend is the **increase in Corporate monthly account churn** (from 1.92% to 2.49% YoY) alongside a **decrease in SoHo monthly account churn** (from 3.42% to 3.26% YoY)[50](index=50&type=chunk)

Group 1 - Consensus Cloud Solutions, Inc. (NASDAQ: CCSI) is leveraging artificial intelligence to enhance its digital cloud fax technology, which is contributing to accelerated revenue and EPS GAAP growth [1] - The company has over 25 years of operational experience, indicating a strong foundation in the industry [1] Group 2 - The analyst has a beneficial long position in CCSI shares, indicating confidence in the company's future performance [2] - The article reflects the author's personal opinions and does not involve compensation from any company mentioned [2]

Financial Data and Key Metrics Changes - Q4 2024 consolidated revenue was $87 million, a decrease of $0.8 million or 0.9% compared to Q4 2023, performing better than expectations [46] - Full year 2024 revenue was $350.4 million, a decrease of $12.2 million or 3.4% from the prior year, largely driven by the planned decline in the SoHo business [48] - Adjusted net income for Q4 2024 was $25.8 million, an increase of $4.4 million or 20.8% over the prior year [47] - Full year 2024 free cash flow was $88 million, compared to $77 million in the prior year [53] Business Line Data and Key Metrics Changes - Corporate revenue for Q4 2024 was $52.9 million, an increase of approximately 7.1% year-over-year, contributing to a full year corporate revenue of $209.1 million, representing a 4.8% growth rate [17][41] - SoHo revenue for Q4 2024 was $34.1 million, down 11.1% from $38.3 million in the same period last year, with full year SoHo revenues at $141.3 million, down 13.3% [25][45] - Corporate ARPA for Q4 2024 was stable at $304, while full year ARPA ended at $311, down from $316 in 2023 [22][41] Market Data and Key Metrics Changes - The corporate customer count reached approximately 59,000, with over 3,000 new customers added in Q4 [21] - The VA's ECFax solution revenue exceeded $2.6 million in 2024, with expectations to reach up to $5 million in 2025 [24] Company Strategy and Development Direction - The company plans to prioritize profitability and stability in the SoHo business for 2025, with a revenue target of approximately $128 million, down from $141 million in 2024 [31] - For the corporate channel, the company aims for a revenue target of $222 million in 2025, reflecting a growth rate of 6% to 6.5% compared to 2024 [35] - The company is focusing on customer retention, upselling, and cross-selling strategies to drive growth [20] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the corporate channel's growth, noting improvements in decision-making and market normalization [72][74] - The company anticipates a flat revenue year at $350 million for 2025, with expectations for growth in subsequent years [36] Other Important Information - The company repurchased approximately $20 million in debt during Q4 2024, bringing total debt repurchases to $207 million since the program's inception [11][51] - The company expects to file its fiscal '24 10-K by the close of business on the day of the call [38] Q&A Session Summary Question: Can you talk about the uptake of your advanced products, particularly Clarity and jSign? - Management highlighted that Clarity is in full production and is capable of extracting data from unstructured documents, with significant demand and several proof of concepts underway [60][62] Question: What are your expectations for corporate revenue growth going forward? - Management indicated that while Q4 showed a 7.1% growth, a more normalized growth rate is about 5.5%, with a target of 6.25% for 2025 [68][70] Question: Can you provide details on the '25 go-to-market investments? - Investments will focus on expanding sales headcount and reallocating marketing funds to enhance corporate marketing efforts, with most impacts expected in 2026 and beyond [80][81] Question: How much of the corporate growth in 2025 is derived from the VA rollout? - Management expects about $5 million contribution from the VA in 2025, with the rollout anticipated to continue without disruption [110]