Group Aims to Better Equip Organizations that Depend on Fax Communication with New Interoperability Standard LOS ANGELES, May 29, 2024 /PRNewswire/ -- Consensus Cloud Solutions, Inc. (NASDAQ: CCSI), a global leader of digital cloud fax technology and trusted provider of interoperability solutions, proudly announces that DirectTrust's Interoperable Secure Cloud Fax Consensus Body has elected Consensus Chief Technology Officer, Jeffrey Sullivan, as its Chairperson. Sullivan will steer the efforts of the Conse ...

Financial Data and Key Metrics Changes - Q1 2024 consolidated revenue was $88.1 million, a decrease of $3.3 million or 3.6% compared to Q1 2023, but better than expectations [50] - Adjusted EBITDA for Q1 2024 was $48.1 million, with a margin of 54.5%, an increase of 6 percentage points from the prior year [50][60] - Free cash flow for Q1 2024 was $35.8 million, representing a 21.6% increase compared to the prior year [51][60] Business Line Data and Key Metrics Changes - Corporate business revenue reached $51.4 million in Q1 2024, a 4% increase from $49.4 million in Q1 2023, marking a record quarter for this segment [45][49] - SOHO business revenue was $36.8 million, down from $42 million in the previous year, attributed to reduced advertising spend and a decrease in paid ads [62] - Advanced products accounted for 21% of new sales in Q1, driven by demand for Clarity and Unite, showing a healthy increase over Q4 [45][46] Market Data and Key Metrics Changes - The VA rollout is progressing as expected, with a goal of achieving a seven-digit contribution in 2024 [46] - Monthly customer churn for the corporate segment was 1.92%, with a trailing 12-month revenue retention rate of 98% [49] - The SOHO account base decreased from 831,000 to 800,000, slightly ahead of expectations [62] Company Strategy and Development Direction - The company aims to eliminate certain costs in the SOHO channel while pursuing customer acquisition primarily in the healthcare space for the corporate channel [42] - A focus on optimizing the overall cost structure to drive EBITDA margins above 54% is a key strategic goal [42] - The company is excited about the partnership with a leading revenue cycle management vendor, which will enhance market reach [19][63] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing interest in the Clarity platform and its potential to generate new use cases [2][33] - The company noted that while there are ups and downs in the VA rollout, it is growing steadily [21] - Management highlighted that clients remain slow in decision-making and resource-constrained, which is not expected to change soon [64] Other Important Information - The company repurchased $63.5 million of debt in Q1 2024, bringing total repurchases to $126 million since the program's launch [60][67] - The company reaffirmed its full-year 2024 guidance, expecting revenue between $338 million and $353 million [75] Q&A Session Summary Question: Can you provide more color on the advanced products and their impact? - Management noted that advanced products made up 21% of new sales in Q1, indicating strong demand and a focused sales initiative [45][33] Question: What is the status of the VA partnership and its revenue contribution? - Management confirmed that the VA rollout is progressing as expected and contributing at the anticipated rate [21][22] Question: How is the corporate revenue growth expected to trend moving forward? - Management cautioned that one quarter does not establish a trend, and they will continue to monitor growth closely [79] Question: What are the expectations for marketing spend in Q2? - Management indicated that marketing spend would be lower in Q2 compared to Q1, which may impact net adds but will be offset by savings [80]

Revenue Performance - Revenues for the three months ended March 31, 2024, were $88,146 thousand, a decrease of $3,308 thousand or 4% compared to $91,454 thousand in the same period of 2023[203]. - The SoHo business experienced a decline of $5,300 thousand or 13%, while the corporate business saw an increase of $2,000 thousand or 4% during the same period[231]. Customer Metrics - Monthly churn rate for paying customer accounts was reported at 3.32% for the quarter, compared to 3.63% in the previous year[227]. - The company serves approximately 900 thousand customers across 46 countries, with top 10 customers contributing about 8% of total revenues[197]. Expenses - Sales and marketing expenses decreased by $4,335 thousand or 26% to $12,558 thousand, primarily due to a reduction in third-party advertising spend[206]. - General and administrative expenses decreased by $2,184 thousand or 10% to $18,968 thousand, attributed to lower professional fees and personnel-related expenses[208]. - Cost of revenues decreased by $460 thousand or 3% to $17,048 thousand, remaining consistent at 19% of total revenues[232]. - Research, development, and engineering costs remained stable at $1,905 thousand, representing 2% of total revenues[234]. Taxation - The effective tax rate increased to 27.3% for the three months ended March 31, 2024, compared to 24.9% in the same period of 2023[211]. - The effective tax rate is influenced by pre-tax income and various statutory tax rates across jurisdictions, with valuation allowances established for deferred tax assets[237]. - The company withheld 15,340 shares for tax obligations related to equity awards in Q1 2024, compared to 11,418 shares in Q1 2023[242]. Financing Activities - Interest expense for Q1 2024 was $6.2 million, down from $12.6 million in Q1 2023, primarily due to a $4.9 million gain from partial debt extinguishment[236]. - Net cash used in financing activities increased to $58.8 million in Q1 2024 from $9.6 million in Q1 2023, mainly due to senior notes repurchases[243]. - The company has authorized a debt repurchase program allowing for a reduction of up to $300.0 million in principal amount of senior notes, with $126.0 million already retired as of March 31, 2024[240]. Foreign Exchange and Translation Adjustments - Foreign exchange gain for Q1 2024 was $3.9 million, compared to a loss of $(0.9) million in Q1 2023, attributed to intra-entity balance translations[247]. - Cumulative translation adjustment loss for Q1 2024 was $(6.3) million, compared to a gain of $3.1 million in Q1 2023[12]. Risk Management - The company has not entered into interest rate hedging transactions, exposing it to potential adverse effects from future interest rate movements[245]. - The company’s cash and cash equivalents approximated fair value as of March 31, 2024, with no significant interest rate risk due to short maturities[9]. Internal Controls - There were no material changes in internal control over financial reporting during Q1 2024[250]. Future Outlook - The company anticipates growth through organic and opportunistic acquisitions to enhance its product offerings in the interoperability space[202].

[Q1 2024 Financial Highlights](index=1&type=section&id=Q1%202024%20Financial%20Highlights) Consensus Cloud Solutions reported mixed Q1 2024 results with a 3.6% revenue decline, but strong profitability growth and cash flow [Overall Performance](index=1&type=section&id=Overall%20Performance) Q1 2024 saw a 3.6% revenue decline to $88.1M, but GAAP Net Income surged 70.6% and Adjusted EBITDA rose 8.7% to $48.1M Key Financial Metrics | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Revenues | $88.1M | $91.5M | (3.6)% | | GAAP Net Income | $26.4M | $15.5M | 70.6% | | GAAP Net Income per Diluted Share | $1.37 | $0.78 | 75.6% | | Adjusted non-GAAP Net Income | $29.8M | $22.0M | 35.6% | | Adjusted non-GAAP EPS | $1.55 | $1.10 | 40.9% | | Adjusted EBITDA | $48.1M | $44.2M | 8.7% | | Adjusted EBITDA Margin | 54.5% | 48.4% | 6.1 pts | | Free Cash Flow | $35.8M | $29.4M | 21.6% | - CEO Scott Turicchi highlighted that SoHo and Corporate revenues exceeded expectations, which, combined with cost-saving measures, led to a strong EBITDA margin of **54.5%**[1](index=1&type=chunk) [Revenue Analysis](index=1&type=section&id=Revenue%20Analysis) Q1 2024 total revenue decreased 3.6% to $88.1M, driven by a 12.6% decline in SoHo, partially offset by 4.0% Corporate growth Revenue by Segment | Revenue Segment | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Corporate | $51.4M | $49.4M | 4.0% | | SoHo | $36.8M | $42.0M | (12.6)% | | **Total Revenue** | **$88.1M** | **$91.5M** | **(3.6)%** | - The overall revenue decline of **$3.3 million** was driven by a **$5.3 million** decrease in the SoHo business, offset by a **$2.0 million** increase in the Corporate business[6](index=6&type=chunk) [Profitability Analysis](index=1&type=section&id=Profitability%20Analysis) Q1 2024 profitability significantly improved, with GAAP net income rising to $26.4M and Adjusted EBITDA increasing to $48.1M - GAAP net income increased by **70.6%** to **$26.4 million**, primarily due to a **$3.7 million** increase in income from operations, a **$4.9 million** gain on debt extinguishment, and a **$4.7 million** foreign exchange gain[54](index=54&type=chunk) - Adjusted non-GAAP net income grew **35.6%** to **$29.8 million**, while Adjusted non-GAAP EPS increased **40.9%** to **$1.55**, also benefiting from a lower share count due to repurchases[55](index=55&type=chunk)[58](index=58&type=chunk) - Adjusted EBITDA for Q1 2024 increased to **$48.1 million** from **$44.2 million** in Q1 2023, with the Adjusted EBITDA margin rising to **54.5%**, an increase of approximately **6 percentage points** year-over-year[7](index=7&type=chunk) [Cash Flow and Capital Allocation](index=1&type=section&id=Cash%20Flow%20and%20Capital%20Allocation) Strong cash generation in Q1 2024 saw free cash flow increase 21.6% to $35.8M, with $63.5M spent on debt repurchase, reducing net debt-to-EBITDA to 3.2x - Free cash flow increased by **over 21%** year-over-year, enabling the company to repurchase **$63.5 million** of debt in Q1 2024[1](index=1&type=chunk) Q1 2024 Capital Allocation | Capital Allocation (Q1 2024) | Amount | | :--- | :--- | | Debt Repurchase Program | $63.5M | | Common Stock Repurchase Program | $0.7M | | Purchases of Property and Equipment | ($8.9M) | - Since November 2023, the company has repurchased **$126.0 million** of debt, lowering its net debt-to-EBITDA ratio to **3.2**, with a target of **less than 3x**[1](index=1&type=chunk) [Financial Guidance](index=3&type=section&id=Financial%20Guidance) Consensus Cloud Solutions provided Q2 2024 guidance and reaffirmed full-year 2024 projections for revenue, Adjusted EBITDA, and Adjusted non-GAAP EPS [Q2 2024 Guidance](index=3&type=section&id=Q2%202024%20Guidance) Consensus projects Q2 2024 revenues between $84.5M and $88.5M, Adjusted EBITDA from $46.0M to $49.0M, and Adjusted non-GAAP EPS from $1.30 to $1.35 Q2 2024 Financial Guidance | Q2 2024 Guidance | Low | Midpoint | High | | :--- | :--- | :--- | :--- | | Revenue | $84.5M | $86.5M | $88.5M | | Adjusted EBITDA | $46.0M | $47.5M | $49.0M | | Adjusted non-GAAP EPS | $1.30 | $1.33 | $1.35 | [Full Year 2024 Guidance](index=3&type=section&id=Full%20Year%202024%20Guidance) The company reaffirmed full-year 2024 guidance, projecting revenues between $338M and $352M, Adjusted EBITDA from $182M to $188M, and Adjusted non-GAAP EPS from $5.08 to $5.20 Full Year 2024 Financial Guidance | Full Year 2024 Guidance | Low | Midpoint | High | | :--- | :--- | :--- | :--- | | Revenue | $338M | $345M | $352M | | Adjusted EBITDA | $182M | $185M | $188M | | Adjusted non-GAAP EPS | $5.08 | $5.14 | $5.20 | [Key Performance Metrics (KPIs)](index=12&type=section&id=Key%20Performance%20Metrics%20(KPIs)) Q1 2024 KPIs show Corporate segment growth in revenue and accounts, while the SoHo segment experienced revenue and customer declines [Corporate Segment KPIs](index=12&type=section&id=Corporate%20Segment%20KPIs) The Corporate segment showed positive Q1 2024 momentum with 4.0% revenue growth to $51.4M and increased customer accounts, despite higher monthly churn Corporate Segment Key Performance Indicators | Corporate Segment Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue | $51,390k | $49,407k | | Customer Accounts | 55k | 53k | | ARPA | $316.07 | $315.76 | | Paid Adds | 4k | 3k | | Monthly Account Churn | 1.92% | 1.37% | [SoHo Segment KPIs](index=12&type=section&id=SoHo%20Segment%20KPIs) The SoHo segment experienced an anticipated Q1 2024 decline, with revenue falling 12.6% to $36.8M and customer base contraction, though monthly churn improved SoHo Segment Key Performance Indicators | SoHo Segment Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue | $36,754k | $42,030k | | Customer Accounts | 808k | 914k | | ARPA | $14.95 | $15.10 | | Paid Adds | 64k | 78k | | Monthly Account Churn | 3.42% | 3.76% | [Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated balance sheets, statements of income, and cash flows for Q1 2024 [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets were $620.8M, total liabilities decreased to $772.6M, and stockholders' deficit was $151.8M Consolidated Balance Sheets (in thousands) | Balance Sheet Item (in thousands) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $61,511 | $88,715 | | Total Assets | $620,791 | $647,255 | | Long-term debt, net | $671,697 | $725,405 | | Total Liabilities | $772,615 | $823,377 | | Total Stockholders' Deficit | ($151,824) | ($176,122) | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) Q1 2024 revenues decreased to $88.1M, but income from operations rose to $37.7M, leading to a significant net income increase to $26.4M Consolidated Statements of Income (in thousands) | Income Statement Item (in thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenues | $88,146 | $91,454 | | Gross Profit | $71,098 | $73,946 | | Income from Operations | $37,667 | $33,997 | | Net Income | $26,370 | $15,458 | | Diluted EPS | $1.37 | $0.78 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2024 net cash from operations increased to $44.7M, while investing used $8.9M and financing used $58.8M, resulting in a $27.2M cash decrease Consolidated Statements of Cash Flows (in thousands) | Cash Flow Item (in thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $44,689 | $37,971 | | Net cash used in investing activities | ($8,923) | ($12,548) | | Net cash used in financing activities | ($58,829) | ($9,646) | | Net change in cash and cash equivalents | ($27,204) | $17,101 | | Cash and cash equivalents at end of period | $61,511 | $111,265 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=8&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section provides reconciliations from GAAP net income to Adjusted Non-GAAP Net Income, Adjusted EBITDA, and Free Cash Flow for Q1 2024 [Reconciliation of Net Income to Adjusted Non-GAAP Net Income](index=8&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Non-GAAP%20Net%20Income) Q1 2024 GAAP Net Income of $26.4M was adjusted for various items, resulting in an Adjusted Non-GAAP Net Income of $29.8M Reconciliation of Net Income to Adjusted Non-GAAP Net Income (in thousands) | Reconciliation (in thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Net Income (GAAP)** | **$26,370** | **$15,458** | | Share-based compensation | $3,733 | $4,332 | | Amortization | $622 | $756 | | Severance and related charges | $893 | $130 | | Intra-entity transfer | $942 | $882 | | Debt extinguishment gain | ($3,636) | — | | Other | $902 | $435 | | **Adjusted non-GAAP net income** | **$29,826** | **$21,993** | [Reconciliation of Net Income to Adjusted EBITDA](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) Q1 2024 Adjusted EBITDA was $48.1M, derived from GAAP Net Income of $26.4M after adding back interest, taxes, D&A, share-based compensation, and other adjustments Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Reconciliation (in thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Net Income (GAAP)** | **$26,370** | **$15,458** | | Interest expense | $6,199 | $12,566 | | Income tax expense | $9,923 | $5,129 | | Depreciation and amortization | $4,767 | $4,347 | | Share-based compensation | $4,450 | $5,140 | | Severance and related charges | $1,194 | $173 | | Other adjustments | ($4,837) | $1,423 | | **Adjusted EBITDA** | **$48,066** | **$44,236** | [Reconciliation to Free Cash Flow](index=11&type=section&id=Reconciliation%20to%20Free%20Cash%20Flow) Q1 2024 free cash flow was $35.8M, a 21.6% increase, derived from $44.7M in operating cash flow less $8.9M in capital expenditures Reconciliation to Free Cash Flow (in thousands) | Reconciliation (in thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $44,689 | $37,971 | | Less: Purchases of property and equipment | ($8,923) | ($8,548) | | **Free cash flows** | **$35,766** | **$29,423** |

The leader in digital cloud fax technology will showcase how AI can be applied to fax for faster, more efficient healthcare workflowsLOS ANGELES, March 6, 2024 /PRNewswire/ -- Consensus Cloud Solutions, Inc. (NASDAQ: CCSI), a global leader of digital cloud fax technology and trusted provider of interoperability solutions, will highlight its innovative technology at HIMSS 2024 in Orlando from March 11-14 (Booth 3801).During the conference, staff will showcase Consensus' advanced solutions including eFax Corp ...

☒ ANNUAL 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 Consensus Cloud Solutions, Inc. Delaware 87-1139414 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 700 S. Flower Street, 15th Floor, Los Angeles, California 90017, (323) 860-9200 (Address and telephone number of principal executive offices) Title of each class Trading Symbol(s) Na ...

Industry, Market and Other Data Third Party Information The following factors, among others, could cause our business, prospects, financial condition, operating results and cash flows to be materially adversely affected: consensus - Cloud Solutions SoHo ● Q4 2023 churn rate of 3.34% improved 15 bps sequentially ● QoQ account base moved from 859K to 831K ● Slow, but progress with existing opportunities, no loss ● Pending federal budget (continuing resolution) ● eFax proves to be alternative for small less de ...

LOS ANGELES--(BUSINESS WIRE)--Consensus Cloud Solutions, Inc. (NASDAQ: CCSI) today reported preliminary financial results for the fourth quarter and year ended December 31, 2023. “I am pleased with the free cash flow generation in Q4 and full fiscal year 2023. While there have been challenges in growing the revenue, the focus on cost containment, cash generation and debt paydown are bearing fruit. As we look to 2024, we are eliminating inefficient marketing spend and being judicious with our capital invest ...

TORRANCE, Calif., Feb. 21, 2024 /PRNewswire/ -- Compex Legal Services announces its e-signature solution partnership with Consensus Cloud Solutions. Using the Consensus technology, Compex now provides law firms with an enhanced, compliant alternative to physically signing, sending, and receiving subpoenas. "We're excited about our partnership with Compex as we will help streamline a necessary business function for organizations operating in the insurance and legal sectors," states John Mannion, VP of Global ...

(1)(2)(3) Adjusted non-GAAP earnings per diluted share for the year decreased to $5.09, or 4.5%, compared to $5.33 for 2022. The decrease is primarily due to higher personnel-related expenses, partially offset by a lower share count as a result of share repurchases. Consensus ended the year with $88.7 million in cash and cash equivalents after notable cash outlays of $57.7 million in debt repurchases, $36.5 million of capital expenditures and $23.5 million in repurchases of common stock in 2023. Key financi ...