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- **Corporate Channel Strength**: 6.1% YoY revenue growth in corporate, driven by enterprise clients and VA expansion.
- **VA Expansion Potential**: Usage records set, with $10-20 million revenue growth possible over 2-3 years.
- **SoHo Profitability Focus**: 9.2% YoY revenue decline, but ARPA improvement and reduced cancel rate to 3.71%.
- **Financial Health**: Free cash flow up 32% YoY to $44.4 million, with full-year guidance over $95 million.
- **Debt Management**: $200 million debt retired, targeting 3x debt/EBITDA, with opportunistic share buybacks.

**【CEO Opening Remarks】**
- **Revenue Growth**: Q3 2025 revenue showed slight YoY increase, driven by 6.1% growth in the corporate channel, reaching $56.3 million.
- **Adjusted EBITDA**: $46.4 million, with a 52.8% margin, up from prior quarters, reflecting operational efficiency.
- **Free Cash Flow**: $44.4 million, a 32% YoY increase, due to strong collections and DSO of 25 days.
- **Debt Management**: Retired $200 million of 6% notes, reducing total debt to $569 million, targeting 3x debt/EBITDA ratio.
- **VA Expansion**: Despite government shutdown, VA usage set records, with plans for further rollout and potential $10-20 million revenue growth.

**【CFO Financial Commentary】**
- **Corporate Performance**: 6.1% YoY revenue growth, retention rate of 101.9%, and ARPA of $293, driven by enterprise clients.
- **SoHo Strategy**: Revenue decline of 9.2% YoY to $31.5 million, with ARPA at $15.56 and cancel rate 3.71%, focusing on profitability.
- **Q4 Guidance**: Revenue $84.9-88.9 million, EBITDA $43.1-46 million, EPS $1.27-1.37, reflecting cautious outlook.
- **Free Cash Flow**: Full-year guidance exceeds $95 million, up from prior expectations.

**【Q&A Highlights】**
- **VA Growth**: Usage growth continues, with potential for $10-20 million revenue in future years, dependent on traffic capture.
- **SoHo Focus**: ARPA improvement and reduced cancel rate, but slow decline expected; targeting mid-50s net adds.
- **AI Adoption**: Clarity AI product and integration engine driving advanced product revenue growth.
- **Capital Allocation**: Opportunistic debt retirement and share buybacks, with attention to jurisdictional cash flows.

Consensus Cloud Solutions, Inc. (CCSI) Q3 2025 Earnings Call Transcript

- **Revenue Growth Resumes:** Q2 total revenue growth returned to positive, with corporate channel up 6.9% YoY.
- **Profitability Strong:** 54.8% adjusted EBITDA margin, free cash flow up 29% YoY to $20.3M.
- **Healthcare Expansion:** VA rollout and eFax Protect sign-ups drive corporate growth; 102% revenue retention rate.
- **Debt Refinancing:** $225M bank facility to replace 6% notes, maintaining borrowing costs.
- **Q3 Guidance:** Revenue $85.9-89.9M, EPS $1.33-1.42, with full year EPS target $5.25-5.65.
- **Market Resilience:** No slowdown in health care spending; closed large deals despite industry challenges.


**【CEO Opening Remarks】**
- Q2 2025 marked a return to total revenue growth, with corporate revenue up 6.9% YoY, the best growth in 10 quarters.
- Adjusted EBITDA margin of 54.8% exceeded expectations, driven by disciplined cost management.
- Strategic initiatives include health care vertical expansion, eFax Protect sign-ups, and VA rollout.
- SoHo channel decline slowed to 9.4% YoY, with free cash flow up 29% YoY to $20.3M.
- $225M bank facility secured to refinance 6% notes, with borrowing costs comparable to current rates.
- Monitoring impact of One Big Beautiful Bill Act on healthcare providers.

**【CFO Financial Commentary】**
- Q2 revenue: $87.7M (0.3% YoY growth), adjusted EBITDA: $48.1M (2.1% YoY decline), adjusted EPS: $1.46 (+3.2% YoY).
- Corporate ARPA: $301 (down from $307 Q1 2025), SoHo ARPA: $15.62 (+$0.22 QoQ).
- Full year guidance reaffirmed: revenue $343-357M, EBITDA $179-190M, EPS $5.25-5.65.
- Q3 guidance: revenue $85.9-89.9M, EBITDA $44.4-47.4M, EPS $1.33-1.42.

**【Q&A Highlights】**
- **Demand & Pipeline:** No slowdown in health care spending observed; closed deals with large health systems despite industry volume declines.
- **Retention Rate Drivers:** 102% trailing 12-month retention due to strategic account focus, go-to-market realignment, and SMB churn programs.
- **Public Sector Pipeline:** Varied sales cycles (2-12 months) for government deals; partnership with Accenture accelerates FedRAMP-certified cloud service sales.
- **Regulatory Impact:** Anticipating cost-cutting by providers post-One Big Beautiful Bill Act; positioned to assist with efficiency solutions.


Consensus Cloud Solutions (CCSI)-7 Aug 25-2025 Q2 Earnings call transcript

- **Corporate Growth Accelerates**: Q1 2025 corporate revenue up 5.6% YoY to $54.3M, best growth in 8 quarters, driven by healthcare fax adoption and VA deployments.
- **Profitability Strengthens**: 54.2% EBITDA margin (100bps beat), free cash flow $33.7M, debt reduced to $582M (3.1x EBITDA).
- **SoHo Channel Restructuring**: Revenue down 10.6% YoY as marketing optimized, ARPA stabilizing at $14.83, cancel rate 3.26%.
- **Gov Pipeline Expansion**: VA FedRAMP high certification drives gov interest, but 2025 impact limited.
- **Debt Management**: $222.6M debt repurchased; bank refinancing expected late Q2/early Q3 to retire 6% notes.


**【CEO Opening Remarks】**
- Q1 2025 revenue grew 5.6% YoY to $87.1M, exceeding expectations, with corporate channel driving 5.6% YoY growth to $54.3M.
- Adjusted EBITDA of $47.3M (54.2% margin) beat expectations by 100bps, with free cash flow of $33.7M.
- Debt repurchases totaled $222.6M, reducing outstanding debt to $582M (3.1x trailing EBITDA).
- Maintained discipline on cost structure, with EBITDA margin up 100bps YoY.
- Stress-tested 2025 guidance for modest GDP slowdown, expecting Q3/Q4 headwinds but still within guidance range.

**【CRO Operational Update】**
- Corporate channel: 
  - Record $54.3M revenue (+5.6% YoY), driven by healthcare fax usage, eFax Protect adoption, and VA deployments.
  - ARPA of $307 (down $10 YoY due to SMB mix), with 101% trailing 12-month retention rate.
  - 60,000 corporate customers (+9% YoY), 3,700 new accounts from SoHo upsell program.
- SoHo channel: 
  - Revenue $32.8M (-10.6% YoY), planned decline as marketing costs optimized.
  - ARPA $14.83 (down $0.16 QoQ due to 2024 holiday promotions), cancel rate 3.26% (improving 12bps QoQ).
  - VA FedRAMP high certification driving gov pipeline, but impact to 2025 limited.

**【CFO Financial Highlights】**
- Q1 2025: 
  - Revenue $87.1M (-1.1% YoY), adjusted EBITDA $47.3M (-1.7% YoY), adjusted EPS $1.37.
  - Free cash flow $33.7M (-5.8% YoY) due to higher corporate receivables.
  - CapEx $7.1M (-19% YoY), debt to EBITDA 3.1x (target 3x).
- 2025 Guidance: 
  - Revenue $343-357M (midpoint $350M), EBITDA $179-190M, EPS $5.03-5.42.
  - Q2 2025: Revenue $85-89M, EBITDA $45-48M, EPS $1.31-1.42.

**【Q&A Key Takeaways】**
- VA deployment: FedRAMP high certification unlocking gov pipeline, but 2025 impact minimal.
- SoHo contraction: ARPA $14.83 likely low watermark; LTV/CAC monitoring will guide marketing spend.
- Hiring: 40+ new sales hires focused on upmarket and customer success, on track for 2026+ growth.
- Capital allocation: $5M strategic investment in advanced product partner; bank refinancing expected Q2/Q3.
- Enterprise sentiment: Strong healthcare demand, cautious enterprise spending but no tariff impact yet.


Consensus Cloud Solutions (CCSI)-7 May 25-2025 Q1 Earnings call transcript

- **Revenue Resilience**: 2024 corporate revenue up 4.8% to $209M, exceeding guidance, with Q4 growth of 7.1% (5.5% normalized).
- **Margin Strength**: Full year EBITDA margin of 54%, $88M free cash flow used to repurchase $144M debt, reducing debt/EBITDA to 3.2x.
- **Product Momentum**: Clarity in full production, VA ECFax revenue $2.6M in 2024, targeting $5M in 2025.
- **2025 Outlook**: Flat revenue at $350M midpoint, corporate growth of 6-6.5%, with 1% margin decline for go-to-market investments.
- **Strategic Focus**: Shifting marketing spend to corporate, adding sales headcount, and preparing for M&A with excess cash post-debt repayment.

**【CEO Opening Remarks】**
- Q4 2024 revenue growth of 7.1% (normalized to 5.5% YoY) driven by corporate channel recovery and SoHo channel stabilization.
- Full year 2024 corporate revenue up 4.8% to $209.1M, exceeding guidance midpoint of 3.1%.
- EBITDA margin of 54% for the year, with $88M free cash flow used to repurchase $144M in debt.
- 2025 guidance: Flat revenue at $350M midpoint, corporate growth of 6-6.5%, and EBITDA margin expected to decline by 1% due to go-to-market investments.

**【CRO & EVP of Operations Update】**
- Corporate channel: 7.1% Q4 growth (5.5% normalized), ARPA stable at $304, and 100.5% revenue retention rate (up 170bps YoY).
- SoHo channel: Q4 revenue decline of 11.1% (13.3% YoY), ARPA $14.99, and churn rate stable at 3.38%.
- New product traction: Clarity in full production, VA ECFax revenue $2.6M in 2024, targeting $5M in 2025.
- Customer expansion: 59,000 corporate accounts, +3,000 Q4 additions via eFax Protect upsell.

**【CFO Financial Review】**
- Q4 2024: $87M revenue (0.9% YoY decline), $44.4M EBITDA (51% margin), $25.8M net income, $1.32 EPS.
- Full year 2024: $350.4M revenue (-3.4%), $188.4M EBITDA (+1%), $109.2M net income, $5.45 EPS (excl. FX).
- 2025 guidance: $350M revenue midpoint, $185M EBITDA, $5.22 EPS.
- Free cash flow of $88M in 2024, $34M cash on hand, debt/EBITDA ratio at 3.2x.

**【Q&A Highlights】**
- **Product Uptake**: Clarity in full production with POCs across healthcare, targeting double-digit growth in corporate channel by 2026.
- **Corporate Growth**: 2025 target of 6-6.5% growth driven by new customer adds, with ARPA stable due to e-commerce mix.
- **Investment Allocation**: $1M/Q1 to $1.2M/Q4 in go-to-market expenses, prioritizing sales headcount and marketing for upmarket opportunities.
- **Capital Allocation**: 2025 focus on debt repayment ($30-40M to retire 6% notes), with excess cash for buybacks and M&A.
- **Market Risks**: VA rollout unaffected by federal bureaucracy, but macroeconomic uncertainty may impact healthcare sector decision-making.


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