Consensus Cloud Solutions, Inc.

Good day, ladies and gentlemen, and welcome to Consensus Q2 2024 earnings call. My name is Paul, and I will be the operator assisting you today. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. On this call from Consensus will be Scott Turicchi, CEO, Jim Malone, CFO, Johnny Hecker, CRO and Executive Vice President of Operations, and Adam Varon, Senior Vice President of Finance. I will now turn the call over to Adam Varon, Senior Vice President of Finance at ConsenSys. Thank you. You may begin.

Good afternoon and welcome to the ConsenSys investor call to discuss our Q2 2024 financial results. Other key information, our Q3 2024 financial quarterly guidance, and full-year 2024 guidance. Joining me today are Scott Turicchi, CEO, Johnny Hecker, CRO and EVP of operations, and Jim Malone, CFO. The earnings call will begin with Scott providing opening remarks. Johnny will give an update on operational progress since our Q1 2024 investor call, and then Jim will discuss Q2 2024 Financial Results, our Q3 2024 quarterly and full-year 2024 guidance. After we finish our prepared remarks, we will conduct a Q&A session. At that time, the operator will instruct you on the procedures for asking a question. Before we begin our prepared remarks, allow me to direct you to our forward-looking statements and risk factors on slide two. Thank you, Adam.

We had a strong Q2 outperforming on both channels of revenue, adjusted EBITDA, adjusted earnings, adjusted EPS, and free cash flow. As we laid out in our Q4 earnings call, our goals for this year include the following. First, eliminating certain costs of the SOHO channel, especially in the area of marketing, to provide for stabilization of the base of revenue over time. Second, continue to pursue the acquisition of customers primarily in the healthcare space for our corporate channel. Third, reviewing and improving our overall cost structure with the goal of driving adjusted EBITDA margins to the higher end of our 50% to 55% range. And fourth, continuing to repurchase our debt to further reduce our total debt to adjusted EBITDA ratio in anticipation of the first tranche maturing in October 2026. Let me provide a few additional highlights before turning the call over to Johnny. Our corporate channel continued to add new customers primarily through upgrades from our SOHO base as well as our relatively new e-commerce offering, eFax Protect. Notwithstanding the lower ARPA of these customers than our current average, we were still able to maintain a $310 ARPA and a tight range over the past several quarters Thank you for joining us. We continue to track ahead of our 2023 budget and have found additional marketing opportunities while maintaining a strong LTV to CAC. We were able to substantially reduce our marketing spend and still generate 61,000 paid ads, more than Q4 2023 and similar to Q3 2023, which had higher levels of spend. Our cost structure benefited from a full quarter of the cost optimization that we discussed on our Q4 call. As a reminder, most of those cost reductions came primarily from the SOHO marketing mentioned earlier. The result was a 4.7 percentage point pickup on our adjusted EBITDA margin to 56.1% for the quarter, which is above the upper end of our long-term range. The combination of improved adjusted EBITDA, strong cash collections, and retirement of debt allowed us to improve our free cash flow Thank you for joining us today. I will now turn the call over to Johnny, who will provide you more operating details.