Consensus Cloud Solutions, Inc.

Good day, ladies and gentlemen, and welcome to the Consensus Q1 2025 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 Tariki, 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 Q1 2025 financial results, other key information, and our 2025 full year and Q2 2025 quarterly guidance. Joining me today are Scott Taricki, CEO, Jonny Hecker, CRO and EVP of Operations, and Jim Malone, CFO. The earnings call will begin with Scott providing opening remarks. Jonny will give an operational update on the progress since our year-end 2024 investor call, and then Jim will provide Q1 2025 financial results then discuss our full year 2025 and Q2 2025 guidance range. 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 of our investor presentation. As you know, This call and the webcast will include forward-looking statements. Such statements may involve risks and uncertainties that would cause actual results to differ materially from the anticipated results. Some of those risks and uncertainties include but are not limited to the risk factors that we have disclosed in our 10-K SEC filing. Now, let me turn the call over to Scott for his opening remarks.

Thank you, Adam. As noted in the press release, I'm pleased with the results of the first quarter. This quarter was primarily without any of the volatility introduced by the tariffs, most of which were announced on April 2nd. We slightly exceeded our revenue objective with corporate revenue posting 5.6% growth over Q1 2024, ahead of our budget and the best growth year-over-year in eight quarters on a normalized basis. Soho revenue was in line with our expectations. We carefully watched our cost structure and exceeded our EBITDA expectations by more than the outperformance on revenue. We delivered a robust 54.2% adjusted EBITDA margin. As we discussed on the Q4 earnings call, our goals for this year include the following. First, to pursue the acquisition of customers primarily in the healthcare space for our corporate channel and driving revenue growth to 6.25% this year. Two, to manage our cost structure while making modest investments primarily in our go-to-market operations for the benefit of 2026 and beyond. Three, putting our bank loan refinancing in place for the retirement of the remaining 6% notes due October 2026. And finally, number four, managing the SOHO channel for cash flow efficiency, which we began last year. While Johnny will provide more detail in his portion of the presentation, I am pleased that our corporate channel exceeded our revenue expectations in Q1, driven by strong usage, improved revenue retention, new customer acquisition, and increased contribution from our advanced products. In addition, eFax Protect had record signups. In addition, at the VA, we continue to see more facilities come online and a record level of usage. All of these contributed to the 5.6% growth year-over-year. I am pleased to report that while revenues for the SOHO channel declined in the quarter as anticipated, it was the slowest rate of decline since we began the program to reduce marketing costs. We maintained our discipline on the cost side across the board, generating an EBITDA margin of 54.2%, 100 basis points ahead of our Q1 expectations. Free cash flow for the quarter was $33.7 million, modestly down from Q1 of 2024 due to increased receivables from our growing corporate channel and lower revenues in EBITDA year over year. We continue to expect our free cash flow in 2025 to be similar to 2024. We were able to repurchase approximately $10 million of debt in the quarter and an additional $6 million so far in Q2. This brings our total repurchases since launching the program in November of 2023 to $222.6 million, reducing our total outstanding debt to approximately $582 million, or 3.1 times our trailing 12-month adjusted EBITDA on a gross basis and 2.9 times on a net basis. We have made progress on the bank financing and expect it to be finalized in late Q2 or early Q3. Before turning the call over to Johnny, I would like to comment on the recent volatility in the markets and concerns in the economy regarding a slowdown in economic activity. First, the nature of our business is such that we are not directly impacted by the tariffs and related negotiations. Second, we provide an essential service of critical and secure information delivery across a variety of industries. As part of our normal quarterly process, we did look at a potential slowdown in the economy in the back half of the year, with a reduced annual GDP output that is modestly positive, but less than the GDP growth expected upon entering this year. Under such a scenario, we would expect a modest headwind to our revenues in Q3 and Q4, but still be within our range of guidance. To be clear, this is a stress test against our annual plans and budget, not our base case. We are not currently seeing any impact from the tariffs and related negotiations. We will closely monitor the situation as events develop. I will turn the call over to Johnny to provide more operating details.