Consensus Cloud Solutions, Inc.

Good day, ladies and gentlemen, and welcome to the consensus Q2 2025 earnings call. My name is Tom, 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 Consensus. Thank you. You may begin.

Good afternoon and welcome to the Consensus Investor Call to discuss our Q2 2025 financial results, other key information, and our 2025 full year and Q3 2025 quarterly guidance. Joining me today are Scott Taricki, 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 2025 investor call. Then Jim will provide Q2 2025 financial results and our full year 2025 and Q3 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 on 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 regulatory filings, including our annual 10-K and quarterly 10-Q SEC filings. Now, let me turn the call over to Scott for his opening remarks.

Thank you, Adam. We had a strong Q2 returning us to total revenue growth earlier than anticipated. The continuing improvement in our corporate revenue growth demonstrates both the necessity and value proposition of our solutions. We exceeded our revenue objective, driven by corporate revenue growth posting 6.9% over Q2 2024, ahead of our forecast and the best growth year over year in 10 quarters on a normalized basis. So revenue was in line with our expectations and below a 10% year over year decline for the first time since we began the reduced marketing in late 2023. We carefully monitored our cost structure and exceeded our adjusted EBITDA expectations by more than the outperformance on revenue. We delivered a robust 54.8% adjusted EBITDA margin near the top end of our 50% to 55% range. We remain committed to our goals that we outlined in February of this year, which include pursuing the acquisition of customers primarily in the healthcare space for our corporate channel and driving revenue growth in excess of 6.25% this year. Two, manage our corporate cost structure while making modest investments primarily in our go-to-market operations for the benefit of 2026 and beyond. Three, putting a bank loan in place for the retirement of the remaining 6% notes due October 2026. And finally, managing the SOHO channel for cash flow efficiency which we began last year. As previously announced, we concluded in early July a $225 million bank facility that we will utilize to retire the 6 percent notes in part due October 2026. The loan consists of two pieces, a $75 million revolver and a $150 million term loan. We expect that our borrowing costs, which are SOFR-based, will be similar to the current costs of the 6 percent notes. Johnny will provide more detail in his portion of the presentation regarding the operational results for Q2. I am pleased that our corporate channel exceeded our revenue expectations and hit a growth rate in excess of our target. This success was driven by strong usage, improved revenue retention, new customer acquisition, and increased contribution from our advanced products. In addition, eFax Protect had record signups, which seems to be a trend each quarter. In addition, at the VA, we continue to see more facilities come online and record level of usage. All of these contributed to the 6.9% year-over-year growth. While revenues for the Soho Channel declined in the quarter as anticipated, I am pleased to report that it was the slowest rate of decline since we began the program to reduce marketing costs. We maintained our discipline on the cost side, generating an adjusted EBITDA margin of 54.8%, more than 100 basis points ahead of our Q2 expectations. I would note that we would expect a lower margin in Q3 due to a seasonal increase in costs associated with our upcoming year-end audit and the hiring of additional employees, especially in our go-to-market operations that we discussed when we released our annual guidance in February. Free cash flow was $20.3 million in the quarter, up 29% from Q2 2024, due to excellent management of our receivables, low estimated tax payments, and lower interest expense than a year ago. We now expect our free cash flow in 2025 to exceed the $85 million of free cash flow in 2024. We were able to repurchase an approximate $6 million of debt in the quarter, As we have stated previously, liquidity is modest in each tranche, both of which trade at or near par. We were able to repurchase approximately $12 million of our common stock during the quarter at a valuation of approximately five times adjusted EBITDA, which we view as attractive. Before turning the call over to Johnny, I would like to comment briefly on the one big, beautiful bill act that was signed into law on July 4th. We are studying the impact of the bill, particularly with respect to the anticipated cuts to Medicaid and Medicare over the next 10 years and how those cuts may generally impact providers, especially the smaller practices in rural areas. While the cuts do not start until late 2026, we understand that some providers are already making anticipatory cost-cutting decisions. We believe that we are well-positioned to assist those efforts to reduce cost structure, which we know is one of utmost importance right now. Moreover, the need for health care does not evaporate in these scenarios. It merely shifts locations, predominantly to emergency care facilities. We have a large, diverse base of customers in all care settings, such as providers, payers, doctors' practices, labs, pharmacies, et cetera, including those in the emergency care facilities with little customer concentration. We will closely monitor the situation as it unfolds. I will now turn the call over to Johnny to provide you more operational details.