In This Article:
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Corporate Revenue: $54.3 million, a 5.6% increase from Q1 2024.
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Adjusted EBITDA Margin: 54.2%, exceeding expectations by 100 basis points.
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Free Cash Flow: $33.7 million, down from $35.8 million in Q1 2024.
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Debt Repurchase: $10 million in Q1, with an additional $6 million in Q2.
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Total Debt: Reduced to approximately $582 million.
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Corporate Customer Base: Approximately 60,000, up 9% year-over-year.
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Corporate ARPA: $307, a $3 increase sequentially, but a $10 decrease year-over-year.
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SoHo Revenue: $32.8 million, a 10.6% decrease from Q1 2024.
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Consolidated Revenue: $87.1 million, a 1.1% decrease from Q1 2024.
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Adjusted Net Income: $27 million, a 0.2% increase from Q1 2024.
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Adjusted EPS: $1.37, a 2.1% decrease from the prior year.
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Q2 2025 Revenue Guidance: $85 million to $89 million.
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Q2 2025 Adjusted EBITDA Guidance: $45 million to $48 million.
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Q2 2025 Adjusted EPS Guidance: $1.31 to $1.42.
Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Consensus Cloud Solutions Inc (NASDAQ:CCSI) exceeded its revenue objective with a 5.6% growth over Q1 2024, marking the best year-over-year growth in eight quarters on a normalized basis.
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The company achieved a robust 54.2% adjusted EBITDA margin, surpassing expectations.
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The corporate channel showed strong performance with record revenue of $54.3 million, driven by increased cloud fax consumption, advanced product adoption, and new customer acquisition.
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The company reported a 101% revenue retention rate for the corporate channel, an improvement from the previous year.
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CCSI successfully repurchased approximately $10 million of debt in Q1 and an additional $6 million in Q2, reducing total outstanding debt significantly.
Negative Points
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The SoHo channel experienced a planned revenue decline of 10.6% year-over-year, reflecting strategic focus on optimizing profitability.
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Free cash flow for the quarter was $33.7 million, down from $35.8 million in Q1 2024 due to increased receivables and lower revenues.
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Corporate ARPA decreased by $10 year-over-year, reflecting dynamics within the corporate customer portfolio.
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The company anticipates potential modest headwinds to revenues in Q3 and Q4 due to economic slowdown concerns.
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Adjusted EPS was slightly unfavorable compared to the prior year, driven by higher share count and other financial factors.
Q & A Highlights
Q: Can you talk a little bit more about growth in corporate revenue and the VA deployment? A: Johnny Hecker, Chief Revenue Officer, explained that corporate growth was driven by strong usage across fax brands, adoption of advanced solutions, and new customer acquisitions. The VA deployment is progressing with the Federal Empire certification, unlocking new opportunities and revitalizing stalled public sector projects. However, significant impacts are not expected in 2025 due to the slow government process.