Consensus Cloud Solutions, Inc. Reports Second Quarter 2024 Results; Releases Third Quarter 2024 Guidance; Raises Full Year 2024 Adjusted EPS Guidance
Consensus Cloud Solutions (NASDAQ: CCSI) reported Q2 2024 results with revenues of $87.5 million, down 5.7% year-over-year. Despite the revenue decline, the company saw improvements in profitability metrics. Net income increased 13.4% to $23.9 million, with a net income margin of 27.3%. Adjusted EBITDA rose to $49.1 million with a margin of 56.1%. The company's SoHo business decreased by 15.7%, while the Corporate business grew by 2.7%.
Consensus raised its full-year 2024 Adjusted EPS guidance and reaffirmed revenue and Adjusted EBITDA guidance. The company also made progress in debt reduction, repurchasing nearly $30 million in bonds during Q2 and reducing total debt by approximately $156 million since November 2023.
Consensus Cloud Solutions (NASDAQ: CCSI) ha riportato i risultati del Q2 2024 con ricavi di 87,5 milioni di dollari, in calo del 5,7% rispetto all'anno precedente. Nonostante il calo dei ricavi, l'azienda ha registrato miglioramenti nei parametri di redditività. Il reddito netto è aumentato del 13,4% raggiungendo 23,9 milioni di dollari, con un margine di reddito netto del 27,3%. L'EBITDA rettificato è salito a 49,1 milioni di dollari con un margine del 56,1%. Il business SoHo dell'azienda è diminuito del 15,7%, mentre il settore Corporate è cresciuto del 2,7%.
Consensus ha alzato le previsioni per l'Adjusted EPS dell'intero 2024 e ha confermato le previsioni sui ricavi e sull'EBITDA rettificato. L'azienda ha anche fatto progressi nella riduzione del debito, riacquistando quasi 30 milioni di dollari in obbligazioni durante il Q2 e riducendo il debito totale di circa 156 milioni di dollari da novembre 2023.
Consensus Cloud Solutions (NASDAQ: CCSI) reportó los resultados del Q2 2024 con ingresos de 87,5 millones de dólares, una disminución del 5,7% en comparación con el año anterior. A pesar de la caída en los ingresos, la compañía vio mejoras en los indicadores de rentabilidad. El ingreso neto aumentó un 13,4% alcanzando los 23,9 millones de dólares, con un margen de ingreso neto del 27,3%. El EBITDA ajustado subió a 49,1 millones de dólares con un margen del 56,1%. El negocio SoHo de la empresa disminuyó un 15,7%, mientras que el negocio Corporativo creció un 2,7%.
Consensus elevó su guía de Ajustado EPS para todo el año 2024 y reafirmó las estimaciones de ingresos y EBITDA ajustado. La compañía también avanzó en la reducción de la deuda, recomprando casi 30 millones de dólares en bonos durante el Q2 y reduciendo la deuda total en aproximadamente 156 millones de dólares desde noviembre de 2023.
컨센서스 클라우드 솔루션즈(네덜란드 거래소: CCSI)는 Q2 2024 결과를 보고하며 매출이 8,750만 달러로 전년 대비 5.7% 감소했습니다. 매출이 감소했음에도 불구하고, 회사는 수익성 지표에서 개선을 보았습니다. 순이익은 13.4% 증가하여 2,390만 달러에 달하고, 순이익 마진은 27.3%였습니다. 조정된 EBITDA는 4,910만 달러로 증가하였고, 마진은 56.1%였습니다. 회사의 SoHo 비즈니스는 15.7% 감소했지만, 기업 비즈니스는 2.7% 성장했습니다.
컨센서스는 2024년 전체 연간 조정 EPS 가이던스를 상향 조정하고, 매출 및 조정 EBITDA 가이던스를 재확인했습니다. 또한, 회사는 채무 감소에서 진전을 이루었으며, Q2 동안 거의 3,000만 달러의 채권을 재매입하고, 2023년 11월 이후로 총 채무를 약 1억 5,600만 달러 줄였습니다.
Consensus Cloud Solutions (NASDAQ: CCSI) a publié les résultats du Q2 2024 avec des revenus de 87,5 millions de dollars, en baisse de 5,7% par rapport à l'année précédente. Malgré la baisse des revenus, l'entreprise a constaté des améliorations dans les indicateurs de rentabilité. Le revenu net a augmenté de 13,4% pour atteindre 23,9 millions de dollars, avec une marge de revenu net de 27,3%. Le EBITDA ajusté a augmenté pour atteindre 49,1 millions de dollars avec une marge de 56,1%. L'activité SoHo de l'entreprise a diminué de 15,7%, tandis que l'activité Corporate a augmenté de 2,7%.
Consensus a rehaussé ses prévisions de bénéfice par action ajusté pour l'année 2024 et a réaffirmé ses prévisions de revenus et d'EBITDA ajusté. L'entreprise a également progressé dans la réduction de sa dette, ayant racheté presque 30 millions de dollars d'obligations au cours du Q2 et réduit sa dette totale d'environ 156 millions de dollars depuis novembre 2023.
Consensus Cloud Solutions (NASDAQ: CCSI) hat die Ergebnisse des Q2 2024 mit Einnahmen von 87,5 Millionen Dollar veröffentlicht, was einem Rückgang von 5,7% im Vergleich zum Vorjahr entspricht. Trotz des Rückgangs der Einnahmen verzeichnete das Unternehmen Verbesserungen in den Rentabilitätskennzahlen. Der Nettogewinn stieg um 13,4% auf 23,9 Millionen Dollar, mit einer Nettogewinnmarge von 27,3%. Das bereinigte EBITDA stieg auf 49,1 Millionen Dollar mit einer Marge von 56,1%. Das SoHo-Geschäft des Unternehmens ging um 15,7% zurück, während das Geschäft mit Unternehmen um 2,7% wuchs.
Consensus hob seine Prognose für das bereinigte EPS für das Gesamtjahr 2024 an und bekräftigte die Prognosen für Einnahmen und bereinigtes EBITDA. Das Unternehmen machte auch Fortschritte bei der Schuldenreduzierung und kaufte im Q2 fast 30 Millionen Dollar an Anleihen zurück und reduzierte die Gesamtverschuldung seit November 2023 um etwa 156 Millionen Dollar.
- Net income increased 13.4% to $23.9 million with a 27.3% margin
- Adjusted EBITDA rose to $49.1 million with a 56.1% margin
- Corporate business segment grew by 2.7%
- Raised full-year 2024 Adjusted EPS guidance
- Reduced debt by approximately $156 million since November 2023
- Quarterly revenues decreased by 5.7% to $87.5 million
- SoHo business segment declined by 15.7%
Insights
Consensus Cloud Solutions' Q2 2024 results show a mixed picture. While revenues declined by
The raised full-year 2024 Adjusted EPS guidance suggests management's confidence in future performance. However, investors should note the continued decline in the SoHo business segment, which fell by
The Q2 results reveal interesting market dynamics for Consensus Cloud Solutions. The contrasting performance of the SoHo and Corporate segments highlights shifting trends in cloud solutions adoption. The significant decline in SoHo business (
Investors should monitor the company's ability to pivot towards the Corporate segment to offset SoHo declines. The improved profitability metrics, despite revenue decline, demonstrate effective cost management but may raise questions about long-term growth strategies. The company's focus on debt reduction and share repurchases suggests a defensive posture, which could impact its ability to invest in new growth initiatives or acquisitions.
“I am pleased with our Q2 performance. Corporate and SoHo revenues were ahead of expectations, which combined with a full quarter benefit of our cost saving measures, produced a net income margin of
SECOND QUARTER UNAUDITED 2024 HIGHLIGHTS
Q2 2024 quarterly revenues decreased by
Net income (1) increased to
Earnings per diluted share (1) increased to
Adjusted EBITDA (3)(4) for Q2 2024 of
Adjusted net income (1)(2) in Q2 2024 increased to
Adjusted earnings per diluted share (1)(2)(3) for the quarter increased to
Key financial results from operations for Q2 2024 versus Q2 2023 are set forth in the following table. Reconciliations of GAAP measures to comparable non-GAAP financial measures accompany this press release.
(Unaudited, in thousands except per share amounts and percentages) |
|
Favorable /
|
||||||
|
Q2 2024 |
Q2 2023 |
Change |
|||||
Revenues |
$ |
87,500 |
|
$ |
92,792 |
|
(5.7)% |
|
Net income (1) |
$ |
23,874 |
|
$ |
21,058 |
|
|
|
Net income margin (1) |
|
27.3 |
% |
|
22.7 |
% |
4.6 pts |
|
Earnings per diluted share (1) |
$ |
1.24 |
|
$ |
1.07 |
|
|
|
Adjusted net income (1)(2) |
$ |
28,054 |
|
$ |
26,732 |
|
|
|
Adjusted earnings per diluted share (1)(2)(3) |
$ |
1.45 |
|
$ |
1.36 |
|
|
|
Adjusted EBITDA (3)(4) |
$ |
49,072 |
|
$ |
47,670 |
|
|
|
Adjusted EBITDA margin (3) |
|
56.1 |
% |
|
51.4 |
% |
4.7 pts |
|
Net cash provided by operating activities |
$ |
24,365 |
|
$ |
14,121 |
|
|
|
Free cash flow (5) |
$ |
15,809 |
|
$ |
3,994 |
|
|
Notes:
(1) |
The effective tax rates were approximately |
|
(2) |
Adjusted net income and Adjusted earnings per diluted share exclude certain non-GAAP items, as defined in the accompanying Reconciliation of GAAP to non-GAAP Financial Measures. Such exclusions totaled |
|
(3) |
Adjusted EBITDA is defined as earnings before interest expense; interest income; other income (expense), net; income tax expense; depreciation and amortization; and other items used to reconcile net income per diluted share to Adjusted earnings per diluted share, as presented in the Reconciliation of GAAP to non-GAAP Financial Measures. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenues. Adjusted EBITDA amounts and Adjusted EBITDA margin are not meant as a substitute for measures calculated in accordance with GAAP, but are presented solely for informational purposes. The most directly comparable GAAP financial measure to Adjusted EBITDA and Adjusted EBITDA margin is net income and net income margin. |
|
(4) |
See Net Income to Adjusted EBITDA Reconciliation for the components of Adjusted EBITDA. |
|
(5) |
Free cash flow is defined as net cash provided by operating activities, less purchases of property and equipment. Free cash flow amounts are not meant as a substitute for measures calculated in accordance with GAAP, but are solely for informational purposes. |
CAPITAL ALLOCATION STRATEGIC INITIATIVES
Consensus ended the quarter with
The following table consists of our material capital allocation strategic initiatives (in thousands):
Capital Allocation: |
Q2 2024 |
Cumulative Total |
Remaining
|
||||||||
Debt repurchase program (6) |
$ |
29,670 |
|
$ |
155,697 |
|
$ |
144,303 |
|
||
Common stock repurchase program (7) |
$ |
— |
|
$ |
31,790 |
|
$ |
68,210 |
|
||
|
|
|
|
||||||||
|
Q2 2024 |
Q2 2023 |
Change |
||||||||
Purchases of property and equipment |
$ |
(8,556 |
) |
$ |
(10,127 |
) |
|
(15.5)% |
Notes:
(6) |
On November 9, 2023, the Company’s Board of Directors approved a debt repurchase program, pursuant to which Consensus may reduce, through redemptions, open market purchases, tender offers, privately negotiated purchases or other retirements, a combination of the outstanding principal balance of the 2026 Senior Notes and 2028 Senior Notes. The authorization permits an aggregate principal amount reduction of up to |
|
(7) |
On March 1, 2022, the Company’s Board of Directors approved a share buyback program. Under this program, the Company may purchase in the public market or in off-market transactions up to |
REAFFIRMS REVENUE AND ADJUSTED EBITDA AND RAISES ADJUSTED EARNINGS PER DILUTED SHARE 2024 GUIDANCE (i)
The following table presents ranges for the Company’s 2024 full year guidance (in millions, except per share amounts):
|
Low |
Midpoint |
High |
|||||
Revenues |
$ |
338 |
$ |
345 |
$ |
353 |
||
Adjusted EBITDA |
$ |
182 |
$ |
188 |
$ |
194 |
||
Adjusted earnings per diluted share (ii) |
$ |
5.45 |
$ |
5.50 |
$ |
5.55 |
Q3 2024 GUIDANCE (i)
The following table presents ranges for the Company’s Q3 2024 guidance (in millions, except per share amounts):
|
Low |
Midpoint |
High |
|||||
Revenues |
$ |
83.5 |
$ |
85.5 |
$ |
87.5 |
||
Adjusted EBITDA |
$ |
44.5 |
$ |
46.0 |
$ |
47.5 |
||
Adjusted earnings per diluted share (ii) |
$ |
1.25 |
$ |
1.30 |
$ |
1.35 |
Notes:
(i) |
Annual and quarterly guidance is provided on a non-GAAP basis, except revenues, only because certain information necessary to calculate the most comparable GAAP measures is unavailable due to the uncertainty and inherent difficulty of predicting the occurrence and the future financial statement impact of certain items. Therefore, as a result of the uncertainty and variability of the nature and amount of future adjustments, which could be significant, we are unable to provide a reconciliation of these measures without unreasonable effort. |
|
(ii) |
Annual and quarterly guidance for Adjusted earnings per diluted share excludes share-based compensation, amortization of acquired intangibles and certain gains or costs related to non-routine and other matters that are nonrecurring, in each case net of tax. The non-GAAP effective tax rate for Q3 2024 is expected to be between |
About Consensus Cloud Solutions
Consensus Cloud Solutions, Inc. (NASDAQ: CCSI) is a global leader in digital cloud fax technology. With over 25 years of success with eFax® at its core, the Company has evolved to be a trusted provider of interoperability solutions, leveraging artificial intelligence and secure data exchange to transform digital information, automate critical workflows, and maximize operational efficiencies. Consensus maintains industry-leading compliance standards, making it a preferred partner for heavily regulated industries including healthcare, the public sector, financial services, insurance, real estate, and manufacturing. For more information about Consensus, visit consensus.com.
“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release are “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations or beliefs and are subject to numerous assumptions, risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These factors and uncertainties include, among other items: the Company’s ability to grow fax revenues, profitability and cash flows; the Company’s ability to identify, close and successfully transition acquisitions; subscriber growth and retention; variability of the Company’s revenue based on changing conditions in particular industries and the economy generally; protection of the Company’s proprietary technology or infringement by the Company of intellectual property of others; the risk of adverse changes in the
About non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: Adjusted net income, Adjusted earnings per diluted share, Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow. The presentation of this non-GAAP financial information is not intended to be considered in isolation from, or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance and liquidity. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.
For more information on these non-GAAP financial measures, please see the appropriate GAAP to non-GAAP reconciliation tables included within the attached Exhibit to this Release.
CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(UNAUDITED, IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA) |
|||||||
|
June 30, 2024 |
|
December 31, 2023 |
||||
ASSETS |
|
|
|
||||
Cash and cash equivalents |
$ |
49,201 |
|
|
$ |
88,715 |
|
Accounts receivable, net of allowances of |
|
26,126 |
|
|
|
26,342 |
|
Prepaid expenses and other current assets |
|
8,631 |
|
|
|
10,191 |
|
Total current assets |
|
83,958 |
|
|
|
125,248 |
|
Property and equipment, net |
|
91,937 |
|
|
|
81,196 |
|
Operating lease right-of-use assets |
|
6,018 |
|
|
|
6,766 |
|
Intangibles, net |
|
43,065 |
|
|
|
44,990 |
|
Goodwill |
|
346,740 |
|
|
|
348,822 |
|
Deferred income taxes |
|
32,127 |
|
|
|
34,869 |
|
Other assets |
|
4,612 |
|
|
|
5,364 |
|
TOTAL ASSETS |
$ |
608,457 |
|
|
$ |
647,255 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
|
|
||||
Accounts payable and accrued expenses |
$ |
34,806 |
|
|
$ |
36,506 |
|
Income taxes payable, current |
|
4,407 |
|
|
|
2,224 |
|
Deferred revenue, current |
|
22,632 |
|
|
|
22,041 |
|
Operating lease liabilities, current |
|
1,969 |
|
|
|
2,038 |
|
Current portion of long-term debt |
|
16,599 |
|
|
|
8,575 |
|
Total current liabilities |
|
80,413 |
|
|
|
71,384 |
|
Long-term debt, net of current portion |
|
626,204 |
|
|
|
725,405 |
|
Deferred revenue, noncurrent |
|
2,094 |
|
|
|
2,270 |
|
Operating lease liabilities, noncurrent |
|
12,217 |
|
|
|
13,212 |
|
Liability for uncertain tax positions |
|
11,179 |
|
|
|
9,740 |
|
Deferred income taxes |
|
535 |
|
|
|
1,098 |
|
Other long-term liabilities |
|
255 |
|
|
|
268 |
|
TOTAL LIABILITIES |
|
732,897 |
|
|
|
823,377 |
|
Commitments and contingencies |
|
|
|
||||
Common stock, |
|
204 |
|
|
|
203 |
|
Treasury stock, at cost (1,071,624 and 1,028,662 shares as of June 30, 2024 and December 31, 2023, respectively) |
|
(31,990 |
) |
|
|
(31,282 |
) |
Additional paid-in capital |
|
51,043 |
|
|
|
41,247 |
|
Accumulated deficit |
|
(122,869 |
) |
|
|
(173,113 |
) |
Accumulated other comprehensive loss |
|
(20,828 |
) |
|
|
(13,177 |
) |
TOTAL STOCKHOLDERS’ DEFICIT |
|
(124,440 |
) |
|
|
(176,122 |
) |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT |
$ |
608,457 |
|
|
$ |
647,255 |
|
CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES |
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
|||||||||||||||
(UNAUDITED, IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues |
$ |
87,500 |
|
|
$ |
92,792 |
|
|
$ |
175,646 |
|
|
$ |
184,246 |
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenues (1) |
|
17,122 |
|
|
|
17,246 |
|
|
|
34,170 |
|
|
|
34,754 |
|
Gross profit |
|
70,378 |
|
|
|
75,546 |
|
|
|
141,476 |
|
|
|
149,492 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Sales and marketing (1) |
|
11,718 |
|
|
|
17,507 |
|
|
|
24,276 |
|
|
|
34,400 |
|
Research, development and engineering (1) |
|
1,643 |
|
|
|
1,765 |
|
|
|
3,548 |
|
|
|
3,669 |
|
General and administrative (1) |
|
17,136 |
|
|
|
17,432 |
|
|
|
36,104 |
|
|
|
38,584 |
|
Total operating expenses |
|
30,497 |
|
|
|
36,704 |
|
|
|
63,928 |
|
|
|
76,653 |
|
Income from operations |
|
39,881 |
|
|
|
38,842 |
|
|
|
77,548 |
|
|
|
72,839 |
|
Interest expense |
|
(8,657 |
) |
|
|
(12,817 |
) |
|
|
(14,856 |
) |
|
|
(25,383 |
) |
Interest income |
|
593 |
|
|
|
661 |
|
|
|
1,516 |
|
|
|
665 |
|
Other income (expense), net |
|
663 |
|
|
|
568 |
|
|
|
4,565 |
|
|
|
(280 |
) |
Income before income taxes |
|
32,480 |
|
|
|
27,254 |
|
|
|
68,773 |
|
|
|
47,841 |
|
Income tax expense |
|
8,606 |
|
|
|
6,196 |
|
|
|
18,529 |
|
|
|
11,325 |
|
Net income |
$ |
23,874 |
|
|
$ |
21,058 |
|
|
$ |
50,244 |
|
|
$ |
36,516 |
|
|
|
|
|
|
|
|
|
||||||||
Net income per common share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
1.24 |
|
|
$ |
1.07 |
|
|
$ |
2.61 |
|
|
$ |
1.85 |
|
Diluted |
$ |
1.24 |
|
|
$ |
1.07 |
|
|
$ |
2.61 |
|
|
$ |
1.85 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
19,249,116 |
|
|
|
19,654,922 |
|
|
|
19,234,728 |
|
|
|
19,750,570 |
|
Diluted |
|
19,287,479 |
|
|
|
19,662,201 |
|
|
|
19,260,608 |
|
|
|
19,772,898 |
|
|
|
|
|
|
|
|
|
||||||||
(1) Includes share-based compensation expense as follows: |
|
|
|
|
|
|
|
||||||||
Cost of revenues |
$ |
481 |
|
|
$ |
334 |
|
|
$ |
984 |
|
|
$ |
630 |
|
Sales and marketing |
|
585 |
|
|
|
387 |
|
|
|
1,264 |
|
|
|
759 |
|
Research, development and engineering |
|
70 |
|
|
|
52 |
|
|
|
165 |
|
|
|
92 |
|
General and administrative |
|
2,602 |
|
|
|
3,890 |
|
|
|
5,775 |
|
|
|
8,322 |
|
Total |
$ |
3,738 |
|
|
$ |
4,663 |
|
|
$ |
8,188 |
|
|
$ |
9,803 |
|
CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(UNAUDITED, IN THOUSANDS) |
|||||||
|
Six Months Ended June 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
50,244 |
|
|
$ |
36,516 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
9,930 |
|
|
|
8,689 |
|
Amortization of financing costs and discounts |
|
937 |
|
|
|
1,004 |
|
Non-cash operating lease costs |
|
741 |
|
|
|
874 |
|
Share-based compensation |
|
8,188 |
|
|
|
9,803 |
|
Provision for doubtful accounts |
|
2,196 |
|
|
|
3,080 |
|
Deferred income taxes, net |
|
1,233 |
|
|
|
2,036 |
|
Gain on extinguishment of debt |
|
(6,555 |
) |
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Decrease (increase) in: |
|
|
|
||||
Accounts receivable |
|
(2,057 |
) |
|
|
(5,852 |
) |
Prepaid expenses and other current assets |
|
1,536 |
|
|
|
1,237 |
|
Other assets |
|
753 |
|
|
|
780 |
|
Increase (decrease) in: |
|
|
|
||||
Accounts payable and accrued expenses |
|
(1,329 |
) |
|
|
(5,829 |
) |
Income taxes payable |
|
2,345 |
|
|
|
651 |
|
Deferred revenue |
|
598 |
|
|
|
(1,173 |
) |
Operating lease liabilities |
|
(1,133 |
) |
|
|
(1,121 |
) |
Liability for uncertain tax positions |
|
1,439 |
|
|
|
1,428 |
|
Other liabilities |
|
(12 |
) |
|
|
(31 |
) |
Net cash provided by operating activities |
|
69,054 |
|
|
|
52,092 |
|
Cash flows from investing activities: |
|
|
|
||||
Purchases of property and equipment |
|
(17,479 |
) |
|
|
(18,675 |
) |
Purchase of investments |
|
— |
|
|
|
(4,000 |
) |
Net cash used in investing activities |
|
(17,479 |
) |
|
|
(22,675 |
) |
Cash flows from financing activities: |
|
|
|
||||
Proceeds from the issuance of common stock under employee stock purchase plan |
|
747 |
|
|
|
871 |
|
Repurchase of common stock |
|
(708 |
) |
|
|
(11,244 |
) |
Taxes paid related to net share settlement |
|
(615 |
) |
|
|
(1,175 |
) |
Repurchase of debt |
|
(85,525 |
) |
|
|
— |
|
Net cash used in financing activities |
|
(86,101 |
) |
|
|
(11,548 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
(4,988 |
) |
|
|
(56 |
) |
Net change in cash and cash equivalents |
|
(39,514 |
) |
|
|
17,813 |
|
Cash and cash equivalents at beginning of period |
|
88,715 |
|
|
|
94,164 |
|
Cash and cash equivalents at end of period |
$ |
49,201 |
|
|
$ |
111,977 |
|
CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
The following table sets forth the reconciliation of net income to Adjusted net income for the three months ended June 30, 2024 and 2023:
|
Three Months Ended June 30, |
||||||||||||||
|
|
2024 |
|
|
Per Diluted
|
|
2023 * |
|
Per Diluted
|
||||||
Net income |
$ |
23,874 |
|
$ |
1.24 |
|
|
$ |
21,058 |
|
$ |
1.07 |
|
||
Plus: |
|
|
|
|
|
||||||||||
Share-based compensation (1) |
|
3,738 |
|
|
0.19 |
|
|
|
4,663 |
|
|
0.24 |
|
||
Amortization (2) |
|
845 |
|
|
0.04 |
|
|
|
987 |
|
|
0.05 |
|
||
Intra-entity transfers (3) |
|
924 |
|
|
0.05 |
|
|
|
1,186 |
|
|
0.06 |
|
||
Debt extinguishment gain (4) |
|
(1,691 |
) |
|
(0.09 |
) |
|
|
— |
|
|
— |
|
||
Other (5) |
|
290 |
|
|
0.02 |
|
|
|
(99 |
) |
|
(0.01 |
) |
||
Income tax adjustments |
|
74 |
|
|
— |
|
|
|
(1,063 |
) |
|
(0.05 |
) |
||
Adjusted net income |
$ |
28,054 |
|
$ |
1.45 |
|
|
$ |
26,732 |
|
$ |
1.36 |
|
* The prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported Adjusted net income or Adjusted earnings per diluted share.
Adjusted net income as calculated above represents net income and the items used to reconcile GAAP to non-GAAP financial measures, including (1) share-based compensation; (2) amortization; (3) intra-entity transfers; (4) debt extinguishment gain; (5) other benefits or costs related to non-routine and other matters; and (6) income tax adjustments. Adjusted net income and weighted average diluted shares are then used to calculate Adjusted earnings per diluted share. The Company discloses these measures as a supplemental non-GAAP financial performance measure, as it believes it is a useful metric by which to compare the performance of its business from period to period. The Company also understands that measures are broadly used by analysts, rating agencies and investors in assessing our performance. Accordingly, the Company believes that the presentation of these measures provides useful information to investors.
Adjusted net income and Adjusted earnings per diluted share are not calculated in accordance with, or presented as an alternative to, net income or earnings per diluted share, and may be different from similarly or identically named non-GAAP measures used by other companies. In addition, these measures are not based on any comprehensive set of accounting rules or principles. These non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations determined in accordance with GAAP.
Non-GAAP Financial Measures
To supplement its unaudited condensed consolidated financial statements, the Company uses the following non-GAAP financial measures: Adjusted net income, Adjusted earnings per diluted share, Adjusted EBITDA, Adjusted EBITDA margin and Free cash flow (collectively the “non-GAAP financial measures”). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with
The Company’s non-GAAP financial measures are adjusted for the following items:
(1) Share-based compensation. The Company excludes share-based compensation because it is non-cash in nature and because the Company believes that the non-GAAP financial measures excluding this item provides meaningful supplemental information regarding the operational performance of the business. In addition, excluding this item from the non-GAAP measures facilitates comparisons to historical operating results and comparisons to peers, many of which similarly exclude this item.
(2) Amortization. The Company excludes amortization of patents and acquired intangible assets because it is non-cash in nature and because the Company believes that the non-GAAP financial measures excluding this item provides meaningful supplemental information regarding the operational performance of the business. In addition, excluding this item from the non-GAAP measures facilitates comparisons to historical operating results and comparisons to peers, many of which similarly exclude this item.
(3) Intra-entity transfers. The Company excludes certain effects of intra-entity transfers to the extent the related tax asset or liability in the financial statement is not recovered or settled, respectively during the year. During December 2019, the Company entered into an intra-entity asset transfer that resulted in the recording of a tax benefit and related tax asset representing tax deductible amounts to be realized in future years which is expected to be recovered over a period of up to 20 years. The Company believes that excluding the cumulative future unrealized benefit of the assets transferred in 2019 and amortization of the tax asset in the subsequent years in the non-GAAP financial measures, thereby presenting the tax benefit in the non-GAAP measures in the year of realization, provides meaningful supplemental information regarding operational performance and facilitates comparisons to historical operating results.
(4) Debt extinguishment gain. The Company excludes certain gains associated with the retirement of our debt. The Company believes that the non-GAAP financial measures excluding this item provides meaningful supplemental information regarding the operational performance of the business. In addition, excluding this item from the non-GAAP measures facilitates comparisons to historical operating results and comparisons to peers, many of which similarly exclude this item.
(5) Other. The Company excludes certain benefits or costs related to non-routine and other matters. The Company believes that the non-GAAP financial measures excluding this item provides meaningful supplemental information regarding the operational performance of the business. In addition, excluding this item from the non-GAAP measures facilitates comparisons to historical operating results.
CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES
NET INCOME TO ADJUSTED EBITDA RECONCILIATION
(UNAUDITED, IN THOUSANDS)
The following table sets forth a reconciliation of net income to Adjusted EBITDA for the three months ended June 30, 2024 and 2023:
|
Three Months Ended June 30, |
||||||
|
|
2024 |
|
|
2023 * |
||
Net income |
$ |
23,874 |
|
|
$ |
21,058 |
|
Plus: |
|
|
|
||||
Interest expense |
|
8,657 |
|
|
|
12,817 |
|
Interest income |
|
(593 |
) |
|
|
(661 |
) |
Other income (expense), net |
|
(663 |
) |
|
|
(568 |
) |
Income tax expense |
|
8,606 |
|
|
|
6,196 |
|
Depreciation and amortization |
|
5,163 |
|
|
|
4,344 |
|
EBITDA: |
|
|
|
||||
Plus: |
|
|
|
||||
Share-based compensation |
|
3,738 |
|
|
|
4,663 |
|
Other |
|
290 |
|
|
|
(179 |
) |
Adjusted EBITDA |
$ |
49,072 |
|
|
$ |
47,670 |
|
* The prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on Adjusted EBITDA.
Adjusted EBITDA as calculated above represents earnings before interest expense, interest income, other income (expense), net, income tax expense, depreciation and amortization and the items used to reconcile GAAP to non-GAAP financial measures, including (1) share-based compensation; and (2) other benefits or costs related to non-routine and other matters. The Company discloses Adjusted EBITDA as a supplemental non-GAAP financial performance measure, as it believes it is a useful metric by which to compare the performance of its business from period to period. The Company also understands that measures similar to Adjusted EBITDA are broadly used by analysts, rating agencies and investors in assessing our performance. Accordingly, the Company believes that the presentation of Adjusted EBITDA provides useful information to investors.
Adjusted EBITDA is not calculated in accordance with, or presented as an alternative to, net income, and may be different from similarly or identically named non-GAAP measures used by other companies. In addition, Adjusted EBITDA is not based on any comprehensive set of accounting rules or principles. This Adjusted non-GAAP measure has limitations in that it does not reflect all of the amounts associated with the Company’s results of operations determined in accordance with GAAP.
CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES |
|||||||||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW RECONCILIATION |
|||||||||||||||
(UNAUDITED, IN THOUSANDS) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by operating activities |
$ |
24,365 |
|
|
$ |
14,121 |
|
|
$ |
69,054 |
|
|
$ |
52,092 |
|
Less: Purchases of property and equipment |
|
(8,556 |
) |
|
|
(10,127 |
) |
|
|
(17,479 |
) |
|
|
(18,675 |
) |
Free cash flow |
$ |
15,809 |
|
|
$ |
3,994 |
|
|
$ |
51,575 |
|
|
$ |
33,417 |
|
The term Free cash flow is defined as net cash provided by operating activities, less purchases of property and equipment. The Company discloses Free cash flow as a supplemental non-GAAP financial performance measure, as it believes it is a useful metric by which to compare the performance of its business from period to period. The Company also understands that this non-GAAP measure is broadly used by analysts, rating agencies and investors in assessing the Company’s performance. Accordingly, the Company believes that the presentation of this non-GAAP financial measure provides useful information to investors.
Free cash flow is not calculated in accordance with, or presented as an alternative to, net cash provided by operating activities, and may be different from non-GAAP measures with similar or even identical names used by other companies. In addition, free cash flow is not based on any comprehensive set of accounting rules or principles. This non-GAAP measure has limitations in that it does not reflect all of the amounts associated with the Company’s results of operations determined in accordance with GAAP.
Key Performance Metrics (Unaudited)
The following table sets forth certain key performance metrics for Consensus for the three months ended June 30, 2024 and 2023 (in thousands, except for percentages and Average Revenue per Customer Account):
|
Three Months Ended June 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Corporate revenue |
$ |
51,720 |
|
|
$ |
50,361 |
|
Corporate customer accounts (1) |
|
56 |
|
|
|
54 |
|
Corporate Average Revenue per Customer Account (“ARPA”) (2) |
$ |
310.18 |
|
|
$ |
316.55 |
|
Corporate paid adds (3) |
|
4 |
|
|
|
3 |
|
Corporate monthly account churn (4) |
|
2.29 |
% |
|
|
1.26 |
% |
|
|
|
|
||||
SoHo revenue |
$ |
35,779 |
|
|
$ |
42,429 |
|
SoHo customer accounts (1) |
|
786 |
|
|
|
889 |
|
SoHo ARPA (2) |
$ |
14.97 |
|
|
$ |
15.69 |
|
SoHo paid adds (3) |
|
61 |
|
|
|
74 |
|
SoHo monthly account churn (4) |
|
3.40 |
% |
|
|
3.57 |
% |
(1) |
Consensus customers are defined as paying Corporate and SoHo customer accounts. |
|
|
|
|
(2) |
Represents a monthly ARPA for the quarter and is calculated as follows: Monthly ARPA on a quarterly basis is calculated using our standard convention of dividing revenue for the quarter by the average of the quarter’s beginning and ending customer base and dividing that amount by 3 months. Consensus believes ARPA provides investors an understanding of the average monthly revenues we recognize per account associated within Consensus’ customer base. As ARPA varies based on fixed subscription fee and variable usage components, Consensus believes it can serve as a measure by which investors can evaluate trends in the types of services, levels of services and the usage levels of those services across Consensus’ customers. |
|
|
|
|
(3) |
Paid Adds represents paying new Consensus customer accounts added during the periods presented. |
|
|
|
|
(4) |
Monthly churn is defined as a Consensus paying customer accounts that cancelled services during the period divided by the average number customers over the period. This measure is calculated monthly and expressed as an average over the applicable period. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240808225029/en/
Laura Hinson
Consensus Cloud Solutions, Inc.
844-211-1711
investor@consensus.com
Source: Consensus Cloud Solutions, Inc.
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