Consensus Cloud Solutions (CCSI) Financial Report Summaries

Risks

• Our fax services constitute substantially all of our revenue and operating income.
• Developments in the healthcare industry could adversely affect our business.
• The market for our products and services is relatively new and rapidly evolving. If the market does not develop further, develops more slowly, or in a way that we do not expect, our business will be adversely affected.
• There are particular challenges in addressing the market for healthcare interoperability solutions. If we do not successfully address these challenges, our business will be adversely affected.
• Our industry is undergoing rapid technological changes, and we may not be able to keep up. If our products and services do not gain market acceptance, our operating results may be negatively affected.
• We have made and expect to continue to make acquisitions that could disrupt our operations and harm our operating results.
• Pandemics or global health crises, and related governmental responses could negatively affect our business, operations and financial performance.
• Our business could suffer if providers of broadband Internet access services block, impair or degrade our services.
• Our business is dependent on a small number of telecommunications carriers in each region and our inability to maintain agreements at attractive rates with such carriers may negatively impact our business.
• The successful operation of our business depends upon the supply of critical business elements from other companies.
• We may be subject to increased rates for the telecommunications services we purchase from regulated carriers which could require us to either raise the retail prices of our offerings and lose customers or reduce our profit margins.
• Increased cost of email transmissions could have a material adverse effect on our business.
• Our sales cycle with enterprise and commercial customers can be long and unpredictable, and our sales efforts require considerable time and expense.
• A system failure, cybersecurity breach or other technological risk could delay or interrupt service to our customers, harm our reputation or subject us to significant liability.
• If our products and services fail to perform properly and if we fail to develop enhancements to resolve any defect or other problems, we could lose customers or become subject to service performance or warranty claims, and our market share could decline.
• The markets in which we operate are highly competitive, and our competitors may have greater resources to commit to growth, superior technologies, cheaper pricing or more effective marketing strategies. Also, we face significant competition for users, developers and distributors.
• Our growth will depend on our ability to develop, strengthen, and protect our brands, and these efforts may be costly and have varying degrees of success.
• Inadequate intellectual property protections could prevent us from defending our proprietary technology and intellectual property.
• We may be found to have infringed the intellectual property rights of others, which could expose us to substantial damages or restrict our operations.
• We may be subject to risks from international operations.
• Our business is highly dependent on our billing systems.
• Increased numbers of credit and debit card declines in our business could lead to a decrease in our revenues or rate of revenue growth.
• If our business experiences excessive fraudulent activity or cannot meet evolving credit card company merchant standards, we could incur substantial costs and lose the right to accept credit cards for payment and our customer base could decrease significantly.
• Our success depends on our retention of our executive officers, senior management and our ability to hire and retain key personnel.
• Political instability and volatility in the economy may adversely affect segments of our customers, which may result in decreased usage and advertising levels, customer acquisition and customer retention rates and, in turn, could lead to a decrease in our revenues or rate of revenue growth.
• Changes in regulations relating to health information communication protocols could affect our business.
• Our services may become subject to burdensome regulation, which could increase our costs or restrict our service offerings.
• Taxing authorities may successfully assert that we should have collected, or in the future should collect sales and use, telecommunications or similar taxes, and we could be subject to liability with respect to past or future tax, which could adversely affect our operating results.
• We are subject to a variety of new and existing laws and regulations which could subject us to claims, judgments, monetary liabilities and other remedies, and to limitations on our business practices.
• The requirements of being a public company, including developing and maintaining proper and effective disclosure controls and procedures and internal control over financial reporting, may strain our resources and divert management’s attention away from other business concerns.
• The trading market for our common stock has existed for a relatively short time since the distribution. Our stock price may fluctuate significantly.
• We do not intend to pay dividends on our common stock.
• We previously identified material weaknesses in our internal control over financial reporting, and if we fail to design and maintain effective internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
• Certain provisions in our amended and restated certificate of incorporation and amended and restated bylaws, and of Delaware law, may prevent or delay an acquisition of Consensus, which could decrease the trading price of our common stock.
• Our amended and restated bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, and the United States federal district courts as the exclusive forum for claims under the Securities Act, which could limit our stockholders’ ability to obtain what such stockholders believe to be a favorable judicial forum for disputes with us or our directors, officers or employees.
• If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business, our stock price and trading volume could decline.
• If the distribution, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, Ziff Davis, Consensus and Ziff Davis stockholders could be subject to significant tax liabilities, and, in certain circumstances, Consensus could be required to indemnify Ziff Davis for material taxes and other related amounts pursuant to indemnification obligations under the tax matters agreement.
• Our debt obligations could adversely affect our business and our ability to meet our obligations and pay dividends.
• We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
• We and Ziff Davis continue to have some obligations under transaction agreements that were executed as part of the separation.
• As an independent, publicly traded company, we may not enjoy the same benefits that were available to us as a business unit of Ziff Davis.