CCSI - Earnings call transcript Q4 2024 | Consensus Cloud Solutions, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to Consensus Q4 2024 Earnings Call. My name is Paul, and I will be the operator assisting you today. [Operator Instructions] On this call from Consensus will be Scott Turicchi, CEO; James 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. you. Thank

begin. may You

Adam Varon

guidance. welcome and Consensus other year-end XXXX QX and and discuss key call our our XXXX and year QX XXXX full to afternoon, investor the to information Good financial results,

and Joining me today Operations; Scott Turicchi, CFO. Jim our EVP Hecker, Malone, CEO; and of Johnny are CRO

wrap on asking full then discuss with provide remarks, 'XX call, since results, progress our Q&A the the guidance XXXX XXXX XXXX a investor range. will conduct for The opening year instruct Johnny operational earnings will we our begin XXXX session. call prepared to will question. our remarks. year then our it Jim and will and that time, full on operator QX will finish and providing QX At a After Scott give up an you update financial we QX procedures

direct and of Before me allow we the to presentation. Slide X to our on statements prepared begin our factors you forward-looking investor remarks, risk

As cause statements. would Such results. you involve will include differ that may uncertainties and forward-looking call risks and results from know, the statements to materially anticipated webcast actual the this

have those SEC risk but to, include, Some factors and our file. in are limited that not risks of uncertainties we disclosed XX-K the

Now remarks. Scott to Scott, turn let opening me the for take his call over it away.

R. Turicchi

Thank you, Adam.

slowing of continuation increased of EBITDA expected channel, marketing obtain. the an growth SoHo were in reaching guidance. on rate high revenue which of margin XX%, planned Based able We of in we in an improving end QX channel in to revenue we quarterly another which saw for corporate and quarter the of resulted was in a QX Consensus. our solid revenue spend, part both our our rate decline

$XX of than debt our We EBITDA million were the debt us bringing to total able less Xx. repurchase during goal closer quarter, in to approximately to also of

for of for XXXX. X.X% midpoint stated We very for year, an growth shy of exceed against Looking of our expectations year successful revenue were it corporate guidance. X% full against to the was the our just at able objectives at our expectation the in coming

Similarly, of of combination the to we $X.X of for This channel, guidance decline allowed an decline exceed a SoHo in million of saw in expectation XX.X%. our against us XX.X% year. our midpoint a by revenues

to As EBITDA productivity rationalizing our our we the was of achieved driving marketing XX%, for at XX% end is stated online approximately spend. each our quarter, year the high on XX%. focus margins of We which of range while

translated flow. million $XXX during amount million a EBITDA importantly, principal cash repurchase free since inception approximately to million late program's of the $XX XXXX. this record in this $XXX in cash the year flow debt into cash More We plus utilized balances and

corporate care to facilities Clarity to and to our add Additionally, in increased to pace of rollout the sector, our started offerings. customers see with health we continue the especially channel, the VA traction

combination the our trend will over Johnny are improvement for in XXXX. range, few observations. but our corporate X.X% of a experienced the see a make revenue of beyond. midpoint of the has SoHo. in We decline the at XXXX for We a and of for This and guidance, provide and will granular for detail revenues year-end an flat slowing decline the us I continuation Jim improved growth excited

year. go-to-market adding throughout personnel and years margins to this XXXX in operations on his done view our of perspective, could hold to EBITDA but will as we the the with X that that operational flat marketing a the and sales realign Johnny corporate space. opportunity team channel, mistake we given an believe Based From have we the teams the our work in be

it approximately with will X negatively to While our the to will total revenue we momentum by in believe margin provide growth point us XXXX. XXXX, it impact percentage return in

capital begun also in October notes the of anticipation XXXX. maturing to X% our structure in look at We've

We continue options will to evaluate to the available and various markets us.

today, expeditious expand appears proceeds our it financing notes debt maturity. our that $XX XXXX, most we based be and However, million ample combined of $XX the to to and give intention pay will cost-effective down our option what bank retire This, October to credit. will to million by an on us additional know with line of

of we have notes While of refinancing prohibitive. is X.X% retiring the at noncallable cost tranches debt, currently looked both the

year will you thinking our We refinancing gels update the our as throughout on options.

to will Johnny. over turn I the now call

Johnny Hecker

Scott, and everyone. you, hello, Thank

and for both QX our on SoHo and discuss corporate business and focusing revenue, results, to customer like count I'd our full year XXXX strategy Today, go-to-market channels.

into an provide our insights outlook. and XXXX update I'll operational some share Additionally,

and on The QX increase year-over-year QX to $XXX.X million momentum Therefore, strong customer revenues and increased last year, revenue compared $XX.X in to the run business entry grew growth QX factors. year loss. terminations X.X% resulting I impacted million QX of demonstrated achieved with considering XXXX rate impacts was showing a approximately normalized million customer $XXX.X am last the X.X% corporate still business X.X%. of These driven performance rate a and factors growth approximately revenue impacted business very Revenues rate. XXXX by in extraordinary The in full collections, was from for these by pleased to QX with of growth a of this represents several in increased focus corporate year year XXXX. growth seasonality. strong significantly a in XXXX. $XX.X days, million. of of contributing in we This QX

consumption growth, are continued care We health especially sector. the within fax in cloud seeing

and year basis from base more also rate X points up. and retention ramping improvement implemented results using a our in fiscal year of XX.X% notable Our revenue customers XX.X% and services This in existing ago XXX from XXX.X% new increasing a are of for customer is QX. being XXXX,

revenue and evidenced by are we see. happy sustainable channel positive success which emphasis go-to-market on indicator, results, which to corporate and further upselling encouraging has be to very strategies, The cross-selling Our are the this forward. we believe in customer retention, going produced momentum

XX,XXX of with corporate customers add Protect automated alone, and corporate high approximately quarter than more to achieved program to is the customer This for X,XXX QX. corporate base we customer have customers for eFax another corporate upsell fully just We offering able were the a is e-commerce to SoHo in a count the record account which acquisition. successful

in added at $XXX year matching ARPA corporate a year. remained from for of $XXX in continuum seasonality-related with of Full the $XXX the explainable the roughly This XXXX e-commerce the customers The period ARPA success previous end of same ended customer at XXXX. stable robust lower the is at entirety figure we compared our and throughout corporate to large the XXXX. the $XXX number

successful, proven delighted tailwind this am results Our new and XXXX I for with fiscal year. go-to-market providing has the strategy

offered Let ECFax million. deployment revenue has XXXX, Accenture its me quickly the progress Federal the partnership at initial great VA. shown provide solution Services In exceeded Department in $X.X Affairs. an with Veterans The ECFax update on in of

government FedRAMP the in the XXXX. years, With we FedRAMP this week, continue the high will high million make potentially solution in contribution The the last revenue to awarded impact just $X other in conclusion agencies. coming up authorization corporate of recent attractive expect reaching to authorization more to growth

deployments operational cloud entire to which platform a the VA be platform build a required government-approved with environment. to expected the future our with in place, in faster fully us Additionally, are experience than

a also to XXXX, for $XX.X $XXX.X XX.X% the versus slight on period million Moving fiscal SoHo better-than-expected planned down The million last from total million, a channel. from account to saw $XXX.X SoHo during decrease the in base in million XXXX XXX,XXX the XXX,XXX of quarter. XX.X%. Revenue was were year same SoHo $XX.X year. QX revenues decline

our and strength marketing across targeted the SoHo to quarter portfolio multiple for projections fourth due brand our revenue initial brands. exceeded initiatives the of

optimizing and programs. management of SoHo through close continually are these monitoring We revenue marketing initiatives

$XX.XX from due X.XX% introduction to month the rate XXXX discounted in the XXXX In XXXX. free to decreasing in the improvement, as increased remained overall X.XX%, the in the $XX.XX for year $XX.XX of full stable quarter, rate of The from versus at fourth QX year XXXX This to in slightly cancel and period. an fiscal is down X.X% same showed ARPA trial from a cancel ARPA the of at QX. $XX.XX first

automating optimizing This acquisition all strategy's customer is has across programs continuous in projections. and improvement. evident yielded Our performance initial success focus brands on exceeding our

of for for current detail market our advertising SEO digital on a focus integrating healthy with LTV and an will then on in corporate share SoHo conclusion, for We a more the channel. our update ratio. CAC I'd like first path In the XXXX and conditions on bit a continue to and to outlook

the as operations SoHo profitability will XXXX, stability we and in prioritize XXXX. did continue resources we by and In just business for optimizing our current to

leveraging and on long-term be existing will Our focus ensure to offerings sustainability. strengths

pursue strategies. not growth aggressive will We

million expenses. in XXXX. in We of are and the continuing down in control million to $XXX revenue our approximately SoHo The rate intend to will XXXX guidance, planning carefully For trend slow XX.X% XXXX, in maintain decline X.X% to we for at while XXXX. $XXX this down from approximately from midpoint optimize marketing

channel. and observing. signs of are cautiously the optimistic invest light XXXX that rapid of at pandemic. Looking uncertainties, encouraging slow we a and to in the period growth Despite for decision-making The the to experienced care currently the macroeconomic sector due following health corporate reluctance political remain we

a return market to encouraging seeing now are normality. performance we However, our signs and in

our and on customer proven The and XXXX successful. our realignment strategy suite retention have focus optimization go-to-market of product

We will Fax continue business. to prioritize our core

additions are technology processing. Clarity, market Unite extraction Our are and Clarity facilitate advanced solutions, and perfect data and eFax and data for interest. interoperability advanced featuring conversion to specifically Unite and AI significant generating

happy proof for production accelerated are Clarity and to We clients. with in are promising with concept implementation we share that of full

point revenue solutions marginally and contribute to at in Advanced only XXXX. corporate this

from such relevant our perspective, relevance strategically to are of especially they go-to-market being health However, care business. a with

market growth improvement and continued set for position, in partnerships rigorous our Our our us entrenched our execution up strategic rate.

to is million X% compared to of X.X% guidance X.X% to XXXX. in on fewer would $XXX at goal track keep rate XXXX XXXX and achieve X% midpoint to business which XXXX, a growth us compared revenue the exceed of days despite to reflect Our corporate in

we we X years, from had at growth growth the corporate revenue X a midpoint to what the Overall, guidance, aim into anticipate which improvement just we flat the in year and projected and million Within years at year accelerate a encouraging ago. $XXX digits. to of thereafter, business the the is channel double an in next our

exceptional and my I want for their to our and to for gratitude and trust. customers collaboration to partners expressing ongoing our by employees up sincere wrap the dedication

call I'll Over now about CFO, Jim. to Malone, financial the results you, hand And over update an who our Jim will provide our and to guidance.

James Malone

and Johnny, afternoon, you, good Thank everyone.

call, XXXX year XXXX XXXX call and full QX and release, earnings press plus on In today, QX our results XXXX year and this discussing are we full guidance.

business of close expect to by today. file fiscal We our 'XX XX-K

start shares our year, million Let's increased our QX $XX.X and $X.X revenue at income Full expectations. million estimated count business rate taxes respectively. midpoint, or results. and with of of XX than versus million corporate X.X% XXXX tax share with year XX.X% XX.X% better to XX.X% prior performing

and ARPA As cleanup upward strong our corporate strong growth mentioned versus $XXX XXXX to essentially prior these rate ended was X.X%. in of line ARPA corporate million. was roughly in Johnny of a $XXX QX versus the million range when Normalized corporate is up customer QX period. and with and was of growth $XXX revenue last the XXXX prior and corporate to AR QX compared flat, comparable achieved approximately in trajectory line XXXX terminations year of solid influenced $XXX comparable prior year the $XXX in for QX seasonality XXXX call. period Full an for X.X% quarters' million $XXX Full previously $X.X mentioned, several QX a with factors adjusted $XXX million seasonality, XXXX XXXX into XXXX continuing by XXXX. in year year QX or we growth of at the in

from continuum large As end this is in points basis corporate remarks, retention success added points revenue Full at to at improvement XXXX Johnny lower of e-commerce of and customer XXXX. of throughout mentioned basis influenced his XX QX XXX% An from XXX.X%. year our XXXX in increase of the and fiscal the by XX.X% XX.X% a year XXXX. number sequential heavily the above increased customers we XXX

over $XX.X to QX than revenue XXXX year, XX.X% SoHo. decreased better prior $X.X expectations. or Moving of million the million

ads It advertising to ads. economically mentioned in plans reduction X% up and should were XXXX be to beneficial. year-over-year previously, a approximate corresponding approximately ARPA price These month XX% in reduction decrease reduction the as versus free year-over-year spend. paid $XX.XX, net planned noted to our is with decrease that by due I driven year-over-year first QX As a paid advertising trial. fewer plans an base X,XXX discounted result year-over-year spend this of a continue be of shifting of despite

line X.XX%, of we was by the reduced in slightly up expectations. million, million year as with XXXX. revenue several Churn XX.X% XX% versus SoHo within is in XXXX year last down versus our while approximately year-over-year or quarters prior spend advertising $XXX.X $XX.X Full and

SoHo by a discounted year down the with ARPA first promotion, $XX.XX versus XX revenue of $XX.XX churn full largely basis X.XX%, improvement. customer of point driven from X.X% month

or XX.X% or Moving Adjusted prior delivered income EBITDA $XX.X $XX.X decrease in X.X% performing net an $XX.X million primarily a Adjusted over results, QX of $XX XXXX XX.X% to mentioned a than year, driven expenses and $X.XX million of was million results. with line driven XX.X offset in by million QX of net expectations. versus unfavorable is flow-through, increase count. XX.X%, shares. QX XXXX XX% million over on $X.X better consolidated non-GAAP margin share a consolidated just and higher amortization XXXX, $X.X or items FX Revenue EBITDA $X.XX, taxes. and million of expectations. is of a year by and revaluation EBITDA approximately by interest prior share rate to noncash and Adjusted is count the lower EPS tax QX modest million I favorable balances by depreciation intercompany

net $X.XX million $X.X optimization Adjusted Adjusted was favorable or compared $XXX.X EPS is was decline on The of corporate. by lower driven primarily million foreign better in is million the our primarily offset prior XXXX the Full by expected from Full results. year over than partially an the net shares, approximately was offset non-GAAP the XX.X approximately largely or midpoint lower or XXXX year, of period. spend exchange interest revaluation tax This $X year was business, and due advertising guidance. was The million efforts. consolidated than SoHo share and year. respectively. more a year Full EBITDA increase X.X% expense and X.X% up million cost $XXX.X versus revenue period. million driven XX.X% was rate of the planned $XXX.X the improvement This prior taxes. count higher by growth million, partially our XX.X% million to to prior balances and $X.X XXXX prior intercompany the comparable is decrease $XX.X by X% income comparable of year or in

Moving capital to our strategy. allocation

$XX.X in November our As XXXX we $XX mentioned face X-year call, program. a value QX $XXX million million announced repurchase earnings in bond XXXX, million cash. we for repurchased

our has continued Our to cash million authorized $XXX program remaining cash to us have under and face $XX strong repurchase we $XXX million for flow date, current program. million bonds allowed value

notes. cash flow free our to maturity us be similar XXXX meet by target leverage to We cash to sufficient our with the of X% expect providing our

to our year. close are cash million fund XXXX free EBITDA sufficient versus CapEx With in is to operating prior $XX to 'XX the year getting the is repurchase Xx, ended million adjusted adjusted million $X the we prior cash flow equity. down and which total is comparable very our of and total debt just Xx. period million, strong We million to $XX debt and with or debt on debt EBITDA fiscal X.Xx. operations cash of ratio achieving to EBITDA with Full $XX of activities from X% flow target $XX versus is adjusted debt repurchases mentioned, Net our

between at Adjusted between EBITDA $XXX to year million million million at and $XXX million Moving million midpoint. $XXX million Adjusted Full guidance. rate XX.X% at between with and $XXX count EPS rate share $XXX between XXXX are midpoint. revenue midpoint. estimated with $XXX million tax interest XX respectively. and XX.X% tax and midpoint, with to $X.XX and XX.X% $X.XX at shares with Full year $X.XX

beginning adjusted exclude foreign to net change XXXX on report Please I'd remember gain will QX like income statements. our in revaluation of that our on intercompany XXXX results and guidance we accounts. losses how financial comment exchange this

will period intercompany our and we represent from balances significantly losses both results. income item exchange it does XXXX. foreign performance. from eliminating Our period, line periods, fluctuate to calculation the This gains adjusted operating and operating metric company's XXXX this eliminate on not can Therefore, net and in are

in EPS $X.XX, full on XXXX was press impact the pro stated today, the the of year $X.XX As foreign our forma XXXX resulting a filed EPS release in excluding gain. exchange

Adjusted first are of at Estimated and with provided our million EPS and million quarter midpoint. rate tax EBITDA $XX.X and $XX midpoint. first to income and XXXX, as $XX.X XX.X% $XX.X For XXXX between -- the of $XX with count with million a quarter million million the follows: at revenues $X.XX share $X.XX Adjusted XX.X%. to million shares between $X.XX rate have the between midpoint. at we $XX XX million tax guidance

remarks, This to Thank you. Q&A. turn concludes back to I'd my like for and formal the call the operator

Operator

[Operator coming Instructions] And question first from the David Larsen from is BTIG. today

David Larsen

to Congratulations the particular, on products, the the submit of data on basically data good conference, the with appeals, of structured about helpful? AI in lot jSign? like your quarter. would to uptake Any be a adjudication plans written of to uptake basically there ViVE into advanced of you like health letters color Clarity, talk there processes use was maybe about convert the and Can assist the At claims. talk there to

Johnny Hecker

David, for this you that. is Very Yes. Thank Yes. Johnny. good question.

data obviously, world, of coming where and product or of the understand intelligence is The maybe unstructured for to with applies bit in data of any structured a variety fax prompts basically then us, to So insight on primarily the ingesting we artificial LLM is from or product into from and put documents today. those and the example, underlying and that extract were programmed production we're of Clarity a a give about channels format excited what documents, formats. We to little extract are file based models for that full the it capable our does, then for can customers. kind system system individual through of in, an and import those those points also EHR other customize

there's a So demand of a lot POCs. of There's lot for that.

We have systems actually in already. production a few

to a we're ideas production. the We're lot that, more can There's makes we're what little So be side, with customers. done replicable difficult of to in contracts. deployment is need also of technology in We've focusing like the we on for a much past. why we're very on deployment, But customers fine-tune which which win of a individual this really lot of this to concepts sign bit mentioned solutions. able it in proof developing the

there We purposes. now, authorization models have X right one are for out that prior

So data requests, of those. understanding prior accelerating extracting of processing and authorization there the points

document And secondly, then documents extracting and basically data the creating a it and data additional categorizing documents forwarding basically regarding demographics. and and CCDA document also kind with a file be and unstructured read patient structured that can then in format these those human classifying the of things, demographics but primarily plus providing eye insurance still a structured X things by points clinical and then

very now So What really the process extracting that really within, is or fields. complicated diagnosis data like accelerates systems. of text. filing structured We're not the example, EHR much doing focused documents more right for on currently we're things these

David Larsen

for general your going environment. what -- That's turned That's mean, we it are the growth demand you X% were any high corporate And the from at acceleration a in forward just was substantial great. like on then revenue growth, basis? level, X.X% And the a I Have think earlier I quarterly corner? just color on year-over-year. revenue up expectations year. at I corporate a pretty think

R. Turicchi

calculation, the in think pointed a of variety have Johnny is while a correct Dave, XXXX. QX of did in numbers, terms as mathematical we of I it cleanups X.X%, account So the out,

is So in we had X just believe I comparison. one growth the XXXX. so we in And in correct, prepared remarks best more preceding under X% about the quarters. noted the X.X%, Johnny Still And of quarters not that's low a of think you're best that his normalized X.X%. of the as year-over-year

corporate. see midpoint about you'll So the the look as guidance, of growth in out, we X.XX%

As mentioned, particularly versus corporate. 'XX there's in business 'XX. fewer days us, a Johnny matters to slightly in That

of So exit equal a X will be in it linear I necessarily annual that in X.X% of But rate if customers. and quarters between some each think as at the I in lot 'XX, two. of or obviously of terms volatility because and the you look timing of onboarding think not X.XX%, is not, there you of wins look you there's at the target of the variation saw

you rate So at is to smooth getting think, from for exited to an I QX run reasonably a we'd we a a from into expectation where And expect, full higher 'XX. standpoint, that progression the number be somewhat analytical year. our fiscal should going

the you about want then And of to demand? talk some

Johnny Hecker

Yes. Yes.

close it the mentioned optimistic. call, see the cautiously more than of called I We're green able bit a I think We We're acceleration shoots. just actually in right? seeing deals. So decision-making. on it to I little

collecting fruits. the are We

to X this. there's And factors

it On bit. a I of on -- get was there was there was the normalized lot mentioned of needed one just call, a pandemic. a to during Like tailwind the decision-making, stuff think lot has people There hand, fast done. the I market the little

profited So the then had But pandemic, post exact that. we opposite. we from

that condition one That is more happened. market headwind I finally think that a was of normalized. it has and of So things the

side done did in as a the have we conditions. lot started align the And on changed things And as adjust sales early our to secondly, market 'XX And well marketing side. we we operationally. of on go-to-market to

made the have some accelerate We need growth. now go-to-market our to and in we our build structural that changes foundations

So good to question, the what like. a if position we that's turned yes, in your it very we're and corner, we feels have feel like

aiming happen upward the I going that or path. channel. double-digit we're to what corporate that's but XXXX to what not, our an and get call, in Probably mentioned to thereafter, on our for. on is expecting, growth And the XXXX? we're I ambition years think that's we're Is

R. Turicchi

then. basic sometime as would have expect that the Obviously, between But Usual that now I and you cost. assumption. doesn't a economy it completely would implode assumes

David Larsen

quarter. good a on Congrats

R. Turicchi

Appreciate Dave. Thanks, it.

Operator

question is Citigroup. from Fatima Boolani coming from next The

Mark Zhang

Fatima. headcount in allocated? how investments guess Maybe go-to-market you on is This sales towards I of for can to 'XX guys give adding some finer more looking it terms the So new Mark pursuing details revenue timing, these is will with then cohorts be or even ramp-up after is just a to to partnerships? investments in go or put new 'XX? acceleration new associated really on And customer there industries period

Johnny Hecker

Yes. investing. Thank you, Mark. multiple that Very ways we're There's good questions.

On the go-to-market that not one effect yes, it's -- which hand, XXXX. And happen of throughout in particularly of expanding, be headcount, the that sales ramping most year. most will and the will we're with -- you will impact

had out and that that now. margin pace Obviously, in still rate. focusing foundation to scale We a mind is response we're but that's actually on of investment -- in will keeping of 'XX see what to the question beyond. mentioned build we our the managing up the most into the some to I it, EBITDA question, earlier that obviously, it in and really earlier structure Like right at to and or future and

we'll very continuously our some other have The our thing we're last years, we to marketing expense. shifted are marketing the doing spend do that and corporate we funds over X.X is monitoring those so closely of and continue to SoHo on

trade So thought leadership a working We're doing our advertising. We're attending shows. of we're on lot digital program.

and more to a corporate the establish So we're the programs doing ourselves and lot for generate that there's demand more in channel. market of marketing

R. Turicchi

And I to would just add that.

how ramp looking it at now. quarters, you're but it's X does expense in over from right spread, expense, not think if I ratable perfectly the the of the terms

the speak are quarter the and already XX actually the in into of of we as So mode hiring year. balance we over the days actually

QX. expect you going to So in should going larger that QX. be to you're in some It's get impact

of because of QX heads. the be have will impact biggest the incremental cumulative quarters Your effect you X in the

So in $X in million it to than going roughly, it's of slightly the much higher but that it's terms expense. in QX be QX, quarter, will a that be lower and than

Mark Zhang

go-market follow could terms structure in Johnny, up. already I know, the maybe foundation spend. out building of And Great. this you if I you're mentioned just year of

like bit seeing call something we 'XX little more, turning a or why guide? demand It So back? it, you your the acceleration Is aren't on that's corner. is guys -- seems optimism the holding there

Your traction. gaining initiatives are

little of sort you more So a aggressive any caution being from bit that's on guys 'XX? keeping

Johnny Hecker

Good Yes. question.

we think a right? we're coming If we're now seeing going growth looking are X%. it compare year's significant you at our to from. change I last above That rate, acceleration, is where

the reasons of that speed market. One you're is investment goes that majority about asking of the the see don't key why up we

or our So and our lot and of very and sales adding the base, so end. like but these the impact revenue is size the they're engine, a no with means if by number very operating probably add being engine, e-commerce the you VA our down-market I think accounts they're of corporate on efficiently well, X X a top very, customers mid-market to large very of very customers

have longer closed way So And then cycles. you also have I've ramp them, talked about have longer the they customers customer continuum in the once upmarket past, and sales cycles. those

of they sales X, of a X over and months, you cycles months. think takes XX maybe if to while customers So ramp to sometimes X bring on then about period those XX to it the

customer a full of for and full X-year like maybe years X VA, out, of now the that you case a longer. X process effect sometimes rolling even the So of it's until it's which the another close It In penetration. impact we're see X, us the to that to onboarding. the is X-year in deal, took process

Operator

no were other there And questions.

R. Turicchi

We -- go had some ahead. questions

Operator

were sorry, come did in from... more there other questions, one Yes, Apologies. but get I'm we no

R. Turicchi

via Okay. e-mail. questions We have do some

as questions by is a you questions. through roughly while the midpoint the be driven additional at There's for live will changes in predominantly the that those the of take X.X%, talking me to terms X.X% let in of guidance. came queue e-mail. about be in would growth That corporate, to drivers which customer One opposed So X.XX% few of range material our ARPA. new the additions

maybe to be plus a $XX probably of or expect year. we don't minus range ARPA the fairly shift tends in materially you've As noticed, that's and $X.XX, to tight this that going

going material than more the the in driver ARPA. customer move adds to come from So a new is

but has we on at corporate do is, then one, metric report very churn And it's discussed of don't rate cancel a it's question the before, churn SoHo, the The not that second the important SoHo I as that largest churn X which to at think and do at the from business. as and have, that's the given rate, corporate the if you to question, look accounts within diversity rate. we though is -- actual homogeneous. look the question corporate that's think interesting I rates The customers there's And way base expect opposed with what to the a we not obviously exists we everything to we've SMBs small an it's -- cancel think, rate, the very measured converge? we which point actually the is

not the I'm stable of we cancel the converge what expect since the quarters first discounted of in rate. them a month. because to last SoHo new a ever over XX X we now elevation in first do introduced And with we sure very you've discounted it range points basis seen month an be And has about tight

corporate, on the larger the churn end negligible churn to of, the keep maintain that offset basis elevated to stop higher adds account will that program, come in we a we'd the but that into program by the yes, most or So to as benefit down. XXX,XXX come the lower account But thinking some churn if program we expect will at strategic yes, and which more at year, we're has were about that long almost XXX,XXX to level. as of a cancer gross rate relative which

don't I'm sure expect So converge this to -- certainly, not them year. we

look be to years to convergence work out. there X at enough might done a point haven't We X whether

e-mail is as continue would question coming build a beyond we cash, we agree the with look 'XX, there's And final from presumption to out we'll then that.

of what the free flow, the In it? terms intended and business dynamics uses of the cash the for are

to in cash that As repayment to now to get that of to I noted and $XX million $XX debt to million. my under probably go EBITDA. would debt 'XX, that million Xx to we our in of we much total prepared million there's beyond to expect $XX have need October more Obviously, order number between $XX remarks,

will that of trapped. jurisdictionally Some be

that activities. of call allocated not for So would primarily what readily to debt all what for need stock we we service I going the But say forward beyond U.S. be it available cash repurchases. would is

our put a out program after This that authorization. is notice years. was about the another today place which We're original amount which spin. X that under the board is stock The third in program, expired. It repurchase keeping was bought shortly extended extend that the that's $XX remaining, of stock board has did the X-year about X/X We You'll million. the anniversary.

that opportunity. valuation, an stock So certainly, on based would be the

M&A I I of start start play. then to further done, as bring to think, we've And our we march and out, an structure to we into date, think obviously debt rationalizing excellent job

space, obviously completely matter, at fax-centric. buying at look across different And some terms we opportunities flavors, borrowings There start we'll to of -- only I to some for those in in think bridge things that whatever there's our in we we so that to piece, potential are attention, at occur allocating to part, not interoperable spot many get to more turn with some while and but can wouldn't made, in cash we're done to returns that progress what are that our start more But given our future say both. some M&A. there's our least the increasingly price in is, are add business. flow are the the stock that that debt we've can the are that also And

live the to questions. back Okay,

Operator

have a coming question We did from Matthew Mesirow. Sandschafer from

Matthew Sandschafer

of VA potentially have space well any growth expect do And the any in and to the as HHS VA much the of you or derived corporate disruption in to on particular, for VA the effect bureaucracy currently going is rollout health XXXX the have the federal you? as How larger care from in the specifically? business on

R. Turicchi

booked what's contract $X the done year that assuming about be higher million a level the year. already of We're VA exiting to than anticipate think, from obviously answer mentioned rate Johnny based amount. little we a million the that and a last on Short to run rollout, 'XX that, over as contribution the date, we that Yes. impacted. would $X.X I at We're did don't revenues on been this VA

of caveats. day, that charge exist. have threats got you There's new various departments. to usual in Every people Obviously, may executive there's not new departments There's the orders. various

our well what will be acquirer we of rollout our partner what unimpeded. that. You the who now within both we continue with conversations, see is is as all VA, in Accenture that know But the would who Cognosante as the people see

Matthew Sandschafer

see across impact Do the space any potential overall? care you health

R. Turicchi

No.

Operator

to from remarks. for Scott questions I'll line. the call back other no now the closing Turicchi were hand there And

R. Turicchi

Paul. Thank Great. you,

XXXX first We appreciate joining review us for a all our into look XXXX. of you today and

have certainly our mentioned but the and as amount actual and ultimately results, the 'XX Qs evolves financial opening notes. refinancing I and quarterly the calls, terms size in provide obviously, remarks, we'll the not for we X, of only update as X thinking of of a also As solidifies on status X, you, and my in our timing

my necessary have remarks, debt that we is will that get upon point, to of proceeds which this whatever the bank like notes. will route, left it in upon looks in place mentioned the I draw line that As go we'll line such can repay maturity, at X% a we a

have are we're And I update available conferences, Thank questions have give feel to our be discuss you us. of if we look and next you There is now leverage May call, that. out. next as results, we'll releases forward to conferences. free well conferences a earnings press or in there now as Between whatever any of you. of the a equity to and as on then, between e-mail course, at QX combination debt variety will So call

Operator

does conclude today's you. conference. Thank This

at Thank disconnect participation. time, your your this You for wonderful have lines may a and you day.

Consensus Cloud Solutions (CCSI) 19 Feb 252024 Q4 Earnings call transcript