What changed in this filing

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Item 1. Financial Statements

2024-11-08 compared with 2024-08-09 · 118 added, 108 removed, 524 unchanged (30% of the section changed)

4 unchanged sentences

(Unaudited, in thousands except share and per share data)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Cash and cash equivalents $ 54,598 $ 88,715

27 unchanged sentences

Authorized 120,000,000 ;

total issued is 20,368,194 and 20,273,686 shares and total outstanding is 19,296,570 and 19,245,024 shares as of June 30, 2024 and December 31, 2023, respectively

Treasury stock, at cost ( 1,071,624 and 1,028,662 shares as of June 30, 2024 and December 31, 2023, respectively)

total issued is 20,375,622 and 20,273,686 shares and total outstanding is 19,303,998 and 19,245,024 shares as of September 30, 2024 and December 31, 2023, respectively

Treasury stock, at cost ( 1,071,624 and 1,028,662 shares as of September 30, 2024 and December 31, 2023, respectively)

( 31,990 ) ( 31,282 )

9 unchanged sentences

(Unaudited, in thousands except share and per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

14 unchanged sentences

Interest income 659 1,519 2,175 2,184

Other income (expense), net 663 568 4,565 ( 280 )

Other (expense) income, net ( 2,069 ) 3,725 2,496 3,445

Income before income taxes 27,255 31,544 96,028 79,385

18 unchanged sentences

(Unaudited, in thousands)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Net income $ 21,120 $ 24,007 $ 71,364 $ 60,523

Other comprehensive (loss) gain:

Other comprehensive gain (loss):

Foreign currency translation adjustment 6,091 ( 6,238 ) ( 1,560 ) ( 4,131 )

Other comprehensive (loss) gain

( 1,337 ) ( 971 ) ( 7,651 ) 2,107

Other comprehensive gain (loss) 6,091 ( 6,238 ) ( 1,560 ) ( 4,131 )

Comprehensive income $ 27,211 $ 17,769 $ 69,804 $ 56,392

4 unchanged sentences

(Unaudited, in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

30 unchanged sentences

Repurchase of debt

( 116,162 ) —

Net cash used in financing activities ( 116,809 ) ( 14,090 )

10 unchanged sentences

paid-in Treasury stock Accumulated Accumulated other comprehensive Total

Shares Amount capital Shares Amount deficit

Balance, April 1, 2023 20,118,967 $ 201 $ 26,859 ( 459,306 ) $ ( 16,791 ) $ ( 234,950 ) $ ( 16,030 ) $ ( 240,711 )

Shares Amount capital Shares Amount deficit loss deficit

Balance, July 1, 2023 20,176,291 $ 202 $ 32,182 ( 527,668 ) $ ( 18,937 ) $ ( 213,892 ) $ ( 17,001 ) $ ( 217,446 )

Net income — — — — — 24,007 — 24,007

Other comprehensive loss — — — — — — ( 971 ) ( 971 )

Foreign currency translation adjustment

— — — — — — ( 6,238 ) ( 6,238 )

Vested restricted stock 8,383 — — — — — — —

2 unchanged sentences

Share-based compensation — — 4,250 — — — — 4,250

Issuance of shares under ESPP 29,582 — 871 — — — — 871

Balance, June 30, 2023 20,176,291 $ 202 $ 32,182 ( 527,668 ) $ ( 18,937 ) $ ( 213,892 ) $ ( 17,001 ) $ ( 217,446 )

Balance, September 30, 2023 20,182,262 $ 202 $ 36,362 ( 680,067 ) $ ( 22,728 ) $ ( 189,885 ) $ ( 23,239 ) $ ( 199,288 )

Common stock Additional

paid-in Treasury stock Accumulated Accumulated other comprehensive Total

Shares Amount capital Shares Amount deficit

Balance, April 1, 2024 20,291,793 $ 203 $ 46,201 ( 1,071,624 ) $ ( 31,994 ) $ ( 146,743 ) $ ( 19,491 ) $ ( 151,824 )

Shares Amount capital Shares Amount deficit loss deficit

Balance, July 1, 2024 20,368,194 $ 204 $ 51,043 ( 1,071,624 ) $ ( 31,990 ) $ ( 122,869 ) $ ( 20,828 ) $ ( 124,440 )

Net income — — — — — 21,120 — 21,120

Other comprehensive loss — — — — — — ( 1,337 ) ( 1,337 )

Foreign currency translation adjustment

— — — — — — 6,091 6,091

Vested restricted stock 10,917 — — — — — — —

Shares withheld related to net share settlement ( 3,489 ) — ( 71 ) — — — — ( 71 )

Repurchase of common stock — — — — 4 — — 4

Share-based compensation — — 4,111 — — — — 4,111

Issuance of shares under ESPP 45,420 — 747 — — — — 747

Balance, June 30, 2024 20,368,194 $ 204 $ 51,043 ( 1,071,624 ) $ ( 31,990 ) $ ( 122,869 ) $ ( 20,828 ) $ ( 124,440 )

Balance, September 30, 2024 20,375,622 $ 204 $ 55,083 ( 1,071,624 ) $ ( 31,990 ) $ ( 101,749 ) $ ( 14,737 ) $ ( 93,189 )

CONSENSUS CLOUD SOLUTIONS, INC.

4 unchanged sentences

paid-in Treasury stock Accumulated Accumulated other comprehensive Total

Shares Amount capital Shares Amount deficit

Shares Amount capital Shares Amount deficit loss deficit

Balance, January 1, 2023

8 unchanged sentences

Issuance of shares under ESPP 29,582 — 871 — — — — 871

Balance, June 30, 2023 20,176,291 $ 202 $ 32,182 ( 527,668 ) $ ( 18,937 ) $ ( 213,892 ) $ ( 17,001 ) $ ( 217,446 )

Balance, September 30, 2023

20,182,262 $ 202 $ 36,362 ( 680,067 ) $ ( 22,728 ) $ ( 189,885 ) $ ( 23,239 ) $ ( 199,288 )

Common stock Additional

paid-in Treasury stock Accumulated Accumulated other comprehensive Total

Shares Amount capital Shares Amount deficit

Shares Amount capital Shares Amount deficit loss deficit

Balance, January 1, 2024

8 unchanged sentences

Issuance of shares under ESPP 45,420 — 747 — — — — 747

Balance, June 30, 2024 20,368,194 $ 204 $ 51,043 ( 1,071,624 ) $ ( 31,990 ) $ ( 122,869 ) $ ( 20,828 ) $ ( 124,440 )

Balance, September 30, 2024

20,375,622 $ 204 $ 55,083 ( 1,071,624 ) $ ( 31,990 ) $ ( 101,749 ) $ ( 14,737 ) $ ( 93,189 )

See Notes to Condensed Consolidated Financial Statements

13 unchanged sentences

Ziff Davis retained a 19.9 % interest in Consensus following the Separation.

Subsequently Ziff Davis has sold, or otherwise disposed of, a portion of its Consensus shares, reducing its beneficial ownership in the Company to under 10 % as of June 30, 2024 and December 31, 2023 (see Note 15 - Related Party Transactions).

Subsequently, Ziff Davis has sold, or otherwise disposed of, its Consensus shares, reducing its beneficial ownership in the Company to zero as of September 30, 2024 (see Note 15 - Related Party Transactions).

Principles of Consolidation

34 unchanged sentences

However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective.

The Company is evaluating the potential impact of this guidance on its condensed consolidated financial statements.

The Company is evaluating the potential impact of this guidance on its consolidated financial statements.

In December 2023, the FASB issued ASU No.

6 unchanged sentences

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

The Company is evaluating the potential impact of this guidance on its condensed consolidated financial statements.

The Company is evaluating the potential impact of this guidance on its consolidated financial statements.

In December 2023, the FASB issued ASU No.

5 unchanged sentences

Early adoption is permitted.

The Company is evaluating the potential impact of this guidance on its condensed consolidated financial statements.

The Company’s revenues substantially consist of monthly recurring subscription and usage-based fees from customers accessing the Company’s cloud-based subscription (the “Cloud Fax Services”), a significant portion of which are paid in advance by credit card.

The Company defers the portions of monthly, quarterly, semi-annually and annually recurring subscription and usage-based fees collected in advance of the satisfaction of performance obligations and recognizes them in the period earned.

The Cloud Fax Services allow customers to access the Company’s software without taking possession.

The Company is evaluating the potential impact of this guidance on its consolidated financial statements.

The Company earns revenue from contracts with customers, primarily through the provision of cloud-based communication and digital signature solutions that allow customers to access the Company’s software without taking possession.

The contracts include both recurring subscription and usage-based fees, and the total transaction price is allocated to

performance obligations in each contract as appropriate.

Revenue for cloud-based services is recognized over time in the period earned.

The contracts may be terminated early.

Fees collected in advance are non-refundable, and they are deferred and recognized in revenue when the related performance obligations are satisfied.

Standard Corporate contracts billed monthly include a termination charge equal to the minimum fees payable through the last day of the contract term.

Revenues from external customers classified by revenue source are as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

7 unchanged sentences

Total $ 87,753 $ 90,562 $ 263,399 $ 274,808

The Company has recorded $ 4.4 million and $ 4.5 million of revenue for the three months ended June 30, 2024 and 2023, respectively, and $ 14.5 million and $ 16.0 million of revenue for the six months ended June 30, 2024 and 2023, respectively, that was previously included in the deferred revenue balance as of the beginning of each respective year.

The Company has recorded $ 4.1 million and $ 4.2 million of revenue for the three months ended September 30, 2024 and 2023, respectively, and $ 18.6 million and $ 20.2 million of revenue for the nine months ended September 30, 2024 and 2023, respectively, that was previously included in the deferred revenue balance as of the beginning of each respective year.

Performance Obligations

7 unchanged sentences

Determining whether products and services are considered distinct performance obligations may require significant judgment.

When a cloud-based service includes both on-premises software licenses and cloud-based services, judgment is required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the cloud-based service and recognized over time.

When a contract includes both on-premises software licenses and cloud-based services, judgment is required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the cloud-based service and recognized over time.

Judgment is also required to determine the standalone selling price for each distinct performance obligation when there are multiple performance obligations.

2 unchanged sentences

Performance Obligations Satisfied Over Time

The Company’s business consists primarily of performance obligations that are satisfied over time.

This has been determined based on the fact that the nature of services offered are subscription based where the customer simultaneously

receives and consumes the benefit of the services provided regardless of whether the customer uses the services or not.

Depending on the individual contracts with the customer, revenue for these services is recognized over the contract period when faxing capabilities are provided.

The Company’s business consists primarily of performance obligations that are satisfied over time based on the fact that the nature of the cloud-based services offered is subscription based where the customer simultaneously receives and consumes the benefit of the services provided regardless of whether the customer uses the services or not.

Depending on the individual contracts with the customer, revenue for these services is recognized over the contract period when services are provided.

The Company expects to recognize revenue for Corporate contracts typically in a range from month-to-month up to 36 months and recognize revenue for SoHo contracts in a range from month-to-month up to one year.

Revenue from usage-

based fees is recognized in proportion to the amount for which the Company has the right to invoice for services performed, which corresponds with the utilization of the services by the customer.

The Company has concluded that the best measure of progress toward the complete satisfaction of the performance obligations over time is a time-based measure.

24 unchanged sentences

The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.

Cash and cash equivalents include money market funds of $ 38.3 million and $ 72.1 million as of June 30, 2024 and December 31, 2023, respectively, which are valued based on Level 1 inputs consisting of quoted prices in active markets.

Cash and cash equivalents include money market funds of $ 43.1 million and $ 72.1 million as of September 30, 2024 and December 31, 2023, respectively, which are valued based on Level 1 inputs consisting of quoted prices in active markets.

The carrying value of the Company’s cash and cash equivalents approximates fair value.

5 unchanged sentences

Property and Equipment

Property and equipment, stated at cost, as of June 30, 2024 and December 31, 2023 consisted of the following (in thousands):

June 30, 2024 December 31, 2023

Property and equipment, stated at cost, as of September 30, 2024 and December 31, 2023 consisted of the following (in thousands):

September 30, 2024 December 31, 2023

Internal-use software development costs

9 unchanged sentences

Total property and equipment, net $ 96,342 $ 81,196

Depreciation and amortization expense was $ 4.2 million and $ 3.2 million for the three months ended June 30, 2024 and 2023, respectively, and $ 8.1 million and $ 6.5 million for the six months ended June 30, 2024 and 2023, respectively.

No impairment was recorded in the three and six months ended June 30, 2024 and 2023.

Depreciation and amortization expense was $ 4.1 million and $ 3.3 million for the three months ended September 30, 2024 and 2023, respectively, and $ 12.2 million and $ 9.8 million for the nine months ended September 30, 2024 and 2023, respectively.

No impairment was recorded in the three and nine months ended September 30, 2024 and 2023.

Goodwill and Intangible Assets

The changes in carrying amounts of goodwill for the six months ended June 30, 2024 are as follows (in thousands):

The changes in carrying amounts of goodwill for the nine months ended September 30, 2024 are as follows (in thousands):

Balance as of January 1, 2024

Foreign exchange translation 632

Balance as of June 30, 2024 $ 346,740

As of June 30, 2024 the Company’s goodwill had no accumulated impairment.

Balance as of September 30, 2024 $ 349,454

As of September 30, 2024 the Company’s goodwill had no accumulated impairment.

Intangible Assets with Indefinite Lives:

Intangible assets are summarized as of June 30, 2024 and December 31, 2023 as follows (in thousands):

June 30, 2024 December 31, 2023

Intangible assets are summarized as of September 30, 2024 and December 31, 2023 as follows (in thousands):

September 30, 2024 December 31, 2023

Trade names $ 27,375 $ 27,367

2 unchanged sentences

Intangible Assets Subject to Amortization:

As of June 30, 2024, intangible assets subject to amortization are summarized as follows (in thousands):

As of September 30, 2024, intangible assets subject to amortization are summarized as follows (in thousands):

Weighted-Average Remaining

21 unchanged sentences

This pattern results in a substantial majority of the amortization expense being recognized in the first four to five years , which may not correlate to the overall life of the asset.

Expected amortization expenses for intangible assets subject to amortization at June 30, 2024 are as follows (in thousands):

Expected amortization expenses for intangible assets subject to amortization at September 30, 2024 are as follows (in thousands):

2024 (remainder)

1 unchanged sentence

Total $ 10,781

Amortization expense was $ 0.9 million and $ 1.1 million for the three months ended June 30, 2024 and 2023, respectively, and $ 1.8 million and $ 2.2 million for the six months ended June 30, 2024 and 2023, respectively.

Amortization expense was $ 1.0 million and $ 1.0 million for the three months ended September 30, 2024 and 2023, respectively, and $ 2.8 million and $ 3.2 million for the nine months ended September 30, 2024 and 2023, respectively.

Long-Term Debt

Long-term debt as of June 30, 2024 and December 31, 2023 consists of the following (in thousands):

June 30, 2024 December 31, 2023

Long-term debt as of September 30, 2024 and December 31, 2023 consists of the following (in thousands):

September 30, 2024 December 31, 2023

2026 Senior Notes $ 255,532 $ 280,014

8 unchanged sentences

$ 603,124 $ 725,405

As of June 30, 2024 and December 31, 2023, the estimated fair value of the 2026 Senior Notes was approximately $ 251.3 million and $ 266.0 million, respectively, and was based on quoted market prices or dealer quotes for the 2026 Senior Notes which are Level 1 inputs in the fair value hierarchy.

As of June 30, 2024 and December 31, 2023, the estimated fair value of the 2028 Senior Notes was approximately $ 362.9 million and $ 422.5 million, respectively, and was based on quoted market prices or dealer quotes for the 2028 Senior Notes which are Level 1 inputs in the fair value hierarchy.

At June 30, 2024, future contractual principal payments for debt were as follows (in thousands):

As of September 30, 2024 and December 31, 2023, the estimated fair value of the 2026 Senior Notes was approximately $ 254.9 million and $ 266.0 million, respectively, and was based on quoted market prices or dealer quotes for the 2026 Senior Notes which are Level 1 inputs in the fair value hierarchy.

As of September 30, 2024 and December 31, 2023, the estimated fair value of the 2028 Senior Notes was approximately $ 361.8 million and $ 422.5 million, respectively, and was based on quoted market prices or dealer quotes for the 2028 Senior Notes which are Level 1 inputs in the fair value hierarchy.

At September 30, 2024, future contractual principal payments for debt were as follows (in thousands):

2024 (1) (remainder)

Total $ 618,228

The Company capitalized $ 0.7 million and $ 0.5 million of interest expense within property and equipment, net on the Company’s Condensed Consolidated Balance Sheets during the three months ended June 30, 2024 and 2023, respectively, and $ 1.4 million and $ 1.0 million during the six months ended June 30, 2024 and 2023, respectively.

(1) The Company has reclassified $ 6.5 million and $ 2.6 million from the 2026 and 2028 periods, respectively, into the 2024 period as debt repurchases were made subsequent to September 30, 2024 but prior to the filing of these financial statements (see Note 16 - Subsequent Event).

The Company capitalized $ 0.7 million and $ 0.7 million of interest expense within property and equipment, net on the Company’s Condensed Consolidated Balance Sheets during the three months ended September 30, 2024 and 2023, respectively, and $ 2.1 million and $ 1.8 million during the nine months ended September 30, 2024 and 2023, respectively.

2026 Senior Notes

On October 7, 2021, Consensus issued $ 305.0 million of senior notes due in 2026 (the “2026 Senior Notes”), receiving net proceeds of $ 301.2 million, after deducting the initial purchasers’ discounts, commissions and offering expenses.

The 2026 Senior Notes are presented as current portion of long-term debt and long-term debt, net of current portion, net of deferred issuance costs, on the Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023.

The 2026 Senior Notes bear interest at a rate of 6.0 % per annum and mature on October 15, 2026.

7 unchanged sentences

Restricted payments are applicable only if Consensus Cloud Solutions, Inc.

and subsidiaries designated as restricted subsidiaries has a net leverage ratio of greater than 3.0 to 1.0.

50.0 % of EBITDA for the most recently ended four fiscal quarter period ended immediately prior to such date for which internal financial statements are available.

The Company is in compliance with its debt covenants as of June 30, 2024.

and subsidiaries designated as restricted subsidiaries has a net leverage ratio

of greater than 3.0 to 1.0.

In addition, if such net leverage ratio is in excess of 3.0 to 1.0, the restriction on restricted payments is subject to various exceptions, including the total aggregate amount not to exceed the greater of (A) $ 100.0 million and (B) 50.0 % of EBITDA for the most recently ended four fiscal quarter period ended immediately prior to such date for which internal financial statements are available.

The Company is in compliance with its debt covenants as of September 30, 2024.

2028 Senior Notes

1 unchanged sentence

Ziff Davis then exchanged the 2028 Senior Notes with lenders under its credit agreement (or their affiliates) in exchange for extinguishment of a similar amount of indebtedness under such credit agreement for a total amount of $ 483.8 million, after deducting the initial purchasers’ discounts, commissions and offering expenses.

The 2028 Senior Notes are presented as current portion of long-term debt and long-term debt, net of current portion, net of deferred issuance costs, on the Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023.

The 2028 Senior Notes bear interest at a rate of 6.5 % per annum and mature on October 15, 2028.

9 unchanged sentences

The Company is in compliance with its debt covenants as of June 30, 2024.

The Company is in compliance with its debt covenants as of September 30, 2024.

Credit Agreement

2 unchanged sentences

The final maturity of the Credit Facility will occur on March 4, 2027.

As of June 30, 2024, no amount had been drawn down on the Credit Facility.

As of September 30, 2024, no amount had been drawn down on the Credit Facility.

The Credit Facility is guaranteed by each wholly-owned material domestic subsidiary of Consensus, and secured by substantially all assets of Consensus and the guarantors.

9 unchanged sentences

Unsecured indebtedness may be incurred, assets may be disposed of, restricted payments may be made and investments may be made, in each case subject to compliance with the Company’s financial covenants.

The Company is in compliance with its covenants as of June 30, 2024.

The Company is in compliance with its covenants as of September 30, 2024.

Debt Repurchase Program

2 unchanged sentences

The timing and amounts of purchases will be determined by the Company, depending on market conditions and other factors it deems relevant.

During the three and six months ended June 30, 2024, the Company retired $ 29.7 million and $ 93.1 million, respectively, in principal of its senior notes.

During the three and six months ended June 30, 2023, the Company retired zero in principal of its senior notes.

As of June 30, 2024 the Company had retired an aggregate of $ 155.7 million in principal of its senior notes under this program.

In connection with the Debt Repurchase Program, the Company reclassified $ 16.6 million and $ 8.6 million of long-term debt, net of current portion to the current portion of long-term debt as of June 30, 2024 and December 31, 2023, respectively, as the Company had the intention and cash on hand to extinguish the respective amounts of debt within twelve months of the end of the reporting periods.

For the three and six months ended June 30, 2024, a net gain on debt extinguishment of $ 1.7 million and $ 6.6 million, respectively, related to the Debt Repurchase Program is included in interest expense on the Condensed Consolidated Statements of Income.

For the three and six months ended June 30, 2023, no net gain on debt extinguishment was recorded.

During the three and nine months ended September 30, 2024, the Company retired $ 31.1 million and $ 124.2 million, respectively, in principal of its senior notes.

Refer to Note 16 - Subsequent Event for debt repurchases made subsequent to September 30, 2024 but prior to the filing of these financial statements.

During the three and nine months ended September 30, 2023, the Company retired zero in principal of its senior notes.

As of September 30, 2024, the Company had

retired an aggregate of $ 186.8 million in principal of its senior notes under this program.

In connection with the Debt Repurchase Program, the Company reclassified $ 9.4 million and $ 8.6 million of long-term debt, net of current portion to the current portion of long-term debt as of September 30, 2024 and December 31, 2023, respectively, as the Company had the intention and cash on hand to extinguish the respective amounts of debt within twelve months of the end of the reporting periods.

For the three and nine months ended September 30, 2024, a net gain on debt extinguishment of $ 0.1 million and $ 6.7 million, respectively, related to the Debt Repurchase Program is included in interest expense on the Condensed Consolidated Statements of Income.

For the three and nine months ended September 30, 2023, no net gain on debt extinguishment was recorded.

Commitments and Contingencies

11 unchanged sentences

Taxing authorities may successfully assert that the Company should have collected, or in the future should collect sales and use, telecommunications or similar taxes, and could be subject to liability with respect to past or future tax, which could adversely affect the Company’s operating results.

The Company recorded a sales tax expense within general and administrative expenses in the Condensed Consolidated Statements of Income of $ 0.4 million and $ 0.5 million for the three months ended June 30, 2024 and 2023, respectively, and $ 1.0 million and $ 1.1 million for the six months ended June 30, 2024 and 2023, respectively.

The Company recorded a sales tax expense within general and administrative expenses in the Condensed Consolidated Statements of Income of $ 0.1 million and $ 0.8 million for the three months ended September 30, 2024 and 2023, respectively, and $ 1.2 million and $ 2.0 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company will continue to review and monitor the impact of sales tax rules in order to mitigate any associated risks on its business.

The sales tax liability within accounts payable and accrued expenses on the Company’s Condensed Consolidated Balance Sheets was $ 6.0 million and $ 7.3 million as of June 30, 2024 and December 31, 2023, respectively.

The sales tax liability within accounts payable and accrued expenses on the Company’s Condensed Consolidated Balance Sheets was $ 5.9 million and $ 7.3 million as of September 30, 2024 and December 31, 2023, respectively.

Other Balance Sheet Account Details

1 unchanged sentence

Prepaid expenses and other current assets consisted of the following (in thousands):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Prepaid insurance $ 97 $ 939

6 unchanged sentences

Accounts payable and accrued expenses consisted of the following (in thousands):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Accounts payable $ 9,518 $ 9,858

8 unchanged sentences

Changes in the geographical mix, permanent differences or the estimated level of annual pre-tax income can affect the effective tax rate.

The Company’s effective tax rate for the three months ended June 30, 2024 and 2023 was 26.5 % and 22.7 %, respectively.

The Company’s effective tax rate for the six months ended June 30, 2024 and 2023 was 26.9 % and 23.7 %, respectively.

The Company’s rate increase during the three and six months ended June 30, 2024 over the prior periods is primarily due to the change in the geographical mix of income, an increase in the valuation allowance and an increase in state taxes on foreign earnings not permanently reinvested.

The Company’s effective tax rates for the three and six months ended June 30, 2024 and 2023 differed from the U.S.

The Company’s effective tax rate for the three months ended September 30, 2024 and 2023 was 22.5 % and 23.9 %, respectively.

The Company’s effective tax rate for the nine months ended September 30, 2024 and 2023 was 25.7 % and 23.8 %, respectively.

The decrease in the Company’s effective income tax rate for the three months ended September 30, 2024 was primarily due to the change in the geographical mix of income.

The increase in the Company’s effective income tax rate for the nine months ended September 30, 2024 was primarily attributable to the change in the geographical mix of income, an increase in the valuation allowance and an increase in state taxes on foreign earnings not permanently reinvested.

The Company’s effective tax rates for the three and nine months ended September 30, 2024 and 2023 differed from the U.S.

federal statutory rates of 21% primarily as a result of state income taxes, nondeductible expenses for tax purposes, foreign rate differential, research and development credits and uncertain tax positions.

As of June 30, 2024 and December 31, 2023, the Company had $ 11.2 million and $ 9.7 million, respectively, in liabilities for uncertain income tax positions, including interest and penalties.

As of September 30, 2024 and December 31, 2023, the Company had $ 11.9 million and $ 9.7 million, respectively, in liabilities for uncertain income tax positions, including interest and penalties.

Accrued interest and penalties related to unrecognized tax benefits are recognized in income tax expense on the Company’s Condensed Consolidated Statements of Income.

1 unchanged sentence

The Company is required to file tax returns in the United States, Ireland, Canada, Japan, Netherlands, France and Hong Kong.

As of June 30, 2024, the Company was not under audit in any jurisdiction that it operates within.

As of September 30, 2024, the Company was not under audit in any jurisdiction that it operates within.

In respect to these international subsidiaries, tax returns for the years from 2017 onwards are still open to examination by tax authorities.

5 unchanged sentences

The Company entered into Rule 10b-18 and Rule 10b5-1 trading plans under this program.

There were no shares repurchased during the three months ended June 30, 2024 under this program.

During the three months ended June 30, 2023, the Company repurchased 68,362 shares under this program at an aggregate cost of $ 2.1 million, inclusive of excise tax of $ 0.1 million.

During the six months ended June 30, 2024 and 2023, the Company repurchased 42,962 and 338,554 shares, respectively, at an aggregate cost of $ 0.7 million and $ 11.3 million, respectively, inclusive of excise tax of zero and $ 0.1 million, respectively.

Cumulatively as of June 30, 2024, 1,071,624 shares have been repurchased under this program at an aggregate cost of $ 32.0 million (inclusive of excise tax of $ 0.2 million).

There were no shares repurchased during the three months ended September 30, 2024 under this program.

During the three months ended September 30, 2023, the Company repurchased 152,399 shares under this program at an aggregate cost of $ 3.8 million, inclusive of excise tax of $ 0.1 million.

During the nine months ended September 30, 2024 and 2023, the Company repurchased 42,962 and 490,953 shares, respectively, at an aggregate cost of $ 0.7 million and $ 15.1 million, respectively, inclusive of excise tax of zero and $ 0.1 million, respectively.

Cumulatively as of September 30, 2024, 1,071,624 shares have been repurchased under this program at an aggregate cost of $ 32.0 million (inclusive of excise tax of $ 0.2 million).

The excise tax is assessed at 1 % of the fair market value of net stock repurchases after December 31, 2022.

4 unchanged sentences

These shares do not count against the authorized capacity under the Company’s share repurchase program described above.

During the three months ended June 30, 2024 and 2023, the Company withheld shares on its vested restricted stock units and restricted stock awards relating to its share-based compensation plans of 21,567 shares and 21,538 shares, respectively.

During the six months ended June 30, 2024 and 2023, the Company withheld shares on its vested restricted stock units and restricted stock awards relating to its share-based compensation plans of 36,907 shares and 32,956 shares, respectively.

During the three months ended September 30, 2024 and 2023, the Company withheld shares on its vested restricted stock units and restricted stock awards relating to its share-based compensation plans of 3,489 shares and 2,412 shares, respectively.

During the nine months ended September 30, 2024 and 2023, the Company withheld shares on its vested restricted stock units and restricted stock awards relating to its share-based compensation plans of 40,396 shares and 35,368 shares, respectively.

The Company currently does not issue dividends to Consensus shareholders.

6 unchanged sentences

Under the 2021 Plan, 4,000,000 shares of common stock are authorized to be granted.

As of June 30, 2024, 2,155,317 shares were available to be used under the 2021 Plan.

As of September 30, 2024, 2,147,611 shares were available to be used under the 2021 Plan.

Restricted Stock and Restricted Stock Units

7 unchanged sentences

Stock-based compensation expense related to an award with a market condition is recognized over the requisite service period using the graded-vesting method, unless the market condition has been met and requisite service period has been completed, then the expense will be accelerated and recognized in the period that the market condition and service period requirement have been met.

During the six months ended June 30, 2024 and 2023, the Company awarded zero market-based restricted stock awards and restricted stock units.

Restricted stock activity for the six months ended June 30, 2024 is set forth below:

Number of Shares

Weighted-Average

During the nine months ended September 30, 2024 and 2023, the Company awarded zero market-based restricted stock awards and restricted stock units.

Restricted stock activity for the nine months ended September 30, 2024 is set forth below:

Number of Shares Weighted-Average

Nonvested at January 1, 2024 15,679 $ 39.24

1 unchanged sentence

Canceled ( 6,454 ) 41.07

Nonvested at June 30, 2024

As of June 30, 2024, the Company had no remaining unrecognized share-based compensation cost related to its restricted stock awards, as they have been fully expensed as of the end of the period.

Restricted stock unit activity for the six months ended June 30, 2024 is set forth below:

Nonvested at September 30, 2024

As of September 30, 2024, the Company had no remaining unrecognized share-based compensation cost related to its restricted stock awards, as they have been fully expensed as of the end of the period.

Restricted stock unit activity for the nine months ended September 30, 2024 is set forth below:

Shares Weighted-Average

4 unchanged sentences

Canceled ( 54,344 ) 40.04

Outstanding at June 30, 2024

Outstanding at September 30, 2024

1,503,914 $ 37.71

As of June 30, 2024, the Company had unrecognized share-based compensation cost related to its restricted stock units of $ 26.4 million, which is expected to be recognized over a weighted-average period of 2.4 years.

The Company capitalized $ 0.7 million and $ 0.5 million of share-based compensation cost during the three months ended June 30, 2024 and 2023, respectively, and $ 1.5 million and $ 1.0 million during the six months ended June 30, 2024 and 2023, respectively, within property and equipment, net on its Condensed Consolidated Balance Sheets.

As of September 30, 2024, the Company had unrecognized share-based compensation cost related to its restricted stock units of $ 22.2 million, which is expected to be recognized over a weighted-average period of 2.3 years.

The Company capitalized $ 0.7 million and $ 0.5 million of share-based compensation cost during the three months ended September 30, 2024 and 2023, respectively, and $ 2.2 million and $ 1.5 million during the nine months ended September 30, 2024 and 2023, respectively, within property and equipment, net on its Condensed Consolidated Balance Sheets.

Earnings Per Share

The components of basic and diluted earnings per share are as follows (in thousands, except share and per share data):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

14 unchanged sentences

(1) Represents unvested share-based payment awards that contain certain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid).

For the three months ended June 30, 2024 and 2023, there were 1,405,780 and 747,416 anti-dilutive shares, respectively, that were excluded from the earnings per share calculation.

For the six months ended June 30, 2024 and 2023, there were 1,397,512 and 655,495 anti-dilutive shares, respectively, that were excluded from the earnings per share calculation.

For the three months ended September 30, 2024 and 2023, there were 1,005,413 and 836,655 anti-dilutive shares, respectively, that were excluded from the earnings per share calculation.

For the nine months ended September 30, 2024 and 2023, there were 1,238,732 and 704,837 anti-dilutive shares, respectively, that were excluded from the earnings per share calculation.

Segment Information

7 unchanged sentences

Such information attributes revenues based on markets where revenues are reported (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

6 unchanged sentences

The following presents the Company’s long-lived assets by geographic region, which consist of property and equipment, net and operating lease right-of-use assets (in thousands):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Long-lived assets:

9 unchanged sentences

The TSA terminated on October 7, 2023.

The Company paid approximately $ 0.1 million and $ 0.4 million during the three months ended June 30, 2024 and 2023, respectively, and $ 0.2 million and $ 0.6 million, during the six months ended June 30, 2024 and 2023, respectively, to Ziff Davis for costs primarily associated with the transition services agreement.

Subsequent to the disposition of the shares, Ziff Davis’ beneficial ownership in the Company was under 10 %, as of June 30, 2024 and December 31, 2023 (see Note 1 - Basis of Presentation).

Amounts due to Ziff Davis as of June 30, 2024 and December 31, 2023 were zero and $ 0.1 million, respectively.

The Company paid approximately $ 0.1 million and $ 0.1 million during the three months ended September 30, 2024 and 2023, respectively, and $ 0.3 million and $ 0.6 million, during the nine months ended September 30, 2024 and 2023, respectively, to Ziff Davis for costs primarily associated with the transition services agreement.

Subsequent to the disposition of the shares, Ziff Davis’ beneficial ownership in the Company was zero as of September 30, 2024 (see Note 1 - Basis of Presentation).

Amounts due to Ziff Davis as of September 30, 2024 and December 31, 2023 were zero and $ 0.1 million, respectively.

These amounts are recorded within accounts payable and accrued expenses on the Condensed Consolidated Balance Sheets.

Subsequent Event

In connection with the Company’s Debt Repurchase Program (see Note 7 - Long-Term Debt), the Company paid $ 9.2 million, which includes accrued interest, to repurchase $ 9.1 million in principal of its senior notes subsequent to the period ended September 30, 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements