What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-08 compared with 2024-11-08 · 130 added, 179 removed, 463 unchanged (40% of the section changed)

4 unchanged sentences

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Cash and cash equivalents $ 53,399 $ 33,545

27 unchanged sentences

Authorized 120,000,000 ;

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)

total issued is 20,628,133 and 20,609,725 shares and total outstanding is 19,540,937 and 19,524,000 shares as of March 31, 2025 and December 31, 2024, respectively

Treasury stock, at cost ( 1,087,196 and 1,085,725 shares as of March 31, 2025 and December 31, 2024, respectively)

( 32,347 ) ( 32,313 )

9 unchanged sentences

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

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

2024 2023 2024 2023

Three Months Ended March 31,

Revenues $ 87,138 $ 88,146

6 unchanged sentences

Research, development and engineering (1)

2,034 1,677 5,582 5,346

General and administrative (1)

25 unchanged sentences

(Unaudited, in thousands)

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

2024 2023 2024 2023

Three Months Ended March 31,

Net income $ 21,152 $ 26,370

8 unchanged sentences

(Unaudited, in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

7 unchanged sentences

Deferred income taxes, net 33 1,361

Gain on extinguishment of debt

Loss (gain) on extinguishment of debt

Changes in operating assets and liabilities:

16 unchanged sentences

Cash flows from financing activities:

Proceeds from the issuance of common stock under employee stock purchase plan 747 871

Repurchase of common stock ( 34 ) ( 712 )

15 unchanged sentences

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

Foreign currency translation adjustment

— — — — — — ( 6,238 ) ( 6,238 )

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

Shares withheld related to net share settlement ( 2,412 ) — ( 70 ) — — — — ( 70 )

Repurchase of common stock — — — ( 152,399 ) ( 3,791 ) — — ( 3,791 )

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

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 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

Foreign currency translation adjustment

— — — — — — 6,091 6,091

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

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

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

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.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited, in thousands except share amounts)

Common stock Additional

paid-in Treasury stock Accumulated Accumulated other comprehensive Total

Shares Amount capital Shares Amount deficit loss deficit

Balance, January 1, 2024

7 unchanged sentences

Share-based compensation — — 5,187 — — — — 5,187

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

Balance, September 30, 2023

Balance, March 31, 2024

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

11 unchanged sentences

Share-based compensation — — 4,958 — — — — 4,958

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

Balance, September 30, 2024

Balance, March 31, 2025

20,628,133 $ 206 $ 63,992 ( 1,087,196 ) $ ( 32,347 ) $ ( 62,526 ) $ ( 18,683 ) $ ( 49,358 )

5 unchanged sentences

Consensus Cloud Solutions, Inc., together with its subsidiaries (“Consensus Cloud Solutions”, “Consensus”, the “Company”, “our”, “us” or “we”), is a provider of secure information delivery services with a scalable Software-as-a-Service (“SaaS”) platform.

Consensus serves approximately 825 thousand customers of all sizes, from enterprises to individuals, across approximately 45 countries and multiple industry verticals including healthcare, government, financial services, law and education.

Consensus serves customers of all sizes, from enterprises to individuals, across the globe and multiple industry verticals including healthcare, government, financial services, law and education.

Beginning as an online fax company over two decades ago, Consensus has evolved into a global provider of enterprise secure communication solutions.

Our communication and digital signature solutions enable our customers to securely and cooperatively access, exchange and use information across organizational, regional and national boundaries.

Consensus Cloud Solutions, Inc.

On September 21, 2021, J2 Global, Inc., known since October 7, 2021 as Ziff Davis, Inc.

(“Ziff Davis” or the “Former Parent”) announced that its Board of Directors approved its separation of the Cloud Fax business (the “Separation” or the “Spin-Off”), into an independent publicly traded company, Consensus Cloud Solutions, Inc.

On October 7, 2021, the Separation was completed and the Former Parent transferred certain assets and liabilities associated with its Cloud Fax business to Consensus, including the equity interests in J2 Cloud Services, LLC (“J2 Cloud Services”), in exchange for approximately $ 259.1 million in cash, an asset related to $ 500.0 million in aggregate principal amount of the 6.5 % Senior Notes due in 2028, and the return of the assets and liabilities related to the non-fax business back to Ziff Davis.

On October 8, 2021, Consensus began trading on the Nasdaq Stock Market LLC (“Nasdaq”) under the stock symbol “CCSI”.

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

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).

Our communication, extraction and digital signature solutions enable our customers to securely and cooperatively access, exchange and use information across organizational, regional and national boundaries.

Principles of Consolidation

11 unchanged sentences

The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, including judgments about the reported amounts of revenue and expenses during the reporting period.

The Company believes that its most significant estimates are those related to revenue recognition, internal-use software development costs, share-based

compensation expense and income taxes.

The Company believes that its most significant estimates are those related to revenue recognition, internal-use software development costs, share-based compensation expense and income taxes.

On an ongoing basis, management evaluates its estimates based on historical experience and on various other factors that the Company believes to be reasonable under the circumstances.

3 unchanged sentences

Segment Reporting

Financial Accounting Standards Board (“FASB”) ASC Topic No.

280, Segment Reporting (“ASC 280”), establishes standards for the way that public business enterprises report information about operating segments in their annual consolidated financial statements and requires that those enterprises report selected information about operating segments in interim financial reports.

ASC 280 also establishes standards for related disclosures about products and services, geographic areas and major customers.

The Company’s business segment is based on the organization’s structure used by the chief operating decision maker, who is our chief executive officer (CEO), for making operating and investment decisions and for assessing performance.

The Company’s chief executive officer reviews financial information presented on a consolidated basis for purposes of assessing performance and making decisions on how to allocate resources.

The chief operating decision maker views the Company as one reportable segment known as Cloud Fax (see Note 14 - Segment Information).

FASB ASC Topic No.

280, Segment Reporting (“ASC 280”), establishes standards for the way that public business enterprises report information about reportable segments in their annual consolidated financial statements and requires that those entities report selected information about reportable segments in interim financial reports.

ASC 280 also establishes

standards for related disclosures about products and services, geographic areas and major customers.

The Company’s business segment is based on the organization’s structure used by the chief operating decision maker (“CODM”), who is our chief executive officer (“CEO”), for making operating and investment decisions and for assessing performance.

The Company’s CEO reviews financial information presented on a consolidated basis for purposes of assessing performance and making decisions on how to allocate resources.

The CEO uses consolidated profit or loss from operations before interest and income taxes to allocate resources predominantly in the annual budget and forecasting process.

The CEO considers budget-to-actual variances on a monthly basis when making decisions about allocating capital and personnel.

The CEO also uses consolidated profit or loss from operations before interest and income taxes and consolidated net income to assess performance.

Accordingly, the Company has determined that it operates one reportable segment known as Cloud Fax (see Note 14 - Segment Information).

The condensed consolidated financial statements and related disclosures reflect the segment operations of Cloud Fax.

Reclassifications

2 unchanged sentences

Recent Accounting Pronouncements

In October 2023, the FASB issued ASU No.

In October 2023, the FASB issued Accounting Standards Update (“ASU”) No.

2023-06, Disclosure Improvements:

5 unchanged sentences

In December 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The amendments are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements.

The amendments in this ASU are effective for all fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

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 consolidated financial statements.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

2 unchanged sentences

The amendments in this ASU should be applied on either a prospective or retrospective basis.

The amendments in this ASU are effective for fiscal periods beginning after December 15, 2024.

The amendments in this ASU are effective for annual periods beginning after December 15, 2024.

Early adoption is permitted.

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

In November 2024, the FASB issued ASU No.

2024-03, Income Statement:

Expense Disaggregation Disclosures.

The amendments in this ASU require disclosure of more information about certain expenses and costs and should be applied on either a prospective or retrospective basis.

The amendments in this ASU are effective for fiscal periods beginning after December 15, 2026.

Early adoption is permitted.

The Company is currently 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.

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.

3 unchanged sentences

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

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

2024 2023 2024 2023

Three Months Ended March 31,

Corporate $ 54,289 $ 51,390

Small office home office (“SoHo”) 32,849 36,754

Other 4 3 7 22

$ 87,138 $ 88,146

3 unchanged sentences

Total $ 87,138 $ 88,146

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.

The Company has recorded $ 9.5 million and $ 10.1 million of revenue for the three months ended March 31, 2025 and 2024, respectively, that was previously included in the deferred revenue balance as of the beginning of each respective year.

Performance Obligations

15 unchanged sentences

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.

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.

4 unchanged sentences

In addition, the Company has determined that the payment terms the Company provides to its customers are structured primarily for reasons other than the provision of finance to the Company.

The Company typically charges an upfront subscription amount for services, or amount for usage in arrears, or a combination thereof, as other payment terms would affect the nature of the risk assumed by the Company due to the costs of the customer acquisition and the highly competitive and commoditized nature of the business the Company operates.

The Company typically charges an upfront subscription amount for services, or an amount for usage in arrears, or a combination thereof, as other payment terms would affect the nature of the risk assumed by the Company due to the costs of the customer acquisition and the highly competitive and commoditized nature of the business the Company operates.

Costs to Fulfill a Contract

17 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 $ 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.

Cash and cash equivalents include money market funds of $ 46.1 million and $ 26.8 million as of March 31, 2025 and December 31, 2024, 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.

4 unchanged sentences

However, if any of these types of assets become impaired, the carrying values of the assets are written down to fair value using Level 3 inputs.

The carrying amount of the Company’s investments accounted for using the measurement alternative method in accordance with FASB ASC Topic No.

321, Investments - Equity Securities (“ASC 321”) as of March 31, 2025 and December 31, 2024, was $ 8.0 million and $ 4.0 million, respectively, and is included in other assets within the Company’s Condensed Consolidated Balance Sheets.

If the Company becomes aware of a significant decline in value that is other-than-temporary, the Company assesses whether an other-than-temporary impairment loss on an investment has occurred due to declines in fair value or other market conditions.

The loss will be recorded in the period in which the Company identifies the decline.

During the three months ended March 31, 2025 and 2024, the Company did not recognize any unrealized gains or losses and did not have any impairments during the respective periods.

Property and Equipment

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

Property and equipment, stated at cost, as of March 31, 2025 and December 31, 2024 consisted of the following (in thousands):

March 31, 2025 December 31, 2024

Internal-use software development costs

9 unchanged sentences

Total property and equipment, net $ 103,508 $ 100,076

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.

Depreciation and amortization expense was $ 4.5 million and $ 3.9 million for the three months ended March 31, 2025 and 2024, respectively.

No impairment was recorded in the three months ended March 31, 2025 and 2024.

Goodwill and Intangible Assets

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

The changes in carrying amounts of goodwill for the three months ended March 31, 2025 are as follows (in thousands):

Balance as of January 1, 2025

Foreign exchange translation 2,375

Balance as of September 30, 2024 $ 349,454

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

Balance as of March 31, 2025 $ 347,411

As of March 31, 2025 the Company’s goodwill had no accumulated impairment.

Intangible Assets with Indefinite Lives:

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

September 30, 2024 December 31, 2023

Intangible assets are summarized as of March 31, 2025 and December 31, 2024 as follows (in thousands):

March 31, 2025 December 31, 2024

Trade names $ 27,348 $ 27,316

2 unchanged sentences

Intangible Assets Subject to Amortization:

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

As of March 31, 2025, 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 September 30, 2024 are as follows (in thousands):

Expected amortization expenses for intangible assets subject to amortization at March 31, 2025 are as follows (in thousands):

2025 (remainder)

1 unchanged sentence

Total $ 9,167

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.

Amortization expense was $ 0.7 million and $ 0.9 million for the three months ended March 31, 2025 and 2024, respectively.

No impairment of intangible assets was recorded in the three months ended March 31, 2025 and 2024.

Long-Term Debt

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

September 30, 2024 December 31, 2023

Long-term debt as of March 31, 2025 and December 31, 2024 consists of the following (in thousands):

March 31, 2025 December 31, 2024

2026 Senior Notes $ 240,139 $ 248,980

8 unchanged sentences

$ 577,590 $ 574,080

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):

As of March 31, 2025 and December 31, 2024, the estimated fair value of the 2026 Senior Notes (as defined below) was approximately $ 239.2 million and $ 246.2 million, respectively.

As of March 31, 2025 and December 31, 2024, the estimated fair value of the 2028 Senior Notes (as defined below) was approximately $ 340.4 million and $ 346.1 million, respectively.

At March 31, 2025, future contractual principal payments for debt were as follows (in thousands):

2025 (1) (remainder)

Total $ 588,386

(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.

(1) The Company has reclassified $ 6.0 million from the 2026 period into the 2025 period as debt repurchases were made subsequent to March 31, 2025 but prior to the filing of these financial statements (see Note 15 - Subsequent Event).

The Company capitalized $ 0.8 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 March 31, 2025 and 2024, 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 September 30, 2024 and December 31, 2023.

The 2026 Senior Notes are presented as current portion of long-term debt and long-term debt, net of current portion, which is presented net of deferred issuance costs, on the Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024.

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

The Company may redeem some or all of the 2026 Senior Notes at any time on or after October 15, 2023 at specified redemption prices, plus accrued and unpaid interest, if any, up to, but excluding the redemption date.

The indenture pursuant to which the 2026 Senior Notes were issued contains covenants that restrict the Company’s ability to (i) pay dividends or make distributions on the Company’s common stock;

9 unchanged sentences

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.

The Company is in compliance with its debt covenants as of March 31, 2025.

2028 Senior Notes

On October 7, 2021, Consensus issued $ 500.0 million of 6.5 % senior notes due in 2028 (the “2028 Senior Notes”) to Ziff Davis (see Note 15 - Related Party Transactions) in exchange for the equity interest in the Company.

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 September 30, 2024 and December 31, 2023.

On October 7, 2021, Consensus issued $ 500.0 million of 6.5 % senior notes due in 2028 (the “2028 Senior Notes”) to Ziff Davis, Inc.

(“Ziff Davis” or the “Former Parent”) in exchange for the equity interest in the Company.

The 2028 Senior Notes are presented as current portion of long-term debt and long-term debt, net of current portion, which is presented net of deferred issuance costs, on the Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024.

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

The Company may redeem some or all of the 2028 Senior Notes at any time on or after October 15, 2026 at specified redemption prices plus accrued and unpaid interest, if any, up to, but excluding the redemption date.

The indenture pursuant to which the 2028 Senior Notes were issued contains covenants that restrict the Company’s ability to (i) pay dividends or make distributions on the Company’s common stock;

8 unchanged sentences

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

The Company is in compliance with its debt covenants as of March 31, 2025.

Credit Agreement

2 unchanged sentences

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

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

As of March 31, 2025, 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 September 30, 2024.

The Company is in compliance with its covenants as of March 31, 2025.

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 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.

During the three months ended March 31, 2025 and 2024, the Company retired $ 9.7 million and $ 63.5 million, respectively, in principal of its senior notes.

Refer to Note 15 - Subsequent Event for debt repurchases made subsequent to March 31, 2025 but prior to the filing of these financial statements.

As of March 31, 2025, the Company had retired an

aggregate of $ 216.6 million in principal of its senior notes under this program.

In connection with the Debt Repurchase Program, the Company reclassified $ 6.1 million and $ 18.9 million of long-term debt, net of current portion to the current portion of long-term debt as of March 31, 2025 and December 31, 2024, 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 months ended March 31, 2025 and 2024, a net (loss) gain on debt extinguishment of $( 0.1 ) million and $ 4.9 million, respectively, related to the Debt Repurchase Program is included in interest expense on the Condensed Consolidated Statements of Income.

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 $ 0.1 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 $ 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):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Prepaid insurance $ 1,839 $ 2,601

Prepaid income taxes 673 2,065

Prepaid marketing expense

Prepaid software licenses

4 unchanged sentences

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Accounts payable $ 6,509 $ 7,383

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 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 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.

The Company’s effective tax rate for the three months ended March 31, 2025 and 2024 was 24.1 % and 27.3 %, respectively.

The decrease in the Company’s effective income tax rate for the three months ended March 31, 2025 was primarily due to a change in the geographical mix of income, a decreased impact of the valuation allowance on the quarter and a decrease in uncertain tax positions.

The Company’s effective tax rates for the three months ended March 31, 2025 and 2024 differed from the U.S.

federal statutory rates of 21% primarily as a result of state income taxes, certain expenses not deductible for tax purposes, foreign rate differential, foreign income inclusion, various tax credits and uncertain tax positions.

As of March 31, 2025 and December 31, 2024, the Company had $ 13.6 million and $ 13.2 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.

Income Tax Audits

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

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

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

As of March 31, 2025, 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 2018 onwards are still open to examination by tax authorities.

1 unchanged sentence

Common Stock Repurchase Program

On March 1, 2022, the Company’s Board of Directors approved a share buyback program.

In March 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 $ 100.0 million of the Company’s common stock through February 2025.

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

In February 2025, the Company’s Board of Directors authorized and approved a three-year extension of the share repurchase program through February 2028.

The program may end before this date if the maximum amount of repurchases has been reached or at the discretion of the Company’s Board of Directors.

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

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 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).

During the three months ended March 31, 2025, the Company repurchased 1,471 shares under this program for a minimal amount.

During the three months ended March 31, 2024, the Company repurchased 42,962 shares under this program at an aggregate cost of $ 0.7 million.

Cumulatively as of March 31, 2025, 1,087,196 shares have been repurchased under this program at an aggregate cost of $ 32.4 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 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.

During the three months ended March 31, 2025 and 2024, the Company withheld shares on its vested restricted stock units and restricted stock awards relating to its share-based compensation plans of 13,477 shares and 15,340 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 September 30, 2024, 2,147,611 shares were available to be used under the 2021 Plan.

Restricted Stock and Restricted Stock Units

The Company has awarded restricted stock and restricted stock units to its Board of Directors and certain employees pursuant to the 2021 Plan.

Compensation expense resulting from restricted stock and restricted stock unit grants is measured at fair value on the date of grant and is recognized as share-based compensation expense over the applicable vesting period.

Vesting periods are generally one year for awards to members of the Company’s Board of Directors, four years for employees and five years for the Chief Executive Officer and Chief Operating Officer.

Restricted Stock and Restricted Stock Units with Market Conditions

The Company has awarded certain key employees market-based restricted stock and restricted stock units pursuant to the 2021 Plan.

The market-based awards have vesting conditions that are based on specified stock price targets of the Company’s common stock.

Market conditions were factored into the grant date fair value using a Monte Carlo valuation model, which utilized multiple input variables to determine the probability of the Company achieving the specified stock price targets for 20 out of 30 trading days or 20 out of 25 trading days (look-back period), based on the award agreement.

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 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

Vested ( 9,225 ) 37.95

Canceled ( 6,454 ) 41.07

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:

As of March 31, 2025, 1,374,900 shares were available to be used under the 2021 Plan.

Restricted stock unit activity for the three months ended March 31, 2025 is set forth below:

Shares Weighted-Average

4 unchanged sentences

Canceled ( 22,787 ) 29.29

Outstanding at September 30, 2024

Outstanding at March 31, 2025

2,060,368 $ 33.07

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.

As of March 31, 2025, the Company had unrecognized share-based compensation cost related to its restricted stock units of $ 34.3 million, which is expected to be recognized over a weighted-average period of 2.5 years.

The Company capitalized $ 0.7 million of share-based compensation cost during both of the three months ended March 31, 2025 and 2024, 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 September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Numerator for basic and diluted net income per common share:

2 unchanged sentences

Net income available to participating securities (1)

— ( 12 ) ( 9 ) ( 52 )

Net income available to common shareholders from operations $ 21,152 $ 26,360

8 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 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.

For the three months ended March 31, 2025 and 2024, there were 982,400 and 1,406,900 anti-dilutive shares, respectively, that were excluded from the earnings per share calculation.

Segment Information

The Company’s businesses are based on the organizational structure used by the chief operating decision maker (“CODM”) for making operating and investment decisions and for assessing performance.

The CODM views the Company as one segment:

The Company’s Cloud Fax business is driven primarily by subscription revenues.

The Company evaluates performance based on revenue, gross margin and profit or loss from operations before income taxes, not including nonrecurring gains and losses and foreign exchange gains and losses.

The following presents the segment information of Cloud Fax (in thousands):

Three Months Ended March 31,

Revenues $ 87,138 $ 88,146

Salary and benefits 19,951 21,715

Marketing 5,032 4,460

Phone operations 4,235 4,044

Outside services 3,836 4,341

Depreciation and amortization 5,178 4,767

Other segment items (1)

11,409 11,152

Segment operating profit 37,497 37,667

Interest expense ( 8,976 ) ( 6,199 )

Interest income 451 923

Other (expense) income, net (2)

( 1,097 ) 3,902

Segment earnings before income taxes 27,875 36,293

Income tax expense 6,723 9,923

Segment net income $ 21,152 $ 26,370

(1) Other segment items includes:

database hosting expenses, computer and related expenses, processing fees, bad debt expense, taxes and insurance expenses, office expenses, travel and entertainment expenses, other administrative expenses and miscellaneous expenses.

(2) Other (expense) income, net includes:

gain/loss on foreign currency exchange and miscellaneous income/expense.

The Company maintains operations in the U.S., Canada, Ireland and other countries.

2 unchanged sentences

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

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

2024 2023 2024 2023

Three Months Ended March 31,

United States $ 68,756 $ 69,712

5 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):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Long-lived assets:

5 unchanged sentences

Total $ 109,634 $ 106,591

Related Party Transactions

In connection with the Separation, Consensus and Ziff Davis entered into a transition services agreement (“TSA”) following the Separation, which governed services including certain information technology services, finance and accounting services and human resource and employee benefit services.

The agreed-upon charges, if any, for such services were intended to cover any costs and expenses incurred in providing such services.

The TSA terminated on October 7, 2023.

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.

In connection with the Company’s Debt Repurchase Program (see Note 7 - Long-Term Debt), the Company paid $ 6.0 million, which includes accrued interest, to repurchase $ 6.0 million in principal of its senior notes subsequent to the period ended March 31, 2025.

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