Consensus Cloud Solutions, Inc. 10-K

Item 8. Financial Statements and Supplementary Data REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Consensus Cloud Solutions, Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Consensus Cloud Solutions, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, stockholders' equity (deficit), and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. Basis for Opinions The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. -47- Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Property and Equipment, net – Internal-Use Software Development Costs — Refer to Notes 2 and 5 to the financial statements Critical Audit Matter Description The Company develops software for internal use and capitalizes certain costs incurred in the application development phase of the internal-use software, records the related capitalized costs as internal-use software development costs in property and equipment, and amortizes these costs over the estimated lives of the internal-use software. Costs related to preliminary internal-use software project activities and post implementation activities are expensed as incurred. The determination of whether an internal-use software project’s development costs are capitalized or expensed requires a higher degree of management judgment. We identified management’s determination of capitalized internal-use software development costs, including those in process, as a critical audit matter because of the judgment exercised by management in determining whether costs incurred on internal-use software projects meet the capitalization criteria. The determination of costs to capitalize is subjective in nature requiring management judgment to determine if costs are (1) related to an internal-use software project that entered the application development stage, (2) resulted in additional functionality, (3) the internal-use software project was probable of completion and (4) the internal-use software would be used to perform the function intended. Our evaluation of management’s judgments and their determination of the project and related internal-use software development activities and related costs to be capitalized under the relevant accounting guidance required subjective, and higher degree of auditor judgment and audit effort. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the assessment of the appropriateness of capitalized internal-use software development costs included the following, among others: • We obtained an understanding of management’s process for evaluating internal-use software development costs and the nature of the internal-use software development costs capitalized. • We tested the effectiveness of management’s controls over the identification and recording of costs incurred on internal-use software development projects to be capitalized. • We assessed management’s methodology utilized in calculating capitalized internal-use software development costs based on the allocation of capitalized labor costs. We selected a sample of internal-use software projects and performed audit procedures to agree capitalized labor costs to time records and vendor invoices and made certain inquiries of project members to further assess the reasonableness of time allocated to the selected internal-use software projects. • We tested the accuracy of the data used by management in the capitalization process by reconciling the data with source documents, such as payroll records and vendor invoices, and evaluated whether such costs were properly capitalized as internal-use software or not based upon the nature and stage of work performed and whether the requisite capitalization criteria were met. • We conducted corroborative interviews with Company personnel involved in internal-use software development regarding the nature and functionality of costs incurred related to capitalized software projects. /s/ DELOITTE & TOUCHE LLP Los Angeles, California February 12, 2026 We have served as the Company's auditor since 2023. -48- CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2025 and 2024 (In thousands, except share and per share data) 2025 2024 ASSETS Cash and cash equivalents $ 74,685 $ 33,545 Accounts receivable, net of allowances of $ 3,105 and $ 5,774 , respectively 23,686 24,921 Prepaid expenses and other current assets 18,788 16,059 Total current assets 117,159 74,525 Property and equipment, net 116,869 100,076 Operating lease right-of-use assets 5,098 6,515 Intangibles, net 38,761 41,213 Goodwill 352,939 345,036 Deferred income taxes 21,666 30,521 Other assets 11,323 4,315 TOTAL ASSETS $ 663,815 $ 602,201 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Accounts payable and accrued expenses $ 36,045 $ 36,477 Income taxes payable, current 97 1,068 Deferred revenue, current 19,773 20,714 Operating lease liabilities, current 2,576 2,150 Current portion of long-term debt 7,047 18,902 Total current liabilities 65,538 79,311 Long-term debt, net of current portion 551,322 574,080 Deferred revenue, noncurrent 1,567 1,913 Operating lease liabilities, noncurrent 9,754 12,018 Liability for uncertain tax positions 14,484 13,218 Deferred income taxes 7,176 891 Other long-term liabilities 201 233 TOTAL LIABILITIES 650,042 681,664 Commitments and contingencies (Note 9) Common stock, $ 0.01 par value. Authorized 120,000,000 ; total issued is 21,057,258 and 20,609,725 shares and total outstanding is 18,958,448 and 19,524,000 shares as of December 31, 2025 and December 31, 2024, respectively 211 206 Treasury stock, at cost ( 2,098,810 and 1,085,725 shares as of December 31, 2025 and December 31, 2024, respectively) ( 55,476 ) ( 32,313 ) Additional paid-in capital 76,984 59,373 Retained earnings (accumulated deficit) 849 ( 83,678 ) Accumulated other comprehensive loss ( 8,795 ) ( 23,051 ) TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) 13,773 ( 79,463 ) TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) $ 663,815 $ 602,201 See Notes to Consolidated Financial Statements -49- CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Years Ended December 31, 2025, 2024 and 2023 (In thousands, except share and per share data) 2025 2024 2023 Revenues $ 349,696 $ 350,382 $ 362,562 Cost of revenues (1) 70,601 69,688 68,319 Gross profit 279,095 280,694 294,243 Operating expenses: Sales and marketing (1) 51,548 51,065 65,084 Research, development and engineering (1) 7,464 7,683 7,727 General and administrative (1) 69,844 72,546 74,203 Total operating expenses 128,856 131,294 147,014 Income from operations 150,239 149,400 147,229 Interest expense ( 35,528 ) ( 33,979 ) ( 45,367 ) Interest income 2,515 2,546 3,715 Other (expense) income, net ( 3,217 ) 4,278 ( 2,413 ) Income before income taxes 114,009 122,245 103,164 Income tax expense 29,482 32,810 25,869 Net income $ 84,527 $ 89,435 $ 77,295 Net income per common share Basic $ 4.39 $ 4.64 $ 3.94 Diluted $ 4.35 $ 4.62 $ 3.94 Weighted average shares outstanding: Basic 19,250,895 19,286,579 19,582,460 Diluted 19,449,162 19,383,849 19,600,952 (1) Includes share-based compensation expense as follows: Cost of revenues $ 2,094 $ 2,138 $ 1,400 Sales and marketing 3,071 2,750 1,679 Research, development and engineering 702 622 379 General and administrative 11,826 11,254 14,705 Total $ 17,693 $ 16,764 $ 18,163 See Notes to Consolidated Financial Statements -50- CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Years Ended December 31, 2025, 2024 and 2023 (In thousands) 2025 2024 2023 Net income $ 84,527 $ 89,435 $ 77,295 Other comprehensive income (loss): Foreign currency translation adjustment 14,256 ( 9,874 ) 5,931 Other comprehensive income (loss) 14,256 ( 9,874 ) 5,931 Comprehensive income $ 98,783 $ 79,561 $ 83,226 See Notes to Consolidated Financial Statements -51- CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2025, 2024 and 2023 (In thousands) 2025 2024 2023 Cash flows from operating activities: Net income $ 84,527 $ 89,435 $ 77,295 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 18,733 20,516 17,421 Amortization of financing costs and discounts 1,686 1,822 2,048 Non-cash operating lease costs 1,778 1,549 1,652 Share-based compensation 17,693 16,764 18,163 Provision for doubtful accounts 4,180 5,104 5,897 Deferred income taxes 17,797 2,647 2,428 Loss (gain) on extinguishment of debt 919 ( 6,557 ) ( 4,795 ) Other — — 32 Decrease (increase) in: Accounts receivable ( 2,779 ) ( 3,780 ) ( 4,159 ) Prepaid expenses and other current assets ( 2,486 ) ( 6,002 ) 4,088 Other assets ( 1,730 ) 1,048 1,452 Increase (decrease) in: Accounts payable and accrued expenses ( 880 ) 768 ( 5,542 ) Income taxes payable ( 993 ) ( 1,047 ) ( 231 ) Deferred revenue ( 1,391 ) ( 1,509 ) ( 2,547 ) Operating lease liabilities ( 2,201 ) ( 2,455 ) ( 2,044 ) Liability for uncertain tax positions 1,266 3,478 3,015 Other long-term liabilities ( 33 ) ( 34 ) ( 60 ) Net cash provided by operating activities 136,086 121,747 114,113 Cash flows from investing activities: Purchases of property and equipment ( 30,233 ) ( 33,440 ) ( 36,461 ) Purchases of investments ( 5,000 ) — ( 4,000 ) Net cash used in investing activities ( 35,233 ) ( 33,440 ) ( 40,461 ) Cash flows from financing activities: Borrowings from term loans 150,000 — — Repayment of senior notes ( 234,139 ) — — Debt issuance cost ( 1,674 ) — — Proceeds from line of credit 70,000 — — Repayment of line of credit ( 6,000 ) — — Proceeds from the issuance of common stock under employee stock purchase plan 1,307 1,334 1,386 Repurchase of common stock ( 23,020 ) ( 1,031 ) ( 23,483 ) Taxes paid related to net share settlement ( 4,006 ) ( 2,727 ) ( 1,888 ) Repurchase of debt ( 15,764 ) ( 136,195 ) ( 57,672 ) Net cash used in financing activities ( 63,296 ) ( 138,619 ) ( 81,657 ) Effect of exchange rate changes on cash and cash equivalents 3,583 ( 4,858 ) 2,556 Net change in cash and cash equivalents 41,140 ( 55,170 ) ( 5,449 ) Cash and cash equivalents at beginning of year 33,545 88,715 94,164 Cash and cash equivalents at end of year $ 74,685 $ 33,545 $ 88,715 See Notes to Consolidated Financial Statements -52- CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) Years Ended December 31, 2025, 2024 and 2023 (in thousands, except share amounts) Common stock Additional paid-in Treasury stock Retained earnings (accumulated deficit) Accumulated other comprehensive loss Total equity (deficit) Shares Amount capital Shares Amount Balance, December 31, 2022 20,105,545 $ 201 $ 21,650 ( 189,114 ) $ ( 7,596 ) $ ( 250,408 ) $ ( 19,108 ) $ ( 255,261 ) Net income — — — — — 77,295 — 77,295 Foreign currency translation adjustment — — — — — — 5,931 5,931 Vested restricted stock 173,356 2 ( 2 ) — — — — — Shares withheld related to net share settlement ( 61,878 ) ( 1 ) ( 1,887 ) — — — — ( 1,888 ) Repurchase of common stock — — — ( 839,548 ) ( 23,686 ) — — ( 23,686 ) Issuance of shares under ESPP 56,663 1 1,385 — — — — 1,386 Share-based compensation — — 20,101 — — — — 20,101 Balance, December 31, 2023 20,273,686 $ 203 $ 41,247 ( 1,028,662 ) $ ( 31,282 ) $ ( 173,113 ) $ ( 13,177 ) $ ( 176,122 ) Net income — — — — — 89,435 — 89,435 Foreign currency translation adjustment — — — — — — ( 9,874 ) ( 9,874 ) Vested restricted stock 376,771 3 ( 3 ) — — — — — Shares withheld related to net share settlement ( 122,406 ) ( 1 ) ( 2,726 ) — — — — ( 2,727 ) Repurchase of common stock — — — ( 57,063 ) ( 1,031 ) — — ( 1,031 ) Issuance of shares under ESPP 81,674 1 1,333 — — — — 1,334 Share-based compensation — — 19,522 — — — — 19,522 Balance, December 31, 2024 20,609,725 $ 206 $ 59,373 ( 1,085,725 ) $ ( 32,313 ) $ ( 83,678 ) $ ( 23,051 ) $ ( 79,463 ) Net income — — — — — 84,527 — 84,527 Foreign currency translation adjustment — — — — — — 14,256 14,256 Vested restricted stock 553,636 6 ( 6 ) — — — — — Shares withheld related to net share settlement ( 173,276 ) ( 2 ) ( 4,004 ) — — — — ( 4,006 ) Repurchase of common stock — — — ( 1,013,085 ) ( 23,163 ) — — ( 23,163 ) Issuance of shares under ESPP 67,173 1 1,306 — — — — 1,307 Share-based compensation — — 20,315 — — — — 20,315 Balance, December 31, 2025 21,057,258 $ 211 $ 76,984 ( 2,098,810 ) $ ( 55,476 ) $ 849 $ ( 8,795 ) $ 13,773 See Notes to Consolidated Financial Statements -53- CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025, 2024 and 2023 1. The Company 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 customers of all sizes, from enterprises to individuals, across the globe and multiple industry verticals including, but not limited to, 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, extraction and digital signature solutions enable our customers to securely and cooperatively access, exchange and use information across organizational, regional and national boundaries. 2. Basis of Presentation and Summary of Significant Accounting Policies (a) Principles of Consolidation The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of Consensus and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. (b) Use of Estimates The preparation of 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 net 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. 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. Actual results could materially differ from those estimates due to risks and uncertainties, including uncertainty in the current economic environment due to factors such as inflationary pressures and elevated interest rates. (c) Allowances for Doubtful Accounts The Company maintains an allowance for credit losses for accounts receivable, which is recorded as an offset to accounts receivable and changes in such are classified as general and administrative expenses in the Consolidated Statements of Income. The Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when it identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status. It also considers customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data. On an ongoing basis, management evaluates the appropriateness of these reserves. (d) Revenue Recognition The Company recognizes revenue when the Company satisfies its obligation by transferring control of the goods or services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services (see Note 3 - Revenues). Principal vs. Agent The Company determines whether revenue should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction. If the Company is acting as the principal in a transaction, the Company reports revenue on a gross basis. If the Company is acting as an agent in a transaction, the Company reports revenue on a net basis. In determining whether the Company acts as the principal or an agent, the Company follows the accounting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 606, -54- Revenue from Contracts with Customers (“ASC 606”), for principal-agent considerations and assesses: (i) if another party is involved in providing goods or services to the customer and (ii) whether the Company controls the specified goods or services prior to transferring control to the customer. Sales Taxes The Company has made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are (i) both imposed on and concurrent with a specific revenue-producing transaction and (ii) collected by the Company from a customer. (e) Fair Value Measurements Consensus complies with the provisions of FASB ASC Topic No. 820, Fair Value Measurements and Disclosures (“ASC 820”), in measuring fair value and in disclosing fair value measurements. ASC 820 provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities (see Note 4 - Fair Value Measurements). The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and borrowings under credit facilities (including fixed interest rate and variable interest rate debt) are reflected in the financial statements at cost. With the exception of fixed interest rate debt, cost approximates fair value due to the variable interest rates for variable interest rate debt or due to the short-term nature of such instruments. The fair value of the Company’s fixed-rate outstanding debt was determined using the quoted market prices of debt instruments with similar terms and maturities when available (see Note 7 - Long-Term Debt). (f) Investments The Company accounts for investments in equity securities in accordance with FASB ASC Topic No. 321, Investments - Equity Securities (“ASC 321”), which requires the accounting for equity investments, other than those accounted for under the equity method of accounting, generally be measured at fair value for equity securities with readily determinable fair values. Equity securities without a readily determinable fair value, which are not accounted for under the equity method of accounting, are measured at their cost, less impairment, if any, and adjusted for observable price changes arising from orderly transactions in the same or similar investment from the same issuer. Any unrealized gains or losses resulting from adjustments due to observable price changes, if applicable, are reported within earnings on the Consolidated Statement of Income (see Note 4 - Fair Value Measurements). (g) Cash and Cash Equivalents The Company considers cash equivalents to be only those investments that are highly liquid, readily convertible to cash and with maturities of three months or less at the purchase date. (h) Debt Issuance Costs The Company capitalizes costs incurred with borrowing and issuance of debt securities. Debt issuance costs associated with term debt are recorded as a reduction to the debt amount and are amortized and included in interest expense over the life of the related debt security using the effective interest method. Debt issuance costs associated with revolving credit facilities are recorded within prepaid expenses and other current assets and other assets and are amortized to interest expense on a straight-line basis over the term of the facility. (i) Concentration of Credit Risk All of the Company’s cash and cash equivalents are invested at major financial institutions. These institutions are required to invest the Company’s cash in accordance with the Company’s investment policy with the principal objectives being preservation of capital, fulfillment of liquidity needs and above market returns commensurate with preservation of capital. At December 31, 2025, the Company’s cash and cash equivalents were maintained in accounts in qualifying financial institutions that are insured up to the limit determined by the applicable governmental agency. These institutions are primarily within the United States and Luxembourg, however, the Company has accounts within several other countries and/or territories including the United Kingdom, Australia, Japan, Canada, Ireland, Hong Kong and New Zealand. -55- (j) Foreign Currency Some of Consensus’ foreign subsidiaries use the local currency of their respective countries as their functional currency. Assets and liabilities of those subsidiaries are translated into U.S. Dollars at exchange rates prevailing at the balance sheet dates. Revenues, costs and expenses of those subsidiaries are translated into U.S. Dollars at average exchange rates for the period. Gains and losses resulting from translation are recorded as a component of accumulated other comprehensive loss. Net translation gain (loss) was $ 14.3 million, $( 9.9 ) million and $ 5.9 million for the years ended December 31, 2025, 2024 and 2023, respectively. Foreign exchange (loss) gain from foreign currency transactions is recorded within other (expense) income, net on the Consolidated Statements of Income and amounted to $( 3.2 ) million, $ 4.3 million and $( 2.4 ) million for the years ended December 31, 2025, 2024 and 2023, respectively. There were no reclassifications out of accumulated other comprehensive loss for the years ended December 31, 2025, 2024 and 2023. (k) Property and Equipment Property and equipment are stated at cost. Finance leases are stated at the present value of the minimum lease payments. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets and is recorded in cost of revenues and general and administrative expenses on the Consolidated Statements of Income. The estimated useful lives of property and equipment range from 1 to 7 years. Leasehold improvements are amortized on a straight-line basis over their estimated useful lives or the related lease term, if less (see Note 5 - Property and Equipment). (l) Internal-Use Software Development Costs The Company capitalizes certain internal-use software and website development costs that are incurred during the application development stage, provided that management with the relevant authority authorizes and commits to the funding of the project, it is probable the project will be completed, and the software will be used to perform the function intended. Management estimates the stage of development as well as the time allocated to internal-use software projects. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Capitalized internal-use software development costs are included in property and equipment and are amortized on a straight-line basis over their estimated useful lives, which is recorded in cost of revenues and general and administrative expenses on the Consolidated Statements of Income. The estimated useful life of costs capitalized is evaluated for each specific project and ranges from 1 to 7 years (see Note 5 - Property and Equipment). (m) Impairment or Disposal of Long-Lived Assets and Finite-Lived Intangible Assets The Company accounts for long-lived assets, which include property and equipment, operating lease right-of-use assets and identifiable intangible assets with finite useful lives (subject to amortization), in accordance with the provisions of FASB ASC Topic No. 360, Property, Plant, and Equipment (“ASC 360”). ASC 360 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount of an asset to the expected undiscounted future net cash flows generated by the asset. If it is determined that the asset may not be recoverable, and if the carrying amount of an asset exceeds its estimated fair value, an impairment charge is recognized to the extent of the difference. The Company assesses the impairment of identifiable finite-lived intangibles and long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors it considers important are those that could individually or in combination trigger an impairment review include the following: • Significant underperformance relative to historical or projected future operating results; • Significant changes in the manner of our use of the acquired assets or the strategy for Consensus’ overall business; • Significant negative industry or economic trends; • Significant decline in the Company’s stock price for a sustained period; and • The Company’s market capitalization relative to net book value. -56- If the Company determined that the carrying value of finite-lived intangibles and long-lived assets may not be recoverable based upon the existence of one or more of the above indicators of impairment, it would record an impairment equal to the excess of the carrying amount of the asset over its estimated fair value. The Company assessed whether events or changes in circumstances have occurred that potentially indicate the carrying amount of finite-lived assets may not be recoverable. There were no impairments of long-lived assets or finite-lived intangible assets recorded in 2025, 2024 and 2023. (n) Business Combinations and Valuation of Goodwill and Intangible Assets The Company applies the acquisition method of accounting for business combinations in accordance with GAAP and uses estimates and judgments to allocate the purchase price paid for acquisitions to the fair value of the assets, including identifiable intangible assets and liabilities acquired. Such estimates may be based on significant unobservable inputs and assumptions such as, but not limited to, future revenue growth rates, gross and operating margins, customer attrition rates, royalty rates, discount rates and terminal growth rate assumptions. The Company uses established valuation techniques and may engage reputable valuation specialists to assist with the valuations. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Fair values are subject to refinement for up to one year after the closing date of an acquisition as information relative to closing date fair values becomes available. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Intangible assets resulting from the acquisitions of entities accounted for using the acquisition method of accounting are recorded at the estimated fair value of the assets acquired. Identifiable intangible assets are comprised of purchased customer relationships, trademarks and trade names, developed technologies and other intangible assets. The fair values of these identified intangible assets are based upon expected future cash flows or income, which take into consideration certain assumptions such as customer turnover, trade names and patent lives. These determinations are primarily based upon the Company’s historical experience and expected benefit of each intangible asset. If it is determined that such assumptions have changed in future periods, then the resulting change will impact the fair value of the intangible asset. Intangible assets subject to amortization are amortized over the period of estimated economic benefit ranging from 1 to 20 years and the amortization expense is included in cost of revenues and general and administrative expenses on the Consolidated Statements of Income. The Company evaluates its goodwill and indefinite-lived intangible assets for impairment pursuant to FASB ASC Topic No. 350, Intangibles - Goodwill and Other (“ASC 350”), which provides that goodwill and other intangible assets with indefinite lives are not amortized but tested for impairment annually or more frequently if the Company believes indicators of impairment exist. In connection with the annual impairment test for goodwill, on October 1, the Company has the option to perform a qualitative assessment in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then it performs the impairment test on goodwill. The impairment test involves comparing the fair values of the applicable reporting units with their aggregate carrying values, including goodwill. The Company generally determines the fair value of its reporting units using the income approach methodology of valuation. If the carrying value of a reporting unit exceeds the reporting unit’s fair value, an impairment loss is recognized for the difference. The Company has a single reporting unit. In the fourth quarter of 2025, the Company performed the annual impairment test for goodwill for the year ended December 31, 2025 using a qualitative assessment, primarily taking into consideration macroeconomic, industry and market conditions, overall financial performance and any other relevant company-specific events. There was no accumulated impairment of the Company’s goodwill as of December 31, 2025. The Company performed the annual impairment test for intangible assets with indefinite lives for the year ended December 31, 2025 using a qualitative assessment primarily taking into consideration macroeconomic, industry and market conditions, overall financial performance and any other relevant company-specific events. There were no impairments of the Company’s indefinite-lived intangible assets recorded in 2025, 2024 and 2023. (o) Income Taxes The Company’s income is subject to taxation in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company -57- establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves for tax contingencies are established when the Company believes that certain positions might be challenged despite the Company’s belief that its tax return positions are fully supportable. The Company adjusts these reserves in light of changing facts and circumstances, such as the outcome of a tax audit or lapse of a statute of limitations. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate (see Note 11 - Income Taxes). The Company accounts for income taxes in accordance with FASB ASC Topic No. 740, Income Taxes (“ASC 740”), which requires that deferred tax assets and liabilities are recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the net deferred tax assets will not be realized. The valuation allowance is reviewed quarterly based upon the facts and circumstances known at the time. In assessing this valuation allowance, the Company reviews historical and future expected operating results and other factors, including its recent cumulative earnings experience, expectations of future taxable income by taxing jurisdiction and the carryforward periods available for tax reporting purposes, to determine whether it is more likely than not that deferred tax assets are realizable. ASC 740 provides guidance on the minimum threshold that an uncertain income tax benefit is required to meet before it can be recognized in the financial statements and applies to all income tax positions taken by a company. ASC 740 contains a two-step approach to recognizing and measuring uncertain income tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. If it is not more likely than not that the benefit will be sustained on its technical merits, no benefit will be recorded. Uncertain income tax positions that relate only to timing of when an item is included on a tax return are considered to have met the recognition threshold. The Company recognizes accrued interest and penalties related to uncertain income tax positions in income tax expense on its Consolidated Statements of Income. (p) Share-Based Compensation The Company accounts for share-based awards to employees and non-employees in accordance with the provisions of FASB ASC Topic No. 718, Compensation - Stock Compensation (“ASC 718”). Accordingly, the Company measures share-based compensation expense at the grant date, based on the fair value of the award, and recognizes the expense over the employee’s requisite service period using the straight-line method. The measurement of share-based compensation expense is based on several criteria, including but not limited to, the valuation model used and associated input factors, such as the stock price on the date of grant, expected term of the award, stock price volatility, risk free interest rate, dividend rate and forfeiture rate. These inputs are subjective and are determined using management’s judgment. The Company estimates the expected term based upon the contractual term of the award. For awards with performance-based conditions, share-based compensation expense is recognized using the graded-vesting method over the requisite service period if it is probable that the performance condition will be satisfied. The share-based compensation expense for performance-based awards is evaluated each quarter based on the achievement of the performance conditions. The effect of a change in the estimated number of performance-based awards expected to be earned is recognized in the period those estimates are revised (see Note 13 - Equity Incentive and Employee Stock Purchase Plan). (q) Earnings Per Common Share (“EPS”) In accordance with FASB ASC Topic No. 260, Earnings per Share (“ASC 260”), EPS is calculated under the treasury method or the two-class method, whichever is more dilutive. ASC 260 specifies that under the two-class method, all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends or dividend equivalents are considered participating securities and should be included in the computation of EPS. Basic EPS is calculated by dividing net distributed and undistributed earnings allocated to common shareholders, excluding participating securities, by the weighted-average number of common shares outstanding. The Company’s participating securities consist of its unvested share-based payment awards that contain rights to nonforfeitable dividends or dividend equivalents. Diluted EPS includes the determinants of basic EPS and, in addition, reflects the impact of other -58- potentially dilutive shares outstanding during the period. The dilutive effect of participating securities is calculated under the more dilutive of either the treasury method or the two-class method (see Note 15 - Earnings Per Share). (r) Research, Development and Engineering Research, development and engineering costs are expensed as incurred. Development of internal-use software is capitalized and amortized as described in paragraph (l). (s) Segment Reporting FASB ASC Topic No. 280, Segment Reporting (“ASC 280”), establishes standards for the way that public business entities 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 16 - Segment Information). The consolidated financial statements and related disclosures reflect the segment operations of Cloud Fax. (t) Advertising Costs Advertising costs are expensed as incurred and are included in sales and marketing expenses on our Consolidated Statements of Income. Advertising costs for the years ended December 31, 2025, 2024 and 2023 were $ 29.4 million, $ 29.0 million and $ 51.7 million, respectively. (u) Recent Accounting Pronouncements In October 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, which amends the disclosure or presentation requirements of a variety of topics in the accounting standards codification in order to conform with certain SEC amendments in Release No. 33-10532, Disclosure Update and Simplification. The effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. 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 consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments are intended to improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The amendments in this ASU should be applied on either a prospective or retrospective basis. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company adopted ASU No. 2023-09 for the year ended December 31, 2025 on a prospective basis (see Note 11 - Income Taxes). 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 annual 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. In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this ASU provide a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets. The amendments in this ASU -59- should be applied on a prospective basis. The amendments in this ASU are effective for annual periods beginning after December 15, 2025, and for interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the potential impact of this guidance on its consolidated financial statements. In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendments in this ASU modernize the recognition and disclosure framework for internal-use software costs by removing the previous “development stage” model and introducing a more judgment-based "probable-to-complete" approach. The amendments in this ASU should be applied on either a prospective, retrospective or modified transition approach basis. The amendments in this ASU are effective for annual periods beginning after December 15, 2027, and for interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the potential impact of this guidance on its consolidated financial statements. In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Improvements to Interim Disclosure Requirements. The amendments in this ASU clarify disclosure requirements for interim financial statements. The amendments in this ASU can be applied on either a prospective or retrospective basis. The amendments in this ASU are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the potential impact of this guidance on its consolidated financial statements. In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements. The amendments in this ASU address suggestions received from stakeholders regarding the Accounting Standards Codification and makes other incremental improvements to GAAP. The update represents changes to the codification that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply. The amendments in this ASU are effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years. Entities are required to apply the amendments to ASC 260 retrospectively. All other amendments may be applied prospectively or retrospectively. Early adoption is permitted. The Company is evaluating the potential impact of this guidance on its consolidated financial statements. 3. Revenues 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): Years Ended December 31, 2025 2024 2023 Corporate $ 222,682 $ 209,112 $ 199,621 Small office home office (“SoHo”) 127,002 141,258 162,916 Other 12 12 25 Total revenues $ 349,696 $ 350,382 $ 362,562 Timing of revenue recognition Point in time $ 2,287 $ 1,064 $ 427 Over time 347,409 349,318 362,135 Total revenues $ 349,696 $ 350,382 $ 362,562 The Company has recorded $ 20.1 million and $ 22.0 million of revenue for the years ended December 31, 2025 and 2024, respectively, that was previously included in the deferred revenue balance as of the beginning of each respective year. -60- Performance Obligations Generally, the Company’s contracts with customers include one performance obligation, however, certain contracts may include multiple performance obligations. For such arrangements, revenues are allocated to each performance obligation based on their relative standalone selling price. The Company satisfies its performance obligations upon delivery of products or services to its customers. Payment terms vary by type and location of the Company’s customers and the products and services offered. The time between invoicing and when payment is due is not significant. Due to the nature of the services provided, there are no obligations for returns. Significant Judgments Determining whether products and services are considered distinct performance obligations may require significant judgment. 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. In certain cases, the Company is able to establish the standalone selling price based on observable prices of products or services sold or priced separately in comparable circumstances to similar customers. The Company uses a range of amounts to estimate the standalone selling price when each of the products and services is sold separately to determine whether there is a discount to be allocated based on the relative standalone selling price of the various products and services. Performance Obligations Satisfied Over Time 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. The Company recognizes revenue on a straight-line basis throughout the subscription period and believes that the method used is a faithful depiction of the transfer of goods and services. Practical Expedients Existence of a Significant Financing Component in a Contract As a practical expedient, the Company has not assessed whether a contract has a significant financing component because the Company expects at contract inception that the period between payment by the customer and the transfer of promised goods or services by the Company to the customer will be one year or less. 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 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 Obtain a Contract The Company’s revenues are primarily generated from customer contracts that are for one year or less. Costs primarily consist of incentive compensation paid based on the achievements of sales targets in a given period for related revenue streams and are recognized in the month when the revenue is earned. Incentive compensation is paid upon the issuance or renewal of the -61- customer contract. As a practical expedient, for amortization periods that are determined to be one year or less, the Company expenses any incremental costs of obtaining the contract with a customer when incurred. For those customer contracts greater than one year, the Company capitalizes and amortizes the expenses, when appropriate, over the period of benefit. Revenues Invoiced The Company has applied the practical expedient for certain revenue streams to exclude the value of remaining performance obligations for (i) contracts with an original expected term of one year or less or (ii) contracts for which the Company recognizes revenue in proportion to the amount it has the right to invoice for services performed. 4. Fair Value Measurements The Company complies with the provisions of ASC 820, which defines fair value, provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: § Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. § Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. § Level 3 – Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. 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 $ 65.1 million and $ 26.8 million as of December 31, 2025 and 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. The fair value of fixed interest rate long-term debt is determined using recent quoted market prices or dealer quotes for each of the Company’s instruments, which are Level 1 inputs (see Note 7 - Long-Term Debt). The carrying value of long-term debt is reflected in the financial statements at cost. Assets Measured on a Non-Recurring Basis The Company’s non-financial assets, which primarily consist of goodwill, indefinite-lived intangibles assets, long-lived assets and equity securities without a readily determinable fair value are reported at carrying value, or at fair value as of their acquisition dates, and are not required to be measured at fair value on a recurring basis. 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 December 31, 2025 and 2024, was $ 8.0 million and $ 4.0 million, respectively, and is included in other assets within the Company’s Consolidated Balance Sheets. The Company reviews these investments at each reporting period to determine if there are indicators of impairment. If the Company determines that an investment is impaired, the loss will be recorded in the period in which the impairment is identified. During the years ended December 31, 2025, 2024 and 2023, the Company did not recognize any unrealized gains or losses and did not have any impairments during the respective periods. -62- 5. Property and Equipment Property and equipment, stated at cost, at December 31, 2025 and 2024 consisted of the following (in thousands): 2025 2024 Internal-use software development costs $ 99,961 $ 88,244 Computers, software and equipment 19,504 18,616 Furniture and fixtures 892 882 Leasehold improvements 1,724 1,715 Internal-use software development costs in process 67,400 46,676 189,481 156,133 Less: Accumulated depreciation and amortization ( 72,612 ) ( 56,057 ) Total property and equipment, net $ 116,869 $ 100,076 Depreciation and amortization expense was $ 16.1 million, $ 16.8 million and $ 13.1 million for the years ended December 31, 2025, 2024 and 2023, respectively. 6. Goodwill and Intangible Assets The changes in carrying amounts of goodwill for the years ended December 31, 2025 and 2024 are as follows (in thousands): Amount Balance as of January 1, 2024 $ 348,822 Foreign exchange translation ( 3,786 ) Balance as of December 31, 2024 $ 345,036 Foreign exchange translation 7,903 Balance as of December 31, 2025 $ 352,939 Intangible Assets with Indefinite Lives: Intangible assets are summarized as of December 31, 2025 and 2024 as follows (in thousands): 2025 2024 Trade names $ 27,422 $ 27,316 Other 4,045 4,045 Total $ 31,467 $ 31,361 -63- Intangible Assets Subject to Amortization: As of December 31, 2025, intangible assets subject to amortization are summarized as follows (in thousands): Weighted-Average Remaining Amortization Period Historical Cost Accumulated Amortization Net Trade names 0.1 years $ 8,299 $ 8,148 $ 151 Patent and patent licenses 0.0 years 54,341 54,341 — Customer relationships (1) 1.6 years 109,663 103,616 6,047 Other purchased intangibles 1.0 year 11,917 10,821 1,096 Total $ 184,220 $ 176,926 $ 7,294 (1) The Company amortizes its customer relationship assets in a pattern that best reflects the pace in which the assets’ benefits are consumed. 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. As of December 31, 2024, intangible assets subject to amortization are summarized as follows (in thousands): Weighted-Average Remaining Amortization Period Historical Cost Accumulated Amortization Net Trade names 0.2 years $ 8,107 $ 7,826 $ 281 Patent and patent licenses 0.0 years 54,341 54,341 — Customer relationships (1) 2.1 years 107,287 99,054 8,233 Other purchased intangibles 1.2 years 11,914 10,576 1,338 Total $ 181,649 $ 171,797 $ 9,852 (1) The Company amortizes its customer relationship assets in a pattern that best reflects the pace in which the assets’ benefits are consumed. 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 December 31, 2025 are as follows (in thousands): Fiscal Year: Amount 2026 $ 2,105 2027 1,407 2028 986 2029 803 2030 651 Thereafter 1,342 Total $ 7,294 Amortization expense was $ 2.6 million, $ 3.7 million and $ 4.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. -64- 7. Long-Term Debt Long-term debt as of December 31, 2025 and 2024 consists of the following, terms defined below (in thousands): 2025 2024 2026 Senior Notes $ — $ 248,980 2028 Senior Notes 348,247 349,137 DDTL Facility 150,000 — Revolving Credit Facility 64,000 — Total 562,247 598,117 Less: deferred issuance costs ( 3,878 ) ( 5,135 ) Total debt 558,369 592,982 Less: current portion, net of debt issuance costs ( 7,047 ) ( 18,902 ) Total long-term debt, less current portion $ 551,322 $ 574,080 As of December 31, 2024, the estimated fair value of the 2026 Senior Notes (as defined below) was approximately $ 246.2 million 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 December 31, 2025 and 2024, the estimated fair value of the 2028 Senior Notes (as defined below) was approximately $ 349.1 million and $ 346.1 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. As of December 31, 2025, future contractual principal payments for debt were as follows (in thousands): Total Fiscal year: 2026 $ 7,500 2027 7,500 2028 547,247 2029 — 2030 — Thereafter — Total $ 562,247 2026 Senior Notes On October 7, 2021, Consensus issued $ 305.0 million of 6.0 % senior notes due in 2026 (the “2026 Senior Notes”), in a private placement offering exempt from the registration requirements of the Securities Act of 1933. During the year ended December 31, 2025, the Company redeemed the remaining outstanding principal balance of the 2026 Senior Notes in full. The redemption was funded using proceeds from the 2025 Credit Facility (as defined below) and cash on hand. As of December 31, 2025, there was no outstanding principal balance or unamortized debt issuance costs related to the 2026 Senior Notes. For the year ended December 31, 2025, a loss on debt extinguishment of $ 0.8 million related to the redemption of the 2026 Senior Notes is included in interest expense on the Consolidated Statements of Income. -65- The following table provides additional information related to our 2026 Senior Notes as of December 31, 2025 and 2024 (in thousands): 2025 2024 Principal amount of 2026 Senior Notes $ — 248,980 Less: Debt issuance costs — ( 1,536 ) Net carrying amount of 2026 Senior Notes $ — $ 247,444 2028 Senior Notes On October 7, 2021, Consensus issued $ 500.0 million of 6.5 % senior notes due in 2028 (the “2028 Senior Notes”), in a private placement offering exempt from the registration requirements of the Securities Act of 1933. In exchange for the equity interest in the Company, Consensus issued the 2028 Senior Notes to Ziff Davis. 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. The 2028 Senior Notes are presented as current portion of long-term debt and long-term debt, net of current portion, which are presented net of deferred issuance costs, on the Consolidated Balance Sheets as of December 31, 2025 and 2024. The 2028 Senior Notes bear interest at a rate of 6.5 % per annum, payable semi-annually in arrears on April 15 and October 15 of each year, which commenced on April 15, 2022. The 2028 Senior Notes mature on October 15, 2028, and are senior unsecured obligations of the Company that are guaranteed, jointly and severally, on an unsecured basis by certain of the Company’s existing and future domestic direct and indirect wholly-owned subsidiaries. If Consensus Cloud Solutions, Inc. or any of its restricted subsidiaries acquires or creates a domestic restricted subsidiary, other than an Insignificant Subsidiary (as defined in the indenture pursuant to which the 2028 Senior Notes were issued (the “2028 Indenture”)), after the issue date, or any Insignificant Subsidiary ceases to fit within the definition of Insignificant Subsidiary, such restricted subsidiary is required to unconditionally guarantee, jointly and severally, on an unsecured basis, the Company’s obligations under the 2028 Senior Notes. 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 contains covenants that restrict the Company’s ability to (i) pay dividends or make distributions on the Company’s common stock; (ii) make certain restricted payments; (iii) create liens or enter into sale and leaseback transactions; (iv) enter into transactions with affiliates; (v) merge or consolidate with another company; and (vi) transfer and sell assets. These covenants contain certain exceptions. 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. 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 December 31, 2025. The following table provides additional information related to our 2028 Senior Notes as of December 31, 2025 and 2024 (in thousands): 2025 2024 Principal amount of 2028 Senior Notes $ 348,247 $ 349,137 Less: Debt issuance costs ( 2,731 ) ( 3,599 ) Net carrying amount of 2028 Senior Notes $ 345,516 $ 345,538 2022 Credit Agreement On March 4, 2022, the Company entered into a Credit Agreement (the “2022 Credit Agreement”) with certain lenders party thereto (the “Lenders”) and MUFG Union Bank, N.A., as agent (the “Agent”). Pursuant to the 2022 Credit Agreement, the Lenders provided Consensus with a senior secured revolving credit facility of $ 25.0 million with an option held by the Company to obtain an additional commitment of up to a maximum of $ 25.0 million. The final maturity of the credit facility was scheduled to occur on March 4, 2027. On July 9, 2025, this credit facility was retired with no balance. -66- 2025 Credit Agreement On July 9, 2025, the Company entered into a Credit Agreement (the “2025 Credit Agreement”) with certain lenders party thereto (the “Lenders”) and U.S. Bank National Association, as agent (the “Agent”). Pursuant to the 2025 Credit Agreement, the Lenders have provided the Company with a senior secured revolving credit facility of $ 75.0 million (the “Revolving Credit Facility”) and a senior secured delayed-draw term loan facility of $ 150.0 million (the “DDTL Facility” and together with the Revolving Credit Facility, the “2025 Credit Facility”). The final maturity of the 2025 Credit Facility will occur on July 10, 2028, subject to limited customary accelerators. The Company incurred debt issuance costs of $ 1.7 million associated with the 2025 Credit Agreement, of which $ 0.6 million and $ 1.1 million have been allocated to the Revolving Credit Facility and the DDTL Facility, respectively. Subject to the terms and conditions of the 2025 Credit Agreement, the Company may borrow, repay and reborrow revolving loans at any time during the term of the facility. Borrowings under the DDTL Facility that are prepaid or repaid may not be reborrowed. Voluntary prepayments of loans and voluntary reductions of unused commitments under the 2025 Credit Agreement are permissible without penalty (other than customary interest breakage charges). The 2025 Credit Facility is guaranteed by each wholly-owned material domestic subsidiary of the Company and secured by substantially all assets of the Company and the guarantors, subject to other customary exceptions. Commencing with the first full fiscal quarter ending after the DDTL Facility is funded, the Company is required to make consecutive quarterly principal payments, each in an amount of 1.25 % of the initial aggregate principal amount borrowed on the DDTL Facility. The interest rates applicable to the loans made under the 2025 Credit Facility are, at the Company’s option, equal to either a base rate or the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin based on the total net leverage ratio ( 0.50 % - 1.25 % in the case of base rate loans and 1.50 % - 2.25 % in the case of SOFR loans). Due to the variable nature of these interest rates, the Company has determined that the carrying value of any borrowings under the 2025 Credit Facility approximates fair value. As of December 31, 2025, the Company had $ 150.0 million outstanding under the DDTL Facility and $ 64.0 million outstanding under the Revolving Credit Facility and the weighted-average interest rate on borrowings under the 2025 Credit Facility was 5.7 %. The 2025 Credit Agreement contains covenants that, subject to certain exceptions, restrict the Company’s ability to: (i) pay dividends or make distributions on the Company’s common stock; (ii) make certain restricted payments (including certain voluntary payments in respect of the Company’s 2028 Senior Notes); (iii) create liens or enter into sale and leaseback transactions; (iv) enter into transactions with affiliates; (v) merge or consolidate with another company; (vi) incur indebtedness, (vii) make acquisitions and other investments and (viii) transfer and sell assets. Additionally, the 2025 Credit Facility is subject to a maximum total net leverage ratio covenant and a minimum fixed charges coverage ratio covenant, in each case tested on a quarterly basis. The Company is in compliance with its covenants as of December 31, 2025. The following table provides additional information related to our DDTL Facility as of December 31, 2025 (in thousands): 2025 Principal amount of DDTL Facility $ 150,000 Less: Debt issuance costs ( 1,147 ) Net carrying amount of DDTL Facility $ 148,853 Debt Repurchase Program On November 9, 2023, the Board of Directors approved a debt repurchase program, pursuant to which Consensus may reduce, through redemptions, open market purchases, tender offers, privately negotiated purchases or other retirements, a combination of the outstanding principal balance of the 2026 and 2028 Senior Notes (“Debt Repurchase Program”). The authorization permits an aggregate principal amount reduction of up to $ 300 million and expires on November 9, 2026. The timing and amounts of purchases are determined by the Company, depending on market conditions and other factors it deems relevant. During the years ended December 31, 2025 and 2024 the Company retired $ 15.7 million and $ 144.3 million, respectively, in principal of its senior notes under this program. Cumulatively as of December 31, 2025, $ 222.6 million in principal of the Company’s senior notes has been retired under this program. In connection with the Debt Repurchase Program, the Company reclassified $ 18.9 million of long-term debt, net of current portion to the current portion of long-term debt as of December 31, 2024 as the Company had the intention and cash on hand to extinguish this amount of debt within twelve months of the end of the reporting period. -67- For years ended December 31, 2025, 2024 and 2023 a (loss) gain on debt extinguishment of $( 0.1 ) million, $ 6.6 million and $ 4.8 million, respectively, related to the Debt Repurchase Program is included in interest expense on the Consolidated Statements of Income. 8. Leases The Company leases certain facilities and equipment under non-cancelable operating and finance leases which expire at various dates through 2031. Office and equipment leases are typically for terms of three to ten years and generally provide renewal options for terms up to an additional five years . The Company determines if an arrangement is a lease at inception. Short-term leases are defined as leases that have a term of 12 months or less and do not include an option to purchase the underlying asset or include an option to purchase the underlying asset that the Company is not reasonably certain to exercise. The Company accounts for short-term leases by recognizing the lease payments in general and administrative expenses in the Consolidated Statements of Income. Short-term lease expense is recognized on a straight-line basis over the term of the lease and associated variable lease payments are recognized in the period in which the obligation for the payments is incurred. Operating lease assets represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at the commencement date. The Company uses a collateralized incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. Operating leases typically require payment of certain non-lease costs, such as real estate taxes, common area maintenance and insurance. These components comprise the majority of the Company’s variable lease costs and are excluded from the present value of lease liabilities unless an event occurs that results in the payments becoming fixed for the remaining term. The remaining lease and non-lease components are accounted for together as a single lease component for all underlying classes of assets. Operating lease assets are adjusted for lease incentives, initial direct costs, impairments and exit or disposal costs. The Company accounts for operating leases greater than one year by recognizing the lease payments in cost of revenues and general and administrative expenses in the Consolidated Statements of Income. Operating lease costs are recognized on a straight-line basis from the commencement date to the end of the lease term. Amortization of finance lease right-of-use assets is included in general and administrative expenses in the Consolidated Statements of Income. Interest related to finance lease right-of-use assets, if any, is included in interest expense in the Consolidated Statements of Income. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The components of lease expense, recorded in cost of revenues and general and administrative expenses on the Consolidated Statements of Income, are as follows (in thousands): Years Ended December 31, 2025 2024 2023 Operating lease cost $ 2,637 $ 2,491 $ 2,663 Short-term lease cost 182 182 1,671 Finance lease cost Amortization of right-of-use assets — 378 1,057 Total lease cost $ 2,819 $ 3,051 $ 5,391 Supplemental cash flow information related to leases is as follows (in thousands): Years Ended December 31, 2025 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 3,056 $ 3,281 $ 2,999 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 431 $ 1,304 $ 542 -68- Other supplemental operating lease information consists of the following: December 31, 2025 December 31, 2024 Operating leases: Weighted average remaining lease term 4.7 years 5.6 years Weighted average discount rate 4.9 % 4.9 % Maturities of operating lease liabilities as of December 31, 2025 are as follows (in thousands): Total Fiscal Year: 2026 $ 3,271 2027 2,916 2028 2,612 2029 2,691 2030 2,645 Thereafter 219 Total lease payments 14,354 Less: Imputed interest ( 2,024 ) Present value of operating lease liabilities $ 12,330 Significant Judgments Discount Rate The majority of the Company’s leases are discounted using the Company’s collateralized incremental borrowing rate as the rate implicit in the lease is not readily determinable. Rates are obtained from various large banks to determine the appropriate incremental borrowing rate at the lease commencement date for collateralized loans with a maturity similar to the lease term. Options The lease term is generally the minimum noncancelable period of the lease. The Company does not include option periods unless the Company determined it is reasonably certain of exercising the option at inception or when a triggering event occurs. 9. Commitments and Contingencies Litigation From time to time, the Company and its affiliates are involved in litigation and other legal disputes or regulatory inquiries that arise in the ordinary course of business. Any claims or regulatory actions against the Company and its affiliates, whether meritorious or not, could be time consuming and costly, and could divert significant operational resources. The outcomes of such matters are subject to inherent uncertainties, carrying the potential for unfavorable rulings that could include monetary damages and injunctive relief. The Company does not believe, based on current knowledge, that any legal proceedings or claims currently exist which, after giving effect to existing accrued liabilities, are likely to have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. It is the Company’s policy to expense as incurred legal fees related to any litigation. -69- Non-Income Related Taxes The Company believes that it has sufficiently reserved for historical sales tax liabilities under FASB ASC Topic No. 450, Contingencies, although some state and local taxing authorities may challenge the Company’s sales tax position, the methodology used to calculate the sales tax liability, and may also impose other taxes on its business. 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 will continue to review and monitor the impact of sales tax rules in order to mitigate any associated risks on its business. 10. Other Balance Sheet Account Details Prepaid expenses and other current assets Prepaid expenses and other current assets consisted of the following as of December 31, 2025 and 2024 (in thousands): 2025 2024 Prepaid insurance $ 2,830 $ 2,601 Prepaid income taxes 5,484 2,065 Prepaid marketing expense 4,067 3,365 Prepaid software licenses 3,953 4,346 Other prepaid expenses 2,092 3,389 Other current assets 362 292 Total $ 18,788 $ 16,059 Accounts payable and accrued expenses Accounts payable and accrued expenses consisted of the following as of December 31, 2025 and 2024 (in thousands): 2025 2024 Accounts payable $ 7,544 $ 7,383 Accrued sales and other taxes 6,969 6,796 Accrued interest 7,349 7,939 Accrued compensation 9,614 10,425 Accrued advertising expenses 1,611 2,719 Other accrued expenses 2,958 1,216 Total $ 36,045 $ 36,477 11. Income Taxes Income from operations before income taxes for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands): Years Ended December 31, 2025 2024 2023 Domestic $ 47,869 $ 46,637 $ 30,998 Foreign 66,140 75,608 72,166 Income before income taxes $ 114,009 $ 122,245 $ 103,164 -70- Income tax expense consists of the following (in thousands): Years Ended December 31, 2025 2024 2023 Current: Federal $ 3,539 $ 19,296 $ 17,330 State 463 3,774 4,058 Foreign 7,590 7,261 1,945 Total current tax expense 11,592 30,331 23,333 Deferred: Federal 11,593 ( 3,733 ) ( 852 ) State 2,199 2,364 ( 884 ) Foreign 4,098 3,848 4,272 Total deferred tax expense 17,890 2,479 2,536 Income tax expense $ 29,482 $ 32,810 $ 25,869 The table below provides the updated requirements of ASU No. 2023-09 for 2025 (see Basis of Presentation and Summary of Significant Accounting Policies - Recent Accounting Pronouncements ) . The effective income tax rate for the year ended December 31, 2025 differs from the statutory federal income tax rate as follows (in thousands, except percentages): Year Ended December 31, 2025 $ % U.S. federal statutory income tax rate $ 23,942 21.0 % Domestic state and local income taxes, net of federal benefit (1) 2,303 2.0 Foreign: Canada 1,476 1.3 Ireland Foreign rate differential ( 4,081 ) ( 3.6 ) Other 149 0.1 Other Foreign 165 0.2 Tax credits: Federal research and development credits ( 1,108 ) ( 1.0 ) Effect of cross-border tax laws: Net Global Intangible Low-Taxed Income 2,531 2.2 Other 271 0.2 Non-taxable or non-deductible items: Nondeductible compensation 1,645 1.4 Other 631 0.6 Changes in valuation allowance 175 0.2 Other 86 0.1 Changes in unrecognized tax benefits 1,297 1.2 Total income tax expense and effective tax rate $ 29,482 25.9 % (1) State and local income taxes in California, Colorado, Illinois, New York and New York City comprise the majority of the domestic state and local income taxes, net of federal effect category. The effective tax rate for the year ended December 31, 2025, differs from the federal statutory rate primarily due to the foreign income inclusion, an increase in the net reserve for uncertain tax positions, impact of jurisdictional mix of earnings, various tax credits and certain expenses not deductible for tax purposes. -71- On July 4, 2025, the budget reconciliation bill H.R. 1, referred to as the One Big Beautiful Bill Act (“OBBBA”), was signed into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions, including modifications to capitalization of research and development expenses, limitations on deductions for interest expense and accelerated fixed asset depreciation. The OBBBA did not have a significant impact on the Company’s effective tax rate for the year ended December 31, 2025. As previously disclosed for the years ended December 31, 2024 and 2023, a reconciliation of the statutory federal income tax rate with the Company’s effective income tax rate is as follows: Years ended December 31, 2024 2023 Statutory tax rate 21.0 % 21.0 % State income taxes, net 2.0 2.1 Foreign rate differential ( 2.9 ) ( 1.8 ) Foreign income inclusion 5.1 7.9 Foreign tax credit ( 3.3 ) ( 5.7 ) Reserve for uncertain tax positions 2.9 3.1 Valuation allowance 0.8 — Impact on deferred taxes of enacted tax law and rate changes 0.3 ( 0.1 ) Tax credits and incentives ( 2.1 ) ( 2.6 ) Executive compensation 0.3 1.4 Return to provision adjustments 0.3 ( 0.9 ) Other 2.4 0.7 Effective tax rates 26.8 % 25.1 % The effective tax rates for the years ended December 31, 2024 and 2023 differ from the federal statutory rate primarily due to the foreign income inclusion, an increase in the net reserve for uncertain tax positions, impact of jurisdictional mix of earnings, various tax credits and certain expenses not deductible for tax purposes. Cash paid for income taxes, net of refunds is as follows (in thousands): Year Ended December 31, 2025 Cash paid during the period for income taxes, net of refunds U.S. federal $ 4,950 U.S. state and local (1) 1,113 Foreign Canada federal 3,018 Canada Ontario 1,674 Ireland 2,728 Other foreign (1) 1,163 Total cash paid during the period for income taxes $ 14,646 (1) There were no individual jurisdictions equaling 5% or more of the total income taxes paid (net of refunds) for the year ended December 31, 2025. Cash paid for income taxes, net of refunds received (prior to ASU 2023-09), was $ 26.4 million and $ 16.6 million during the years ended December 31, 2024 and 2023. The primary foreign tax jurisdictions that the Company operates in are: Canada, Ireland and Japan with statutory tax rates of 26.5%, 12.5% and 30.6%, respectively. -72- Deferred tax assets and liabilities result from differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Temporary differences and carryforwards which give rise to deferred tax assets and liabilities are as follows (in thousands): December 31, 2025 2024 Deferred tax assets: Net operating loss carryforwards $ 328 $ 44 Tax credit carryforwards 2,141 1,716 Accrued expenses 1,321 1,264 Allowance for bad debt 765 1,401 Share-based compensation expense 3,278 3,568 Basis difference in intangibles 7,275 9,259 Basis difference in developed software — 2,772 Deferred revenue 826 918 Operating lease 2,975 3,550 State taxes 158 665 Section 163(j) interest limitation 9,505 7,820 Other 2,518 2,769 31,090 35,746 Less: valuation allowance ( 1,424 ) ( 1,064 ) Total deferred tax assets $ 29,666 $ 34,682 Deferred tax liabilities: Basis difference in property and equipment $ ( 240 ) $ ( 132 ) Basis difference in developed software ( 9,041 ) — ROU asset ( 1,205 ) ( 1,617 ) Prepaid expenses ( 3,076 ) ( 1,757 ) Other ( 1,614 ) ( 1,546 ) Total deferred tax liabilities ( 15,176 ) ( 5,052 ) Net deferred tax assets $ 14,490 $ 29,630 Reported as: Deferred income taxes (non-current assets) $ 21,666 $ 30,521 Deferred income taxes (non-current liabilities) 7,176 891 Net deferred tax assets $ 14,490 $ 29,630 The Company had approximately $ 14.5 million and $ 29.6 million in net deferred tax assets as of December 31, 2025 and 2024, respectively, related primarily to tax bases differences in intangibles and developed software and the Section 163(j) interest limitation. Based on the weight of available evidence, the Company assesses whether it is more likely than not that some portion or all of a deferred tax asset will not be realized. If necessary, the Company records a valuation allowance sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized. As of December 31, 2025, the Company had a valuation allowance of $ 1.4 million against its foreign tax credit. As of December 31, 2024, the Company had a valuation allowance of $ 1.1 million against its foreign tax credit. As of December 31, 2025 and 2024, the Company had an interest expense limitation carryforward of $ 40.8 million and $ 32.9 million, respectively, which carries forward indefinitely. As of December 31, 2025 and 2024, the Company had $ 2.1 million and $ 1.7 million, respectively, of foreign tax credit carryforwards. If unused, these credits will begin to expire in 2031. -73- In addition, as of December 31, 2025 and 2024, the Company had state research and development tax credits of $ 1.9 million and $ 1.7 million, respectively, which can be carried forward indefinitely. As of December 31, 2025, the Company also had $ 1.7 million of state net operating loss carryforwards that will expire in 2044, if unused. Federal and state laws can impose substantial restrictions on the utilization of tax credit carryforwards in the event of an “ownership change,” as defined in Section 382 of the Internal Revenue Code. The Company has determined that no significant limitation would be placed on the utilization of its tax credit carryforwards due to ownership changes. The Company had approximately $ 315.8 million of undistributed earnings from foreign subsidiaries as of December 31, 2025. The Company considers earnings of $ 46.4 million of certain non-U.S. subsidiaries to be indefinitely invested outside the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and our specific plans for reinvestment of those subsidiary earnings. If the Company decides to repatriate these foreign earnings, the Company would need to adjust the income tax provision in the period in which it is determined that the earnings will no longer be indefinitely invested outside the United States. Certain tax payments are prepaid during the year and are included within prepaid expenses and other current assets on the Consolidated Balance Sheets. The Company’s prepaid tax payments were $ 5.5 million and $ 2.1 million at December 31, 2025 and 2024, respectively (see Note 10 - Other Balance Sheet Account Details). Uncertain Income Tax Positions Tax positions are evaluated in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold, it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company classifies gross interest and penalties and unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year as non-current liabilities in the Consolidated Balance Sheets. The aggregated changes in the balance of unrecognized tax benefits, which excludes interest and penalties, for 2025, 2024 and 2023, is as follows (in thousands): Years Ended December 31, 2025 2024 2023 Beginning balance $ 11,283 $ 8,487 $ 5,742 Increases related to tax positions during a prior year 30 — — Decreases related to tax positions taken during a prior year ( 47 ) — — Increases related to tax positions taken in the current year 1,403 2,796 2,745 Decreases related to expiration of statute of limitations ( 571 ) — — Ending balance $ 12,098 $ 11,283 $ 8,487 As of December 31, 2025, the total amount of unrecognized tax benefits, excluding interest and penalties, was $ 12.1 million, which, if recognized, would affect the Company’s effective tax rate. As of December 31, 2024, the total amount of unrecognized tax benefits, excluding interest and penalties, was $ 11.3 million, which, if recognized, would affect the Company’s effective tax rate. As of December 31, 2023, the total amount of unrecognized tax benefits, excluding interest and penalties, was $ 8.5 million, which, if recognized, would affect the Company’s effective tax rate. The Company includes interest and penalties related to unrecognized tax benefits within the provision for income taxes. As of December 31, 2025 and 2024, the total amount of interest and penalties accrued was $ 2.5 million and $ 2.0 million, respectively, which is classified as a liability for uncertain tax positions on the Consolidated Balance Sheets. In connection with tax matters, the Company recognized interest and penalty expense in 2025, 2024 and 2023 of $ 0.5 million, $ 0.8 million and $ 0.3 million, respectively. The Company files tax returns in the U.S., Ireland, Canada, Japan, Netherlands, France and Hong Kong. As of December 31, 2025, the Company is not under audit in any jurisdiction that it operates within. The U.S. federal and most state tax returns filed for 2022 onwards, as well as certain state returns filed for 2021 onwards, are still open to examination by tax authorities. With respect to the Company’s international subsidiaries, tax returns filed for the years from 2019 onwards are still -74- open to examination by tax authorities. Subsequent to December 31, 2025, the Company received notification of a review by the Irish tax authorities relating to tax years 2023 and 2024. 12. Stockholders’ Equity (Deficit) Common Stock Each holder of the common stock is entitled to one vote for each share on all matters to be voted upon by the stockholders. The holders of common stock have no cumulative voting rights. Subject to the preferences that may be applicable to any outstanding preferred stock, holders of common stock are entitled to receive ratably such dividends as may be declared by the Board of Directors out of funds legally available for that purpose. In the event of liquidation, dissolution or winding up of the Company, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preferences of any outstanding preferred stock. Holders of common stock have no preemptive, conversion, or subscription rights, and there are no redemption or sinking fund provisions applicable to the common stock. Preferred Stock The Company’s Board of Directors is authorized, subject to limitations prescribed by Delaware law, to issue preferred stock in one or more series, to establish from time to time the number of shares to be included in each series, and to fix the designation, powers, preferences, and rights of the shares of each series and any of its qualifications, limitations, or restrictions, in each case without further vote or action by the stockholders. As of December 31, 2025 and 2024, there were no shares of preferred stock issued or outstanding. Common Stock Repurchase Program On March 1, 2022, the Company’s Board of Directors approved a share buyback program. Under this program, the Company was authorized to purchase, in the public market, or in off-market transactions up to $ 100.0 million of the Company’s common stock through February 2025. 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. During the years ended December 31, 2025 and 2024, the Company repurchased 1,013,085 and 57,063 shares, respectively, at an aggregate cost of $ 23.2 million (inclusive of excise tax of $ 0.1 million) and $ 1.0 million, respectively, under this program. Cumulatively as of December 31, 2025, 2,098,810 shares have been repurchased at an aggregate cost of $ 55.5 million (inclusive of excise tax of $ 0.3 million). The excise tax is assessed at 1 % of the fair market value of net stock repurchases after December 31, 2022. Vested Restricted Stock At the time of certain vesting events related to restricted stock units or restricted stock awards that are held by participants in Consensus’ Equity Incentive Plan, a portion of the awards subject to vesting are withheld by the Company to satisfy the employees’ tax withholding obligations that arise upon the vesting of restricted stock. As a result, the number of shares issued upon vesting for these awards is net of the statutory withholding requirements that the Company pays on behalf of its employees. Although shares withheld are not issued, they are treated as common share repurchases in the Company’s consolidated financial statements, as they reduce the number of shares that would have been issued upon vesting. These shares do not count against the authorized capacity under the Company’s share repurchase program described above. During the years ended December 31, 2025, 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 173,276 , 122,406 and 61,878 shares, respectively. Refer to Note 13 - Equity Incentive and Employee Stock Purchase Plan, for shares of common stock issued in relation to the Company’s equity incentive plan. Dividends The Company currently does not pay dividends to Consensus shareholders. Future dividends are subject to the approval of the Company’s Board of Directors. Our current debt agreements could trigger restrictions on dividend payments under certain circumstances (see Note 7 - Long-Term Debt). -75- 13. Equity Incentive and Employee Stock Purchase Plan The Company’s share-based compensation plans include the 2021 Equity Incentive Plan (the “2021 Plan”) and the 2021 Employee Stock Purchase Plan (the “Purchase Plan”). The 2021 Equity Incentive Plan In December 2021, Consensus’ Board of Directors adopted the 2021 Plan, which provides for the grant of incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and share units, and other share-based awards. 4,000,000 shares of common stock are authorized to be used for 2021 Plan purposes. As of December 31, 2025, 870,811 shares were available to be issued 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, three or four years for employees and five years for the Chief Executive Officer and Chief Operating Officer. The Company granted 713,155 , 809,439 and 567,218 restricted stock units during the years ended December 31, 2025, 2024 and 2023, respectively. Restricted Stock Units with Market Conditions or Performance Conditions The Company has awarded certain key employees market-based and performance-based 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. For awards with market conditions, the 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. Share-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 the 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. For awards with performance-based conditions, share-based compensation expense is recognized using the graded-vesting method over the requisite service period if it is probable that the performance condition will be satisfied. The performance vesting conditions generally relate to the achievement of specified internal financial and operational targets. The share-based compensation expense for performance-based awards is evaluated each quarter based on the achievement of the performance conditions. The effect of a change in the estimated number of performance-based awards expected to be earned is recognized in the period those estimates are revised. During the years ended December 31, 2025, 2024 and 2023, the Company granted 15,335 , 190,749 and 122,150 shares, respectively, of market-based and performance-based restricted stock units. The per share weighted-average grant-date fair values of the performance-based awards granted during the year ended December 31, 2025 were $ 28.03 . There were no performance-based awards granted during the years ended December 31, 2024 and 2023. The per share weighted-average grant-date fair values of the market-based awards granted during the years ended December 31, 2024 and 2023 were $ 24.34 and $ 23.69 , respectively, as determined by the Monte Carlo valuation. There were no market-based awards granted during the year ended December 31, 2025. Notwithstanding the valuation, for the underlying stock price assumption, all market-based stock awards utilize the market value at the close of business on the date the grant is awarded. The Monte Carlo valuation model used to estimate the fair value of the market-based awards granted utilized the following weighted-average assumptions: December 31, 2024 December 31, 2023 Underlying stock price at valuation date $ 25.04 $ 25.00 Expected volatility 63.9 % 50.0 % Risk-free interest rate 4.1 % 4.2 % Contractual term 8 years 8 years -76- There was no restricted stock activity for the year ended December 31, 2025. Restricted stock activity for the years ended December 31, 2024 and 2023 is set forth below: Number of Shares Weighted-Average Grant-Date Fair Value Nonvested at January 1, 2023 35,416 $ 38.42 Granted — — Vested ( 19,737 ) 37.77 Canceled — — Nonvested at December 31, 2023 15,679 39.24 Granted — — Vested ( 9,225 ) 37.95 Canceled ( 6,454 ) 41.07 Nonvested at December 31, 2024 — $ — As of December 31, 2025, the Company had no outstanding restricted stock awards and no unrecognized share-based compensation cost related to its restricted stock awards, as they had been fully expensed as of December 31, 2024. Restricted stock unit activity for the years ended December 31, 2025, 2024 and 2023 is set forth below: Number of Shares Weighted-Average Grant-Date Fair Value Outstanding at January 1, 2023 1,082,451 $ 51.63 Granted 689,368 27.21 Vested ( 173,356 ) 55.96 Canceled ( 37,906 ) 55.45 Outstanding at December 31, 2023 1,560,557 40.27 Granted 1,000,188 24.04 Vested ( 383,225 ) 37.58 Canceled ( 81,204 ) 34.41 Outstanding at December 31, 2024 2,096,316 33.24 Granted 728,490 22.60 Vested ( 553,636 ) 32.31 Canceled ( 68,665 ) 28.67 Outstanding at December 31, 2025 2,202,505 $ 30.10 The total fair value as of the respective vesting dates of restricted stock units that vested during the years ended December 31, 2025, 2024 and 2023 was $ 12.8 million, $ 8.8 million, and $ 5.1 million, respectively. As of December 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 2.6 years. The Company recognized $ 1.9 million, $ 1.9 million and $ 0.9 million of tax benefits related to the share-based compensation costs for the years ended December 31, 2025, 2024 and 2023, respectively, related to the 2021 Plan. Employee Stock Purchase Plan (“ESPP”) In October of 2021, Consensus established the Purchase Plan, which provides the issuance of a maximum of 1,000,000 shares of common stock. Under the Purchase Plan, eligible employees can have up to 15 % of their earnings withheld, up to certain maximums, to be used to purchase shares of Consensus’ common stock on certain plan-defined dates. The purchase price for each offering period is 85 % of the lesser of the fair market value of a share of common stock of the Company on the -77- first or last day of the offering period, with each offering period being six months. As of December 31, 2025, 751,973 shares were available to be issued under the Purchase Plan. The plan includes a provision which allows for the more favorable of two exercise prices, commonly referred to as a “look-back” feature. The purchase price discount and the look-back feature cause the Purchase Plan to be compensatory and therefore, the Company is required to recognize compensation expense. The compensation cost is recognized on a straight-line basis over the requisite service period, which is the same as the offering period of the Purchase Plan. The Company used the Black-Scholes option pricing model to calculate the estimated fair value of the purchase right issued under the Purchase Plan. The expected volatility is based on historical volatility of the Company’s common stock. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a term equal to the expected term of the option assumed at the date of grant. Estimated forfeiture rates were 5.30 %, 5.93 % and 7.69 % as of December 31, 2025, 2024 and 2023, respectively. During 2025, 2024 and 2023, 67,173 , 81,674 and 56,663 Consensus shares were purchased under the Purchase Plan for a weighted average purchase price of $ 19.45 , $ 16.33 and $ 24.45 per share, respectively. Cash received upon issuance of the Company’s common stock under the Purchase Plan was $ 1.3 million, $ 1.3 million and $ 1.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, there are 751,973 shares available under the Purchase Plan for future issuance. The compensation expense related to the Purchase Plan has been estimated utilizing the following assumptions: December 31, 2025 December 31, 2024 December 31, 2023 Risk-free interest rate 3.80 % 4.44 % 5.38 % Expected term (in years) 0.5 0.5 0.5 Dividend yield 0.00 % 0.00 % 0.00 % Expected volatility 50.47 % 49.53 % 53.57 % Weighted average volatility 50.47 % 49.53 % 53.57 % 14. Defined Contribution 401(k) Savings Plan Consensus has a 401(k) Savings Plan that qualifies under Section 401(k) of the Internal Revenue Code. Eligible U.S. employees may contribute a portion of their salary through payroll deductions, subject to certain limitations. The Company may make annual contributions at its sole discretion to these plans. For the years ended December 31, 2025, 2024 and 2023, the Company made contributions of $ 1.2 million, $ 1.1 million and $ 1.1 million, respectively, to this 401(k) Savings Plan. -78- 15. Earnings Per Share The components of basic and diluted earnings per share for the years ended December 31, 2025, 2024 and 2023 are as follows (in thousands, except share and per share data): Years Ended December 31, 2025 2024 2023 Numerator for basic and diluted net income per common share: Net income attributable to common shareholders $ 84,527 $ 89,435 $ 77,295 Net income available to participating securities (1) — ( 9 ) ( 59 ) Net income available to common shareholders from operations $ 84,527 $ 89,426 $ 77,236 Denominator: Weighted-average outstanding shares of common stock 19,250,895 19,286,579 19,582,460 Dilutive effect of: Equity incentive plans 196,232 94,227 13,970 Employee stock purchase plan 2,035 3,043 4,522 Common stock and common stock equivalents 19,449,162 19,383,849 19,600,952 Net income per share from operations: Basic $ 4.39 $ 4.64 $ 3.94 Diluted $ 4.35 $ 4.62 $ 3.94 (1) Represents unvested share-based payment awards that contain certain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid). For the years ended December 31, 2025, 2024 and 2023, 903,348 , 1,144,088 and 872,418 anti-dilutive shares were excluded from earnings per share calculation, respectively. -79- 16. Segment Information The following presents the segment information of Cloud Fax (in thousands): Years Ended December 31, 2025 2024 2023 Revenues $ 349,696 $ 350,382 $ 362,562 Less: Salary and benefits 84,428 83,361 80,503 Marketing 19,818 20,544 34,825 Phone operations 16,392 16,003 17,989 Outside services 15,222 15,801 20,166 Depreciation and amortization 18,733 20,516 17,421 Other segment items (1) 44,864 44,757 44,429 Segment operating profit 150,239 149,400 147,229 Interest expense ( 35,528 ) ( 33,979 ) ( 45,367 ) Interest income 2,515 2,546 3,715 Other (expense) income, net (2) ( 3,217 ) 4,278 ( 2,413 ) Segment earnings before income taxes $ 114,009 $ 122,245 $ 103,164 Income tax expense 29,482 32,810 25,869 Segment net income $ 84,527 $ 89,435 $ 77,295 (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. Geographic information about the U.S. and all other countries for the reporting periods is presented below. Such information attributes revenues based on markets where revenues are reported (in thousands): Years Ended December 31, 2025 2024 2023 Revenues: United States $ 274,334 $ 276,472 $ 286,829 Canada 56,006 53,449 52,216 Ireland 10,804 12,035 14,534 All other countries 8,552 8,426 8,983 Foreign countries 75,362 73,910 75,733 Total $ 349,696 $ 350,382 $ 362,562 -80- 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): December 31, 2025 December 31, 2024 Long-lived assets: United States $ 121,947 $ 106,244 Canada — 191 Ireland 18 155 All other countries 2 1 Foreign countries 20 347 Total $ 121,967 $ 106,591 17. Supplemental Cash Flows Information Cash paid for interest on outstanding debt during the years ended December 31, 2025, 2024 and 2023 was $ 37.3 million, $ 43.5 million and $ 51.4 million, respectively. The Company capitalized $ 3.9 million, $ 2.9 million and $ 2.6 million of interest expense within property and equipment, net on the Company’s Consolidated Balance Sheets during the years ended December 31, 2025, 2024 and 2023, respectively. The Company capitalized $ 2.6 million, $ 2.8 million and $ 1.9 million of share-based compensation cost within property and equipment, net on the Company’s Consolidated Balance Sheets during the years ended December 31, 2025, 2024 and 2023, respectively. Item 9. Changes In And Disagreements With Accountants On Accounting And Financial Disclosure None.