Consensus Cloud Solutions Aktie

Good day, ladies and gentlemen, and welcome to Consensus Q2 2026 Earnings Call. My name is Paul, and I will be the operator assisting you today. [Operator Instructions]

On this call from Consensus will be Scott Turicchi, CEO; Kip Killpack, Vice President of Finance; Johnny Hecker, CRO and Executive Vice President of Operations; and Adam Varon, CFO. I will now turn the call over to Kip Killpack, Vice President of Finance at Consensus. Thank you. You may begin.

Good afternoon, and welcome to the Consensus investor call to discuss our Q2 2026 financial results, other key information and our Q3 2026 quarterly guidance. Joining me today are Scott Turicchi, CEO; Johnny Hecker, CRO and EVP, Operations; and Adam Varon, CFO.

The earnings call will begin with Scott providing opening remarks. Johnny will give an update on operational progress since our Q1 2026 investor call, then Adam will provide Q2 2026 financial results and our Q3 2026 guidance range. After we finish our prepared remarks, we will conduct a Q&A session. At that time, the operator will instruct you on the procedures for asking a question.

Before we begin our prepared remarks, allow me to direct you to our forward-looking statements and risk factors on Slide 2 of our investor presentation. As you know, this call and the webcast will include forward-looking statements. Such statements may involve risks and uncertainties that would cause actual results to differ materially from the anticipated results. Some of these risks and uncertainties include, but are not limited to, the risk factors that we have disclosed in our regulatory filings, including our annual 10-K and quarterly 10-Q SEC filings.

Now let me turn the call over to Scott for his opening remarks.

Thank you, Kip. We had excellent financial results in Q2, continuing our acceleration of total revenue growth with meaningful contributions from each channel of revenue. In addition, this was the third consecutive quarter that we had year-over-year growth in the following key financial metrics: consolidated revenue, adjusted EBITDA, adjusted non-GAAP EPS and free cash flow.

Our revenue growth was driven by the continuing improvement in our corporate channel, which reinforces both the necessity and value proposition of our solutions. We exceeded our revenue objective with corporate revenue posting a 9.3% growth over Q2 2025 ahead of our forecast. This success was driven by record strong usage, increased revenue retention, new customer acquisition and contribution from our advanced products.

In addition, eFax Protect had record sign-ups, which is a continuing trend each quarter. In addition, at the VA, we continue to see more facilities come online, generating a record level of usage. All of these factors contributed to the stellar year-over-year growth for our corporate channel.

SoHo revenue was also ahead of our expectations and had the slowest rate of decline since we began the shift of our marketing dollars to corporate in late 2023. We continue to be judicious in adding to our cost structure, producing an adjusted EBITDA margin of 52.9% in Q2, comfortably within our range of 50% to 55%. Johnny will provide more detail in his portion of the presentation regarding the operational results for Q2.

Free cash flow was $25.5 million in the quarter, up approximately 25% from Q2 2025 due to excellent management of our receivables and lower interest expense than a year ago. We continue to expect our free cash flow in 2026 to approximate the $106 million of free cash flow in 2025. In addition, we were able to repurchase approximately $9.6 million of our stock during the quarter or approximately 300,000 shares.

Before turning the call over to Johnny, I want to share 2 strategic developments during the quarter. The first is the formation of our new Healthcare Strategy and Solutions group headed by Steve Tolle and the second is the tuck-in acquisition of doc.health. The Healthcare Strategy and Solutions group will own the health care product portfolio, go-to-market efforts and strategy primarily for our non-fax solutions. This group will build on the foundation we have built in health care through our eFax product.

By way of example, when our fax customers receive referrals, prior authorizations, orders or record requests via fax, they are receiving data in an unstructured format. And as a result, they need someone to process the document and enter the information into the EHR. We can seamlessly fill that gap with our variety of technologies and solutions. We have discussed our vision for Harmony before and how pieces of it are already in production. This group will be responsible for unifying our health care portfolio of solutions. The inbound image in the prior example will be transformed into structured data, which will be routed to the right people so they can act. These solutions will target specific segments and use cases in the health care ecosystem. This will allow our existing eFax customers to expand into higher-value services and for new clients to come to us for the intelligence rather than merely the transport.

The Healthcare Strategy and Solutions group will be led by Steve Tolle, as I mentioned, and he will have the role of Chief Healthcare Solutions Officer. He's a 35-year health care technology executive, who delivered the industry's first AI-based radiology product at IBM Watson Health. He also founded iConnect Network Services at Merge Healthcare before its acquisition by IBM, and he's held senior roles at Allscripts, OptumInsight and Pfizer Health Solutions. His domain is interoperability and AI applied to clinical workflow, which is precisely what this group is tasked to do. We will continue to hire into this business unit and its related areas over the balance of the year and into 2027 as we look for meaningful contributions from this group to our non-fax revenue in 2028 and beyond.

doc.health is a workflow platform developed by a practicing medical professional. It handles the clinically adjacent work that surrounds patient care but doesn't live cleanly inside an electronic health record, such as referral management, care coordination, patient follow-up and the administrative tasks that fall between visits. doc.health fits perfectly into our vision for the Harmony platform. Adam will provide more financial details regarding the transaction, but I'm excited to welcome the 14 employees of doc.health that have joined Consensus as well as its customer base and pipeline and key technologies.

I'll now turn the call over to Johnny, who will provide more operational details.

Thank you, Scott, and hello, everyone. As Scott mentioned, we are pleased to see continued progress across the business with consolidated revenue growing 4.1% year-over-year to $91.4 million. Over the last few quarters, I have talked extensively about the structural shift in our business toward high-value corporate revenue. In Q2, we saw this established pattern solidify. I want to emphasize the strength of secure cloud fax in this context. It is the primary driver of total dollar growth, which we expect to continue into the future. The migration to the cloud in regulated industries, especially in health care and the public sector, has only just begun. We're vigorously riding that wave by replacing legacy on-premise servers across these verticals.

Our volume growth is coming from 3 distinct reliable pillars. We're winning new customers, our existing customers' traffic is growing and we're capturing larger shares of wallet within those established accounts. Fax is what is driving our top line and the demand for it remains robust. Our Q2 results reflect the power of that core engine delivering another quarter of record performance. The corporate channel achieved a major milestone, crossing the $60 million mark for the very first time to deliver a record $60.5 million in total revenue for the quarter. That represents a 9.3% year-over-year increase and a solid 3% sequential increase from Q1, setting a new high watermark for this channel.

With Q2 coming in at 9.3% corporate growth, we're consistently operating in the high single digits, well on our path to reaching double digits. This record growth is supported by an expanding market presence ending the quarter with approximately 67,000 corporate customers, which is a 9.4% increase year-over-year.

Another key metric that truly demonstrates the health and durability of our corporate business is our net revenue retention rate. I am very pleased to share that our NRR continued its upward climb this quarter by more than 1%, reaching 103.1%, up from 102% in Q1. This is the ultimate validation of our strategy. It proves that once we land these enterprise accounts, we're successfully expanding our footprint, capturing more volume and embedding ourselves deeper into their daily operations.

To secure and grow those enterprise accounts, we're continuing to invest purposefully in our health care solutions strategy. As Scott mentioned in his opening remarks, this investment involves building out a dedicated group of subject matter experts. Their specific mandate is to build laser-focused solutions that create tangible value for our health care customers at the intelligence and workflow layer. Last quarter, I spoke quite a bit about the importance of workflow. I'm excited to report that we made great progress on that front in Q2, executing a strategic buy versus build decision through a small asset acquisition, whereby we acquired excellent caliber technology and talent. It brings an appealing customer base and strong partnerships that will directly benefit our go-to-market motions and accelerate our road map for flexible health care provider workflows. The decision fits perfectly into our broader product strategy.

The new eFax platform we continue to deploy provides excellent entry-level workflow capabilities right out of the box. By integrating these newly acquired advanced capabilities upmarket, we're building an ecosystem where we can provide AI-powered workflow layer seamlessly along the entire customer continuum from a small independent clinic all the way up to a major health system or payer. This strategy is the natural evolution of our platform, supporting our deep vertical focus by making our core fax products stickier and more deeply embedded in clinical workflows.

This continuous product evolution brings me to our SoHo channel and how it converges with our corporate SMB business. We countered the overlap of SoHo and corporate with a very high-performing upgrade program in the past. We launched a new corporate e-commerce offering, eFax Protect, in mid-2023, which has been a meaningful service and a highly relevant revenue contributor. As this captures that SMB demand so efficiently, it has allowed us to scale back our legacy upgrade program and reallocate those valuable resources upmarket to focus on our enterprise accounts.

Now we're taking the next step. With the general availability launch of our new eFax platform in Q2, we are offering a dedicated business plan effectively replacing eFax Protect for new customers. It provides an even smoother upgrade path and a much better self-service experience for our customers. I am happy to report a successful rollout resulting in a seamless transition on the new customer acquisition side.

We're not stopping there. In Q3, we're releasing enhanced mobile capabilities alongside an optional frictionless migration path from the legacy platform to the new eFax. We're already seeing strong early signs of adoption of these new features, particularly around the self-service flexibility the new platform provides. As we continue to deploy additional features, we expect the platform to grow steadily. Of course, a superior product experience is only half the equation. We also have to drive the right volume to the top of the funnel. On that front, I am pleased to report that our adoption to the new advertising and search environment continues to yield tangible results. Our ongoing search and AI search optimization efforts are driving improved higher-quality traffic directly into our customer acquisition channels.

Looking at the financial performance of the SoHo channel, revenue for Q2 was $30.9 million. The year-over-year decline narrowed to 4.7% this quarter, so we view the specific level of improvement as an exceptional result that may not recur at this rate in future periods, particularly compared to the 9.5% decline reported in Q1. I want to be extremely clear about how we are managing this channel. As I've mentioned in the past, metrics in SoHo have been deprioritized. We're managing the strategy strictly for cash optimization and contribution margin, not for absolute subscriber volume or ARPA. Because of this disciplined yield-first approach, we fully expect to see volatility in net adds, ARPA and total revenue in the SoHo channel in the coming months.

We will not chase low-margin volume simply to manage our subscriber count. We will accept subscriber volatility in SoHo as long as the channel continues to generate the highly efficient free cash flow required to fund our corporate growth initiatives.

Before I hand it over to Adam to walk through the detailed financials, I want to touch briefly on our public sector business because it serves as a massive proof point for our overall upmarket strategy. The Department of Veterans Affairs remains the absolute highlight here, serving as a true lighthouse customer for us and testament to our entrenched position in the federal space. In late Q1, the VA issued a policy that mandates ECFax powered by eFax as the secure fax solution within the VA. It is doing exactly what we believed it would do. It is driving a highly qualified lead pipeline across the public sector and adjacent organizations such as government contractors and suppliers alike.

This rare policy mandate solidifies our standing in the public sector and boost our credibility alongside our FedRAMP Class D, formerly FedRAMP High certification. In Q1, we discussed the VA's contribution to our 2026 performance. Based on our current execution and deployment pace, we are highly confident that the VA revenue contribution should be north of $9 million in 2026. This engagement demonstrates our capability to scale rapidly within complex, highly secure environments, and it serves as a powerful door opener for further public sector wins. When you look at the business in totality, the pieces are working together exactly as designed.

In summary, Q2 was a quarter of highly focused execution. We're expanding our most valuable enterprise relationships, evolving our product to solve real health care workflow problems and actively optimizing our SoHo cash engine to fuel that growth. I want to thank our entire team for their hard work and discipline this quarter as well as our customers and partners for their continued trust and collaboration.

And now I will hand the call over to Adam to walk through the financials in detail. Adam?

Thank you, Johnny, and good afternoon, everyone. Today, I will discuss our Q2 2026 results as well as guidance for Q3 2026 and full year 2026. We expect to file our 10-Q later today. Moving to Corporate results. During the second quarter of 2026, our Corporate business achieved a major milestone breaking the $60 million mark with record-breaking revenue of $60.5 million, representing a 9.3% increase of $5.2 million compared to the previous year. This performance continues our accelerating momentum when compared to 8.2% year-over-year revenue growth last quarter. This 9.3% year-over-year expansion represents the strongest year-over-year growth rate our Corporate business has realized since Q4 2022 and continues the corporate momentum to double-digit growth.

Our record Q2 2026 Corporate revenue delivered a trailing 12-month net retention rate of 103.1%. This reflects a sequential and year-over-year increase of approximately 110 basis points. Our Corporate customer base of approximately 67,000 was up 9.4% over the prior comparable period, with corporate ARPA increasing year-over-year by approximately 1% to $305.

Moving to SoHo. As mentioned previously and to be very clear, we manage our SoHo revenue channel as a strategic cash engine to fund our accelerating corporate business growth. Q2 2026 SoHo revenue of $30.9 million decreased by $1.5 million or 4.7% over the prior year, slowing from the Q1 2026 decline of 9.5%. We expect SoHo year-over-year revenues to decline in the range of 5% to 7% in each of the next 2 quarters.

Moving to consolidated results. As Scott stated, this is the third consecutive quarter that we have demonstrated year-over-year growth in all 4 of our key financial metrics being revenue, adjusted EBITDA, adjusted non-GAAP EPS and free cash flow. Consolidated revenue of $91.4 million represents an increase of $3.6 million or 4.1% over Q2 2025 and a $2.9 million or 3.3% increase sequentially. Additionally, this represents the fifth consecutive quarter of year-over-year consolidated revenue growth and the highest consolidated revenue growth since Q4 of 2022.

Q2 2026 adjusted EBITDA of $48.3 million increased $0.2 million or 0.5% year-over-year from $48.1 million in Q2 2025, delivering a solid 52.9% EBITDA margin and firmly within our target adjusted EBITDA margin range of 50% to 55%. Adjusted net income of $28.7 million is an increase of $0.2 million or 0.7% over the prior year. Adjusted EPS of $1.49 is favorable to the prior year by 2.1% or $0.03, driven by the items mentioned and a lower share count from equity repurchases. The Q2 2026 non-GAAP tax rate and share count were 20.3% and 90.2 million shares, respectively.

Moving on to capital allocation. Our free cash flow of $25.5 million was driven by Q2 2026 performance, which fueled a $5.1 million or 25% year-over-year increase. We expect full year free cash flow to be in line with 2025 free cash flows at $106 million. We ended Q2 2026 with approximately $99 million in cash, an increase of $6.6 million when compared to Q1 of 2026. Q2 2026 CapEx of $7.8 million was in line with prior year-end expectations.

With regard to equity repurchases, I am pleased to announce that our Board of Directors has authorized an amendment in our equity repurchase plan to approve an increase in the total authorization to $200 million. In Q2 2026, we bought 300,000 shares for approximately $9.6 million. Program to date, we have utilized approximately $82 million to repurchase 3 million shares, leaving approximately $118 million available under our amended $200 million Board authorized equity repurchase plan.

Our Q2 2026 total debt balance stands at approximately $558 million with $348 million of 6.5% high-yield notes, $146 million in our term loan and $64 million on our revolver. Our net debt-to-EBITDA ratio for Q2 2026 was 2.45x, and we held our total debt-to-EBITDA ratio steady sequentially just below 3x at 2.97x.

Moving to guidance. We are reaffirming our full year 2026 outlook as follows: Revenue, we anticipate between $350 million and $364 million, representing a $357 million midpoint. Adjusted EBITDA is expected to range from $182 million to $193 million with a midpoint of $187.5 million. Our adjusted EPS guidance remains between $5.55 and $5.95 or $5.75 at the midpoint. We estimate our full year income tax rate will be between 19.7% and 21.7% with 20.7% at the midpoint with an approximate 19.2 million share count.

Albeit immaterial, we have incorporated our recent doc.health acquisition into our full year guidance with the following impact: revenues approximately $1 million; EBITDA, negative $0.6 million; EPS, negative $0.02. Based on our first half 2026 performance, Q3 2026 guidance range and acquisition impact, we expect full year revenues to be between the midpoint and high end of the range. Full year adjusted EBITDA and adjusted EPS are expected to track slightly above the midpoint of guidance.

Moving to Q3 2026 guidance. Revenues between $89.2 million and $93.2 million with $91.2 million at the midpoint, adjusted EBITDA between $45 million and $48 million with $46.5 million at the midpoint; adjusted EPS of $1.34 to $1.44 with $1.39 at the midpoint. We estimate our Q3 2026 income tax rate between 19.7% and 21.7% with 20.7% at the midpoint and an approximate share count of 19.2 million shares.

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

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

This is Jenny Shen on for Dave. Congrats on the quarter. First, I just wanted to ask about the demand environment, hospital spending. This is one of the first quarters where we've really heard some of the hospitals start to express some of their volume challenges that they're going through. Have your conversations with hospitals changed at all? And are the way that you're pitching your products changing? For example, are you emphasizing the ROI aspect of it more? And along those lines, just the quarter looks very good with the top and bottom line beats. What was your decision to reaffirm the full year guide without raising it? Is that just added conservatism given the environment?

Johnny, do you want to take the first one on the market?

Yes. Thanks for the question. I think it's a very good pointed question, and you're basically almost answering it yourself in the way you asked it. So we're experiencing similar things that hospitals are a little bit -- they're slowing down. They're more diligent in their vendor selection. They're particularly focused on EHR integration and buying services through existing vendors. And we can say that we're lucky to be integrated in many EHR vendors. We have very strong partners in the space. So we can basically balance that out a little bit. But the direct communication is exactly as you have described, it's a little bit slower. They're a little bit more reluctant, and we're doing exactly what you said is we're emphasizing ROI with the solutions that we sell and that we position in these hospitals. So yes, very good question, and I think we're positioned really well to balance these kind of ups and downs as we've experienced them throughout the past few years in the health care sector.

And still getting important wins for us.

Yes, absolutely.

And then I'll take the second one, Jenny. We've reiterated this before, our philosophy on guidance, and I think Adam did a good job of giving you where we think we'll sit within the range. When we come out with the range at the beginning of the year, it is not our practice to -- even if we have beats in a quarter or 2 quarters to raise the ranges. But as Adam noted, based on the first 2 quarters, we think clearly we'll be above the midpoint of the revenues, in fact, between the midpoint and the high end. And we believe we will outperform the midpoint somewhat on both EBITDA and EPS, but neither one of those are sufficient enough to cause us to actually change the range.

[Operator Instructions] And the next question is coming from Ian Zaffino from Oppenheimer.

This is Isaac Sellhausen on for Ian. My question is just on the VA ECFax. You talked about the contribution for this year. Maybe any additional color you can provide on how many sites that includes and kind of runway for growth going forward? And then in addition to that, maybe highlight your expectations around adoption from other public sector customers and potential conversations with customers there.

Yes. Thanks. Really good questions. So on the VA sites, that's not a number that we publicly announce or publish. So I can give you roughly an estimate of where we think we are on the rollout. We're probably, I would say, somewhere between 65%, 75%, maybe 80% through the rollout within the VA. But that mandate that I indicated or that I spoke about in the -- on the call, I think it's opening up other opportunities for us in the broader VA ecosystem. So there's a lot of vendors that are providing services, government contractors that are processing data for the VA. And they are -- we're in active conversations with the first contractors there to get on to ECFax and use the same platform as the VA and as the VA is mandating internally.

So the other thing about the sites, maybe to comment why we're not publishing that. On the one hand, signing the VA, we're excited about talking -- about us talking about this. And secondly, it's not really the perfect indicator for the volume. It gives you a little bit of a direction, but there's no direct correlation between -- really between sites and volume. We've learned over the past couple of years that the volume differs from site to site, depending on what they do at those sites, how well they're integrated in the community, how many veterans they can actually serve on-site versus off-site, all those kind of things. So they're not direct correlative to the volume.

On the other question that you asked with other public sector opportunities, that is going well. We're expanding that team. We're building out that go-to-market motion. We're seeing more engagement with government contractors as well as with government agencies. And obviously, that mandate, the policy mandate from the VA is giving us increased credibility and some tailwind in that respect. But the VA is just such a large customer that the other wins that we're -- that we can actually put on the board in that space are not contributing at the rate that you would really see in that revenue yet. But we're -- that's a matter of time.

I think if you look at the VA time line, it took us years to actually close that deal and implement it. While we don't think it's going to take that long with other larger agencies, the government still operates at the pace that it does. So we expect the next couple of years to see more on that front. I don't know if you want to add anything.

Well, no, we have a question by e-mail that sort of dovetails with this. One, it was about the federal state local deal pipeline, which I think you in part addressed. And I think it's correlative because the question was what will it take to get corporate growth over 10%, obviously 9% and change. So it's knocking on the door. Part of it, I think, is this opportunity in the public sector over the next several quarters. I would also add that the continuation, particularly the usage trends we've seen in the core base and then outside of the public sector, as I mentioned in response to the previous question, we have some meaningful wins that may take them some time to ramp. But as we look into '27, all of those factors together, assuming there's no change in -- major change in the economy or things like that in terms of how the bases behave would be the elements that would push us into double-digit growth, at least as we see it right now.

I mean, obviously, as we're growing, it gets harder and harder, right? Yes, absolute number gets just bigger all the time. But I think we're -- like I said in the call, I think we're on that path. And as Scott stated, it's multiple things. And yes, the public sector plays a big role in getting us across that line.

And then we had 2 other questions by -- well, I don't know the live question, any follow-ups?

There were no other questions from the lines at this time, Scott. Please go ahead.

Okay. Then we have 2 others that come by e-mail. One is what is our thoughts on capital deployment in the back half of the year given the strong free cash flow generation. Glad you asked that question. Obviously, as Adam noted, we have been more aggressive purchasers of stock in the first half of the year than probably any 6-month period since we -- 5 years since we spun. We continue to view the stock as very attractive. We look at it on a free cash flow yield basis. We've given you sort of our estimate of the free cash flow for the year. So at the current stock price, the yield is like 16%, 17%. So I would anticipate, subject to volume limitations and just there's not a lot of activity in our stock that, that continues to be very attractive for us.

We have looked at buying some of the 6.5% in the open market. There's really no volume to speak of. So I don't think, as has been the case the last several quarters, we'll be able to retire any of the 6.5s at better than par. As a note, they do become callable in October of this year at 101.625%. We don't find that attractive in terms of the call price. October 15, 2027, though they are callable at par. So I think that given that, the 2 uses in the near term of our cash would be equity subject to price and availability.

And then we do have the option, particularly with our U.S. cash, which is an important distinction, to pay down some of the revolver. And while that's not extraordinarily attractive, there is a 2% to 2.5% arbitrage between what we earn on the money markets on that cash versus the cost of the debt, which is a SOFR-based loan. So basically, we can make that differential. So I think those are the 2 ways you'll see us deploy the cash through the balance of the year.

And then the final question by e-mail, there was a note, we didn't discuss it that we, on a GAAP basis, booked a $5.3 million gain on an investment in the quarter. You may recall that over the last probably 2.5, 3 years, we've talked about investments we've made in one of our partner companies. It's an AI company that is one of the third parties we use in conjunction with Clarity. They had a priced round during the second quarter. So that triggered a valuation. Up until that point, there were no discernible valuation points. So we kept it on the books at our invested cost.

We have a $10.5 million cash investment in the business, but it's valued close to $16 million, hence the $5.3 million gain. I would note, one, that is noncash. So that is an accounting gain. And two, you will see some additional disclosure in our Q that just highlights primarily what we already say in our K, which is, hey, these kind of investments are inherently risky. So there could be future valuation changes up or down based on either the company's performance and what future capital raises and what price it raises that. Go back to live questions.

Okay. We did have another question coming in from Isaac from Oppenheimer.

Just one quick follow-up. Just on the EBITDA margin in the quarter. I think you had previously talked about some hiring across the organization. Maybe you could just provide an update on where the company stands on that. And then I guess the guidance implies margins are towards the lower end of your guys target for the back half. So yes, just any clarification as far as hiring there.

Yes, 2 things. So you're correct. You may remember in the Q1 earnings call, I noted we had extraordinarily large margins, and I was disappointed in that because the hiring was slow relative to the way we budgeted. Now through a combination of organic hiring and the doc.health acquisition, we started to catch up in Q2. So we sit right now at about 550 employees versus sub-520 when we entered the year. So there's been a growth of 32 employees roughly from the beginning of the year until now. So yes, you're starting to see the comp expense ramp in Q2. Obviously, that will carry through in Q3 and Q4. The other thing I would note, and it's something we're looking at changing for next year, but we account for our accounting fees and professional fees as incurred. And so because of the -- we're a year-end company, the bulk of those fees occur in Q3 and Q4.

So on a sequential basis from Q2 to Q3 of this year, we will have an additional $1.3 million of costs that will be expensed in the quarter, primarily relating to the audit. Those fees will repeat again in Q4. So if you look historically at our margin profile, and you'll see Q1 and Q2 have superior margins to 3 and 4 in almost all instances because of that. Now as I say, we're working with our Chief Accounting Officer to estimate those fees in '27 and spread them ratably over the 4 quarters, so you don't have that influencing the margins.

So those are the 2 things that are the takeaways in terms of the hiring is catching up. That's a good thing as it relates to the future because the people we're hiring are primarily in the go-to-market product health care solutions group. So these are all people that directly or indirectly are revenue generators in the future, they're not G&A. But then we do have this anomaly of the way we've accounted for our year-end audit, which is heavy in 3 and 4.

And there are no other questions from the lines at this time. I'd now like to hand the call back to Scott Turicchi for closing remarks.

Great. Well, we appreciate you joining us for our Q2 update. I'd like to note before we sign off that we will be virtually at the Opco Conference on August 12. There are still some slots available. So if you're interested in a follow-up one-on-one, you can reach out to Oppenheimer and be happy to schedule some time for a meeting. The next time that we will be talking will be in early November to report on the Q3 results and maybe have a little insight into 2027. Thank you.

This does conclude today's conference. You may disconnect at this time, and have a wonderful day. Thank you for your participation.

Good day, ladies and gentlemen, and welcome to Consensus Q1 2026 Earnings Call. My name is Paul, and I will be the operator assisting you today.

[Operator Instructions] On this call from Consensus will be Scott Turicchi, CEO; Kipp Kilpak, Vice President of Finance; Johnny Hecker, CRO and Executive Vice President of Operations; and Adam Varon, CFO.

I will now turn the call over to Kipp Kilpak, Vice President of Finance at Consensus. Thank you. You may begin.

Good afternoon, and welcome to the Consensus investor call to discuss our Q1 2026 financial results, other key information and our Q2 2026 quarterly guidance.

Joining me today are Scott Turicchi, CEO; Johnny Hecker, CRO and EVP Operations; and Adam Varon, CFO.

The earnings call will begin with Scott providing opening remarks. Johnny will give an update on operational progress since our Q4 2024 investor call, then Adam will provide Q1 2026 financial results and our Q2 2026 guidance range. After we finish our prepared remarks, we will conduct a Q&A session. At that time, the operator will instruct you on the procedures for asking a question.

Before we begin our prepared remarks, allow me to direct you to our forward-looking statements and risk factors on Slide 2 of our investor presentation. As you know, this call and the webcast will include forward-looking statements. Such statements may involve risks and uncertainties that would cause actual results to differ materially from the anticipated results. Some of those risks and uncertainties include, but are not limited to, the risk factors that we have disclosed in our regulatory filings, including our annual 10-K and quarterly 10-Q SEC filings.

Now let me turn the call over to Scott for his opening remarks.

Thank you, Kipp. I'd also like to welcome Adam on his first earnings call as our Chief Financial Officer. I'm very proud of the momentum that our team carried into 2026 and the results that we posted to begin the fiscal year.

As I stated last quarter, the next phase of Consensus has begun. While we did post three consecutive quarters last year of revenue growth, it was minimal. However, in Q1 2026, we exceeded our expectations in both our Corporate and SoHo channels of revenue and had a 1.5% consolidated revenue growth compared to Q1 of 2025.

In fact, this is now the second consecutive quarter that we have demonstrated year-over-year growth in all four of our key financial metrics: revenue, adjusted EBITDA, non-GAAP EPS and free cash flow. Before turning the call over to Johnny, who will provide you with more detail regarding the quarter, I would like to note a few items.

Our Q1 financial results were driven by an 8.2% revenue growth in our Corporate channel, driven by record usage as well as a continuation of customer acquisition across our continuum. This is the highest growth rate for our Corporate channel since Q4 of 2022.

The SoHo channel also beat our forecast as we saw improvement in customer acquisition during the quarter and had a significant improvement in the year-over-year rate of decline experienced in Q4 2025. Our adjusted EBITDA margins remained consistent with Q1 of 2025 and above the midpoint of our range of 50% to 55%.

This is due in part to the timing of hiring relative to our budget expectations. We plan to close the hiring gap throughout the year and would expect our adjusted EBITDA margins to track more to the midpoint of our range for the remainder of the year.

We started the year with a strong Q1 free cash flow of $38.5 million, which allowed us to repurchase approximately 600,000 shares of our stock during the quarter while maintaining cash balances such that we can fully borrow under our credit facility and term loan. We do not have any substantial maturities on our debt until late 2028. However, we are monitoring both the bank and debt markets to see if an opportunistic refinancing can be achieved before late 2027.

We expect free cash flow to approximate the record level of 2025 and look to continue to be buyers of our stock, given the free cash flow yield on our stock is approximately 3x that of our debt costs. I'll now turn the call over to Johnny.

Thank you, Scott, and hello, everyone. Last year, I described 2025 as our foundational year, a period of deliberate realignment to favor high-value, high durability Corporate revenue. Today, I want to share how that transformation is accelerating in a way that confirms the core of our platform thesis. In times of uncertainty and a tight macroeconomic environment, particularly within Healthcare, we're actively intensifying our go-to-market execution, focusing relentlessly on intent-driven customer acquisition to increase deal volume.

I am pleased that we're seeing this strategy come to fruition. In Q1, our teams participated in several of the most important industry conferences in our sector, and the results validated this targeted approach. The record lead volume and intensity of interest we captured at these events confirmed that the ongoing migration to the cloud represents a structural opportunity for Consensus.

Our eFax brand has proven to be a highly effective magnet in this space. It is the strategic entry point that allows us to lead the conversation around digital transformation. For these organizations, migrating to our platform is no longer a discretionary tech stack update. It has become a mandatory operational upgrade. Our Q1 results substantiate once more that our center of gravity has shifted.

The Corporate channel delivered record revenue this quarter, generating $58.7 million. I'm excited to report an 8.2% year-over-year growth rate over the $54.3 million of Corporate revenue in Q1 of 2025, a significant acceleration from the 7.3% we reported last quarter. This sustained increase in our momentum is the primary takeaway here as it demonstrates the compounding strength of our strategy and keeps us firmly on path towards double-digit Corporate growth.

While we also saw a solid 3.4% sequential increase coming out of a record fourth quarter, it is the consistent year-over-year expansion that validates our thesis. This trajectory is driven by the continued execution of our barbell strategy reflected in our Corporate base of approximately 65,000 customers, which has grown roughly 7% year-over-year.

While we have maintained this level since Q3 of 2025 as we prioritize high-grading our portfolio towards larger enterprise accounts, the annual growth proves the scalability of our acquisition power. More importantly, that upmarket momentum is directly feeding our expansion economics.

Our Net Revenue Retention rate exceeded 102% this quarter, a 76 basis point improvement over Q4 of 2025 and the highest NRR rate since we reached the target of 100% in Q4 of 2024. It proves our customers are finding more value in our solutions. They're adding more volume and adopting our solutions more broadly as they integrate deeply into our ecosystem.

This lift results from a powerful utilization tailwind as our largest enterprise clients route more uninterrupted data flows through our network with ever-increasing volumes that consistently exceed our internal targets. As evidenced by our native integration into major EHR vendor platforms, eFax has developed into an operational dependency within the clinical workflow.

This shift underscores our move to an embedded infrastructure layer. We're seeing a similar trend in the public sector where our FedRAMP high certified ECFax solution continues to gain traction. Our Q1 results give us confidence that we can meet or exceed the $9 million VA contribution to 2026 revenue we projected last quarter as that engagement continues to scale and integrate into their daily operations.

Capturing volume is the foundation. The next phase of our growth is about value extraction, moving from being a transport layer to being an intelligence layer. With that in mind, last month, we soft launched a rearchitected eFax platform for our Corporate and SoHo e-commerce offerings. This launch, which brings the identity of our recent brand refresh directly into the product experience, serves as our new workflow and AI monetization framework.

It is an infrastructure upgrade specifically engineered to remove friction from the customer journey and provide a seamless on-ramp for our advanced technologies. As part of a continuous deployment, this architecture will eventually enable our clients to layer on eFax Clarity AI capabilities at scale, moving at the pace of their own digital transformation.

In our last call, I emphasized that we are no longer just selling a connection. We're tackling a labor problem. This product evolution is how we deliver on that promise. Our customers, particularly in Healthcare, are facing severe staffing constraints and margin pressure. They can no longer afford to have high-value staff performing manual data entry.

By combining our platform with Clarity, we're extracting actionable data from unstructured documents and routing it directly into the EHRs and back-office systems. These automated workflows give our customers the time back, reduce manual errors and accelerate the revenue cycles. While last month's launch is just the beginning, we expect this infrastructure to improve deal conversion rates and serve as a lever to our path to delivering sustained double-digit growth in our Corporate channel.

We are prioritizing these workflow and solution propositions because they resonate deeply with our prospects, helping us capture new market share while simultaneously locking in our existing base for the long term.

Moving to SoHo. As we have consistently stated, we manage that channel as a Strategic Cash Engine. We're not managing SoHo for subscriber longevity. Our priority remains yield, efficiency and maximizing the contribution margin that funds our high-growth Corporate expansion. SoHo revenue for the quarter was $29.7 million, representing a managed 9.5% year-over-year decline.

I am happy to report that this is a significant improvement over the minus 11.1% we experienced last quarter in line with the rate of decline we experienced in Q3 of 2025.

In summary, Q1 has proven that our go-to-market strategy is functioning exactly as intended. Our SoHo business is providing disciplined cash flow, while our Corporate channel is delivering record results with growth accelerating past 8%.

None of this is possible without the dedication of our global team, who executed exceptionally well and with high energy this quarter. I also want to thank our partners and customers for their continued trust and collaboration as we capture these high-stakes operational opportunities together.

With that, I'll hand the call over to Adam to provide the financial details. Adam?

Thank you, Johnny, and good afternoon, everyone. We will discuss our Q1 2026 results, guidance for 2026 as well as guidance for Q2 2026. We expect to file our 10-Q later today.

Moving to Corporate results. During the first quarter of 2026, our Corporate business achieved record-breaking revenue of $58.7 million, representing an 8.2% increase or $4.4 million compared to the previous year. This performance indicates our accelerating momentum when compared to the 7.3% revenue growth last quarter.

Notably, this 8.2% year-over-year expansion also represents the strongest year-over-year growth rate our Corporate business has realized since Q4 of 2022. With our record Corporate revenue in Q1 2026, we achieved a trailing 12-month Net Revenue Retention rate of 102%. This reflects a sequential rise of 76 basis points and an approximate 100 basis point gain compared to the same period last year.

Our Corporate customer base of approximately 65,000 customers, was up 7% over the prior comparable period. Propelled by higher volumes, specifically within the upper tier of our customer continuum, Corporate ARPA for Q1 2026 rose sequentially by approximately 3% to $306 and was roughly flat year-over-year.

Moving to SoHo results. As Johnny mentioned, we continue to manage the SoHo channel as a Strategic Cash Engine, focusing on customer acquisition yield and contribution margin to generate cash flow that funds our accelerating Corporate business growth. SoHo Q1 2026 revenue of $29.7 million decreased $3.1 million or 9.5% over the prior year, slowing from the Q4 2025 decline of 11.1%.

Moving to consolidated results. As Scott stated, this is the second consecutive quarter that we have demonstrated year-over-year growth in all four of our key financial metrics. number one, revenue; two, adjusted EBITDA; three, non-GAAP EPS; and four, free cash flow.

Consolidated revenue of $88.5 million represents an increase of $1.3 million or 1.5% over Q1 2025 and $1.4 million or 1.6% increase sequentially. Additionally, this represents the fourth consecutive quarter of year-over-year consolidated revenue growth.

Adjusted EBITDA of $47.9 million versus $47.3 million in Q1 2025 delivered a consistent year-over-year EBITDA margin of 54.1%, driven by revenue flow-through, partially offset by marketing spend and personnel-related expenses.

Adjusted net income of $28.9 million is an increase of $2 million or 7.3% over the prior year, primarily driven by the items mentioned plus favorable net interest expense on lower debt balances.

Adjusted EPS of $1.52 is favorable to the prior year by 10.9% or $0.15 driven by the items mentioned above and a lower share count from equity repurchases. The Q1 2026 non-GAAP tax rate and share count were 20.5% and approximately 19 million shares, respectively.

Moving on to capital allocation. Free cash flow was a robust $38.5 million driven by Q1 2026 performance which fueled a 14% or $4.7 million year-over-year increase. We ended Q1 2026 with $92.3 million in cash, an increase of $17.6 million when compared to Q4 2025.

Q1 2026 CapEx of $7.4 million was in line with the prior year and expectations. On equity repurchases program to date, we have utilized $72 million to repurchase 2.7 million shares, leaving $28 million available under our $100 million Board-authorized equity repurchase plan. This includes our successful Q1 2026 activity where we bought back 600,000 shares for approximately $17 million.

Our Q1 2026 total debt balance stands at approximately $560 million, comprised of the following components: $348 million of 6.5% high-yield notes, $148 million of delayed draw term loan and $64 million on our revolver. Our net debt-to-EBITDA ratio for Q1 2026 was 2.5x, and we held our total debt-to-EBITDA ratio steady at the Q4 2025 level of 3x.

Moving to 2026 guidance. We are reaffirming our full year 2026 outlook as follows: for revenue, we anticipate between $350 million and $364 million, representing a $357 million midpoint.

Adjusted EBITDA is expected to range from $182 million to $193 million with a midpoint of $187.5 million.

Our adjusted EPS guidance remains between $5.55 and $5.95 or $5.75 at the midpoint.

Finally, we estimate our full year income tax rate will be between 19.7% and 21.7% with 20.7% at the midpoint with approximately 19 million shares.

Moving to Q2 2026 quarterly guidance.

We are issuing the following guidance for the quarter. Total revenue is projected to be in the range of $87.9 million to $91.9 million, representing a midpoint of $89.9 million. Adjusted EBITDA is expected to fall between $46.4 million and $49.6 million with $48 million at the midpoint. Adjusted EPS is anticipated to range from $1.43 to $1.53 or $1.48 at the midpoint.

For Q2 2026, our estimated income tax rate is 19.7% to 21.7% with 20.7% at the midpoint with an expected share count of approximately 19 million. That concludes our formal comments. Now I'd like to turn the call over to the operator for Q&A.

[Operator Instructions] Thank you, and the first question today is coming from David Larsen from BTIG.

This is Jenny Shen on for Dave. Congrats on the quarter. Just looking at the reaffirmed full year 2026 guide, was that not raised mainly due to conservatism? And what do you expect revenue and earnings growth, the cadence to be for the rest of the year?

So, we set the range of guidance just a quarter ago. And obviously, though there's a width on it on both revenues, EBITDA and adjusted EPS. Certainly, if you look at the first quarter results, where we've had the most positive movement from the mean would be in the adjusted non-GAAP EPS. So right now, we see even if you migrate towards the upper end of the range, that's still being sufficient. We only change our range of guidance, whether it's for all the metrics or a single metric when we are highly confident we will be exceeding one or more of them.

So, it's too early in the year to do that. So, it's neither a conservatism. It's really more a philosophical principle on which we construct our guidance on an annual basis. I think you get a sense in terms of the second question, though, given that we do give quarterly guidance, what you see in Q2.

But the one thing I would note and caution people on, as I said in my opening remarks, is one of the benefits that flowed through in the first quarter was not only more revenue, which is clearly a good thing. And I'd say most of that incremental revenue relative to our expectations went to the bottom line, but we did not hire as much in Q1 as we had budgeted. And I do anticipate that, that will pick up as it already has in the early stages of Q2 throughout the end of the year.

In fact, I want it to pick up. So while we had 54% EBITDA margins in Q1, I do not expect that to repeat, and I do not want it to repeat; because I want to see us fill out the hiring that we have, which is primarily in the go-to-market operations, which is Johnny's area, and in the product area and the engineering, which is Jeff Sullivan, our CTO.

So, if we are successful in our hiring, a lot of those people will not be immediately contributing revenue within the calendar year, they're really more setting up for 2027. So that's the basis on which we constructed our reforecast for the balance of the year, also played into account Q2 guidance. And then we'll take a much deeper dive as we hit the midway point once we report Q2 results for the back half of the year.

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

Okay. All right. I was just checking to see if there's any questions that came by e-mail, give us a second, Paul.

Okay. All right. Well, we know it's a crowded day for reporting. So, we appreciate those that have been able to listen live. And if not, hopefully, you'll listen to the rebroadcast of it that will be available on our website. Look for some releases at some various conferences that we're likely to be at over the coming weeks.

Obviously, if you do have questions, you know how to reach either myself or Adam or Laura, and we'd be happy to address those. also set up one-on-ones even outside of any formal conference. And then without any further news, we would be planning to release Q2 results sometime in the first probably 10 days of August.

So, look for that press release as we get closer to that actual release date. And then as Adam mentioned, we're looking to file the 10-Q for Q1 this evening, so it should be available, if not tonight, by tomorrow morning. Thank you.

Thank you. This does conclude today's conference. You may disconnect your lines at this time and have a wonderful day. Thank you for your participation.

Good day, ladies and gentlemen, and welcome to Consensus Q4 2025 Earnings Call. My name is Paul, and I will be the operator assisting you today. [Operator Instructions] On this call from Consensus will be Scott Turicchi, CEO; and Jim Malone, CFO; Johnny Hecker, CRO and Executive Vice President of Operations; and Adam Varon, Senior Vice President of Finance. I will now turn the call over to Adam Varon. Senior Vice President of Finance at Consensus. Thank you. You may begin.

Good morning, and welcome to the consensus investor call to discuss our Q4 and year-end 2025 financial results. Other key information and our 2026 full year and Q1 2026 guidance. Joining me today are Scott Turicchi, CEO; and Johnny Hecker, CRO and EVP of Operations; and Jim Malone, CFO. The earnings call will begin with Scott providing opening remarks. Johnny will give an update on operational progress since our Q3 2025 investor call, and then Jim will discuss Q4 2025 and full year 2025 financial results, then provide our full year 2026 and Q1 2026 guidance range.

After we finish our prepared remarks, we will conduct a Q&A session. At that time, the operator will instruct you on the procedures for asking a question. Before we begin our prepared remarks, allow me to direct you to our forward-looking statements and risk factors on Slide 2 and of our investor presentation.

As you know, this call and the webcast will include forward-looking statements. Such statements may involve risks and uncertainties that would cause actual results to differ materially from the anticipated results. Some of those risks and uncertainties include, but are not limited to, the risk factors that we have disclosed in our regulatory filings, including our annual 10-K and quarterly 10-Q SEC filings. Now let me turn the call over to Scott for his opening remarks. .

Thank you, Adam. I'm extremely pleased with both the fourth quarter and full year 2025 results. I believe that we've closed the first phase of Consensus' history and look forward to embarking on the next phase which begins now. For the time of the spin 4-plus years ago, we had $805 million of debt with a leverage of 4x gross debt to adjusted EBITDA, a majority SOHO revenue business, tech debt core product offerings that were cloud fax only and a thinly staffed company with 450 people.

And all of this is before inflation spiked in 2022, adding an additional operational headwind. Material progress has been made on all fronts. Through the hard work of our employees, much of it a grind, consensus has generated more than $800 million of adjusted EBITDA since spin, resulting in free cash flow of approximately $375 million after investing approximately $150 million in the business.

This went to retiring tech debt, enhancing our core fax solutions as well as adding other solutions benefiting primarily the health care sector. The free cash flow has been utilized primarily for the retirement of $243 million of debt, bringing us down to $562 million of debt at year-end and hitting our initial target leverage of 3x total debt to adjusted EBITDA.

In addition, given the attractive valuation of our stock throughout most of the past 4 years, we have been able to repurchase $57 million worth of our stock or approximately 2.2 million shares, which represents about 10% of the shares outstanding at spin. We have added about 75 employees to our team over this time frame, and we have shifted the business to its corporate focus.

So I want to extend a big thank you to all of our employees who have been part of this transformation. Before turning the call over to Johnny, who will provide you with much detail regarding both the quarter and the full fiscal year, I would like to note a few items.

Historically, Q4 is always a more challenging quarter to forecast given holiday closures, vacations and unpredictable weather. I'm highly encouraged that we beat our top line objectives for the quarter saw sequential growth in revenue from Q3 despite having 1.6 fewer business days in Q4 2025 and saw the corporate channel exit with a 7.3% growth rate, positioning us favorably for 2026.

This is the third consecutive quarter of total revenue growth for the company. The SoHo channel also beat our forecast as we saw improvement in customer acquisition in the latter part of Q4, which is continuing thus far in 2026. We remain focused on our cost structure while adding employees into our product and go-to-market operations during the quarter.

We produced positive free cash flow in our most challenging quarter. and, more importantly, hit a record $106 million of free cash flow for the year, up 20% from 2024 on flat revenues. We are well positioned for the next phase of Consensus. Johnny and Jim will provide details regarding our guidance for 2026, but I will make a few observations.

We see a continuation of the trend for accelerating corporate growth, approximately 9% at the midpoint of our guidance and a similar rate of decline in SoHo as in 2025, approximately a 10% decline. This combination will have us grow approximately 2% at the midpoint of our range for the year in revenues.

From an operational perspective, we expect a modest flow-through of the incremental revenue to adjusted EBITDA as we see increases in our cost structure roughly in line with inflation and have additional people investments that we'll make in the business.

Primarily, again, in product development and go-to-market operations. We do not have any substantial maturity in our debt until 2028. We will monitor the debt markets to see if an opportunistic refinancing can be achieved, but more likely will occur sometime in 2027.

We expect free cash flow to approximate the record level of 2025 and look to be more aggressive in our share repurchase program this year, given the free cash flow yield on our stock is more than 3x that of our debt costs.

I will now turn the call over to Johnny.

Thank you, Scott, and hello, everyone. I want to frame our operational update today, not by starting with a list of numbers but by highlighting the fundamental transformation of our business composition. We continue to see a decisive shift in how our customers utilize our network.

This has been going on for a few quarters and has become an established trajectory, a significant acceleration in the utilization of our services within the corporate channel showing a year-over-year increase in usage per business day that has remained in the double digits for 5 consecutive quarters. For several quarters now, we have witnessed large health care organizations shift to the cloud.

This is coupled with the desire to eliminate manual data entry and to improve workflows in order to increase productivity, reduce costs and accelerate revenue. It is transforming our network from a passive transport layer into an operational contributor, driving notable search and usage per business day.

At the same time, we benefit from our largest customers and channel partners organic growth. As they grow, we grow. This is not accidental. It is the result of our deliberate strategy to build a highly durable recurring revenue platform.

Operationally, we are seeing the continuation of a powerful trend corporate revenue solidifying its position as a substantial majority of our total top line. To put this in perspective, in Q4 2021, our revenue split was roughly 51% SoHo and 49% corporate. However, by 2024, our corporate revenue represented 60%.

In 2025, that figure rose to 64%. And based on our current path, we project it will reach 68% in 2026. This confirms that we have successfully shifted our center of gravity to our highest value asset. The fourth quarter served as a powerful evidence of this strategy. We delivered a record $56.8 million in corporate revenue representing a 7.3% year-over-year increase compared to $52.9 million in Q4 2024.

Sequentially, we drove a notable increase from $56.3 million in the prior quarter despite having approximately 1.6 less business days in Q4. This performance is significant. It breaks the historical seasonal pattern of sequential decline in Q4 and marks our best corporate growth rate since Q4 of 2022.

For the full fiscal year, we delivered $222.7 million in corporate channel revenue, a 6.5% growth rate that validates our acceleration path and puts us ahead of the midpoint of the guidance we provided in February of 2025.

We drove this growth through 2 primary operational engines, health care and the public sector. In health care, we are successfully executing on our strategy to expand our trusted network, which serves as the critical foundation for our platformization journey. By entrenching our position as the secure transfered layer for sensitive data we are creating the necessary infrastructure to layer on our advanced interoperability tools, effectively deepening our relationship and future wallet share with existing customers.

We are already seeing the strategic logic validated by our deal quality. Group serving a shift where health care clients are moving beyond simple connectivity and beginning to bundle our eFax Clarity AI solution to solve specific workflow bottlenecks.

We are no longer just selling a connection, we're tackling a labor problem. This shift in customer conversation from price per page to value for workflow is the leading indicator that our platform thesis is taking hold. In the public sector, ECFax, our FedRAMP high certified effect offering for the government is experiencing high demand across the public sector and nongovernment organizations of all sizes mandated to migrate to secure FedRAMP solutions.

Such as contractors supporting the government in claims processing waste, fraud and abuse prevention or to operate government facilities. This surge in demand is transiting directly into a robust and growing pipeline and we're actively investing in the expansion of our dedicated team and go-to-market capabilities to capture this opportunity. The department of federate fairs to VA continues to be a major source of growth and a crucial reference account.

It demonstrates our capability to operate securely and at scale, meeting the highest standards. Furthermore, the VA exceeded our 2025 expectations and is projected to contribute in excess of $9 million this year.

And additionally, our state, local and education, the SLED business has established itself as a second relevant pillar growing significantly faster than the commercial space. I'm happy to report that our corporate revenue retention rate stands at 101.3%, continuing our trend of operating well above the 100% target.

This compares to 100.5% in Q4 of last year. Our total corporate customer base is approximately 65,000, representing an 11.3% increase year-over-year. To ensure both stability and reach we're executing a distinct barbell strategy where the quality of this revenue is as important as the quantity.

On the enterprise side, the average revenue per account ARPA of our non-eFax Protect cohort has now increased for 4 consecutive quarters and is well above $300 per month, while the account churn for the same cohort is the lowest in 7 quarters.

This confirms that our largest customers are finding more value in our platform and expanding their usage. On the volume side, we added approximately 7,000 new paid accounts in the quarter on a gross basis. This was driven significantly by our eFax protect e-commerce engine.

We successfully navigated the search environment shift and e-commerce headwinds discussed last quarter, stabilizing our subscriber funnel. Turning to our SoHo business. Our operational focus remains on efficiency and maximizing contribution margin. Revenue for the quarter was $30.3 million, a decrease of 11.1% year-over-year slightly ahead of our expectations outlined in our Q3 call.

For the full fiscal year, we delivered $127 million in SoHo channel revenue, a 10% decline versus 2024. We effectively managed our subscriber base to approximately 638,000 with ARPA holding steady at $15.55.

Crucially, we're actively navigating the shift to the search environment that created the headwinds we forecasted. While the first half of Q4 presented challenges, our operational turnaround plan yielded measurable success by the end of the quarter.

Despite the traditionally soft holiday season, we sold our sign-up metrics improve, and we're continuing to see those improvements into Q1 of 2026. Most importantly, we have successfully reinvented and are managing this channel as the strategic cash engine.

This managed decline in revenue is a deliberate choice, acceptable only when offset by increased efficiency or when explicitly funding our corporate channel strategy. This discipline ensures we're maximizing the long-term value of this asset to fuel our broader transformation.

Let me close my remarks by looking ahead. We view 2025 as the foundational investment year that set the stage for 2026 and beyond. As a result of our go-to-market realignment, we are maturing as an organization, moving upmarket and deepening our footprint in our key verticals.

You will see our revenue mix continue to shift towards corporate and our advanced product suite. While Cloud fax remains a robust growth driver, 2025 showed the first real success with our AI-based eFax clarity offering. Our total revenue contribution is still early. The unit economic multiplier is key for our future growth.

We're excited about the green shoots. Revenue contribution and expanding installed base, solid exit run rate into 2026, increased number of POCs and a clear go-to-market focus for 2026.

While we don't and won't publish line item product revenues, I'm excited to share that we have a clear line of sight to multimillion dollar revenue contribution from eFax clarity in 2026. The public sector and VA wins are excellent indicators of our ability to grow outside our traditional comfort zone, and we are on track to prove it again with our advanced product suite.

We remain laser-focused on our key targets. Returning to total growth, setting us up for double-digit growth in the corporate channel and expanding our advanced product footprint. Finally, I want to express my sincere gratitude to our entire team for the execution during this transformative year and to our customers and partners for their continued trust and collaboration.

With that, I will hand the call over to our CFO, Jim Malone, to provide the detailed financial update and our 2026 guidance. Jim?

Thank you, Johnny, and good morning, everyone. In our press release and on the earnings call today. We are discussing Q4 2025 and full year 2025 results, plus 2026 full year and quarter 1 guidance. We expect to file our 10-K within the next few business days.

Starting with Q4 2025 corporate results, Q4 2025 had record revenue of $56.8 million increased $3.9 million or 7.3% versus prior year, performing better than expectations. It was our highest quarterly year-over-year growth rate in 2025. And a broker a historical trend of Q4 sequential revenue declines. It also represents the best year-over-year corporate growth rate since Q4 2022.

Revenue delivered a trailing 12-month revenue retention rate of 101.3%, an improvement of approximately 80 basis points from the prior comparable period. Our corporate customer base of approximately 65,000 was up 11.3% over the prior comparable period. Q4 2025 corporate offer of approximately $290, a decrease of approximately $13 from the prior comparable period and approximately $3 sequentially was in line with our expectations.

As Johnny mentioned, corporate ARPU, excluding eFax protect has increased for 4 consecutive quarters and is materially greater than $300 per month. Moving to full year corporate results. full year corporate revenue of $222.7 million is up $13.6 million or 6.5% versus the prior year and better than the midpoint of our initial 2025 guidance in February 2025.

Our corporate revenue has grown at a 7% CAGR from approximately $170 million in 2021 to approximately $223 million in 2025. Full year corporate [indiscernible] ended at a solid $300 compared to $310 in the prior year comparable period and in line with the last several quarters' range, of $290 to $316. Moving to Q4, SoHo results.

Revenue of $30.3 million is a decrease of $3.8 million or 11.1% over the prior year and slightly ahead of expectations, considering a 13,000 year-over-year decline in paid ads. As Johnny mentioned, while experiencing headwinds in the first half of Q4 due to shifts in the search environment, our operational plans have seen measured success with sign-up metrics improving into Q1 2026.

[indiscernible] $15.55 a is flat year-over-year. Churn of 3.5% is down sequentially and year-over-year by approximately 21 basis points and 8 basis points, respectively.

Full year of SoHo results, as a reminder, our SoHo revenue decline is a deliberate choice that we made several quarters ago. as we pivoted this revenue channel to a strategic cash engine. Full year SoHo revenue, $127 million is down.3 million or approximately 10% versus prior year, which is in line with our original 2025 guidance range in February 2022 and of a negative 11.5% to a negative 7.5%. SoHo [indiscernible] of $15.58 is up from $15.39 and with full year customer churn of 3.64% versus 3.56% in the prior period.

Moving to Q4 consolidated results. Revenue of $87.1 million is the third consecutive quarter of consolidated year-over-year growth an increase of $0.1 million or 0.1% over Q4 2024. Adjusted EBITDA of $45.2 million versus $44.4 million in Q4 2024, delivered a solid 51.9% EBITDA margin and performed ahead of expectations.

Adjusted net income of $27.3 million is an increase of $3.1 million or 12.7% over the prior year. Primarily driven by adjusted EBITDA, net interest expense and depreciation and amortization. Adjusted EPS of $1.41, an is favorable to the prior year by 13.7% or $0.17, driven by the items I mentioned.

The Q4 2025 non-cap tax rate and share count were approximately 19.5% and approximately 19.4 million shares. Moving to 2025 full year consolidated results. Full year 2025 revenue of $349.7 million is essentially flat year-over-year near our midpoint of the 2025 full year guidance range.

Full year 2025 adjusted EBITDA of $186.9 million delivers a solid 52.4% adjusted EBITDA margin above our original 2025 full year guidance range. Adjusted net income of $109.4 million was $3.8 million or 3.6% favorable versus the prior year comparable period, driven primarily by operational performance and efficient capital management.

Adjusted EPS grew to $5.62, up 3.1% or $0.17 from the prior year primarily due to the items I mentioned.

This result exceeded our initial high-end guidance range and was close to the high end of the revised guidance range provided on our Q2 call. The 2025 non-cap tax rate and share count was approximately 21% and approximately 19.4 million shares. Moving to our cash -- our capital allocation strategy.

Free cash flow, we ended 2025 with $106 million in free cash flow, an increase of $18 million or approximately 20% versus 2024, and on strong cash flow from operating initiatives. CapEx ended at $30 million, a decrease of approximately $3 million or 10% versus the prior year.

Debt and equity. Q4 2025, we fully retired our 6% bonds to October 2026 at par, our current debt balance of $562 million consists of 6.5% notes of $348 million.

Delayed or term loan, $15 million revolver $64 million. At December 31, 2025, and we met our total debt-to-EBITDA ratio of 3x, but a net debt-to-EBITDA of 2.6x. Equity. Q4 2025, we repurchased 344,000 shares for $8 million.

For year 2025, we repurchased 1 million shares for $23 million. And program to date, we have repurchased approximately 2.2 million shares for $57 million. Cash and cash equivalents, we ended fiscal 2025 with $75 million in cash, which is sufficient to fund our operations and capital allocation strategies.

Now on to 2026 guidance. Our full year guidance as follows: revenue between $350 million and $364 million were $357 million at the midpoint. Adjusted EBITDA between $182 million and $193 million with $187.5 million at the midpoint. Adjusted EBIT -- adjusted EPS between $5.55 to $5.95 and with $5.75 at the midpoint. Full year estimated share count and income tax rate are approximately 19.1 million shares and 19.7% to 21.7% or 20.7% at the midpoint for our tax rate.

For our fiscal quarter of '26 6, we are also providing guidance as follows: revenue between $85.4 million and $89.4 million. With $87.4 million at the midpoint. Adjusted EBITDA, $43.8 million between and $46.8 million with a midpoint of $45.3 million. [indiscernible] between $1.36 to $1.46 a with $1.41 at midpoint. Q1 2026 starting share count and income tax rate are approximately 19 million shares and $19.7 million to 21.7% with 20.7% at the midpoint, respectively.

That concludes my formal comments. Now I'd like to turn the call back to Scott. Thank you.

Thank you, Jim. Before taking questions, I want to draw your attention to an 8-K that we filed last night. As noted, our CFO, Jim Malone, will be retiring this year. He will stay on as CFO through the end of Q1 and then we'll transition to becoming a special adviser to me through the balance of the year. I want to publicly thank Jim for his more than 4 years at consensus. He is ending on a high note, and we will miss him. .

As I noted in my opening remarks, we were leanly staffed in late 2021. Jim came in and built a stellar Finance and Accounting Department, culminating in the earliest investor call and 10-K filing in the company's history. More importantly, he developed his successors internally sited upon him stepping down as CFO, the Board has approved effective April 1 for Adam Varon and our current SVP of Finance, to succeed Jim as CFO, and Karel Krulik, our current SVP of Accounting to become our Chief Accounting Officer. Adam has 14 years with the business and Carrel is approaching 4 years. I look forward to working with both of them and their respective teams. We will now take questions.

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

Congratulations on the good quarter and the continued growth in total revenue and corporate revenue. Can you talk about the demand environment that you're seeing. There's some concern around the big bail bill a potential declines in exchange enrollment, potential decline in Medicaid enrollment.

Is that putting pressure on hospitals' budgets or not -- and just sort of as an anecdotal point, maybe you could sort of comment on the success of the VA, please.

Yes. Thanks, David. Good questions. Really appreciate it. So on the OBBA and the mega cuts, what we're seeing right now is hospitals have figured it out. We hear from our customers, they usually budget in the last calendar quarter of the year.

They went into a little bit of a -- yes, halt mode and just monitoring what was happening and figuring that out with their budgets. Obviously, we talked about it in the past, focusing more on OpEx than CapEx, managing their cash. So they're interested in moving into services like ours. It took them a while to work through that process, and we're seeing now increasing engagement from that customer group, which is very encouraging, and we're very excited about.

On the VA, yes, I stated on the call, we had a good year. We exceeded the $5 million that we had projected for the year in 2025 and we're expecting probably north of $9 million or around $9 million of revenue in 2026. So that is a significant growth for just a single account -- we're continuing the rollout successfully.

We're seeing increased adoption within the sites that we have rolled out, and we still have runway within that customer. So obviously, that run rate is built into our 2026 projected protection, but it's a really encouraging progress with that customer. Beyond the VA, we're engaged with other government agencies and interestingly, also nongovernment organizations that are mandated to use a Federation high solution. now since 1 is available on the market.

So it's very encouraging what we're seeing in the public sector and with that eFax or ECFax for government product.

Then that's very helpful. And then it's my understanding that clarity and harmony to use AI that can actually be very effective in the billing and AR process within the revenue cycle for facilities.

Just any color there in terms of your use of AI and I mean, the hospitals view the purchase of your product as a way to accelerate cash collections? Or is it more of a CapEx purchase.

So on the -- and it's a good question on the -- on the hospital side, we see it being used primarily or more on the referral side. So we're very focused on specific use cases. In that case, it's referrals and orders. that for inbound tax traffic, but also scan referrals and those kind of things, just getting sorting through those documents.

So the first step is indexing. And then secondly is processing those at a higher pace. So that is helping them cutting down on that administrative burden and on the administrate flavor. So that's what I meant by tackling a labor problem.

Is that they're actually freeing up headcount that they suggest frequent need on the clinical side by using these tools to help on the administrative side. And that's what they're really focused on. On the rev cycle side, you see is, for example, for Medicaid claims management, those kind of things where a more in the prior authorization space.

To meet those CMS requirements of turning around prior authorizations within the 72 hours. The ones that do come in by fast are completely on structured, right? And so you need to pull out data points and accelerate that processing and AI helps to extract those important data points.

And just one last quick one.

No, I was just going to say, you've addressed the Harmony product suite, right? So with clarity extracting the data, we still need to translate it into a data format and deliver it on a protocol that the customer requires. So it needs to integrate with their EHR system more with the recycle management system, whatever they need.

So they need a fire message or H07 format so that's where the Harmony where the platform talk on in where we transfer that structured data and then unstarted data into a structured data piece, but then deliver it in the exact format that the customer acquires.

Great. And then 3 years from now, what percentage of revenue would you expect to be corporate?

It's a good question. And part of that goes to not only the growth of corporate over the next 3 years, which, as you can tell from all of our remarks, we're very bullish about those trends and they're breaking through double-digit growth.

But obviously, it introduces the question of where so will be. But I would say if we're at almost 2/3, 1/3 today in favor of corporate, you're probably going to be around 75-25 and within the 3-year time frame. And that would be promised in part on breaking through the 10% for corporate growth. and then pulling in that minus 10% on sold, but that should be roughly the mix about 3 years out.

The next question will be from Gene Mannheimer from Freedom Capital

And Jim will miss you, and Adam, congrats on the promotion. Thank you, welcome -- good results. I wanted to just dig in a little bit more to clarity. You indicated you have line of sight in the multimillions in revenue this year.

What are the kind of the underlying demand dynamics that is driving that interest from the market? And who's the competition that you face there? And then my follow-up question would be just on the guidance range for 2026.

Looks a little wide. And I'm just wondering if that's correct? Or did you provide a similar range for your initial 2025 view a year ago? On, what are the variables between the low and the high end of that range. .

Well, I'll let Johnny start with the operational question on clarity, and then I'll jump in and talk about the guidance and the construction of it.

Yes. So good. So maybe give you a little bit of background on clarity. As you can imagine, what you hear about all of the AI projects and other verticals as well. is I think the first couple of years was everybody was like trying things out and was going very broad.

And what we have filtered out for ourselves and where we see most demand, it's really that -- First, what I mentioned on the last question, first, really, on the indexing on document classification and then trying to get as much value out to the solution as you possibly can. And with the referral management and the order management that I indicated or talked about you really have -- you really have 2 value drivers.

On the one hand, you can manage that administrative burden and some of these imaging centers or radiology centers or if you think about other verticals there or some verticals that are -- or very reliant on referrals like infusion management or those kind of things.

They have like dozens of people sitting there sometimes just keying in data. So that's a cost driver on the one hand where they can -- that drives demand, but they can reduce the cost.

On the other hand, the acceleration of processing those referrals faster really drives top line for them. So you have a -- basically a double benefit driving top line, getting the referral faster. One of our customers called the rate to get, right? And so whoever responds to a referral first, we'll get that patient and then what's driving the demand there, and that's what we're focusing on.

So we're trying to move away a little bit from everybody wanting like everything to really focusing, and that's what I meant with my remarks earlier when I said we have a clear go-to-market focus for 2026 for queries, really only in on the referral and on the prior-authorization piece and the first step, and then we will add additional workflows to that.

And that's great color.

So as to the guidance, let me give everybody a little bit of a history on this and our philosophy. And it has been done consistently Gene for a number of years and certainly with 2025. So as you can imagine, the focus for us from a financial standpoint of operational is on our budget or any upcoming fiscal year this 2026.

That budget then translates into the midpoint of our guidance of both revenue, adjusted EBITDA and non-GAAP EPS. And this is important because those are also the numbers that are used as it relates to the various compensation programs for our employees. So some have certain bonus participation based on a combination of revenue and EBITDA in other cases, it's revenue and adjusted non-GAAP net income.

So those are all consistent at the midpoint. Then what we do is a while ago, we came up with what I'll call an extrapolation on the top line of about 2%. So I'll give you, based on the current level of revenue, about a $7 million range on either side. And those are just to account for all the known unknown or unknown unknowns, if you will.

Things that could change in the economy, not catastrophic changes where you would go from, say, a stable economy to a great financial crisis, but what I'd call moderating either headwinds or tailwinds in the economy. There's obviously a number of variables that go in to generate the top line. There's going to be some volatility and variability around it. The thesis is that our midpoint, which is the budget -- when you combine that with the extrapolation should accommodate most of those current unknowns.

And obviously, if they accumulate in one direction or another, the range may not be sufficient. So that's where we start. That's the philosophy on the range of revenues. And then from there, we lead down and we look, obviously, most importantly, at the margin at the midpoint. And then we say, well, if you're going to have a little less revenue, you're probably going to have a little less margin even operationally, you may make some adjustments during the year to mitigate some of your costs given less revenue.

Conversely, on the upside, we'll probably flow through a little bit more than at the midpoint, but you'll also introduce the question of additional reinvestment. And then from there, the things below the line are, I'd say, relatively fixed, independent of revenues. So our depreciation and amortization is really not going to be a function of where we are in the revenue range.

The way we budget our interest expense and interest income as we look at the debt outstanding at the end of the year. So in this case, [ 562. ] We have the credit facility portion versus the high-yield lows. The high-yield notes are fixed at 6.5%. The credit facilities float, but we generally getting into a mode where we're lacking in the SOFR for 6 months. So that's known.

And we assume no debt retirement during the year or equity repurchases and then we just take our estimated free cash flow and we let it accumulate and we assume that gets reinvested at money market fund rates. Now and then, of course, the share count that gets you to the bottom line.

Now what happened obviously during the course of the year, something I mentioned in my opening remarks and it's also responsive to a question that we have received by e-mail is we will take that cash and there may be better uses for us. Obviously, marginally better returns would come from retirement debt.

In our judgment, more material returns come from retiring equity, given the free cash flow yield, which today the spot free cash flow of one against our equity is about 25% free cash flow yield, whereas we retire debt, we're retiring it either under 6% or at most at 6.5% if we can get those high-yield notes at par.

So that's what will practically happen as we flow through the year. As I mentioned in the opening remarks, given where the stock price is, we have a strong bias towards shifting our cash flow allocations more in the favor of equity repurchases versus debt retirement. Having said that, if we look out over the next 2.5 years to the ultimate maturity, the 6.5% notes. It is our goal to bring the total debt [indiscernible] down and that's kind of a question mark.

My sense is, right now, and of course, these are fluid conversations based on market conditions, not only today, but in the future, we probably want to bring that debt down over time to around $500 million. There may be an argument for going lower, and that's something that we'll be exploring over the course of this year because, as I mentioned, given the uncallable nature of the 6.5% notes until October and then at a premium, it's unlikely we do any refinancing this year.

It's possible, but unlikely. So these are probably 27 events. But obviously, we're going to keep our pulse on the market and start going to get that actually right now. So I know that a bit more than you asked in the question, but I will give a little flavor of how we go from the top line to the bottom

And the next question will be from Ian Zaffino from Oppenheimer.

This is Isaac Sellhausen on for Ian. Just one on the corporate channel. Could you discuss your expectations for ARPU this year? Do you believe tax protect will continue to have a dilutive impact on ARPA or any offsets on that for the year? .

Thank you. I mentioned it on the call, I think we're looking at ARPA a little bit contain it by now, right? Because we have so much traffic and so much volume coming in on the eFax protect that it really bases that ARPA downwards, modestly. And then if we look at the non-eFax protect cohort, we see that ARPA growth. So I think we -- as we drive more and more e-Fax protect customers into our customer base that we're successful with that program, and we expect it to continue to grow, we will see a little bit downward pressure on that corporate ARPA.

The aggregate corporate.

Aggregate example.

Exactly. The question is if that's really still the right metric to measure that business. We're focusing more and more on the revenue retention rate, which I think is the stronger indicator for how that business develops.

Okay. Understood. And then just a quick follow-up on -- just on margins. I know you guided to the EBITDA margin -- if you could provide any color on gross margin expectations. I know you talked a little bit about modest cost increases in prepared remarks, but any additional details on that would be great.

Yes. I'd say most of our cost increases are in OpEx, not up there in COGS. So we have, on a non-GAAP basis, pretty stable margins right around 80%. And there's no reason to believe those will not continue. So we expect it to be in the 80% range this year and going forward. Remember, most of our cost structure, the largest single piece is people and most of the people are expense down below. They're not in COGS, there is OpEx.

So that's where we have the increased salaries that I mentioned not only for the core employee base in terms of raises year-over-year, but also as we add incremental people, they're coming in at the OpEx because they're in Johnny's group, which is all flavors of go-to-market and are Jeff Sullivan, our CTO, in his product and engineering group.

Thank you. There were no other questions at this time. I would now like to hand the call back to Scott Turicchi for closing remarks.

Great. Thank you, Paul. Thanks, everyone, for getting up early, depending on where you are in the country to listen to our Q4 earnings call, we will return to the normal time slot when we report Q1 in May.

This was unusual. As we announced, we are at the BTIG conference. So to accommodate their schedule we did the release last night and did the call early this morning. This is unusual for us, but we appreciate you attending and asking questions this morning.

Of course, we're available not only at the conference over the next couple of days but we'll be available for Q&A, you can reach out to us, and then there'll probably be 1 or 2 conferences over the next several months that we'll attend and we'll put our press releases [indiscernible] to those. our next regularly scheduled call will be sometime in May to discuss Q1 results. Thank you.

Thank you. This does conclude today's conference. You may disconnect at this time. Thank you for your participation, and have a wonderful day.

Good day, ladies and gentlemen, and welcome to Consensus Q3 2025 Earnings Call. My name is Paul, and I will be the operator assisting you today. [Operator Instructions] On this call from Consensus will be Scott Turicchi, CEO; Jim Malone, CFO; Johnny Hecker, CRO and Executive Vice President of Operations; and Adam Varon, Senior Vice President of Finance. I will now turn the call over to Adam Varon, Senior Vice President of Finance at Consensus. Thank you. You may begin.

Good afternoon, and welcome to the Consensus investor call to discuss our Q3 2025 financial results, other key information and our Q4 2025 quarterly guidance. Joining me today are Scott Turicchi, CEO; Johnny Hecker, CRO and EVP of Operations; and Jim Malone, CFO. The earnings call will begin with Scott providing opening remarks. Johnny will give an update on operational progress since our Q2 2025 investor call, then Jim will provide Q3 2025 financial results and our Q4 2025 guidance range. After we finish our prepared remarks, we will conduct a Q&A session. At that time, the operator will instruct you on the procedures for asking a question. Before we begin our prepared remarks, allow me to direct you to our forward-looking statements and risk factors on Slide 2 of our investor presentation. As you know, this call and the webcast will include forward-looking statements. Such statements may involve risks and uncertainties that would cause actual results to materially differ from the anticipated results. Some of those risks and uncertainties include, but are not limited to, the risk factors that we have disclosed in our regulatory filings, including our annual 10-K and quarterly 10-Q SEC filings. Now let me turn the call over to Scott for his opening remarks.

Thank you, Adam. We had another solid quarter in Q3 with a slight increase in revenue over Q3 2024. Our corporate channel continued to lead the way with another 6% plus growth quarter despite there being a difficult comparable presented by Q3 2024. This was led once again by record usage from our customers and a record quarterly amount of net adds from our eFax Protect service. In addition, the VA also hit record revenue for the quarter. SoHo revenue was in line with our expectations and showed an improvement in its rate of decline from Q2 2025. Adjusted EBITDA was slightly ahead of our expectations and generated a 52.8% adjusted EBITDA margin. In the quarter, we added key personnel that we outlined in our original guidance in February, and we expect to continue to hire in Q4. As a result, due to these hires and seasonal cash costs associated with the year-end audit, we would expect a lower adjusted EBITDA margin in Q4 than we experienced in Q3. Free cash flow in the quarter was an exceptional amount of $44.4 million, up 32% from $33.6 million in Q3 of 2024. This was due in large part to the adjusted EBITDA conversion to free cash flow, coupled with an outstanding rate of collections, especially in our corporate channel, which has driven our total DSOs down to 25 days for the company as a whole. As a reminder, we pay our interest on the bond semiannually in Q4. And as a result, we do not expect the quarter to generate much, if any, free cash flow. However, based on our nine-month free cash flow, we would expect the free cash flow for the year to be in excess of $95 million, which is ahead of our original expectations. On October 15, we drew approximately $200 million of our credit facility and retired a like amount of the 6% notes. We have issued a call notice for the remaining $34 million, which will be funded with a further draw of $20 million from the credit facility and $14 million from our cash balances. This will reduce our total indebtedness from the original $805 million to $569 million and will put us very close to our target of 3x gross debt to adjusted EBITDA. In addition, the interest rate on the new debt will be 5.65% or 35 basis points below the cost of the notes that we are retiring. We will continue to look for opportunistic repurchases of both our debt and equity. I will now turn the call over to Johnny to provide more operational details.

Thank you, Scott, and hello, everyone. During my remarks, I will focus on our key performance indicators, such as revenue and customer metrics, and we'll discuss the go-to-market strategies for our corporate and SoHo business channels. I will also provide operational updates and share several key highlights from the quarter. Our corporate channel continues to demonstrate strong execution and sustained positive momentum. In Q3 2025, revenue reached a record $56.3 million, a 6.1% increase over $53.1 million in Q3 of 2024 and a sequential increase from the $55.3 million in revenue we reported in Q2 2025. As we noted last quarter, Q3 2024 was a particularly strong comparable, which makes this continued 6% plus year-over-year growth even more encouraging. This growth is driven by the sustained expansion and increased usage within our upper enterprise accounts and the continued momentum in our public sector business, complemented by stable growth in advanced products and strong performance in our corporate e-commerce channels. This reaffirms our corporate go-to-market strategy and lays the foundation for our future go-to-market, which I will address later in my remarks. I am pleased to announce that our trailing 12-month revenue retention rate stands at 101.9%. This is stable from 102% in the previous quarter, again, confidently meeting our greater than 100% target, up from 99.8% in Q3 2024. Our corporate customer base expanded to a new record of approximately 65,000 at the close of Q3. This represents an increase of over 12% from 58,000 in Q3 of last year and a sequential increase from approximately 63,000 at the close of Q2. The primary driver for this growth remains our eFax Protect offering, which expanded by approximately 6,700 new customers this quarter, contributing to our SMB cohort. Corporate ARPA was $293 for the quarter compared to $301 in the prior quarter and $310 in Q3 of last year. This expected trend is a direct result of two counterbalancing factors: the successful expansion of our smaller SMB cohort, which includes our eFax Protect product at an ARPA of around $50, balanced by strong high-value performance from our large enterprise clients. Importantly, we are proud to report strong sustained growth in our corporate ARPA net of eFax Protect for several quarters now, which demonstrates the underlying strength and growing value of our core enterprise customer base. Our corporate performance this quarter continued to trend from recent quarters, demonstrating sustained success at all levels of the market. We're effectively pairing robust revenue growth at high retention rates from our enterprise clients with steady customer base expansion in the SMB cohort. This balanced approach to growth proves our ability to execute across the entire customer continuum and provide significant stability to our business, which is evident by a continued expansion on two key metrics in our eFax network: the number of participants or endpoints and the volume of data we process across the network. Turning to the public sector, I want to make a clear distinction. Our main revenue driver in this vertical, the VA, saw its rollout and usage remain unphased by the government shutdown. The VA continues to set new all-time high records for usage, a clear proof of deepening adoption that has persisted even during the shutdown. Separately, since achieving our official FedRAMP High impact certification, we have built a solid pipeline among other government agencies and nongovernment organizations. We're successfully winning and onboarding new customers onto the ECFax product. While the temporary government shutdown has led to some delayed decision-making, we see this as a short-term timing impact on the conversion pace, and it does not affect our positive outlook for this new pipeline. Moving on to our SoHo business. We recorded Q3 revenue of $31.5 million, representing a strategic planned year-over-year decrease of 9.2% from $34.7 million in Q3 2024. This is a slight sequential decrease from $32.4 million in Q2 2025, reflecting our continued strategic focus on optimizing profitability and maximizing the efficiency of our advertising investments in this channel. The global SoHo account base declined from approximately 682,000 in the prior quarter to approximately 661,000 during Q3. SoHo ARPA for Q3 2025 was $15.56 compared to $15.62 in Q2 2025 and $15.38 in Q3 of last year. Our SoHo cancellation rate in Q3 2025 was 3.71%, down from 3.84% in the previous quarter. As I explained in our Q2 call, our SoHo customer acquisition strategy led to an unusual spike in ads last quarter, which temporarily influenced the cancel rate in both Q2 and Q3. Since then, our customer acquisition has reverted to a more normal pattern. Yet like all businesses that rely on digital marketing, we are actively navigating the recent changes in the search environment. This has created a near-term headwind contributing to a slight decline in organic sign-ups in Q3, which we believe will continue in Q4. We are already executing a multistep plan to recover from these impacts. While we continue to manage profitability with discipline, we are determined to return our paid ads numbers to the mid-50s, which we expect several months to fully realize. One key factor in this plan is to emphasize one of our greatest assets, our trademarked and redesigned eFax brand. This strategic focus on eFax follows a year-long intensive brand study. From day 1, more than 30 years ago, eFax was a pioneer and leader in digital transformation, and we have invested heavily in this brand over decades. With the brand refresh, we now better leverage that established market trust proven by millions of visitors to our web assets every month to unify our advanced solutions. It allows us to bring our entire go-to-market portfolio from cloud fax to interoperability and AI under one familiar name, clarifying our evolution from a simple fax service to a comprehensive platform for secure data exchange and digital transformation. Consensus Cloud Solutions, which has also received a brand refresh, will remain the company's NASDAQ-listed brand for investor continuity and as a universal home for employees. To summarize, we are very pleased with the quarter's performance and remain highly confident in our outlook. We will continue on our go-to-market path, which has proven to be very effective. Health care remains at the center of our strategy, complemented by strong execution on our automated e-commerce channel for the down market. We are expanding our efforts in the corporate SMB and upper enterprise market, which has extended into the public sector. We expect our SoHo business to continue on its trajectory with a clear focus on profitability. Before handing the call over, I want to express my sincere thanks to our employees for their hard work and dedication this past quarter. My gratitude also extends to our customers and partners for their ongoing trust and collaboration. We have delivered another excellent quarter, and we are focused on building on this momentum. With that, I'm handing over to our CFO, Jim Malone, who will now provide a detailed update on our financial performance and outlook. Jim?

Thank you, Johnny, and good afternoon, everyone. In our press release and on this call today, we are discussing Q3 2025 results and guidance for Q4 2025. We expect to file our 10-Q by close of business today. Moving to corporate. Beginning with our corporate business results, Q3 2025 was another strong quarter for corporate with record revenue of $56.3 million, an increase of $3.2 million or 6.1% versus the prior year quarter. As Johnny just mentioned, Q3 2024 was a particularly strong comparable quarter, which makes the continued 6% plus corporate growth even more meaningful. Our record of Q3 2025 corporate revenue delivered a trailing 12-month revenue retention rate of approximately 102%, up from 99.8% from the prior comparable period and stable sequentially. Our corporate customer base expanded to approximately 65,000 in Q3 2025 versus 63,000 in Q2 2025 and 58,000 in the prior comparable period. Corporate ARPA was $293 versus $301 in Q2 2025 and $310 in Q3 2024. This trend is in line with our expectations and an expanding customer base in the lower SMB cohort, primarily due to record eFax Protect paid ads, which generated an approximate $50 ARPA. As Johnny stated, corporate ARPA net of eFax Protect has experienced sustained growth for several quarters, demonstrating strong performance from our core enterprise customer base. Moving to SoHo. Q3 2025 revenue of $31.5 million compared to $34.7 million, representing a strategic plan decline of $3.2 million or 9.2% from the prior comparable period and a slowing decline from the Q2 2025 comparable year-over-year period of 9.4% Q3 2025 ARPA of $15.56 had an improvement from the prior year comparable period of $0.18 and was in line sequentially. The total cancel rate improved sequentially to 3.71% from 3.84% in Q2 2025. Moving to consolidated results. $87.8 million. Revenue was consistent with the prior year comparable period. Adjusted EBITDA of $46.4 million is a decrease of $0.6 million or 1.2% versus Q3 2024, primarily driven by planned headcount additions. We delivered a healthy 52.8% adjusted EBITDA margin or approximately 60 basis points favorable to the midpoint of our Q3 2025 guidance range. Q3 2025 adjusted net income of $26.6 million is a decrease of $0.2 million or 0.8% versus Q3 2024, primarily driven by lower interest expense and depreciation and amortization, offset in part by lower adjusted EBITDA and higher income tax. Adjusted EPS of $1.38 was unchanged from the prior year comparable period. Q3 2025 non-GAAP tax rate and share count was 22.3% and 19.3 million shares. Capital allocation, free cash flow. Q3 2025 free cash flow was $44.4 million, an increase of approximately $11 million or 32% versus the prior comparable period, driven primarily by operational performance. Q3 2025 CapEx of $7.2 million, a decrease of $0.8 million or approximately 10% versus the prior year. Cash and cash equivalents. We ended Q3 2025 with cash of approximately $98 million, which is sufficient to fund our operations and repurchases of equity and debt. 6% notes debt retirement. As noted in our 8-K filed on July 14, 2025, we executed a $225 million 3-bank club deal, including standard covenants to retire our 6% notes to October 2026. The loan consists of $150 million delayed draw term loan plus a $75 million revolving credit facility. The interest rate is SOFR plus an applicable margin based on total net leverage ratio. Subsequent to the quarter end, on October 15, 2025, we called $200 million of our 6% notes at par, leaving $34 million outstanding. We utilized our $150 million delayed draw term loan plus $50 million on the revolver. We didn't retire the entire $234 million as our secured lien capacity under our bond indentures was $200 million based upon our June 30, 2025 cash balance. The borrowing cost will be approximately 10 to 35 basis points lower than our current 6% rate. We have notified our trustee, and we will call the remaining balance of the 6% notes, $34 million on or about November 10, with a combination of $14 million balance sheet cash and $20 million of the remaining revolver. Equity repurchases. In February 2025, the Board approved an extension to the previously approved program for another 3 years and up to $67 million. In Q3 2025, we repurchased 121,000 shares for $2.7 million, bringing the total equity purchases to date of approximately 1.8 million shares for approximately $47 million. There were no bond repurchases in Q3 2025. Moving to guidance. We are providing Q4 2025 guidance as follows: revenues between $84.9 million and $88.9 million with $86.9 million at the midpoint. Adjusted EBITDA between $43.1 million and $46 million with $44.5 million at the midpoint. Adjusted EPS of $1.27 to $1.37 with $1.32 at the midpoint. Estimated Q4 2025 share count is approximately 19.4 million shares with a tax rate between 20.5% and 22.5% with 21.5% at the midpoint. Please remember that as previously mentioned, our 2025 guidance and actual results exclude foreign exchange gain or losses on revaluation of intercompany accounts. That concludes my formal remarks. I'd like to turn the call back to the operator for Q&A. Thank you.

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

Congratulations on the good quarter. Can you maybe talk a bit about the VA and corporate sales? And I think I heard you say that the VA had their highest usage rate yet. Just any sort of color there in terms of incremental growth going forward? And just any thoughts there would be helpful.

Great. Yes, I'll turn it over to Johnny because both the VA...

Yes. Thank you, David. Good question. Yes, the VA continues to expand. So, what we're seeing, we're seeing increased usage in the existing base, but we also continue to roll out to new facilities. We still haven't rolled out the solution to the entire base of facilities and sites within the VA. That is an ongoing process. We know it's going to continue throughout 2026 to do that. But we also think there is room for expansion and increased adoption within the existing base. And we see that happening. we see growth within the usage in existing sites, so basically same-store sales, but also with new sites coming on. And as I stated on the call, we do see record highs in usage on weekdays. And overall, the volume is growing as well. So that is very, very encouraging, and we expect that growth to continue into 2026. So, I don't think we've reached the limits with the VA just yet. Go ahead.

How many VA sites are you in now? And what is the total potential or on a scale of 1 to 10, 10 being 100% penetrated across all potential VA sites, what number would you put yourself at now?

Well, I think there's 2 elements to that question. So, one is we're more than 50% in the absolute raw number of sites deployed, but not all sites are equal. So that's one element. But the other element is even in the sites where we are deployed, we do not yet have, in many instances, all of the traffic. And there are some reasons for that, such as incumbent contracts that have to burn off before we'll capture some of that traffic. In some instances, the site didn't fully appreciate all the different ways in which faxes could be either sent or received or outbound is easier to do. So, you've got to port the numbers before you the inbound traffic. So that's why I tag on to what Johnny said, which is we're on the $5 million-plus pace for this year in terms of actual revenue. and we'll meet that goal. We'll go somewhat north of $5 million. And then what we're setting is the exit run rate going into '26. That will give us a book of business based on the number of pages processed on average per business day, peak volumes, et cetera. And then the exercise we're going through now from a budgetary standpoint is what is the timing and what is the pace at which we pick up incremental traffic in the sites where we're already deployed, but don't yet have all of it. So, it's all of those pieces together. But if you don't bind it to a given year, and I understand kind of where you're headed because people are looking at trying to build '26 models. But if you look out over, say, a 2- to 3-year time frame, there leads us to believe there are multiples of revenue available to what we booked in 2025. How many multiples, that's what's still under discussion.

So, could the $5 million turn into $10 million or $20 million?

Yes. But the question is where between $10 million and $20 million. I think $10 million is a highly confident number and it's a number we had talked about when this contract was originally won several years ago. But I think we have good reason to believe it's a higher number than that. The question is how much higher than $10 million. And in order to get confidence in that number, we need to, in conjunction with the VA, do some additional analytical work and then see what is a reasonable time frame over which that traffic can be captured, not all of which is in our control. Some of it has to do with the VA, some has to do with the way they roll things out. And as I said, existing contracts that carried over that need to expire. So, I think it is probably still at least 3 years before realistically we can capture all the traffic, but it could be even more than 3 years.

Okay. Great. And then another quick one, if you don't mind. The SoHo year-over-year revenue growth was down 9%. What would you expect that like deceleration rate to be, let's say, in 2027 or 2028, when are we going to see that sort of level off?

Yes. I think that it's a good question, but it's very difficult to predict. I don't think we can give guidance in that direction 2 years out at this point. We've been talking about it for 1.5 years now and where is that at what point is it going to like reach that steady base and then the decline will go into the low single digits. But it's very difficult to model. There are so many moving parts to this business. I mean we've seen it slow down over time, but I don't think we can give you a clear number on '27 just yet.

I mean I think look, it's clearly even at the accelerated pace, it's not going to happen in '26, probably depending on where your goal, it's not going to happen in '27. So, it's '28 or later. And the input factors that are relevant to us are as the base ages, how we see that cancel rate come down. You saw it come down sequentially from Q2 to Q3, about 13, 14 basis points. Some of that, as Johnny mentioned in his prepared remarks, is negatively influenced by certain excess customers that were acquired in Q2, which burn off very quickly, but they're very cheap acquisition costs. So, we're actually looking and studying the various cohorts to see where is that stabilized base of cancel as that base ages. So that's one element of the equation. And then the other element is not only how many gross adds you bring in, many new net customers in a given period, but what kind of customers do you bring in. Are they short-lived customers that you can get at a very attractive LTV to CAC, but they may only be around 2, 3, 4 months? Or are they longer customers because there's a whole range of use cases that will dictate the life of the customer. For us, it's really a matter of matching the right expense against their life, not so much whether the life is 4 months or 12 months or 18 months, but what are you paying to get that stream of revenue. So all those things are going in. We will keep crunching those models as we go through our budgeting process, which has commenced, but it's still early stage.

Okay. And then just one more quick one. Can you talk a little bit about the advanced products upsells into corporate? Just any color there on the use of AI, RCM acceleration?

Yes. I can comment on that, David. It's a couple of things that we saw accelerate in Q3. One of them Clarity adoption and Clarity revenue, which is that AI product that abstracts data turns that unstructured data into structured data. So I've commented on it, I think, on the last call a little bit, but that is one of the key -- was one of the key drivers. And the other one was in combination with that, really our integration engine business, right, where we help customers connect their EHR systems to provide that interoperability. That has also been performing quite well. And the combination of those 2 with the connectivity to our eFax network is what's driving revenue there and what's helping us succeed.

[Operator Instructions] The next question is coming from Gene Mannheimer from Freedom Capital.

Congrats on the good numbers. Question on that SoHo paid adds. I know, Johnny, you talked about that at 50 was the lowest in a while. And just so for my edification, that was due to a spike last quarter around promotional pricing? Or is there also some level of conversion of the SoHo customers to enterprise that was a factor?

No, I think what we mentioned, Gene, thanks for the question. Yes, what we mentioned was last quarter, we had a little bit of a spike because of an acquisition channel for new customers that was commercially very interesting for us. But as Scott mentioned earlier, those customers come on at a low price, but they also fall off fairly quickly. So they burn off -- they have a shorter lifetime than regular customers. We did see a little bit of a decline in our paid adds this quarter. There was multiple factors to it. And the one that I mentioned was the change in search that we're seeing a little bit of headwind in the organic traffic, but we have put some measures in place, and we're already seeing some recovery of that. That we're getting additional sign-ups and reverting back to that mid-50 number. I don't think it's going to happen overnight. I don't think we will see -- we will probably not reach that by the end of this quarter. Q4 is usually a slow quarter for SoHo anyways. But we're expecting it in the course of the first few months of the next year to get back to that number.

Okay. Yes, that helps out. And then just my follow-up is on the VA discussion, getting from, say, $10 million in revenue to $20 million or whatever the number happens to be, is that -- can that be accomplished based on the scope of the agreement you have in place today? Or would it involve selling additional products into the VA?

That's a good question. I think we are -- right now, we're just talking about the fax platform, right, about the ECFax platform that is FedRAMP High certified. There's obviously potential to upsell other solutions into the VA. They would have to go through a similar process as the Fax platform to be certified on that FedRAMP High platform or environment. I think we've learned a lot, so it wouldn't take us as long as it did for eFax, but what we're talking about right now is really only the Fax platform. We're not adding in any additional products into that growth. So there's additional potential... Within the... That would be under different contract. We have –

Before we go to more live questions, we've got a question by e-mail. So one has to do with capital allocation and our thoughts really as we look forward to 2026 between retirement of debt and share repurchases. As I noted in my opening remarks, I think both are going to be opportunistic in nature. Right now, there's no mix that we've set between the two as it relates to either cash balances or free cash flow generated in 2026. One of the things that we're going to be looking at is as we get into '27 and we look at the 6.5s and their maturity in October of '28, what is sort of the right level of debt as we think about that refinancing. So that may influence some retirement of debt, which could be a combination of either the continuation of buying the 6.5% in the open market. But as I've noted before, the volume there has been limited because we've taken about $150 million out over the last couple of years. But we do have the ability as we generate cash to take our revolver down. And I think if we're going to prepay or repay any bank debt or credit facility, it would be in the revolver because that we can reborrow. The delayed draw term loan by its terms does have some mandatory prepayments per quarter of slightly under $2 million per quarter. So you will see about a little under $8 million come out next year just for the terms of the delayed draw term loan. But if we do have excess cash and we can't buy bonds and we don't like the stock price, we can't get enough stock, we could pay down the revolver. And then if we have needs in the future, we could reborrow the revolver. So that's kind of how we're thinking about it now. As I mentioned, we're still in the relatively early stage of the budgeting. So things like how much free cash flow and based on our current balances, what kind of capital is available is also going to be a question of the jurisdictional issue of where that cash sits, not only at 12/31/25, but as it's earned over '26. Clearly, there'll be an amount in the U.S., but there are also an amount in foreign jurisdictions. And so we'll have to look about how much of that cash we can bring back home to the U.S. because both stock repurchases and debt retirement, whether it is in the form of the bank debt or the 6.5 require U.S. cash as opposed to foreign cash. Paul, is there no live questions? -- if not, I've got another e-mail question.

There were no other questions from the lines at this time.

Okay. So the second e-mail question that came in had to do, I think I can interpret this in terms of -- it's stated the marketing-related disruption we mentioned in SoHo, which I think is really what Johnny commented both in his prepared remarks, but also in response to Gene's question, is that this likely disrupt the improvement year-over-year going into Q4 and '26. If you mean the rate of decline, which has been declining, it may very well impact Q4 somewhat. In other words, we've been seeing on a pretty much sequential basis, the rate of decline coming down. So it went from 9.4% to 9.2% from Q2 to Q3. That could trend modestly in Q4. We'll have to see because I think as Johnny mentioned, it's probably going to take up to a few months, which will take us into early '26, possibly through Q1 to get that normalized base back to around 55,000 net adds per quarter. So you could see a little bit of friction in Q4, might carry through to Q1. I haven't done, I say, enough budgeting and enough quarterization of that to know what kind of impact there might be. But I think, yes, you should expect there could be some noise in Q4, possibly in Q1 as well. Paul, we'll open up if there's any further live questions.

There were no further questions from the line. Scott, I will hand it back to you for closing remarks.

Great. Thank you. Appreciate everybody for joining us today for our Q3 call. We will be at a couple of conferences, I think more catering to the high-yield market than the equity market between now and our next earnings call. So stay tuned for those activities. We will also be putting out a release probably in late January, early February in terms of giving the timing for the Q4 release, at which time we will give full year 2026 guidance. At this point, we would intend, as we've done in the past, to give a range of revenues, adjusted EBITDA and adjusted net earnings per share. So obviously, it will be a call that will look back to '25, report the quarter, the full fiscal year and then what we're seeing as we look forward to 2026. And obviously, if there's any questions that you have between now and then, feel free to reach out and contact Laura or any one of us, and we can either arrange a call or if it's a fairly straightforward question answered by e-mail.

Thank you. And this does conclude today's conference. You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation.