Consensus Cloud Solutions Aktie

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.

Good day, ladies and gentlemen, and welcome to the Consensus Q2 2025 Earnings Call. My name is Tom, 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 Q2 2025 financial results, other key information and our 2025 full year and Q3 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 Q1 2025 investor call. Then Jim will provide Q2 2025 financial results and our full year 2025 and Q3 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 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. We had a strong Q2, returning us to total revenue growth earlier than anticipated. The continuing improvement in our corporate revenue growth demonstrates both the necessity and value proposition of our solutions. We exceeded our revenue objective, driven by corporate revenue growth posting 6.9% over Q2 2024, ahead of our forecast and the best growth year-over-year in 10 quarters on a normalized basis.

So, revenue was in line with our expectations and below a 10% year-over-year decline for the first time since we began the reduced marketing in late 2023. We carefully monitored our cost structure and exceeded our adjusted EBITDA expectations by more than the outperformance on revenue. We delivered a robust 54.8% adjusted EBITDA margin near the top end of our 50% to 55% range.

We remain committed to our goals that we outlined in February of this year, which include pursuing the acquisition of customers, primarily in the health care space for our corporate channel and driving revenue growth in excess of 6.25% this year; two, manage our corporate cost structure while making modest investments primarily in our go-to-market operations for the benefit of 2026 and beyond; three, putting a bank loan in place for the retirement of the remaining 6% notes due October 2026; and finally, managing the SoHo channel for cash flow efficiency, which we began last year.

As previously announced, we concluded in early July a $225 million bank facility that we will utilize to retire the 6% notes in part due October 2026. The loan consists of two pieces: a $75 million revolver and $150 million term loan. We expect that our borrowing costs, which are SOFR-based, will be similar to the current cost of the 6% notes. Johnny will provide more detail in his portion of the presentation regarding the operational results for Q2.

I'm pleased that our corporate channel exceeded our revenue expectations and hit a growth rate in excess of our target. This success was driven by strong usage, improved revenue retention, new customer acquisition and increased contribution from our advanced products. In addition, eFax Protect had record sign-ups, which seems to be a trend each quarter. In addition, at the VA, we continue to see more facilities come online and record level of usage.

All of these contributed to the 6.9% year-over-year growth. While revenues for the SoHo channel declined in the quarter as anticipated, I am pleased to report that it was the slowest rate of decline since we began the program to reduce marketing costs. We maintained our discipline on the cost side, generating an adjusted EBITDA margin of 54.8%, more than 100 basis points ahead of our Q2 expectations.

I would note that we would expect a lower margin in Q3 due to a seasonal increase in costs associated with our upcoming year-end audit and the hiring of additional employees, especially in our go-to-market operations that we discussed when we released our annual guidance in February. Free cash flow was $20.3 million in the quarter, up 29% from Q2 2024 due to excellent management of our receivables, low estimated tax payments and lower interest expense than a year ago.

We now expect our free cash flow in 2025 to exceed the $85 million of free cash flow in 2024. We were able to repurchase an approximate $6 million of debt in the quarter. As we have stated previously, liquidity is modest in each tranche, both of which trade at or near par. We were able to repurchase approximately $12 million of our common stock during the quarter at a valuation of approximately 5x adjusted EBITDA, which we view as attractive.

Before turning the call over to Johnny, I would like to comment briefly on the One Big Beautiful Bill Act that was signed into law on July 4. We are studying the impact of the bill, particularly with respect to the anticipated cuts to Medicaid and Medicare over the next 10 years and how those cuts may generally impact providers, especially the smaller practices in rural areas.

While the cuts do not start until late 2026, we understand that some providers are already making anticipatory cost-cutting decisions. We believe that we are well positioned to assist those efforts to reduce cost structure, which we know is one of utmost importance right now. Moreover, the need for health care does not evaporate in these scenarios. It merely shifts locations predominantly to emergency care facilities.

We have a large diverse base of customers in all care settings such as providers, payers, doctors' practices, labs, pharmacies, et cetera, including those in the emergency care facilities with little customer concentration. We will closely monitor the situation as it unfolds.

I will now turn the call over to Johnny to provide you more operational details.

Thank you, Scott, and hello, everyone. In my remarks, I will cover key performance indicators, including revenue and customer metrics as well as our go-to-market strategies for the corporate and SoHo channels. I'll also touch on operational updates and provide some key highlights for the quarter. Our corporate channel continues to show robust performance and positive momentum. In Q2 2025, we saw revenue reach a record $55.3 million, a 6.9% increase over $51.7 million in Q2 of 2024 and another sequential increase from $54.3 million in revenue we reported in Q1 of 2025. This was an exceptional quarter.

While we anticipate continued growth, we don't expect it to maintain this accelerated year-over-year growth pace, especially considering our strong performance in Q3 of 2024. Nevertheless, this quarter's results, coupled with a strong sales pipeline across our entire portfolio of services reinforce our confidence that we are well on our path to achieving double-digit growth for this business channel.

Our Q2 growth is driven by several key factors. As a direct result of our focus on the health care industry, we're experiencing sustained and impressive growth within the health care vertical, which is becoming an ever-larger portion of our total corporate revenue. Our strategic partnerships continue to yield significant contributions to our growth.

Furthermore, we are particularly encouraged by the sustained expansion within our largest account cohorts, including both strategic and public sector clients. I am pleased to announce that our trailing 12-month revenue retention rate has reached 102%. This is up from 101% in the previous quarter, keeping us on track with our 100% target and marking a substantial year-over-year increase from 99% in Q2 of 2024.

Our corporate customer base has grown to a record approximately 63,000 at the close of Q2, up 11% year-over-year. This is an increase from approximately 60,000 at the close of Q1. As in the previous quarters, eFax Protect and the increasingly automated SoHo to corporate upsell option of our customers drive the growth in this metric. Together, they contributed over 5,800 new accounts during Q2 to the SMB cohort.

Corporate ARPA was $301 for the quarter from $307 in the previous quarter and $310 in Q2 of 2024. Corporate ARPA is simultaneously bolstered by significant enterprise clients, such as the Department of Veterans Affairs and tampered by the account expansion and achievements within our smaller SMB cohort.

Our strong corporate performance is multifaceted, demonstrating success at every level of the market. The combination of robust revenue growth and high retention rates among our enterprise clients paired with the steady expansion of our SMB customer base underscores our ability to execute effectively across the entire customer continuum.

This balanced growth model provides significant stability even in uncertain market conditions and strengthens our overall market position. It establishes us as a credible and attractive partner, a crucial advantage in a fragmented industry like health care. Our capacity to serve this diverse spectrum of clients is a key differentiator and fundamental to our long-term market expansion and product strategies.

Turning to our public sector initiatives. I am thrilled to report uninterrupted progress. The VA rollout is proceeding well, and we are seeing steady increase in the adoption of our services. This is a direct reflection of the government's commitment to enhancing operational efficiency, and we are proud to be a key partner in that mission.

The value of our FedRAMP high certification cannot be overstated. It has opened up numerous doors, and we are now in active high-level discussions with other government agencies and nongovernmental organizations that require this level of security for their critical communications.

Consequently, our public sector pipeline remains robust and is accelerating. While we are actively bidding on several larger opportunities, our immediate priority is to build upon the success with the VA. We are seeing smaller deals progress through the sales funnel at a higher velocity, of which we're excited to report one just closed early in Q3. Adding to our book of business on this product line is a key focus in our public sector business at the moment.

The first half of 2025 has concluded with strong momentum in corporate, and we are very pleased with the results. This positive performance, a direct outcome of our strategic execution, gives us the necessary tailwinds to confidently pursue our ambitious goals for the corporate business throughout the fiscal year and into the future.

Before moving on to SoHo, I'd like to comment on the evolving and dynamic regulatory landscape, specifically with regards to the expected Medicaid and Medicare reform from the One Big Beautiful Bill Act, the continued discussion around the TEFCA network and the prior authorization automation ambitions.

The impact of these changes can create substantial opportunities for our business by the increasing need for efficiency and automation. Since administrative burden has historically been a driver for our business, the increase in complexity may accelerate demand for our solutions.

We believe our broad presence across multiple sectors of the health care industry is a huge offsetting asset and key factor of stability regardless of the possible risks from potential provider financial strain. With regards to TEVCA and prior authorization automation, we view ourselves as a critical on-ramp to the newer interoperable networks that the industry is moving toward.

For example, we have just in the last quarter, enabled a large health system to automate their high-touch prior authorization process by taking unstructured faxes, extracting key data with our AI-powered clarity offering and translating it into a modern fire resource-based format that feeds directly into the enterprise platform. This solution bridges the old and the new, seamlessly connecting legacy workflows to modern networks without requiring a costly overhaul from the provider.

Moving on to our SoHo business. We recorded Q2 revenue of $32.4 million, representing a planned and slowing year-over-year decrease of 9.4% from $35.8 million in Q2 of 2024. This is a slight sequential decrease from $32.9 million in Q1 of 2025, reflecting our continued strategic focus on optimizing profitability and maximizing the efficiency of our advertising investments in this channel.

As anticipated, the total global SoHo account base saw an expected reduction from 702,000 in the prior quarter to 682,000 during Q2. SoHo ARPA for Q2 2025 was $15.62 compared to $15.39 in Q1 of 2025. Our SoHo cancellation rate in Q2 of 2025 was 3.84%, up from 3.52% in the previous quarter.

Our strategic focus in the SoHo channel remains squarely on optimizing customer acquisition for maximum profitability with a close watch on metrics like return on advertising spend and LTV to CAC. I want to provide some color on the recent volatility in our SoHo cancel rate, which we see as a direct result of our strategic execution.

There are two primary drivers. First, as we continuously refine our acquisition strategy, we're attracting a more diverse mix of customers with varied usage -- this includes an increase in limited use customers from certain channels, a cohort we welcome as long as they meet our strict profitability thresholds.

Second, the outstanding success of our corporate e-commerce channel allows us to more effectively guide customers to the right product from their very first interaction. This eliminates the need for many to start in SoHo and manually upgrade later. As a result, the composition of our remaining SoHo customer base is changing, leading to a churn rate range that is slightly broader than the narrow range of the past.

This is an acceptable outcome of our recently established and strictly executed strategy. To summarize, we are very pleased with the quarter's performance and remain highly confident in our outlook. Our corporate business is executing as planned, driven by a healthy pipeline and growing customer adoption of our solutions.

In the SoHo channel, our strategic initiatives are delivering the expected outcomes. While we continue to monitor the broader macroeconomic environment, we are reaffirming our full year revenue and EBITDA guidance. Before I hand the call over, I want to extend my sincere gratitude to our employees for their dedication and hard work this past quarter.

Many thanks also go out to our customers and partners for their continued trust and collaboration. We've had an excellent first half of the year, and we look forward to building on this momentum.

With that, I'm turning the call 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 Q2 '25 results and guidance for Q3 '25 and full year '25. We expect to file our 10-Q by close of business today. I'll begin with our corporate business results.

Q2 '25 was another strong quarter for corporate with revenue of $55.3 million, an increase of $3.6 million or 6.9% versus prior year, performing ahead of our expectations. This represents the highest corporate growth year-over-year in the past 10 quarters on a normalized basis. As Johnny stated, we continue to see growth in our health care vertical and strong demand for our core digital fax product.

Q2 '25 corporate ARPA of $301 from $307 in Q1 '25 and $310 in Q2 '24 is in line with expectations. Corporate ARPA varies across our customer continuum based on the mix of customers that range from the lower end of the continuum through large enterprise clients, such as the VA.

Therefore, ARPA is pressured as the eFax Protect base continues to grow within the lower SMB cohort base. Our record Q2 '25 corporate revenue delivered a trailing 12-month retention rate of 102%, 300 basis points and 100 basis points improvement from the prior comparable period and Q1 '25, respectively.

Moving to SoHo. Q2 '25 revenue of $32.4 million compared to $35.8 million over the prior year represents a planned decrease of $3.4 million or 9.4%. We continue our strategic focus on optimizing advertising spend and profitability in the SoHo revenue channel. I would like to note that in the current period, we eliminated dormant accounts not contributing to revenue from the number of SoHo customer accounts.

The prior year period has been revised for consistency with the current year and all metrics calculated based on the number of customer accounts, including ARPA and monthly churn percent are calculated based on the revised number. As a result of this change, the prior year period of SoHo customer accounts decreased by 26,000.

Again, I'd like to reiterate that the elimination of dormant accounts had no impact on revenues. Based on the adjusted customer accounts noted, Q2 '25 ARPA of $15.62 had a modest improvement from the prior year comparable period of $0.17 and a sequential improvement of $0.22.

The SoHo cancel rate was 3.84% versus 3.55% in the prior comparable period. The increase, as Johnny stated, is due to the improving funnel effect and success of the eFax Protect and a marginal shift in marketing dollars towards a customer that is more profitable but has a shorter life.

Moving to consolidated results. Consolidated revenue of $87.7 million represents an increase of $0.2 million or 0.3% versus Q2 '24 and returning us to total revenue growth earlier than anticipated. This is the first quarterly year-over-year consolidated revenue increase in 8 quarters.

Adjusted EBITDA of $48.1 million is a decrease of $1 million or 2.1% versus Q2 '24, primarily driven by planned headcount. We delivered a healthy 54.8% adjusted EBITDA margin or approximately 135 basis points, favorable to the midpoint of our Q2 '25 guidance range.

Q2 '25 adjusted net income of $28.4 million is an increase of $0.9 million or 3.2% versus Q2 '24, primarily driven by lower interest expense and depreciation and amortization, offset in part by adjusted EBITDA and a higher share count. Adjusted EPS of $1.46 is favorable to prior year by 2% or $0.03, driven by the items mentioned and a lower share count.

Q2 '25 non-GAAP tax rate and share count was approximately 21% and 19.5 million shares, respectively. Capital allocation. Free cash flow. Q2 '25 free cash flow is $20.3 million versus $15.8 million in the prior comparable period, primarily driven by operational performance. CapEx of $8 million was down $0.6 million or approximately 7% versus the prior year. Cash and cash equivalents.

We ended Q2 '25 with cash of approximately $58 million, which is sufficient to fund our operations and repurchases of equity and debt. Equity repurchases. In February 25, the Board approved an extension to the previously approved program for another 3 years and up to $67 million.

In Q2 '25, we repurchased 546,000 shares for $12 million, bringing the total to date equity purchases of approximately 1.6 million shares for $45 million. Bond repurchases. As mentioned in our November '23 earnings call, we announced a $300 million 3-year bond repurchase program.

In Q2 '25, we repurchased approximately $6 million face value of bonds at par. Our continued strong cash flow has allowed us to repurchase approximately $223 million face value bonds for approximately $209 million of cash to cash in the program to date. with approximately $77 million remaining under our current authorized program.

Debt refinance. As noted in our 8-K filed on July 14, 25, we concluded a $225 million bank facility that we will utilize to retire our 6% notes due October 26. The loan consists of $150 million delayed draw term loan plus a $75 million revolving credit facility. Interest rate is SOFR plus applicable margin based on total net leverage ratio.

We expect our borrowing costs to be similar to the current cost of the 6% notes, executed a 3-bank club deal, including standard covenants. The new credit facility credit agreement will be filed with our 10-Q.

Moving to '25 guidance. We're reaffirming '25 full year guidance for revenue and adjusted EBITDA, while raising our adjusted EPS range as follows: full year revenue between $343 million and $357 million with $350 million at midpoint; adjusted EBITDA between $179 million and $190 million with $185 million at midpoint; adjusted EPS between $5.25 to $5.65 with $5.45 at midpoint, an increase of approximately $0.23.

Full year estimated share count and income tax rate of approximately 19.4 million shares and a tax rate between 20.5% and 22.5% with 21.5% at the midpoint. Please remember that, as previously mentioned, our '25 guidance and actual results exclude foreign exchange gain or losses on revaluation of intercompany accounts.

Moving to Q3 '25 guidance. revenues between $85.9 million and $89.9 million with $87.9 million at the midpoint; adjusted EBITDA between $44.4 million and $47.4 million with $45.9 million at the midpoint. Adjusted EPS of $1.33 to $1.42 with $1.38 at midpoint. Estimated Q3 '25 share count and income tax rate are approximately 19.1 million shares and a tax rate between 20.5% to 22.5%.

This concludes my formal remarks, and I'd like to turn the call back to the operator for Q&A. 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. I was just wanting to know more of your thoughts on demand and the pipeline. We've seen all the major hospital systems report and they faced some tough quarters. They're seeing a slowdown in year-over-year growth in volumes. Just any of your thoughts on discussions with the hospitals? Is this translating into more cautious spending, more cautious budgets? Or have you not seen that impact at all?

Jenny, this is John, and thanks for the question. I think it's a really good question. Currently, we're not experiencing what you're seeing. So actually, we were able to close some significant deals just very recently with large health systems and hospitals.

So we're not experiencing that they're slowing down. As I mentioned on the call, there's really two things that are important to say here. One is -- first of all, we're serving a very, very broad spectrum of health care customers across multiple sub verticals. So on the one side, it's health care providers really starting from single physician offices all the way up to large health systems and everything in between.

But then it's also payers, it's also PBMs and pharma distribution customers and a lot of our customers are also in the health care IT space. So, it's a very broad spectrum across any size of customer you can imagine. So, we're not particularly impacted if one piece or one cohort of that market is potentially suffering a little bit at the moment. That's the one thing.

The other thing is with our services and what we're providing, we're really driving efficiency. There's oftentimes a clear ROI for those customers. They go through a POC, they test the product and then they roll it out. So, I think with lowering that administrative burden with increasing efficiencies and with saving costs, we are an attractive service even for providers that are suffering from a little bit more financial strain, as you just mentioned.

Okay. We have a couple of questions by e-mail, and then we'll go back to live questions. It was noted in this e-mail question that our revenue retention rate had improved to 102% and the question is what are the drivers behind that in terms of the customer types and sizes and our expectations for that trend as we go into the back half of the year.

I think Johnny, once again, that's a good one for you because -- dealing with that every day.

Yes, there's multiple drivers for this, right? And as we noted, the retention rate has significantly improved. This doesn't happen overnight. One of the key drivers is obviously our very large and strategic accounts in public sector, our EC Fax offering is definitely contributing to that retention rate.

But also in the enterprise space and in the large account space, we have -- with the go-to-market realignment a couple of years ago, really changed our approach and how we service those customers. So we're very close. We have assigned these books of business to our sales teams -- we have rolled out different kind of sales methodologies, and we're up and cross-selling into those existing accounts.

We're making sure that we're not losing that business. But on the flip side, we're trying to grow it and expanding in those accounts. And then lastly, I think on the lower end of the customer continuum in the SMB world, we have multiple different programs that we have launched in order to improve our retention rate and really tackle churn. And those programs are showing success and are bearing fruit as well.

So we're our offering, our product offering, the way we monitor our customers, the way we look for churn signals, all of those things are being considered and are being worked on and have been rolled out into programs, and that is driving retention really across the entire customer continuum. Now that said, we're expecting that retention rate to stay above the 100% mark. That is definitely our goal, and we're working very hard to sustain that ideally grow it.

Okay. We'll take another question by e-mail, which is a pivot to the public sector pipeline that you mentioned, Johnny, in your prepared remarks. And I think there's really a couple of embedded questions here. One is the length of the sales cycle that we're experiencing in the public sector. And then the second is the partnerships we have in terms of approaching that sector, particularly Cognizant now owned by Accenture.

Yes. So first thing, I mentioned part of this on the call, these are very diverse deal sizes in the public sector. They can be very, very small. That's a few thousand bucks a month for customers that still need that high level of security. Obviously, those sales cycles are a lot faster, and we can bring those customers. It's a couple of months, just like in the commercial space to get through. We have very standardized contract terms, pricing and all those kind of things.

So we're able to process them quickly. That was the deal that we just recently closed. So an additional customer on that platform, which is a big win for us. There's others that we're working on that are at the same speed. Once they get larger and you talk to very large government agencies, they go through an RFI and RFP process and sometimes go silent for 6, 12 months, they wait until the next budgeting cycle.

So, these sales cycles, just like with the VA, it was multiple years until we were able to close that deal and then eventually roll it out and really vary tremendously from a few couple of months to multiple years. Now the size is not the only thing that matters. Sometimes these larger deals can also move faster, but we're still early in our federal government sales program and learning as we go.

But we do have a few RFPs that we have responded to, and we're hoping to close some more deals in the near future. And with regards to our partnership with Accenture and former Cognizant, Accenture Cal Services. That is working really well. We -- if you have noticed the cloud service provider ship was transferred over to us. We're now the listed cloud service provider on the FedRAMP marketplace.

This makes sense because we're actually the owner of the IP and the inventor of the technology. But besides that, partnership is working really well. We're working very closely still with Accenture on many of these larger government deals. And on the smaller ones where it doesn't make sense for a large system integrator to participate, we do it by ourselves.

Tom, do you want to see if there's any other live questions?

Certainly. [Operator Instructions] And there are no further questions in queue at this time. As such, I would like to turn the floor back to Scott Turicchi, CEO of Consensus for closing remarks.

Great. Well, we appreciate you joining us today for the results of our second fiscal quarter and our outlook for the balance of the year. Keep posted. We do have, I know a virtual conference we'll be participating in, in about actually next week.

So stay tuned for that and other conferences that we have between now and November. We'll announce by press release. And then in early November, we'll have our Q3 earnings call. So thank you. And if you have any other further questions that you didn't have a chance to ask now, you can e-mail us, and we'll get back to you.

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