ccs-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For transition period from to

Commission File Number: 001-40750

Consensus Cloud Solutions, Inc.

(Exact name of registrant as specified in its charter)


Delaware						87-1139414
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

700 S. Flower Street, 15th Floor

Los Angeles, California 90017

(Address of principal executive offices)

(323) 860-9200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.01 par value

CCSI

Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

As of May 2, 2025, there were approximately 19,540,937 shares of the registrant's common stock outstanding.

TABLE OF CONTENTS


			Page

Part I.	Financial Information

	Item 1.	Financial Statements
		Condensed Consolidated Balance Sheets (unaudited)	3
		Condensed Consolidated Statements of Income (unaudited)	4
		Condensed Consolidated Statements of Comprehensive Income (unaudited)	5
		Condensed Consolidated Statements of Cash Flows (unaudited)	6
		Condensed Consolidated Statements of Stockholders’ Deficit (unaudited)	7
		Notes to Condensed Consolidated Financial Statements (unaudited)	8

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29

	Item 4.	Controls and Procedures	30

Part II.	Other Information

	Item 1.	Legal Proceedings	31

	Item 1A.	Risk Factors	31

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31

	Item 3.	Defaults Upon Senior Securities	31

	Item 4.	Mine Safety Disclosures	31

	Item 5.	Other Information	32

	Item 6.	Exhibits	33

		Signatures	34

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Part I - Financial Information

Item 1. Financial Statements.

CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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


	March 31, 2025		December 31, 2024
ASSETS
Cash and cash equivalents	$	53,399	$	33,545
Accounts receivable, net of allowances of $5,564 and $5,774, respectively	26,712		24,921
Prepaid expenses and other current assets	11,350		16,059
Total current assets	91,461		74,525

Property and equipment, net	103,508		100,076
Operating lease right-of-use assets	6,126		6,515
Intangibles, net	40,560		41,213
Goodwill	347,411		345,036
Deferred income taxes	31,372		30,521
Other assets	9,209		4,315
TOTAL ASSETS	$	629,647	$	602,201

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Accounts payable and accrued expenses	$	39,863	$	36,477
Income taxes payable, current	3,328		1,068
Deferred revenue, current	21,719		20,714
Operating lease liabilities, current	2,309		2,150
Current portion of long-term debt	6,126		18,902


Total current liabilities	73,345		79,311
Long-term debt, net of current portion	577,590		574,080
Deferred revenue, noncurrent	1,825		1,913
Operating lease liabilities, noncurrent	11,471		12,018

Liability for uncertain tax positions	13,635		13,218
Deferred income taxes	908		891
Other long-term liabilities	231		233
TOTAL LIABILITIES	679,005		681,664
Commitments and contingencies (Note 8)
Common stock, $0.01 par value. Authorized 120,000,000; total issued is 20,628,133 and 20,609,725 shares and total outstanding is 19,540,937 and 19,524,000 shares as of March 31, 2025 and December 31, 2024, respectively	206		206
Treasury stock, at cost (1,087,196 and 1,085,725 shares as of March 31, 2025 and December 31, 2024, respectively)	(32,347)		(32,313)
Additional paid-in capital	63,992		59,373
Accumulated deficit	(62,526)		(83,678)
Accumulated other comprehensive loss	(18,683)		(23,051)
TOTAL STOCKHOLDERS’ DEFICIT	(49,358)		(79,463)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	629,647	$	602,201

See Notes to Condensed Consolidated Financial Statements

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CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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


	Three Months Ended March 31,
		2025		2024
Revenues		$	87,138	$	88,146

Cost of revenues (1)		18,070		17,048
Gross profit		69,068		71,098
Operating expenses:
Sales and marketing (1)		12,788		12,558
Research, development and engineering (1)		1,712		1,905
General and administrative (1)		17,071		18,968
Total operating expenses		31,571		33,431
Income from operations		37,497		37,667
Interest expense		(8,976)		(6,199)
Interest income		451		923
Other (expense) income, net		(1,097)		3,902
Income before income taxes		27,875		36,293
Income tax expense		6,723		9,923


Net income		$	21,152	$	26,370









Net income per common share:
Basic		$	1.08	$	1.37
Diluted		$	1.07	$	1.37

Weighted average shares outstanding:
Basic		19,530,579		19,220,340
Diluted		19,690,822		19,233,736


(1) Includes share-based compensation expense as follows:
Cost of revenues	$	476	$	503
Sales and marketing	714		679
Research, development and engineering	105		95
General and administrative	2,969		3,173

Total	$	4,264	$	4,450

See Notes to Condensed Consolidated Financial Statements

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CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited, in thousands)


	Three Months Ended March 31,
		2025		2024

Net income		$	21,152	$	26,370
Other comprehensive gain (loss):
Foreign currency translation adjustment		4,368		(6,314)
Other comprehensive gain (loss)		4,368		(6,314)
Comprehensive income		$	25,520	$	20,056

See Notes to Condensed Consolidated Financial Statements

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CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)


	Three Months Ended March 31,
	2025		2024
Cash flows from operating activities:
Net income	$	21,152	$	26,370
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,178		4,767
Amortization of financing costs and discounts	420		479
Non-cash operating lease costs	394		370
Share-based compensation	4,264		4,450
Provision for doubtful accounts	1,417		875
Deferred income taxes, net	33		1,361
Loss (gain) on extinguishment of debt	77		(4,865)





Changes in operating assets and liabilities:
Decrease (increase) in:
Accounts receivable	(3,148)		(2,008)
Prepaid expenses and other current assets	4,710		378
Other assets	105		411
Increase (decrease) in:
Accounts payable and accrued expenses	3,276		9,111
Income taxes payable	2,215		2,373
Deferred revenue	829		430
Operating lease liabilities	(393)		(531)
Liability for uncertain tax positions	418		724
Other liabilities	(4)		(6)
Net cash provided by operating activities	40,943		44,689
Cash flows from investing activities:
Purchases of property and equipment	(7,196)		(8,923)


Purchase of investments	(5,000)		—


Net cash used in investing activities	(12,196)		(8,923)
Cash flows from financing activities:







Repurchase of common stock	(34)		(712)
Taxes paid related to net share settlement	(339)		(233)
Repurchase of debt	(9,749)		(57,884)



Net cash used in financing activities	(10,122)		(58,829)
Effect of exchange rate changes on cash and cash equivalents	1,229		(4,141)
Net change in cash and cash equivalents	19,854		(27,204)
Cash and cash equivalents at beginning of period	33,545		88,715
Cash and cash equivalents at end of period	$	53,399	$	61,511

See Notes to Condensed Consolidated Financial Statements

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CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited, in thousands except share amounts)


	Common stock			Additional paid-in	Treasury stock				Accumulated		Accumulated other comprehensive				Total
	Shares	Amount				capital		Shares	Amount		deficit		loss			deficit
Balance, January 1, 2024	20,273,686	$	203			$	41,247	(1,028,662)	$	(31,282)	$	(173,113)	$	(13,177)		$	(176,122)

Net income	—	—				—		—	—		26,370		—			26,370
Foreign currency translation adjustment	—	—				—		—	—		—		(6,314)			(6,314)


Vested restricted stock	33,447	—				—		—	—		—		—			—
Shares withheld related to net share settlement	(15,340)	—				(233)		—	—		—		—			(233)
Repurchase of common stock	—	—				—		(42,962)	(712)		—		—			(712)
Share-based compensation	—	—				5,187		—	—		—		—			5,187



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


	Common stock			Additional paid-in	Treasury stock				Accumulated		Accumulated other comprehensive				Total
	Shares	Amount				capital		Shares	Amount		deficit		loss			deficit
Balance, January 1, 2025	20,609,725	$	206			$	59,373	(1,085,725)	$	(32,313)	$	(83,678)	$	(23,051)		$	(79,463)
Net income	—	—				—		—	—		21,152		—			21,152
Foreign currency translation adjustment	—	—				—		—	—		—		4,368			4,368
Vested restricted stock	31,885	—				—		—	—		—		—			—
Shares withheld related to net share settlement	(13,477)	—				(339)		—	—		—		—			(339)
Repurchase of common stock	—	—				—		(1,471)	(34)		—		—			(34)
Share-based compensation	—	—				4,958		—	—		—		—			4,958


Balance, March 31, 2025	20,628,133	$	206			$	63,992	(1,087,196)	$	(32,347)	$	(62,526)	$	(18,683)		$	(49,358)

See Notes to Condensed Consolidated Financial Statements

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CONSENSUS CLOUD SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Basis of Presentation

The Company

Consensus Cloud Solutions, Inc., together with its subsidiaries (“Consensus Cloud Solutions”, “Consensus”, the “Company”, “our”, “us” or “we”), is a provider of secure information delivery services with a scalable Software-as-a-Service (“SaaS”) platform. Consensus serves customers of all sizes, from enterprises to individuals, across the globe and multiple industry verticals including healthcare, government, financial services, law and education. Beginning as an online fax company over two decades ago, Consensus has evolved into a global provider of enterprise secure communication solutions. Our communication, extraction and digital signature solutions enable our customers to securely and cooperatively access, exchange and use information across organizational, regional and national boundaries.

Principles of Consolidation

The accompanying interim condensed consolidated financial statements include the accounts of Consensus and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Basis of Presentation

The accompanying interim condensed consolidated financial statements are unaudited and have been prepared in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X issued by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. The Company believes that the disclosures made are adequate to make that information not misleading. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for the fair statement of these interim financial statements have been reflected. It is suggested that these financial statements be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2024, included in our Annual Report (Form 10-K) filed with the SEC on February 20, 2025. Accordingly, significant accounting policies and other disclosures normally provided have been omitted since such items are disclosed therein.

The results of operations for this interim period are not necessarily indicative of the operating results for the full year or for any future period.

Use of Estimates

The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, including judgments about the reported amounts of revenue and expenses during the reporting period. The Company believes that its most significant estimates are those related to revenue recognition, internal-use software development costs, share-based compensation expense and income taxes. On an ongoing basis, management evaluates its estimates based on historical experience and on various other factors that the Company believes to be reasonable under the circumstances. Actual results could materially differ from those estimates due to risks and uncertainties, including uncertainty in the current economic environment due to factors such as inflationary pressures and elevated interest rates.

Significant Accounting Policies

There have been no material changes to our significant accounting policies from our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Segment Reporting

FASB ASC Topic No. 280, Segment Reporting (“ASC 280”), establishes standards for the way that public business enterprises report information about reportable segments in their annual consolidated financial statements and requires that those entities report selected information about reportable segments in interim financial reports. ASC 280 also establishes

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standards for related disclosures about products and services, geographic areas and major customers. The Company’s business segment is based on the organization’s structure used by the chief operating decision maker (“CODM”), who is our chief executive officer (“CEO”), for making operating and investment decisions and for assessing performance. The Company’s CEO reviews financial information presented on a consolidated basis for purposes of assessing performance and making decisions on how to allocate resources. The CEO uses consolidated profit or loss from operations before interest and income taxes to allocate resources predominantly in the annual budget and forecasting process. The CEO considers budget-to-actual variances on a monthly basis when making decisions about allocating capital and personnel. The CEO also uses consolidated profit or loss from operations before interest and income taxes and consolidated net income to assess performance. Accordingly, the Company has determined that it operates one reportable segment known as Cloud Fax (see Note 14 - Segment Information). The condensed consolidated financial statements and related disclosures reflect the segment operations of Cloud Fax.

Reclassifications

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

2.Recent Accounting Pronouncements

In October 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, which amends the disclosure or presentation requirements of a variety of topics in the accounting standards codification in order to conform with certain SEC amendments in Release No. 33-10532, Disclosure Update and Simplification. The effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective. The Company is evaluating the potential impact of this guidance on its consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments are intended to improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The amendments in this ASU should be applied on either a prospective or retrospective basis. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is evaluating the potential impact of this guidance on its consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement: Expense Disaggregation Disclosures. The amendments in this ASU require disclosure of more information about certain expenses and costs and should be applied on either a prospective or retrospective basis. The amendments in this ASU are effective for fiscal periods beginning after December 15, 2026. Early adoption is permitted. The Company is currently evaluating the potential impact of this guidance on its consolidated financial statements.

3.Revenues

The Company earns revenue from contracts with customers, primarily through the provision of cloud-based communication and digital signature solutions that allow customers to access the Company’s software without taking possession. The contracts include both recurring subscription and usage-based fees, and the total transaction price is allocated to performance obligations in each contract as appropriate. Revenue for cloud-based services is recognized over time in the period earned. The contracts may be terminated early. Fees collected in advance are non-refundable, and they are deferred and recognized in revenue when the related performance obligations are satisfied. Standard Corporate contracts billed monthly include a termination charge equal to the minimum fees payable through the last day of the contract term.

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


	Three Months Ended March 31,
		2025		2024
Revenues
Corporate		$	54,289	$	51,390
Small office home office (“SoHo”)		32,849		36,754
Other		—		2
Total		$	87,138	$	88,146

Timing of revenue recognition
Point in time		$	643	$	210
Over time		86,495		87,936
Total		$	87,138	$	88,146

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

Performance Obligations

Generally, the Company’s contracts with customers include one performance obligation, however, certain contracts may include multiple performance obligations. For such arrangements, revenues are allocated to each performance obligation based on their relative standalone selling price.

The Company satisfies its performance obligations upon delivery of products or services to its customers. Payment terms vary by type and location of the Company’s customers and the products and services offered. The time between invoicing and when payment is due is not significant. Due to the nature of the services provided, there are no obligations for returns.

Significant Judgments

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

Judgment is also required to determine the standalone selling price for each distinct performance obligation when there are multiple performance obligations. In certain cases, the Company is able to establish the standalone selling price based on observable prices of products or services sold or priced separately in comparable circumstances to similar customers. The Company uses a range of amounts to estimate the standalone selling price when each of the products and services is sold separately to determine whether there is a discount to be allocated based on the relative standalone selling price of the various products and services.

Performance Obligations Satisfied Over Time

The Company’s business consists primarily of performance obligations that are satisfied over time based on the fact that the nature of the cloud-based services offered is subscription based where the customer simultaneously receives and consumes the benefit of the services provided regardless of whether the customer uses the services or not. Depending on the individual contracts with the customer, revenue for these services is recognized over the contract period when services are provided. The Company expects to recognize revenue for Corporate contracts typically in a range from month-to-month up to 36 months and recognize revenue for SoHo contracts in a range from month-to-month up to one year. Revenue from usage-based fees is recognized in proportion to the amount for which the Company has the right to invoice for services performed, which corresponds with the utilization of the services by the customer.

The Company has concluded that the best measure of progress toward the complete satisfaction of the performance obligations over time is a time-based measure. The Company recognizes revenue on a straight-line basis throughout the subscription period and believes that the method used is a faithful depiction of the transfer of goods and services.

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Practical Expedients

Existence of a Significant Financing Component in a Contract

As a practical expedient, the Company has not assessed whether a contract has a significant financing component because the Company expects at contract inception that the period between payment by the customer and the transfer of promised goods or services by the Company to the customer will be one year or less. In addition, the Company has determined that the payment terms the Company provides to its customers are structured primarily for reasons other than the provision of finance to the Company. The Company typically charges an upfront subscription amount for services, or an amount for usage in arrears, or a combination thereof, as other payment terms would affect the nature of the risk assumed by the Company due to the costs of the customer acquisition and the highly competitive and commoditized nature of the business the Company operates.

Costs to Fulfill a Contract

The Company’s revenues are primarily generated from customer contracts that are for one year or less. Costs primarily consist of incentive compensation paid based on the achievements of sales targets in a given period for related revenue streams and are recognized in the month when the revenue is earned. Incentive compensation is paid upon the issuance or renewal of the customer contract. As a practical expedient, for amortization periods that are determined to be one year or less, the Company expenses any incremental costs of obtaining the contract with a customer when incurred. For those customer contracts greater than one year, the Company capitalizes and amortizes the expenses, when appropriate, over the period of benefit.

Revenues Invoiced

The Company has applied the practical expedient for certain revenue streams to exclude the value of remaining performance obligations for (i) contracts with an original expected term of one year or less or (ii) contracts for which the Company recognizes revenue in proportion to the amount it has the right to invoice for services performed.

4. Fair Value Measurements

The Company complies with the provisions of FASB ASC Topic No. 820, Fair Value Measurement, (“ASC 820”), which defines fair value, provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:


			§			Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

			§			Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

			§			Level 3 – Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. Cash and cash equivalents include money market funds of $46.1 million and $26.8 million as of March 31, 2025 and December 31, 2024, respectively, which are valued based on Level 1 inputs consisting of quoted prices in active markets. The carrying value of the Company’s cash and cash equivalents approximates fair value.

The fair value of long-term debt is determined using recent quoted market prices or dealer quotes for each of the Company’s instruments, which are Level 1 inputs (see Note 7 - Long-Term Debt). The carrying value of long-term debt is reflected in the financial statements at cost.

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Assets Measured on a Non-Recurring Basis

The Company’s non-financial assets, which primarily consist of goodwill, indefinite-lived intangible assets, long-lived assets and equity securities without a readily determinable fair value are reported at carrying value, or at fair value as of their acquisition dates, and are not required to be measured at fair value on a recurring basis. However, if any of these types of assets become impaired, the carrying values of the assets are written down to fair value using Level 3 inputs.

The carrying amount of the Company’s investments accounted for using the measurement alternative method in accordance with FASB ASC Topic No. 321, Investments - Equity Securities (“ASC 321”) as of March 31, 2025 and December 31, 2024, was $8.0 million and $4.0 million, respectively, and is included in other assets within the Company’s Condensed Consolidated Balance Sheets. If the Company becomes aware of a significant decline in value that is other-than-temporary, the Company assesses whether an other-than-temporary impairment loss on an investment has occurred due to declines in fair value or other market conditions. The loss will be recorded in the period in which the Company identifies the decline. During the three months ended March 31, 2025 and 2024, the Company did not recognize any unrealized gains or losses and did not have any impairments during the respective periods.

5. Property and Equipment

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


	March 31, 2025		December 31, 2024
Internal-use software development costs	$	89,670	$	88,244
Computers, software and equipment	18,779		18,616
Furniture and fixtures	885		882
Leasehold improvements	1,718		1,715
Internal-use software development costs in process	53,140		46,676
	164,192		156,133
Less: Accumulated depreciation and amortization	(60,684)		(56,057)
Total property and equipment, net	$	103,508	$	100,076

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

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

6. Goodwill and Intangible Assets

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


	Amount
Balance as of January 1, 2025	$	345,036




Foreign exchange translation	2,375
Balance as of March 31, 2025	$	347,411

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

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Intangible Assets with Indefinite Lives:

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


	March 31, 2025		December 31, 2024
Trade names	$	27,348	$	27,316
Other	4,045		4,045
Total	$	31,393	$	31,361

Intangible Assets Subject to Amortization:

As of March 31, 2025, intangible assets subject to amortization are summarized as follows (in thousands):


	Weighted-Average Remaining Amortization Period	Historical Cost		Accumulated Amortization		Net
Trade names	0.2 years	$	8,165	$	7,916	$	249
Patent and patent licenses	0.0 years	54,341		54,341		—
Customer relationships (1)	2.0 years	108,016		100,310		7,706
Other purchased intangibles	1.1 years	11,920		10,708		1,212
Total		$	182,442	$	173,275	$	9,167

(1) The Company amortizes its customer relationship assets in a pattern that best reflects the pace in which the assets’ benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first four to five years, which may not correlate to the overall life of the asset.

As of December 31, 2024, intangible assets subject to amortization are summarized as follows (in thousands):


	Weighted-Average Remaining Amortization Period	Historical Cost		Accumulated Amortization		Net
Trade names	0.2 years	$	8,107	$	7,826	$	281
Patent and patent licenses	0.0 years	54,341		54,341		—
Customer relationships (1)	2.1 years	107,287		99,054		8,233
Other purchased intangibles	1.2 years	11,914		10,576		1,338
Total		$	181,649	$	171,797	$	9,852

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


Fiscal Year:	Amount
2025 (remainder)	$	1,888
2026	2,099
2027	1,399
2028	986
2029	803
Thereafter	1,992
Total	$	9,167

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

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

7. Long-Term Debt

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


	March 31, 2025		December 31, 2024
2026 Senior Notes	$	240,139	$	248,980
2028 Senior Notes	348,247		349,137

Total	588,386		598,117
Less: deferred issuance costs	(4,670)		(5,135)
Total debt	583,716		592,982
Less: current portion, net of debt issuance costs	(6,126)		(18,902)
Total long-term debt, less current portion	$	577,590	$	574,080

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

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

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


Fiscal year:	Total
2025 (1) (remainder)	$	6,000
2026	234,139
2027	—
2028	348,247
2029	—
Thereafter	—
Total	$	588,386

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

The Company capitalized $0.8 million and $0.7 million of interest expense within property and equipment, net on the Company’s Condensed Consolidated Balance Sheets during the three months ended March 31, 2025 and 2024, respectively.

2026 Senior Notes

On October 7, 2021, Consensus issued $305.0 million of senior notes due in 2026 (the “2026 Senior Notes”), receiving net proceeds of $301.2 million, after deducting the initial purchasers’ discounts, commissions and offering expenses. The 2026 Senior Notes are presented as current portion of long-term debt and long-term debt, net of current portion, which is presented net of deferred issuance costs, on the Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024. The 2026 Senior Notes bear interest at a rate of 6.0% per annum and mature on October 15, 2026. The Company may redeem some or all of the 2026 Senior Notes at any time on or after October 15, 2023 at specified redemption prices, plus accrued and unpaid interest, if any, up to, but excluding the redemption date.

The indenture pursuant to which the 2026 Senior Notes were issued contains covenants that restrict the Company’s ability to (i) pay dividends or make distributions on the Company’s common stock; (ii) make certain restricted payments; (iii) create liens or enter into sale and leaseback transactions; (iv) enter into transactions with affiliates; (v) merge or consolidate with another company; and (vi) transfer and sell assets. These covenants contain certain exceptions. Restricted payments are applicable only if Consensus Cloud Solutions, Inc. and subsidiaries designated as restricted subsidiaries has a net leverage ratio

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of greater than 3.0 to 1.0. In addition, if such net leverage ratio is in excess of 3.0 to 1.0, the restriction on restricted payments is subject to various exceptions, including the total aggregate amount not to exceed the greater of (A) $100.0 million and (B) 50.0% of EBITDA for the most recently ended four fiscal quarter period ended immediately prior to such date for which internal financial statements are available. The Company is in compliance with its debt covenants as of March 31, 2025.

2028 Senior Notes

On October 7, 2021, Consensus issued $500.0 million of 6.5% senior notes due in 2028 (the “2028 Senior Notes”) to Ziff Davis, Inc. (“Ziff Davis” or the “Former Parent”) in exchange for the equity interest in the Company. Ziff Davis then exchanged the 2028 Senior Notes with lenders under its credit agreement (or their affiliates) in exchange for extinguishment of a similar amount of indebtedness under such credit agreement. The 2028 Senior Notes are presented as current portion of long-term debt and long-term debt, net of current portion, which is presented net of deferred issuance costs, on the Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024. The 2028 Senior Notes bear interest at a rate of 6.5% per annum and mature on October 15, 2028. The Company may redeem some or all of the 2028 Senior Notes at any time on or after October 15, 2026 at specified redemption prices plus accrued and unpaid interest, if any, up to, but excluding the redemption date.

The indenture pursuant to which the 2028 Senior Notes were issued contains covenants that restrict the Company’s ability to (i) pay dividends or make distributions on the Company’s common stock; (ii) make certain restricted payments; (iii) create liens or enter into sale and leaseback transactions; (iv) enter into transactions with affiliates; (v) merge or consolidate with another company; and (vi) transfer and sell assets. These covenants contain certain exceptions. Restricted payments are applicable only if Consensus Cloud Solutions, Inc. and subsidiaries designated as restricted subsidiaries has a net leverage ratio of greater than 3.0 to 1.0. In addition, if such net leverage ratio is in excess of 3.0 to 1.0, the restriction on restricted payments is subject to various exceptions, including the total aggregate amount not to exceed the greater of (A) $100.0 million and (B) 50.0% of EBITDA for the most recently ended four fiscal quarter period ended immediately prior to such date for which internal financial statements are available. The Company is in compliance with its debt covenants as of March 31, 2025.

Credit Agreement

On March 4, 2022, the Company entered into a Credit Agreement (the “Credit Agreement”) with certain lenders party thereto (the “Lenders”) and MUFG Union Bank, N.A., as agent (the “Agent”). Pursuant to the Credit Agreement, the Lenders have provided Consensus with a senior secured revolving credit facility of $25.0 million (the “Credit Facility”) with an option held by the Company to obtain an additional commitment of up to a maximum of $25.0 million. The final maturity of the Credit Facility will occur on March 4, 2027. As of March 31, 2025, no amount had been drawn down on the Credit Facility. The Credit Facility is guaranteed by each wholly-owned material domestic subsidiary of Consensus, and secured by substantially all assets of Consensus and the guarantors. The loans made under the Credit Facility are subject to a Secured Overnight Financing Rate (“SOFR”) base interest rate plus a SOFR margin between 1.75% - 2.50%, with stepdowns subject to the total net leverage ratio.

The Credit Facility is subject to a total net leverage ratio covenant and a minimum EBITDA requirement, in each case tested on a quarterly basis. The Credit Agreement contains covenants that restrict the Company’s ability to (i) pay dividends or make distributions on the Company’s common stock; (ii) make certain restricted payments; (iii) create liens or enter into sale and leaseback transactions; (iv) enter into transactions with affiliates; (v) merge or consolidate with another company; and (vi) transfer and sell assets. These covenants contain certain exceptions. Unsecured indebtedness may be incurred, assets may be disposed of, restricted payments may be made and investments may be made, in each case subject to compliance with the Company’s financial covenants. The Company is in compliance with its covenants as of March 31, 2025.

Debt Repurchase Program

On November 9, 2023, the Board of Directors approved a debt repurchase program, pursuant to which Consensus may reduce, through redemptions, open market purchases, tender offers, privately negotiated purchases or other retirements, a combination of the outstanding principal balance of the 2026 Senior Notes and 2028 Senior Notes (“Debt Repurchase Program”). The authorization permits an aggregate principal amount reduction of up to $300 million and expires on November 9, 2026. The timing and amounts of purchases will be determined by the Company, depending on market conditions and other factors it deems relevant. During the three months ended March 31, 2025 and 2024, the Company retired $9.7 million and $63.5 million, respectively, in principal of its senior notes. Refer to Note 15 - Subsequent Event for debt repurchases made subsequent to March 31, 2025 but prior to the filing of these financial statements. As of March 31, 2025, the Company had retired an

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aggregate of $216.6 million in principal of its senior notes under this program. In connection with the Debt Repurchase Program, the Company reclassified $6.1 million and $18.9 million of long-term debt, net of current portion to the current portion of long-term debt as of March 31, 2025 and December 31, 2024, respectively, as the Company had the intention and cash on hand to extinguish the respective amounts of debt within twelve months of the end of the reporting periods.

For the three months ended March 31, 2025 and 2024, a net (loss) gain on debt extinguishment of $(0.1) million and $4.9 million, respectively, related to the Debt Repurchase Program is included in interest expense on the Condensed Consolidated Statements of Income.

8. Commitments and Contingencies

Litigation

From time to time, the Company and its affiliates are involved in litigation and other legal disputes or regulatory inquiries that arise in the ordinary course of business. Any claims or regulatory actions against the Company and its affiliates, whether meritorious or not, could be time consuming and costly, and could divert significant operational resources. The outcomes of such matters are subject to inherent uncertainties, carrying the potential for unfavorable rulings that could include monetary damages and injunctive relief.

The Company does not believe, based on current knowledge, that any legal proceedings or claims currently exist which, after giving effect to existing accrued liabilities, are likely to have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. It is the Company’s policy to expense legal fees related to any litigation as incurred.

Non-Income Related Taxes

In the third quarter of 2022, the Company initiated a Voluntary Disclosure Agreement (“VDA”) process to voluntarily report sales tax liability related to prior periods where the Company had previously not been able to estimate its exposure. The Company recorded an accrual as the exposure became probable and estimable. The VDA process was completed in the fourth quarter of 2023. While the Company believes that it has sufficiently reserved for historical sales tax liabilities under FASB ASC Topic No. 450, Contingencies, some state taxing authorities may still challenge the Company’s sales tax position, the methodology used to calculate the sales tax liability, and may also impose other taxes on its business. Taxing authorities may successfully assert that the Company should have collected, or in the future should collect sales and use, telecommunications or similar taxes, and could be subject to liability with respect to past or future tax, which could adversely affect the Company’s operating results. The Company will continue to review and monitor the impact of sales tax rules in order to mitigate any associated risks on its business.

9. Other Balance Sheet Account Details

Prepaid expenses and other current assets

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


	March 31, 2025		December 31, 2024
Prepaid insurance	$	1,839	$	2,601
Prepaid income taxes	673		2,065
Prepaid marketing expense	—		3,365
Prepaid software licenses	4,812		4,346
Other prepaid expenses	3,778		3,389
Other current assets	248		293
Total	$	11,350	$	16,059

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Accounts payable and accrued expenses

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


	March 31, 2025		December 31, 2024
Accounts payable	$	6,509	$	7,383
Accrued sales and other taxes	6,821		6,796
Accrued interest	17,000		7,939
Accrued compensation	5,023		10,425
Accrued advertising expenses	1,566		2,719
Other accrued expenses	2,944		1,215
Total	$	39,863	$	36,477

10. Income Taxes

The Company’s tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate adjusted for discrete interim period tax impacts. Each quarter the Company updates its estimated annual effective tax rate and, if the estimate changes, makes a cumulative adjustment. Changes in the geographical mix, permanent differences or the estimated level of annual pre-tax income can affect the effective tax rate. The Company’s effective tax rate for the three months ended March 31, 2025 and 2024 was 24.1% and 27.3%, respectively. The decrease in the Company’s effective income tax rate for the three months ended March 31, 2025 was primarily due to a change in the geographical mix of income, a decreased impact of the valuation allowance on the quarter and a decrease in uncertain tax positions.

The Company’s effective tax rates for the three months ended March 31, 2025 and 2024 differed from the U.S. federal statutory rates of 21% primarily as a result of state income taxes, certain expenses not deductible for tax purposes, foreign rate differential, foreign income inclusion, various tax credits and uncertain tax positions.

As of March 31, 2025 and December 31, 2024, the Company had $13.6 million and $13.2 million, respectively, in liabilities for uncertain income tax positions, including interest and penalties. Accrued interest and penalties related to unrecognized tax benefits are recognized in income tax expense on the Company’s Condensed Consolidated Statements of Income.

Income Tax Audits

The Company is required to file tax returns in the United States, Ireland, Canada, Japan, Netherlands and Hong Kong. As of March 31, 2025, the Company was not under audit in any jurisdiction that it operates within. In respect to these international subsidiaries, tax returns for the years from 2018 onwards are still open to examination by tax authorities.

11. Stockholders’ Deficit

Common Stock Repurchase Program

In March 2022, the Company’s Board of Directors approved a share buyback program. Under this program, the Company may purchase in the public market or in off-market transactions up to $100.0 million of the Company’s common stock through February 2025. In February 2025, the Company’s Board of Directors authorized and approved a three-year extension of the share repurchase program through February 2028. The program may end before this date if the maximum amount of repurchases has been reached or at the discretion of the Company’s Board of Directors. The timing and amounts of purchases are determined by the Company, depending on market conditions and other factors it deems relevant. The Company entered into Rule 10b-18 and Rule 10b5-1 trading plans under this program. During the three months ended March 31, 2025, the Company repurchased 1,471 shares under this program for a minimal amount. During the three months ended March 31, 2024, the Company repurchased 42,962 shares under this program at an aggregate cost of $0.7 million. Cumulatively as of March 31, 2025, 1,087,196 shares have been repurchased under this program at an aggregate cost of $32.4 million (inclusive of excise tax of $0.2 million). The excise tax is assessed at 1% of the fair market value of net stock repurchases after December 31, 2022.

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Vested Restricted Stock

At the time of certain vesting events related to restricted stock units or restricted stock awards that are held by participants in Consensus’ Equity Incentive Plan, a portion of the awards subject to vesting are withheld by the Company to satisfy the employees’ tax withholding obligations that arise upon the vesting of restricted stock. As a result, the number of shares issued upon vesting for these awards is net of the statutory withholding requirements that the Company pays on behalf of its employees. Although shares withheld are not issued, they are treated as common share repurchases in the Company’s condensed consolidated financial statements, as they reduce the number of shares that would have been issued upon vesting. These shares do not count against the authorized capacity under the Company’s share repurchase program described above. During the three months ended March 31, 2025 and 2024, the Company withheld shares on its vested restricted stock units and restricted stock awards relating to its share-based compensation plans of 13,477 shares and 15,340 shares, respectively.

Dividends

The Company currently does not issue dividends to Consensus shareholders. Future dividends are subject to Board approval. Our current debt agreements could trigger restrictions on dividend payments under certain circumstances (see Note 7 - Long-Term Debt).

12. Equity Incentive Plan

The Company’s share-based compensation plans include the 2021 Equity Incentive Plan (the “2021 Plan”).

2021 Equity Incentive Plan

In December 2021, Consensus’ Board of Directors adopted the 2021 Plan, which provides for the grant of incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and share units and other share-based awards. Under the 2021 Plan, 4,000,000 shares of common stock are authorized to be granted. As of March 31, 2025, 1,374,900 shares were available to be used under the 2021 Plan.

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


	Number of Shares	Weighted-Average Grant-Date Fair Value
Outstanding at January 1, 2025	2,096,316	$	33.24
Granted	18,724	28.03
Vested	(31,885)	44.43
Canceled	(22,787)	29.29
Outstanding at March 31, 2025	2,060,368	$	33.07

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

The Company capitalized $0.7 million of share-based compensation cost during both of the three months ended March 31, 2025 and 2024, respectively, within property and equipment, net on its Condensed Consolidated Balance Sheets.

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13. Earnings Per Share

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


	Three Months Ended March 31,
		2025		2024
Numerator for basic and diluted net income per common share:
Net income attributable to common shareholders		$	21,152	$	26,370
Net income available to participating securities (1)		—		(10)
Net income available to common shareholders from operations		$	21,152	$	26,360
Denominator:
Weighted-average outstanding shares of common stock		19,530,579		19,220,340
Dilutive effect of:
Equity incentive plans		155,786		4,582
Employee Stock Purchase Plan		4,457		8,814
Common stock and common stock equivalents		19,690,822		19,233,736
Net income per share from operations:
Basic		$	1.08	$	1.37
Diluted		$	1.07	$	1.37

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

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

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14. Segment Information

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


	Three Months Ended March 31,
	2025		2024

Revenues	$	87,138	$	88,146
Less:
Salary and benefits	19,951		21,715
Marketing	5,032		4,460
Phone operations	4,235		4,044
Outside services	3,836		4,341
Depreciation and amortization	5,178		4,767
Other segment items (1)	11,409		11,152
Segment operating profit	37,497		37,667

Interest expense	(8,976)		(6,199)
Interest income	451		923
Other (expense) income, net (2)	(1,097)		3,902
Segment earnings before income taxes	27,875		36,293

Income tax expense	6,723		9,923
Segment net income	$	21,152	$	26,370

(1) Other segment items includes: database hosting expenses, computer and related expenses, processing fees, bad debt expense, taxes and insurance expenses, office expenses, travel and entertainment expenses, other administrative expenses and miscellaneous expenses.

(2) Other (expense) income, net includes: gain/loss on foreign currency exchange and miscellaneous income/expense.

The Company maintains operations in the U.S., Canada, Ireland and other countries. Geographic information about the U.S. and all other countries for the reporting periods is presented below. Such information attributes revenues based on markets where revenues are reported (in thousands):


	Three Months Ended March 31,
		2025		2024
Revenues:
United States		$	68,756	$	69,712
Canada		13,623		13,119
Ireland		2,702		3,174
All other countries		2,057		2,141
Foreign countries		18,382		18,434
Total		$	87,138	$	88,146

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


	March 31, 2025		December 31, 2024
Long-lived assets:
United States	$	109,324	$	106,244
Canada	170		191
Ireland	139		155
All other countries	1		1
Foreign countries	310		347
Total	$	109,634	$	106,591

15. Subsequent Event

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

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Information

In addition to historical information, we have also made forward-looking statements in this report. These statements are based on our estimates and assumptions and are subject to risks and uncertainties. Forward-looking statements include the information concerning our possible or assumed future results of operations. Forward-looking statements also include those preceded or followed by the words “expects,” “may,” “anticipates,” “believes,” “estimates,” “will,” “hopes” or similar expressions. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those discussed below, the risk factors discussed in Part II, Item 1A - “Risk Factors” of this Quarterly Report on Form 10-Q (if any) and in Part I, Item 1A - “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 (together, the “Risk Factors”), and the factors discussed in the section in this Quarterly Report on Form 10-Q entitled “Quantitative and Qualitative Disclosures About Market Risk.” Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date hereof. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. Readers should carefully review the Risk Factors and the risk factors set forth in other documents we file from time to time with the SEC.

Some factors that could cause actual results to differ materially from those anticipated in these forward-looking statements include, but are not limited to, our ability and intention to:

◦Sustain growth or profitability, particularly in light of an uncertain U.S. or worldwide economy, recent global conflicts, inflationary pressures, elevated interest rates, and the prospect of a U.S. federal government shutdown, and the related impact on customer acquisition and retention rates, customer usage levels and credit and debit card payment declines;

◦Maintain and increase our customer base and average revenue per user;

◦Generate sufficient cash flow to make interest and debt payments, reinvest in our business and pursue desired activities and business plans while satisfying restrictive covenants relating to debt obligations;

◦Acquire businesses on acceptable terms and successfully integrate and realize anticipated synergies from such acquisitions;

◦Continue to expand our Cloud Fax businesses and operations internationally in the wake of numerous risks, including adverse currency fluctuations, difficulty in staffing and managing international operations, higher operating costs as a percentage of revenues or the implementation of adverse regulations;

◦Maintain our financial position, operating results and cash flows in the event that we incur new or unanticipated costs or tax liabilities, including those relating to federal and state income tax and indirect taxes, such as sales, value-added and telecommunication taxes;

◦Accurately estimate the assumptions underlying our effective worldwide tax rate;

◦Manage risks from our international operations, including risks associated with currency fluctuations and foreign exchange controls and adverse changes in global financial markets;

◦Manage certain risks inherent to our business, such as costs associated with fraudulent activity, system failure or network security breach; effectively maintaining and managing our billing systems; allocating time and resources required to manage our legal proceedings; liability for legal and other claims; or adhering to our internal controls and procedures;

◦Compete with other similar providers with regard to price, service and functionality;

◦Cost-effectively procure, retain and deploy large quantities of fax numbers in desired locations in the United States and abroad;

◦Achieve business and financial objectives in light of burdensome domestic and international telecommunications, internet or other regulations including data privacy, access, security and retention;

◦Successfully manage our growth, including but not limited to, our operational and personnel-related resources, and integration of newly acquired businesses;

◦Successfully adapt to technological changes and diversify services and related revenues at acceptable levels of financial return;

◦Successfully develop and protect our intellectual property, both domestically and internationally, including our brands, patents, trademarks and domain names, and avoid infringing upon the proprietary rights of others;

◦Recruit and retain key personnel; and

◦Maintain favorable relationships with critical third-party vendors whose financial condition will not negatively impact the services they provide.

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In addition, other factors that could cause actual results to differ materially from those anticipated in these forward-looking statements or materially impact our financial results include the risks associated with new accounting pronouncements, as well as those associated with natural disasters, public health crises and other catastrophic events outside of our control.

Overview

Consensus is a leading provider of secure information delivery services with a scalable Software-as-a-Service (“SaaS”) platform. Consensus serves approximately 790 thousand customers of all sizes, from enterprises to individuals, across approximately 45 countries and/or territories and multiple industry verticals including healthcare, government, financial services, law and education. Our top 10 customers represent approximately 9% of total revenues and approximately 74% of our Small office home office (“SoHo”) customer accounts are older than 2 years. Beginning as an online fax company over two decades ago, Consensus has evolved into a leading global provider of enterprise secure communication solutions. Consensus is well positioned to capitalize on advancements in how people and businesses share private documents and information. Its mission is to democratize secure information interchange across technologies and industries, and solve the healthcare interoperability challenge. Consensus’ communication and interoperability solutions enable its customers to securely and cooperatively access, exchange and use information across organizational, regional and national boundaries.

For purposes of this management’s discussion and analysis of the results of operations and financial condition of Consensus (“MD&A”) section, we use the terms “the Company,” “we,” “us” and “our” to refer to Consensus.

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Key Performance Metrics

We use the following metrics to generally assess the operational and financial performance of our business, including the growth of our business, the value provided by customers to our business and our customer retention that provide insights that contribute to certain of our business planning decisions. We believe these financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.

The following table sets forth certain key performance metrics for our operations for the three months ended March 31, 2025 and 2024 (in thousands, except for percentages and Average Revenue per Customer Account):


	Three Months Ended March 31,
		2025			2024
Revenue
Corporate		$	54,289		$	51,390
SoHo		32,849			36,754
Total		87,138			88,144
Other revenues		—			2
Consolidated		$	87,138		$	88,146
Average Revenue per Customer Account (“ARPA”) (1)(2)
Corporate		$	306.54		$	316.07
SoHo		$	14.83		$	14.95
Consolidated		$	36.42		$	33.63

Customer Accounts (1)
Corporate		60			55
SoHo		730			808
Consolidated		790			863

Paid Adds (3)
Corporate		5			4
SoHo		58			64
Consolidated		63			68

Monthly Churn % (4)
Corporate		2.49		%	1.92		%
SoHo		3.26		%	3.42		%
Consolidated		3.21		%	3.32		%

(1)Consensus customers are defined as paying Corporate and SoHo customer accounts.

(2)Represents a monthly ARPA for the quarter period, and is calculated as follows: Monthly ARPA on a quarterly basis is calculated using our standard convention of dividing revenue for the quarter by the average of the quarter’s beginning and ending customer base and dividing that amount by 3 months. We believe ARPA provides investors an understanding of the average monthly revenues we recognize per account associated within Consensus’ customer base. As ARPA varies based on fixed subscription fee and variable usage components, we believe it can serve as a measure by which investors can evaluate trends in the types of services, levels of services and the usage levels of those services across Consensus’ customers.

(3)Paid Adds represents paying new Consensus customer accounts added during the periods presented.

(4)Monthly churn represents paid monthly SoHo and Corporate customer accounts that were cancelled during each month of the quarter period, divided by the average number of customers during each month of the same quarter period, including the paid adds. The period measured is the quarter period and expressed as a monthly churn rate over the quarter period.

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Critical Accounting Estimates

In the ordinary course of business, we have made a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of our financial statements. Actual results could differ significantly from those estimates under different assumptions and conditions. Our critical accounting policies are described in our 2024 Annual Report on Form 10-K filed with the SEC on February 20, 2025. During the three months ended March 31, 2025, there were no significant changes in our critical accounting policies and estimates.

Results of Operations for the Three Months Ended March 31, 2025 and 2024

The main strategic focus of our Consensus offerings is to enable our customers to securely and cooperatively access, exchange and use information across organizational, regional and national boundaries. As a result, we expect to continue to take steps to enhance our existing offerings and offer new services to continue to satisfy the evolving needs of our customers.

We expect our business to primarily grow organically and inorganically through the use of capital for re-investment in the business and opportunistic acquisitions that expedite our product roadmap in the interoperability space should they arise.

Revenues


(in thousands, except percentages)	Three Months Ended March 31,			Percentage Change
		2025		2024
Revenues		$	87,138	$	88,146	(1)%

Our revenues primarily consist of revenues from “fixed” customer subscription revenues and “variable” revenues generated from actual usage of our services.

Revenues decreased by $1.0 million or 1% for the three months ended March 31, 2025 over the prior year comparable period. The decrease was due to a decline of $3.9 million or 11% in our SoHo business, partially offset by an increase of $2.9 million or 6% in our Corporate business.

Cost of Revenues


(in thousands, except percentages)	Three Months Ended March 31,		Percentage Change
		2025	2024
Cost of revenues		$18,070	$17,048	6%
As a percent of revenue		21%	19%

Cost of revenues is primarily comprised of costs associated with personnel costs, data transmission, online processing fees, network operations as well as capitalized software amortization and equipment depreciation.

The increase in cost of revenues for the three months ended March 31, 2025 over the prior year comparable period was primarily due to increases of $0.8 million in network operations costs, $0.7 million in depreciation associated with platform development costs and $0.2 million in data transmission costs, partially offset by a decrease of $0.7 million in personnel-related expenses.

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Operating Expenses

Sales and Marketing


(in thousands, except percentages)	Three Months Ended March 31,		Percentage Change
		2025	2024
Sales and marketing		$12,788	$12,558	2%
As a percent of revenue		15%	14%

Our sales and marketing costs consist primarily of personnel costs, internet-based advertising and other business development-related expenses. Our internet-based advertising relationships consist primarily of fixed cost and performance-based (cost-per-impression, cost-per-click and cost-per-acquisition) advertising relationships with an array of online service providers. Our sales personnel consist of a combination of inside sales and outside sales professionals.

Sales and marketing for the three months ended March 31, 2025 remained consistent with the prior year comparable period.

Research, Development and Engineering


(in thousands, except percentages)	Three Months Ended March 31,		Percentage Change
		2025	2024
Research, development and engineering		$1,712	$1,905	(10)%
As a percent of revenue		2%	2%

Our research, development and engineering costs consist primarily of personnel-related expenses.

The decrease in research, development and engineering for the three months ended March 31, 2025 over the prior year comparable period was primarily due to decreases of $0.1 million in personnel-related expenses and $0.1 million in computer related expenses.

General and Administrative


(in thousands, except percentages)	Three Months Ended March 31,		Percentage Change
		2025	2024
General and administrative		$17,071	$18,968	(10)%
As a percent of revenue		20%	22%

Our general and administrative costs consist primarily of personnel-related expenses (inclusive of share-based compensation), professional fees, depreciation and amortization and bad debt expense.

The decrease in general and administrative expenses for the three months ended March 31, 2025 over the prior year comparable period was primarily due to decreases of $0.9 million in personnel-related expenses, $0.7 million in professional fees and $0.5 million in non-income related tax expenses.

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Share-Based Compensation

The following table represents share-based compensation expense included in cost of revenues and operating expenses in the accompanying Condensed Consolidated Statements of Income for the three months ended March 31, 2025 and 2024 (in thousands):


	Three Months Ended March 31,
		2025		2024
Cost of revenues		$	476	$	503
Operating expenses:
Sales and marketing		714		679
Research, development and engineering		105		95
General and administrative		2,969		3,173


Total		$	4,264	$	4,450

Non-Operating Income and Expenses

Interest expense. Our interest expense is due to outstanding debt and is offset by any extinguishment gain or losses and capitalized interest. Interest expense was $9.0 million and $6.2 million for the three months ended March 31, 2025 and 2024, respectively. During the three months ended March 31, 2025, interest expense increased by $2.8 million compared to the prior year comparable period. Interest expense increased due to a net loss on debt extinguishment of $(0.1 million) in the current period compared to a net gain on debt extinguishment of $4.9 million in the prior year comparable period. This increase to interest expense was partially offset by a favorable decrease of $2.2 million in interest expense as debt repurchases lowered our outstanding debt balance.

Interest income. Our interest income is generated from interest earned on cash and cash equivalents. Interest income was $0.5 million and $0.9 million for the three months ended March 31, 2025 and 2024, respectively. Interest income for the three months ended March 31, 2025 decreased compared to the prior year comparable period as the Company decreased its investment in money market funds in order to repurchase long-term debt.

Other (expense) income, net. Our other (expense) income, net is generated primarily from foreign currency and miscellaneous items. Other (expense) income, net was $(1.1) million and $3.9 million for the three months ended March 31, 2025 and 2024, respectively. The change between periods was primarily attributable to exchange rate fluctuations on intercompany balances between periods in foreign subsidiaries that were in functional currencies other than the U.S. Dollar.

Income Taxes

Significant judgment is required in determining our provision for income taxes and in evaluating our tax positions on a worldwide basis. We believe our tax positions, including intercompany transfer pricing policies, are consistent with the tax laws in the jurisdictions in which we conduct our business. Certain of these tax positions have, in the past been challenged, and this may have a significant impact on our effective tax rate if our tax reserves are insufficient.

Our effective tax rate is based on pre-tax income, statutory tax rates, tax regulations and different tax rates in the various jurisdictions in which we operate. The tax basis of our assets and liabilities reflect our best estimate of the tax benefits and costs we expect to realize. When necessary, we establish valuation allowances to reduce our deferred tax assets to an amount that will more likely than not be realized.

The provision for income taxes was $6.7 million and $9.9 million for the three months ended March 31, 2025 and 2024, respectively.

Our effective tax rate was 24.1% and 27.3% for the three months ended March 31, 2025 and 2024, respectively. The decrease in our effective income tax rate for the three months ended March 31, 2025 was primarily due to a change in the geographical mix of income, a decreased impact of the valuation allowance on the quarter and a decrease in uncertain tax positions.

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Liquidity and Capital Resources

Cash and Cash Equivalents

As of March 31, 2025, we had cash and cash equivalents of $53.4 million compared to $33.5 million as of December 31, 2024. The increase in cash and cash equivalents resulted primarily from cash provided by operations, partially offset by cash used for debt repurchases, capitalized expenditures and investments. As of March 31, 2025, cash and cash equivalents held within domestic and foreign jurisdictions were $36.5 million and $16.9 million, respectively.

Credit Agreement

On March 4, 2022, the Company entered into a Credit Agreement with certain lenders party thereto (collectively, the “Lenders”) and MUFG Union Bank, N.A., as agent (the “Agent”). Pursuant to the Credit Agreement, the Lenders have provided Consensus with a revolving credit facility of $25.0 million (the “Credit Facility”) with an option held by the Company to obtain an additional commitment of up to a maximum of $25.0 million. The final maturity of the Credit Facility will occur on March 4, 2027. As of March 31, 2025, no amount had been drawn down on the Credit Facility.

Material Cash Requirements

Our long-term contractual obligations generally include our debt and related interest payments, noncancellable operating leases as well as other commitments. As of March 31, 2025, we had outstanding $588.4 million in aggregate principal amount of indebtedness (see Note 7 - Long-Term Debt of the Notes to the Condensed Consolidated Financial Statements) and total minimum lease payments of $16.4 million, which had a weighted average remaining lease term of 5.4 years. As of March 31, 2025, our liability for uncertain tax positions was $13.6 million. Due to uncertainties in the timing of the amounts and timing of cash settlement with the taxing authorities, we are unable to make a reasonably reliable estimate of the timing of payments.

We currently anticipate that our existing cash and cash equivalents and cash generated from operations and financing activities will be sufficient to fund our anticipated needs for working capital, capital expenditures, stock and debt repurchases, if any, for at least the next 12 months and the foreseeable future.

Debt Repurchase Program

On November 9, 2023, the Board of Directors approved a debt repurchase program, pursuant to which Consensus may reduce, through redemptions, open market purchases, tender offers, privately negotiated purchases or other retirements, a combination of the outstanding principal balance of the 2026 Senior Notes and 2028 Senior Notes (“Debt Repurchase Program”). The authorization permits an aggregate principal amount reduction of up to $300.0 million and expires on November 9, 2026. The timing and amounts of purchases will be determined by the Company, depending on market conditions and other factors it deems relevant. Any gains or losses on extinguishment of debt are recognized in interest expense on the Condensed Consolidated Statements of Income. As of March 31, 2025, the Company had retired an aggregate of $216.6 million in principal of its senior notes under this program. In connection with the Company’s Debt Repurchase Program (see Note 7 - Long-Term Debt), the Company paid $6.0 million, which includes accrued interest, to repurchase $6.0 million in principal of its senior notes subsequent to the period ended March 31, 2025.

Common Stock Repurchase Program

In March 2022, the Company’s Board of Directors approved a share buyback program, under which the Company was able to purchase in the public market or in off-market transactions up to $100.0 million worth of the Company’s common stock through February 2025. In February 2025, the Company’s Board of Directors authorized and approved a three-year extension of the share repurchase program through February 2028. The share buyback program may end before this date if the maximum amount of repurchases has been reached or at the discretion of the Company’s Board of Directors. The timing and amounts of purchases are determined by the Company, depending on market conditions and other factors it deems relevant. The Company entered into Rule 10b-18 and Rule 10b5-1 trading plans under this program. During the three months ended March 31, 2025, the Company repurchased 1,471 shares under this program for a minimal amount. During the three months ended March 31, 2024, the Company repurchased 42,962 shares under this program at an aggregate cost of $0.7 million. Cumulatively as of March 31, 2025, 1,087,196 shares have been repurchased under this program at an aggregate cost of $32.4 million (inclusive of excise tax of $0.2 million). The excise tax is assessed at 1% of the fair market value of net stock repurchases after December 31, 2022.

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Vested Restricted Stock

Cash Flows

Our primary sources of liquidity are cash flows generated from operations, together with cash and cash equivalents. Net cash provided by operating activities was $40.9 million and $44.7 million for the three months ended March 31, 2025 and 2024, respectively. Our operating cash flows resulted primarily from cash received from our customers offset by cash payments we made to third parties for their services and employee compensation. The decrease in our net cash provided by operating activities over the prior comparable period was primarily attributable to a decrease in net cash inflows resulting from changes in our working capital accounts as well as decreased income after excluding noncash items.

Net cash used in investing activities was $12.2 million and $8.9 million for the three months ended March 31, 2025 and 2024, respectively. For the three months ended March 31, 2025, net cash used in investing activities consisted of capital expenditures, primarily capitalized software development costs, and cash paid for investments. The increase in our net cash used in investing activities over the prior comparable period was primarily attributable to the purchase of investments in the current period.

Net cash used in financing activities was $10.1 million and $58.8 million for the three months ended March 31, 2025 and 2024, respectively. For the three months ended March 31, 2025 and 2024, net cash used in financing activities was primarily attributable to cash outlays the Company used to repurchase a portion of its outstanding senior notes debt facilities. The decrease in net cash used in financing activities over the prior comparable period was primarily attributable to a decrease in cash outflows related to the repurchase of our debt in the current period.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The following discussion of the market risks we face contains forward-looking statements. Forward-looking statements are subject to risks and uncertainties. Actual results could differ materially from those discussed in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date hereof. Consensus undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Readers should carefully review the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2024, as well as in other documents we file from time to time with the SEC, including the Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K filed or to be filed by us in 2025.

Interest Rate Risk

Our cash and cash equivalents are not subject to significant interest rate risk due to the short maturities of these instruments. As of March 31, 2025, the carrying value of our cash and cash equivalents approximated fair value. Our return on these investments is subject to interest rate fluctuations.

As of March 31, 2025 and December 31, 2024, we had cash and cash equivalent investments, primarily in money market funds and cash held in foreign and domestic bank accounts, of $53.4 million and $33.5 million, respectively. We do not have interest rate risk on our outstanding long-term debt as these arrangements have fixed interest rates.

We cannot ensure that future interest rate movements will not have a material adverse effect on our future business, prospects, financial condition, operating results and cash flows. To date, we have not entered into interest rate hedging transactions to control or minimize certain of these risks.

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Foreign Currency Risk

Our principal exposure to foreign currency risk relates to investment and intercompany debt in foreign subsidiaries that transact business in functional currencies other than the U.S. Dollar, primarily the Euro and the Japanese Yen. If we are unable to settle our short-term intercompany debts in a timely manner, we remain exposed to foreign currency fluctuations.

As we expand our international presence, we become further exposed to foreign currency risk by entering new markets with additional foreign currencies. The economic impact of currency exchange rate movements is often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. These changes, if material, could cause us to adjust our financing and operating strategies.

As currency exchange rates change, translation of the income statements of the international businesses into U.S. Dollars affects year-over-year comparability of operating results, the impact of which is immaterial to the comparisons set forth in this Form 10-Q.

Historically, we have not hedged translation risks because cash flows from international operations were generally reinvested locally; however, we may do so in the future. Our objective in managing foreign exchange risk is to minimize the potential exposure to changes that exchange rates might have on earnings, cash flows and our financial position. We currently do not have derivative financial instruments for hedging, speculative or trading purposes and therefore are not subject to such hedging risk. However, we may in the future engage in hedging transactions to manage our exposure to fluctuations in foreign currency exchange rates.

Foreign exchange (loss) gain was $(1.1) million and $3.9 million for the three months ended March 31, 2025 and 2024, respectively. The change in foreign exchange (loss) gain was primarily attributable to the translation of certain intra-entity balances in foreign currencies.

Cumulative translation adjustment gain (loss), included in other comprehensive income, was $4.4 million and $(6.3) million for the three months ended March 31, 2025 and 2024, respectively.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the principal executive officer and the principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the quarterly period ended March 31, 2025. Based on this evaluation, our CEO and CFO concluded that, as of March 31, 2025, our disclosure controls and procedures were effective, at a reasonable assurance level.

Limitations on the Effectiveness of Controls

Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives as specified above. Management does not expect, however, that our disclosure controls and procedures will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based on certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

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(b) Changes in Internal Controls

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) which occurred during the first quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II - Other Information

Item 1. Legal Proceedings

See Note 8 - Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements (Part I, Item 1) for information regarding certain legal proceedings in which we are involved.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part 1, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, as well as in other documents we file from time to time. There have been no material changes to the risk factors from those described in our Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Unregistered Sales of Equity Securities

None.

(b) Issuer Purchases of Equity Securities

On March 1, 2022, the Company’s Board of Directors approved a share buyback program. Under this program, the Company may purchase in the public market or in off-market transactions up to $100.0 million worth of the Company’s common stock through February 2025, which was subsequently extended through February 2028. The timing and amounts of purchases are determined by the Company, depending on market conditions and other factors it deems relevant. For further information on our share repurchases, refer to Note 11 - Stockholders’ Deficit of the Notes to the Condensed Consolidated Financial Statements (Part I, Item 1).

The following table summarizes the share repurchase activity for the three months ended March 31, 2025:


	Total Number of Shares Purchased	Average Price Paid Per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Program	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program
					(in thousands)
January 1 - 31, 2025	—	$	—	—	$	67,887
February 1 - 28, 2025	1,471	22.97		1,471	67,853
March 1 - 31, 2025	—	—		—	67,853
	1,471			1,471	67,853

(1) Average price paid per share includes costs associated with the repurchases, but excludes the 1% excise tax accrued on our share repurchases as a result of the Inflation Reduction Act of 2022.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

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Item 5. Other Information

None.

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Item 6. Exhibits


Exhibit Number			Description

3.1			Amended and Restated Certificate of Incorporation of Consensus Cloud Solutions, Inc.(incorporated by reference to Ex. 3.1 to Consensus’ Current Report on Form 8-K filed with the Commission on October 8, 2021, File No. 001-40750).
3.2			Amended and Restated Bylaws of Consensus Cloud Solutions, Inc. (incorporated by reference to Ex. 3.2 to Consensus’ Current Report on Form 8-K filed with the Commission on October 8, 2021, File No. 001-40750).











31.1*			Rule 13a-14(a) Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*			Rule 13a-14(a) Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**			Section 1350 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101			The following financial information from Consensus Cloud Solutions, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024, (ii) Condensed Consolidated Statements of Income for the three months ended March 31, 2025 and 2024, (iii) Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2025 and 2024, (iv) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024, (v) Condensed Consolidated Statements of Stockholders’ Deficit for the three months ended March 31, 2025 and 2024, and (vi) the Notes to Condensed Consolidated Financial Statements.
104*			Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith ** Furnished herewith

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Consensus Cloud Solutions, Inc.



Date:	May 7, 2025	By:	/s/ R. SCOTT TURICCHI
			R. Scott Turicchi
			Chief Executive Officer and Director
			(Principal Executive Officer)

Date:	May 7, 2025	By:	/s/ JAMES C. MALONE
			James C. Malone
			Chief Financial Officer
			(Principal Financial and Accounting Officer)

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