Consensus Cloud Solutions — Q3 2026 Earnings Summary

Financial Performance:

• Q3 2026 revenues increased 3.7% year-over-year to $91.0 million from $87.8 million in Q3 2025, driven by a $5.1 million (9.1%) increase in Corporate business, partially offset by a $1.9 million (6.0%) decrease in SoHo business.
• Net income decreased 0.5% to $22.0 million in Q3 2026 from $22.1 million in Q3 2025; net income margin was 24.2% compared to 25.2% in the prior year period.
• Earnings per diluted share remained consistent at $1.15 for both Q3 2026 and Q3 2025.
• Adjusted EBITDA increased 2.7% to $47.6 million in Q3 2026 from $46.4 million in Q3 2025; Adjusted EBITDA margin was 52.3% compared to 52.8% in Q3 2025.
• Adjusted net income increased 7.7% to $28.7 million in Q3 2026 from $26.6 million in Q3 2025.
• Adjusted earnings per diluted share increased 8.7% to $1.50 in Q3 2026 from $1.38 in Q3 2025.
• Net cash provided by operating activities decreased 11.7% to $45.6 million in Q3 2026 from $51.6 million in Q3 2025.
• Free cash flow decreased 13.2% to $38.6 million in Q3 2026 from $44.4 million in Q3 2025, primarily due to changes in working capital accounts.
• As of September 30, 2026, cash and cash equivalents totaled $106.7 million.
• Long-term debt, net of current portion, was $549.6 million as of September 30, 2026, compared to $551.3 million as of December 31, 2025.

Guidance and Future Outlook:

• Q4 2026 revenue guidance is set at $88.9 million to $92.9 million, with Adjusted EBITDA guidance of $44.7 million to $47.7 million, and Adjusted EPS guidance of $1.48 to $1.58.
• Full Year 2026 revenue guidance was narrowed to $360 million to $364 million (previously $350 million to $364 million).
• Full Year 2026 Adjusted EBITDA guidance was narrowed to $188 million to $192 million (previously $182 million to $193 million).
• Full Year 2026 Adjusted earnings per diluted share guidance was raised to $6.00 to $6.10 (previously $5.55 to $5.95).
• The company expects the non-GAAP effective tax rate for Q4 2026 to be between 11.0% and 13.0%, and for FY 2026 to be between 17.0% and 19.0%.

Business Segments and Product Lines:

• Corporate channel revenue grew 9.1% year-over-year, marking the second consecutive quarter of over 9% growth.
• SoHo channel revenue declined 6.0% year-over-year, attributed to a strategic initiative, though the channel showed sustained improvement within expected ranges.
• Corporate customer accounts increased to 69 in Q3 2026 from 63 in Q3 2025, with 9 paid adds during the quarter.
• SoHo customer accounts decreased to 641 in Q3 2026 from 661 in Q3 2025, with 101 paid adds during the quarter.
• Corporate monthly account churn was 3.87% in Q3 2026 compared to 2.73% in Q3 2025.
• SoHo monthly account churn was 4.78% in Q3 2026 compared to 3.71% in Q3 2025.

Market and Competitive Landscape:

• The company serves heavily regulated industries including healthcare, the public sector, financial services, insurance, real estate, and manufacturing.
• The company leverages artificial intelligence and secure data exchange to transform digital information and automate workflows.

Risks and Challenges:

• Forward-looking statements are subject to risks including the ability to grow fax revenues, profitability, and cash flows.
• Risks include variability of revenue based on changing conditions in particular industries and the economy, subscriber growth and retention, and protection of proprietary technology.
• Potential risks include adverse changes in U.S. or international regulatory environments, general economic and political conditions, impacts of new tariffs, and the impact of a U.S. federal government shutdown.

Management Commentary and Tone:

• CEO Scott Turicchi stated that Q3 achievements continued momentum from previous quarters, with the corporate channel exceeding 9% revenue growth for the second straight quarter.
• Management noted sustained improvement in the SoHo channel within the range of expectations.
• The company amended its credit facility in anticipation of retiring the 6.5% Notes in 2027.

Other Key Points:

• The company repurchased approximately 550,000 shares of common stock during Q3 2026 at prices management deemed attractive.
• Cumulative common stock repurchases under the program total $102.5 million, with $97.5 million remaining under the plan through February 2028.
• The Board terminated the 2023 Debt Repurchase Program on November 5, 2026, and approved a new 2026 Debt Repurchase Program with an authorization of up to $348.2 million to retire remaining 2028 Senior Notes.
• The company acquired businesses totaling $2.4 million in cash outlays during the nine months ended September 30, 2026.
• Purchases of property and equipment were $7.0 million in Q3 2026 and $22.2 million for the nine months ended September 30, 2026.
• The company recorded a debt extinguishment loss of $385,000 in Q3 2026.
• Share-based compensation expense was $5.7 million in Q3 2026 and $15.8 million for the nine months ended September 30, 2026.