Consensus Cloud Solutions, Inc. ((CCSI)) has held its Q1 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Consensus Cloud Solutions, Inc. presented a balanced mix of positive and negative sentiments. While the corporate segment showcased robust growth and improved metrics, the SoHo segment continued its strategic decline. The overall sentiment was a blend of optimism for corporate growth and caution regarding SoHo’s performance.
Record Corporate Revenue Growth
Corporate revenue reached a record high of $54.3 million, marking a 5.6% increase compared to Q1 2024. This achievement represents the best year-over-year growth in eight quarters on a normalized basis, highlighting the company’s successful strategies in expanding its corporate segment.
Strong EBITDA Margin
Consensus Cloud Solutions reported an adjusted EBITDA margin of 54.2%, surpassing Q1 expectations by 100 basis points. This strong margin reflects the company’s effective cost management and operational efficiency.
Increased Revenue Retention
The company achieved a significant milestone with its revenue retention rate, which increased by 55 basis points since the last quarter to 101%. This improvement is a substantial leap from the 97.9% recorded in Q1 of the previous year, indicating enhanced customer loyalty and satisfaction.
Customer Base Growth
The corporate customer base expanded to approximately 60,000, a 9% year-over-year increase. This growth was driven by new customer acquisitions and the strong adoption of advanced solutions like eFax Protect, underscoring the company’s ability to attract and retain clients.
Decline in SoHo Revenue
The SoHo segment experienced a revenue decline of 10.6% compared to Q1 2024. This decrease aligns with the company’s strategic focus on optimizing profitability and reducing advertising spend in this segment.
Decrease in ARPA for SoHo
The average revenue per account (ARPA) for the SoHo segment decreased to $14.83 in Q1 2025 from $14.99 in Q4 2024. This decline was influenced by the lingering effects of 2024 holiday promotions.
Overall Revenue Decline
Consensus Cloud Solutions reported consolidated revenue of $87.1 million, a decrease of $1 million or 1.1% compared to Q1 2024. This overall decline was primarily due to the reduction in SoHo revenue.
Forward-Looking Guidance
Looking ahead, Consensus Cloud Solutions provided detailed guidance for 2025. The company expects full-year revenue to range between $343 million and $357 million, with adjusted EBITDA between $179 million and $190 million, and adjusted EPS from $5.03 to $5.42. For Q2 2025, projected revenue is between $85 million and $89 million, with adjusted EBITDA from $45 million to $48 million, and adjusted EPS of $1.31 to $1.42. Despite challenges like declining SoHo revenue, the company remains optimistic about corporate growth, particularly in the health care sector and government contracts.
In summary, the earnings call for Consensus Cloud Solutions, Inc. highlighted a balanced sentiment with strong corporate growth countered by strategic declines in the SoHo segment. Key takeaways include record corporate revenue growth, a robust EBITDA margin, and increased revenue retention, all contributing to the company’s optimistic outlook for the future.