Consensus Cloud Solutions (CCSI) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $87.8 million, down 3.1% year-over-year, driven by a 13.6%-14% decline in SoHo revenue, partially offset by 5%-5.3% growth in Corporate revenue, which saw its fastest pace in six quarters.

• Adjusted EBITDA was $46.9 million, down 1.2% year-over-year, with margin improving to 53.5% from 52.5% due to cost-saving measures.

• Net income for Q3 2024 was $21.1 million, a 12% decrease from Q3 2023, impacted by a noncash foreign exchange revaluation loss and lower interest expense.

• Corporate segment achieved record revenue and customer growth, while SoHo segment saw revenue and account declines.

• Macroeconomic uncertainty, inflation, and higher interest rates continue to impact operations and customer acquisition.

Financial highlights

• Q3 2024 consolidated revenue was $87.8 million, down 3.1% year-over-year, in line with expectations.

• Adjusted EBITDA was $46.9 million, down 1.2% year-over-year, with margin at 53.5% (up 100 bps YoY).

• Adjusted net income was $25.5 million, down 14.3% year-over-year, mainly due to a $5.8 million non-cash FX revaluation.

• Adjusted EPS was $1.31, down 13.2% year-over-year; diluted EPS was $1.09.

• Free cash flow for Q3 2024 was $33.6 million, down from $49.9 million in Q3 2023, mainly due to tax payment timing.

Outlook and guidance

• Q4 2024 revenue guidance: $83M–$87M; adjusted EBITDA: $42M–$45M; adjusted EPS: $1.00–$1.24.

• Full-year 2024 revenue guidance: $346M–$353M; adjusted EBITDA: $186M–$194M; adjusted EPS: $5.45–$5.55.

• Q4 expected to have fewer business days, putting downward pressure on revenue.

• Non-GAAP effective tax rate for Q4 2024 expected between 20.5% and 22.5%.

• Management expects to fund operations, capex, and repurchases with existing cash and cash flow for at least the next 12 months.