Executive Summary

Q2 2025 returned CCSI to total revenue growth with $87.7M (+0.3% YoY), driven by Corporate revenue +6.9% YoY to a record $55.3M; SoHo declined 9.4% as planned . Adjusted EBITDA was $48.1M (54.8% margin), near the top of the long-term target range .
The company reaffirmed FY 2025 revenue ($343–$357M) and adjusted EBITDA ($179–$190M), and raised FY adjusted EPS to $5.25–$5.65 from $5.03–$5.42, citing YTD performance and lower interest expense from debt actions .
Q2 beat S&P Global consensus on revenue ($87.7M vs $86.5M*) and EPS ($1.46 vs $1.34*). Q1 also slightly beat on both revenue and EPS [GetEstimates].
Catalysts: newly closed $225M credit facility to retire 6% notes due Oct-2026, alleviating refinancing risk and supporting shareholder returns; continued VA rollout and FedRAMP High strengthening public sector pipeline; raised EPS guidance .

What Went Well and What Went Wrong

What Went Well

Corporate revenue growth of 6.9% YoY to $55.3M, best normalized YoY growth in 10 quarters; management highlighted “strong usage, improved revenue retention and new customer acquisition,” plus record eFax Protect sign-ups and VA usage .
Quote: “Our Corporate revenue growth achieved 6.9% over the prior year quarter… Our operating margins remained robust resulting in strong cash flows…” — CEO Scott Turicchi .
Adjusted EPS rose to $1.46 (+2.1% YoY) and adjusted net income increased (+3.2% YoY), aided by lower interest expense from debt repurchases; free cash flow improved to $20.3M (+28.7% YoY) .
Quote: “We delivered a robust 54.8% adjusted EBITDA margin, near the top end of our 50% to 55% range.” — CEO .
Capital structure progress: closed a $225M facility (SOFR + margin) to retire 6% notes; repurchased ~$6M of bonds and ~$12M of stock in Q2; quarter-end cash was ~$57.9M .

What Went Wrong

GAAP EPS fell to $1.07 (-13.7% YoY) and GAAP net income declined to $20.8M (-13.0% YoY), primarily due to unfavorable FX revaluation in the period .
Adjusted EBITDA declined 2.1% YoY to $48.1M on higher personnel-related expenses; management flagged Q3 margin seasonality (audit costs, incremental hiring) implying near-term margin pressure .
SoHo KPIs: revenue down 9.4% YoY (to $32.4M), monthly churn rose to 3.84% (from 3.55% YoY) amid acquisition mix shifts; management continues to prioritize profitability over growth in this channel .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$87.0	$87.1	$87.7
Net Income ($USD Millions)	$18.1	$21.2	$20.8
Net Income Margin (%)	20.8%	24.3%	23.7%
Diluted EPS (GAAP, $)	$0.92	$1.07	$1.07
Adjusted Net Income ($USD Millions)	$25.8	$27.0	$28.4
Adjusted EPS ($)	$1.32	$1.37	$1.46
Adjusted EBITDA ($USD Millions)	$44.4	$47.3	$48.1
Adjusted EBITDA Margin (%)	51.0%	54.2%	54.8%
Net Cash from Ops ($USD Millions)	$11.1	$40.9	$28.3
Free Cash Flow ($USD Millions)	$3.1	$33.7	$20.3

Performance vs S&P Global Consensus (estimates marked with asterisks; Values retrieved from S&P Global):

Metric	Q1 2025 Estimate*	Q1 2025 Actual	Q2 2025 Estimate*	Q2 2025 Actual
Primary EPS ($)	1.3107*	1.37	1.3410*	1.46
Revenue ($USD)	87.0228M*	87.138M	86.50798M*	87.721M

Segment breakdown:

Segment Metric	Q2 2024	Q1 2025	Q2 2025
Corporate Revenue ($USD Millions)	$51.7	$54.3	$55.3
Corporate ARPA ($)	$310.18	$306.54	$301.29
Corporate Customer Accounts (000s)	56	60	63
Corporate Monthly Churn (%)	2.29%	2.49%	2.86%
SoHo Revenue ($USD Millions)	$35.8	$32.8	$32.4
SoHo ARPA ($)	$15.45	$14.83	$15.62
SoHo Customer Accounts (000s)	760	730	682
SoHo Monthly Churn (%)	3.55%	3.26%	3.84%

Notes: Company disclosed Corporate YoY revenue growth +6.9% and SoHo YoY decline -9.4% for Q2 2025 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	FY 2025	$343–$357	$343–$357	Maintained
Adjusted EBITDA ($USD Millions)	FY 2025	$179–$190	$179–$190	Maintained
Adjusted EPS ($)	FY 2025	$5.03–$5.42	$5.25–$5.65	Raised (~$0.22 higher midpoint)
Non-GAAP Tax Rate (%)	FY 2025	20.5–22.5	20.5–22.5	Maintained
Revenue ($USD Millions)	Q3 2025	—	$85.9–$89.9	New
Adjusted EBITDA ($USD Millions)	Q3 2025	—	$44.4–$47.4	New
Adjusted EPS ($)	Q3 2025	—	$1.33–$1.42	New
Non-GAAP Tax Rate (%)	Q3 2025	—	20.5–22.5	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
Corporate growth trajectory	Q4: normalized corporate YoY ~5.5%; aiming 6.25% in 2025, double-digit longer term . Q1: record $54.3M; retention 101%; VA ramp .	Record $55.3M; retention reached 102%; continued healthcare strength .	Improving growth and retention, pipeline strengthening
AI/advanced products (Clarity/Unite)	Q4: Clarity in production; prior auth automation use-case; modest revenue impact near term . Q1: advanced products adoption rising, complements fax .	Example deploying AI-powered Clarity to convert unstructured fax to FHIR for prior auth; bridging legacy to modern networks .	Execution examples expanding; strategic relevance increasing
Public sector (VA, FedRAMP High)	Q4: FedRAMP High achieved; VA could reach ~$5M 2025 . Q1: public sector pipeline revitalized .	VA rollout continues; doors opening with agencies; Accenture Federal partnership intact; varying sales cycles .	Steady progress; pipeline robust; long cycles but additive
SoHo strategy	Q4: managed decline; ARPA ~$15; churn stable . Q1: decline slowing; focus on LTV/CAC; cancel rate improved .	Decline as planned (-9.4% YoY); churn up to 3.84% due to acquisition mix; profitability focus .	Continued optimization; volatility in churn acceptable
Macro/regulatory (tariffs, One Big Beautiful Bill Act)	Q1: minimal tariff impact; stress test shows modest headwind possible .	Monitoring impacts of anticipated Medicare/Medicaid cuts from new law; believe CCSI solutions can aid provider cost reduction .	Watchful; positioning solutions as efficiency enablers
Capital structure & buybacks	Q4: target <3x debt/EBITDA; $207M bonds retired; buybacks extended . Q1: $223M bonds retired to date; bank loan expected .	$225M credit facility closed; $6M bonds and $12M shares repurchased in Q2 .	Refinancing risk reduced; continued capital returns

Management Commentary

“We continued our momentum through Q2 returning to total positive revenue growth ahead of our expectations… operating margins remained robust resulting in strong cash flows…” — CEO Scott Turicchi .
“We delivered a robust 54.8% adjusted EBITDA margin, near the top end of our 50% to 55% range.” — CEO .
“I am pleased that our corporate channel exceeded our revenue expectations… eFax Protect had record sign ups… at the VA, we continue to see more facilities come online and record level of usage.” — CEO .
“We concluded in early July a $225,000,000 bank facility… to retire the 6% notes… borrowing costs… similar to the current cost of the 6% notes.” — CEO and press release .

Q&A Highlights

Demand and pipeline: Despite hospitals’ volume challenges, CCSI continues closing large health system deals; broad healthcare customer spectrum and clear ROI drive resiliency .
Retention drivers: Improved 102% TTM retention from strategic/public sector accounts and SMB programs targeting churn signals, aiming to stay above 100% .
Public sector sales cycle & partnership: Smaller deals close in months; larger agencies involve multi-stage RFI/RFP cycles; tight collaboration with Accenture Federal Services; CCSI is listed cloud service provider on FedRAMP .
SoHo churn volatility: Driven by acquisition mix and improved corporate e-commerce funnel; acceptable outcome under profitability-first strategy .
Guidance mechanics: FY revenue/EBITDA reaffirmed; FY adjusted EPS raised; Q3 guidance provided with share count and tax rate assumptions .

Estimates Context

Q2 2025 beat consensus: Adjusted/Primary EPS $1.46 vs $1.341* and revenue $87.721M vs $86.508M* [GetEstimates].
Q1 2025 slightly beat: EPS $1.37 vs $1.3107* and revenue $87.138M vs $87.0228M* [GetEstimates].
Implication: Street EPS estimates likely drift higher following raised FY adjusted EPS range ($5.25–$5.65), with revenue/EBITDA ranges maintained .
Values retrieved from S&P Global.

Key Takeaways for Investors

Q2 execution strong in Corporate (+6.9% YoY) with 102% retention and expanding healthcare/public sector footprint; these fundamentals underpin the return to total revenue growth .
Non-GAAP profitability remains robust (54.8% adj. EBITDA margin), but expect Q3 seasonality and go-to-market hiring to modestly compress margins near term .
Balance sheet/capital allocation are positives: $225M facility reduces refinancing risk of 2026 notes; ongoing debt and share repurchases support equity value .
Raised FY adjusted EPS guidance (midpoint +~$0.23 vs prior) should support estimate revisions and sentiment, even as revenue/EBITDA ranges are unchanged .
SoHo remains a managed runoff optimized for cash; watch churn volatility and ARPA mix, but strategy drives strong FCF ($20.3M in Q2) .
AI-driven Clarity wins (prior auth automation, FHIR conversion) strengthen the longer-term interoperability narrative; near-term revenue impact modest but strategic positioning is improving .
Near-term trading: favor positive EPS surprise and guidance raise; medium-term thesis hinges on sustained Corporate growth, public sector ramp (VA, FedRAMP wins), and disciplined capital allocation .

Additional Q2-related press releases: $225M credit facility closed (terms, maturity) ; community relief eFax Protect program (brand awareness and goodwill) .

Consensus Cloud Solutions, Inc. (CCSI)·Q2 2025 Earnings Summary