Q2 2026 Consensus Cloud Solutions Inc Earnings Call Transcript
Key Points
- Consensus Cloud Solutions Inc (CCSI) achieved record corporate revenue of $60.5 million, a 9.3% year-over-year increase, marking the strongest growth since Q4 2022 and nearing double-digit expansion.
- The company reported its third consecutive quarter of year-over-year growth across all key financial metrics: revenue, adjusted EBITDA, adjusted non-GAAP EPS, and free cash flow.
- Net revenue retention (NRR) improved to 103.1%, up from 102% in Q1, demonstrating successful expansion within existing enterprise accounts.
- The Department of Veterans Affairs (VA) mandate for its EFax solution is driving a strong pipeline and is expected to contribute over $9 million in revenue in 2026, with potential for further public sector wins.
- Free cash flow increased 25% year-over-year to $25.5 million, supported by strong receivables management and lower interest expenses, while the company repurchased $9.6 million in stock.
- SOHO revenue continued to decline, albeit at a slower rate of 4.7% year-over-year, and the company expects a 5-7% decline in the next two quarters, with potential volatility in subscriber metrics.
- The company reaffirmed its full-year guidance despite strong Q2 results, citing a cautious approach and potential headwinds from hospital spending slowdowns and longer sales cycles.
- Adjusted EBITDA margin of 52.9% was at the lower end of the target range, with expectations for further margin pressure in H2 due to increased hiring and audit-related costs.
- The recent acquisition of Doc Health is expected to be dilutive to EBITDA and EPS in 2026, with a negative impact of $0.6 million and $0.02, respectively.
- The company faces challenges in capital allocation, as the high-yield notes are not callable at an attractive price until 2027, limiting options for debt reduction, and the stock buyback is constrained by low trading volume.
Good day, ladies and gentlemen, and welcome to Consensus Q2 2026 earnings call. My name is Paul and I will be the operator assisting you today (Operator Instructions) on this call from consensus will be Scott Tariki, CEO, Kip Kilpack, Vice President of Finance, Johnny Hecker, CRO and executive Vice President of Operations, and Adam Veron, CFO.
I will now turn the call over to Kip Kilpack, Vice President of Finance at Consensus. Thank you. You may begin.
Good afternoon. Welcome to the Consensus Investor Call to discuss our Q2 2026 financial results, other key information, and our Q3 2026 quarterly guidance. Joining me today are Scott Tariki, CEO, Johnny Hecker, CRO and EVP operations, and Adam, CFO. The earnings call will begin with Scott providing opening remarks. Johnny will give an update on operational progress since our Q1 2026 investor call, then Adam will provide Q2 2026 financial results and our Q3 2026 guidance range. After we finish our prepared remarks, we will conduct a Q
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