On August 8, 2024, Consensus Cloud Solutions Inc (CCSI, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. Consensus Cloud Solutions Inc is a provider of secure information delivery services with a scalable Software-as-a-Service (SaaS) platform, primarily engaged in the fax cloud business. The company derives most of its revenue from the United States and offers communication and digital signature solutions that enable secure and cooperative information exchange across various boundaries.
Performance Overview
Consensus Cloud Solutions Inc reported Q2 2024 revenues of $87.5 million, a decrease of 5.7% compared to $92.8 million in Q2 2023. This decline was primarily due to a 15.7% decrease in the Small Office Home Office (SoHo) business, partially offset by a 2.7% increase in the Corporate business. Despite the revenue decline, the company achieved a net income of $23.9 million, up from $21.1 million in Q2 2023, driven by a gain on debt extinguishment and increased income from operations.
Key Financial Achievements
Consensus Cloud Solutions Inc's Q2 2024 earnings per diluted share increased to $1.24, surpassing the analyst estimate of $1.10. The adjusted earnings per diluted share also rose to $1.45, up 6.6% from $1.36 in Q2 2023. The company's adjusted EBITDA for Q2 2024 was $49.1 million, reflecting a 2.9% increase from $47.7 million in Q2 2023. The adjusted EBITDA margin improved to 56.1%, up from 51.4% in the previous year.
Income Statement and Cash Flow Highlights
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Revenues | $87.5 million | $92.8 million | (5.7)% |
| Net Income | $23.9 million | $21.1 million | 13.4% |
| Net Income Margin | 27.3% | 22.7% | 4.6 pts |
| Earnings per Diluted Share | $1.24 | $1.07 | 15.9% |
| Adjusted Net Income | $28.1 million | $26.7 million | 5.2% |
| Adjusted Earnings per Diluted Share | $1.45 | $1.36 | 6.6% |
| Adjusted EBITDA | $49.1 million | $47.7 million | 2.9% |
| Adjusted EBITDA Margin | 56.1% | 51.4% | 4.7 pts |
| Net Cash Provided by Operating Activities | $24.4 million | $14.1 million | 72.5% |
| Free Cash Flow | $15.8 million | $4.0 million | 295.0% |
Capital Allocation and Strategic Initiatives
During Q2 2024, Consensus Cloud Solutions Inc repurchased nearly $30 million principal amount of its bonds, reducing its debt by approximately $156 million since November 2023. The company ended the quarter with $49.2 million in cash and cash equivalents. The debt repurchase program has a remaining authorization of $144.3 million, while the common stock repurchase program has $68.2 million remaining under the plan.
Guidance and Future Outlook
Consensus Cloud Solutions Inc reaffirmed its revenue and adjusted EBITDA guidance for the full year 2024 and raised its adjusted earnings per diluted share guidance. The company now expects full-year adjusted earnings per diluted share to range between $5.45 and $5.55. For Q3 2024, the company anticipates revenues between $83.5 million and $87.5 million, with adjusted earnings per diluted share ranging from $1.25 to $1.35.
"I am pleased with our Q2 performance. Corporate and SoHo revenues were ahead of expectations, which combined with a full quarter benefit of our cost saving measures, produced a net income margin of 27.3% and a strong Adjusted EBITDA margin of 56.1%," said Scott Turicchi, CEO of Consensus.
Consensus Cloud Solutions Inc's strong financial performance in Q2 2024, despite a decline in revenues, highlights the company's effective cost-saving measures and strategic initiatives. The increase in net income and adjusted EBITDA margins demonstrates the company's ability to maintain profitability and generate significant cash flow, making it an attractive option for value investors.
Explore the complete 8-K earnings release (here) from Consensus Cloud Solutions Inc for further details.
