Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) Q1 2022 Earnings Conference Call May 16, 2022 5:00 PM ET

Company Participants

Scott Turicchi – Chief Executive Officer

John Nebergall – Chief Operating Officer

James Malone – Chief Financial Officer

Adam Varon – Senior Vice President of Finance

Conference Call Participants

Jonathan Tanwanteng – CJS Securities

Gregory Burns – SIDOTI & Company

Operator

Good day, ladies and gentlemen, and welcome to Consensus Q1 2022 Earnings Call. My name is Paul and I will be the Operator assisting you today. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] On this call from Consensus will be Scott Turicchi, CEO, John Nebergall, COO, Jim Malone, CFO, and Adam Varon, Senior Vice President of Finance. I will now turn the call over to Adam Varon, Senior Vice President of Finance at Consensus. Thank you. You may begin.

Adam Varon

Good afternoon and welcome to the Consensus Investor Call to discuss our Q1 2022, financial results, other key information, and reaffirmation of our 2022 guidance. Joining me today are Scott Turicchi, CEO, John Nebergall, COO, and Jim Malone, CFO. The earnings call will begin with Scott providing opening remarks, John will give an update on operational progress since our Q4 and year-end 2021 Investor Call, and then Jim will discuss Q1 '22 financial results and 2022 guidance. After we finish our prepared remarks, we will conduct a Q&A session. At that time, the Operator will instruct you on the procedures for asking a question. Before we begin our prepared remarks, allow me to direct you to the safe harbor language on Slide 2. As you know, this call and the webcast will include forward-looking statements. Such statements may involve risks and uncertainties that would cause actual results to differ materially from the anticipated results. Some of those risks and uncertainties include, but are not limited to the risk factors outlined on Slide 3 that we have disclosed in our 10-K SEC filing, as well as a summary of those risk factors that we have included as part of the slide show for the webcast. We refer you to discussions and those documents regarding safe harbor language, as well as forward-looking statements. Now, let me turn the call over to Scott.

Scott Turicchi

Thank you, Adam. I'm proud of the accomplishments for the quarter and the positioning of the company for the balance of the year. Jim will provide greater details on our financial performance for the quarter, which was a record revenue quarter in the more than 25-year history of this company. Those results were driven by continued strong performance by the corporate business which grew 13% versus Q1 of 2021, 11.1% of which was organic. In addition, this is the seventh consecutive quarter of corporate revenue growth. It's seven straight quarter of ARPA growth, and for the first time corporate surpassed SoHo as the leading revenue channel for Consensus. With the launch of Clarity late in Q1 additional features in jSign and the integration of certain of summit technology, the corporate channel remains well-positioned for growth, led by more than a majority of incremental revenue coming from the healthcare sector. Our SoHo channel held its own in the quarter, despite FX headwinds of about $500,000, which provided a 1% headwind versus Q1 of 2021. We believe these headwinds will continue throughout the year and are looking at incremental actions to mitigate their effect. We continue to make progress on the ECFax system for the VA. We're working with Cognosante and are on track to meet the authority to operate by the end of September. In addition, we were in the early stages of engaging with the VA for the initial roll out later this year. As we discussed in the last call, we're beginning to see interest from other federal government agencies. We'll have more to share on this in future quarters.