Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) Q1 2024 Earnings Conference Call May 8, 2024 5:00 PM ET

Company Participants

Adam Varon - SVP, Finance
Scott Turicchi - CEO & Director
Johnny Hecker - EVP, Operations & Chief Revenue Officer
James Malone - CFO

Conference Call Participants

Jon Tanwanteng - CJS Securities
Jenny Shen - BTIG
Anne Samue - JPMorgan Chase & Co.
Mark Zhang - Citigroup

Operator

Good day, ladies and gentlemen, and welcome to consensus Q1 2024 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 Turicchi, CYO., Jim Malone, CFO, Johnny Hecker, CRO and Executive Vice President of Operations, and Adam Brown, Senior Vice President of Finance.

I will now turn the call over to Adam for Ron 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 2024 financial results, other key information, Q2 2024 guidance and our 2024 guidance full year. Joining me today are Scott Turicchi, CYO., Johnny Hecker, CRO and EVP of Operations, and Jim Malone, CFO. The earnings call will begin with Scott. Providing opening remarks, Jonny will give an update on operational progress since our year end 2023 investor call. And then Jim will discuss our Q1 2024 financial results.

Q2 guidance and reaffirmation for our full year 2024 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 in 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. As noted in the press release, I'm pleased with the results of our first fiscal quarter. As we discussed on the Q4 earnings call. Our goals for this year include the following first eliminating certain costs of the SoHo channel, especially in the area of marketing, allowing us to stabilize the base of revenue over time to continuing to pursue the acquisition of customers primarily in the health care space for our corporate channel, three, reviewing our overall cost structure with the goal of driving EBITDA margins north of 54% and for continuing repurchase of our debt to further reduce our net debt to EBITDA ratio in anticipation of the first tranche maturing in October of 2026. Johnny will provide more detail in his portion of the presentation. However, I'd like to highlight several things before turning the presentation over to him, I'm happy to report that while revenues for the SoHo channel dipped in the quarter, versus Q1 of 2023, it was better than our expectations. We were able to substantially reduce our marketing spend and still generate 63,000 paid ads more than in Q4 and similar to our Q. three productivity that had higher levels of marketing spend. We continue to monitor the various cohorts and look for opportunities to possibly allocate additional marketing dollars to work above our budgeted amount later in the year.