Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) Q3 2023 Earnings Call Transcript
Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) Q3 2023 Earnings Call Transcript November 9, 2023
Consensus Cloud Solutions, Inc. beats earnings expectations. Reported EPS is $1.51, expectations were $1.32.
Operator: Good day ladies and gentlemen and welcome to the Consensus Q3 2023 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 Q3 2023 financial results, other key information, and 2023 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 you an update on our operational progress since our Q2 investor call, and then Jim will discuss the Q3 2023 financial results and 2023 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 your 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. It's now been two years since our spin, I would like to make some brief comments as we look back over these past two years. As you know we spun with a go-to-market focus and product roadmap aimed at the healthcare sector. We have made substantial investments and strides in this space with more than half of our corporate revenue now coming from the healthcare sector. However, we have also seen inflation and a tight labor market impact revenue growth in this piece of our business. In fact in the past two quarters, we have seen overall corporate revenue growth of approximately 3%, down from approximately 13% in Q3 of 2022. This was driven by a slowdown in revenue generation from our healthcare customers due to stable usage slower, sign-ups, and a slow ramp of our larger customers.
Until there is a substantial relief in the labor markets, we expect these trends to continue. As we look to next year with continuing uncertainty in both the economy as well as the labor markets, we'll be focusing our attention on EBITDA and free cash flow generation. As a result, we will reduce our capitalized investments from the level of the past two years while still investing in the business at a rate higher than prior to the spin. The record cash balances of $156 million in future free cash flow will be dedicated to repurchasing our equity and debt securities. Now, that we have cleared the two-year mark from the spin, we are able to repurchase debt and as a result the Board has authorized a $300 million repurchase program over the next three years.
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