10q10k10q10k.net

What changed in Consensus Cloud Solutions, Inc.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Consensus Cloud Solutions, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+222 added−224 removedSource: 10-K (2026-02-13) vs 10-K (2025-02-20)

Top changes in Consensus Cloud Solutions, Inc.'s 2025 10-K

222 paragraphs added · 224 removed · 162 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

21 edited+12 added−18 removed27 unchanged
Biggest changeUnite : Unite is a single platform that allows the user to choose between several protocols to send and receive healthcare information in an environment that can integrate into an existing electronic health record (“EHR”) system or stand-alone if no EHR is present. jSign® : jSign® provides electronic signature and digital signature solutions to businesses, offering document markup and end-user signing services via mobile-aware web application and enterprise API.
Biggest changeECFax ® is a SaaS offering authorized at the FedRAMP High Impact level operating in a government cloud environment. eFax Unite TM : eFax Unite TM is a single platform that allows the user to choose between several protocols to send and receive healthcare information in an environment that can integrate into an existing electronic health record (“EHR”) system or stand-alone if no EHR is present. jSign® : jSign® provides electronic signature and digital signature solutions to businesses, offering document markup and end-user signing services via mobile-aware web application and enterprise API. eFax Conductor: eFax Conductor is a r obust interface engine and complete interoperability platform that provides seamless integration technology supporting the latest standards for connectivity and data formats (API/FHIR, HL7, Direct Secure Messaging, web services, message queues, etc.), addressing a wide range of interoperability challenges from the simple to the extremely complex. eFax Clarity: Using Natural Language Processing and Artificial Intelligence (“NLP/AI”), the eFax Clarity platform can transform unstructured documents originating in fax transmissions, scans or other technologies into structured actionable data. eFax Clarity’s intelligent data extraction allows data to be sent to the right person, at the right place, at the right time - to accelerate patient treatment across the continuum of care.
Our strategy includes: • Continuing to grow in Corporate secure information exchange; • Providing healthcare interoperability solutions; • Optimizing eCommerce (SoHo) revenue streams; • Leveraging our technology to enter new markets (e.g., government); • Positioning the business for sustained growth through continued focus on profitability and cash flow generation; • Focused investments in our products and capabilities; and -5- • Complementing organic growth investments with targeted acquisitions.
Our strategy includes: • Continuing to grow in Corporate secure information exchange; • Providing healthcare interoperability solutions; • Optimizing eCommerce (SoHo) revenue streams; • Leveraging our technology to enter new markets (e.g., government); • Positioning the business for sustained growth through continued focus on profitability and cash flow generation; • Focused investments in our products and capabilities; and • Complementing organic growth investments with targeted acquisitions.
For more information regarding these risks, please refer to the section entitled Risk Factors contained in Item 1A of this Annual Report on Form 10-K.
For more -5- information regarding these risks, please refer to the section entitled Risk Factors contained in Item 1A of this Annual Report on Form 10-K.
To this effect, we promote and implement trainings and events to foster a respectful, collaborative, and professional workplace environment where each employee feels they can contribute to the overall success of the Company. We reinforce our culture and our values by seeking out qualified candidates who align well with our organizational priorities and values.
To this effect, we promote and implement training to foster a respectful, collaborative, and professional workplace environment where each employee feels they can contribute to the overall success of the Company. We reinforce our culture and our values by seeking out qualified candidates who align well with our organizational priorities and values.
Item 1. Business Overview Consensus Cloud Solutions, Inc., together with its subsidiaries (“Consensus Cloud Solutions”, “Consensus”, the “Company”, “our”, “us” or “we” ), is a provider of secure information delivery services with a scalable Software-as-a-Service (“SaaS”) platform.
Item 1. Business Overview Consensus Cloud Solutions, Inc., together with its subsidiaries (“Consensus Cloud Solutions”, “Consensus”, the “Company”, “our”, “us” or “we” ), is a provider of secure information delivery services.
For more information regarding the technological risks that we face, please refer to the section entitled Risk Factors contained in Item 1A of this Annual Report on Form 10-K.
For more information regarding the technological risks that we face, please refer to the section entitled Risk Factors contained in Item 1A of this Annual Report on Form 10-K. None of our employees are represented by collective bargaining.
Our Products and Solutions Corporate Solutions eFax Corporate®: eFax Corporate® provides digital cloud fax technology, enabling users to send, receive and manage faxes digitally through multiple user interfaces or seamlessly integrated in their application through a robust API.
Our Products and Solutions Corporate Solutions eFax Corporate®: eFax Corporate® is a global online faxing service with customers worldwide. It provides digital cloud fax technology, enabling users to send, receive and manage faxes digitally through multiple user interfaces or seamlessly integrated in their application through a robust API.
None of our employees are represented by collective bargaining. -6- Human Capital Resources As of December 31, 2024, we had 518 employees, with just less than one-quarter of the employees located outside of the United States. Our ability to continue to attract, retain and motivate our highly qualified workforce is very important to our continued success.
Human Capital Resources As of December 31, 2025, we had 520 employees, with just less than one-quarter of the employees located outside of the United States. Our ability to continue to attract, retain and motivate our highly qualified workforce is very important to our continued success.
Our scalable and highly customizable technology infrastructure supports the transmission of a large number of documents each year. Due to our scale and capabilities, we have differentiated visibility into the trends that affect the way our customers transmit, store and manage information. Position in the Growing Enterprise Cloud Fax Market.
Our scalable and highly customizable technology infrastructure supports the transmission of a large number of documents each year. Due to our scale and capabilities, we have differentiated visibility into the trends that affect the way our customers transmit, store and manage information. Robust Security and Compliance Program.
Government Regulation We are subject to a number of foreign and domestic laws and regulations that affect companies conducting business over the internet and, in some cases, using services of third-party telecommunications and internet service providers. These include, among others, laws and regulations addressing privacy, data storage, retention and security, freedom of expression, content, taxation, numbers, advertising and intellectual property.
Government Regulation We are subject to a number of foreign and domestic laws and regulations that affect companies conducting business over the internet and, in some cases, using services of third-party telecommunications and internet service providers.
We believe that the primary competitive factors determining our success in the market for our services include: financial strength and stability; pricing; reputation for reliability and security of service; breadth and depth of product functionality; intellectual property ownership; effectiveness of customer support; sign-up, service and software ease-of-use; service scalability; customer messaging and branding; geographic coverage; scope of services; currency and payment method acceptance; and local language sales, messaging and support. -7- For more information regarding the competition that we face, see “Risk Factors—Risks Related to Our Business—The markets in which we operate are highly competitive, and our competitors may have greater resources to commit to growth, superior technologies, cheaper pricing or more effective marketing strategies.
We believe that the primary competitive factors determining our success in the market for our services include: financial strength and stability; pricing; reputation for reliability and security of service; breadth and depth of product functionality; intellectual property ownership; effectiveness of customer support; sign-up, service and software ease-of-use; service scalability; customer messaging and branding; geographic coverage; scope of services; currency and payment method acceptance; and local language sales, messaging and support.
We continue to evolve our programs to meet our colleagues’ health and wellness needs, which we believe are essential to attract and retain employees of the highest caliber, and we offer a competitive benefits package focused on fostering work/life integration.
We continue to evolve our programs to meet our colleagues’ health and wellness needs, which we believe are essential to attract and retain employees of the highest caliber, and we offer a competitive benefits package focused on fostering work/life integration. -6- Employee Compensation & Benefits Compensation is an important consideration for all of our employees and we strive to pay competitive compensation packages that reflect the success of the business and the individual contributions of each colleague.
The recurring nature of our revenue, combined with high operational efficiency, results in predictable and attractive margins and free cash flow generation. As we evaluate growth investments and expansion into new verticals, we will measure against metrics and parameters that promote efficient and prudent use of capital to generate sustained shareholder value. Proven and Experienced Management Team.
As we evaluate growth investments and expansion into new verticals, we will measure against metrics and parameters that promote efficient and prudent use of capital to generate sustained shareholder value. Proven and Experienced Management Team.
Additionally, our pre-packaged applications of Clarity – Clarity Clinical Documentation™ and Clarity Prior Authorization™ – tackle specific data extraction challenges in the healthcare industry. SoHo Fax Solutions eFax® is a global online faxing service with customers worldwide.
Additionally, our pre-packaged applications of Clarity – Clarity Clinical Documentation™ and Clarity Prior Authorization™ – tackle specific data extraction challenges in the healthcare industry.
Available Information We file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) with the Securities and Exchange Commission (the “SEC”).
Ziff Davis has sold, or otherwise disposed of, its shares of Consensus capital stock, reducing its beneficial ownership in the Company to zero as of December 31, 2025 and 2024. -7- Available Information We file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) with the Securities and Exchange Commission (the “SEC”).
Global and Diversified Customer Base. Our customers are located globally across six continents. We believe that our product-line and geographic diversity, combined with our lack of customer concentration, will help us mitigate the effects of isolated downturns in various end markets. Operational Efficiency and Capital Discipline.
We believe that our product-line and geographic diversity, combined with our lack of customer concentration, will help us mitigate the effects of isolated downturns in various end markets. Operational Efficiency and Capital Discipline. The recurring nature of our revenue, combined with high operational efficiency, results in predictable and attractive margins and free cash flow generation.
We currently serve approximately 59 thousand Corporate customers, ranging from small/medium businesses to large enterprises and government agencies. Our sales are primarily made through direct interaction with a salesperson and involve specific pricing and customer features such as but not limited to multiple line subscriptions, API connections and enhanced security features.
Our sales are primarily made through direct interaction with a salesperson and involve specific pricing and customer features such as but not limited to multiple line subscriptions, API connections and enhanced security features. We currently serve approximately 638 thousand small office/home office (“SoHo”) online fax customers. Approximately 78% of our SoHo base have been customers for more than two years.
We provide our employees with benefits we believe will optimize the talent critical for our success and promote day to day well-being.
We are committed to fair pay practices and roles are periodically benchmarked to help inform where adjustments may be needed. We provide our employees with benefits we believe will optimize the talent critical for our success and promote day to day well-being.
Our revenues consist of monthly recurring subscription and usage-based fees, with monthly recurring subscription revenue representing approximately 69% of our total subscription revenue for 2024. Our cancellation rates have remained relatively steady over time, and we expect this trend to continue into the future given that many of the services we provide are critical to our customers’ business operations.
Our cancellation rates have remained relatively steady over time, and we expect this trend to continue into the future given that many of the services we provide are critical to our customers’ business operations. -4- Global and Diversified Customer Base. Our customers are located globally across five continents.
ECFax: ECFax is comparable to eFax Corporate in its features and use cases but is specifically developed for use by public sector customers with extremely high security demands. As such, ECFax is operated and only accessible in a FedRAMP government cloud environment to meet those standards.
In addition to eFax Corporate®, we offer corporate fax services under a variety of brands, including but not limited to MyFax®, Sfax®, and SRFax®. -3- ECFax®: ECFax ® is comparable to eFax Corporate ® in its features and use cases but is specifically developed for use by public sector customers with extremely high security demands.
We refer to the transactions that resulted in the separation of Consensus and Ziff Davis into two separate publicly traded companies as the “Spin-Off” or “separation and distribution”. Ziff Davis has sold, or otherwise disposed of, its shares of Consensus capital stock, reducing its beneficial ownership in the Company to zero as of December 31, 2024.
Spin-Off On October 7, 2021, we completed a spin-off from our former parent company, J2 Global, Inc. (now known as “Ziff Davis, Inc.”). We refer to the transactions that resulted in the separation of Consensus and Ziff Davis into two separate publicly traded companies as the “Spin-Off” or “separation and distribution”.
Removed
Consensus serves approximately 800 thousand customers of all sizes, from enterprises to individuals, across approximately 46 countries and multiple industry verticals including healthcare, government, financial services, law and education. Our top 10 customers represent approximately $28 million or 8% of total revenues.
Added
With our most prominent brand eFax® established over twenty-five years ago, Consensus has now evolved the service platform from pure cloud Fax to efficient and secure information exchange featuring solutions for data extraction, comprehension and transformation, facilitating interoperability and process improvement.
Removed
Beginning as an online fax company over two decades ago, Consensus has evolved into a leading global provider of enterprise secure communication solutions. Our communication, extraction and digital signature solutions enable our customers to securely and cooperatively access, exchange and use information across organizational, regional and national boundaries.
Added
Consensus is committed to security and compliance in data exchange, and our scalable Software-as-a-Service (“SaaS”) platform is particularly attractive to regulated industries like healthcare and healthcare technology, public sector, financial services, law, and education. We offer local phone numbers in 46 countries and/or territories, servicing approximately 703 thousand customers ranging from small businesses to large enterprises and the federal government.
Removed
Our mission is to democratize secure information interchange across technologies and industries and provide healthcare interoperability solutions. Substantially all of Consensus’ revenue is recurring in nature and is generated either via fixed subscription plans or usage-based contracts. Over the past decade, Consensus has progressively shifted focus towards larger commercial customers (“Corporate”).
Added
Each customer cohort has unique needs and engagement preferences, and our go-to-market and customer service offerings are adapted across this continuum to serve each appropriately. Our top 10 customers represent approximately $33 million or 9% of total revenues. Over the past decade, Consensus has increasingly focused on larger commercial customers (“Corporate”) and public sector customers.
Removed
As enterprise data communication shifted toward digitization and cloud-based solutions, Consensus entered industry verticals such as healthcare, government, financial services, law and education. Our Corporate business has grown from $149 million of revenue in 2020 to approximately $209 million of revenue in 2024, representing a 7.0% five-year compound annual growth rate.
Added
This shift occurred as enterprise data communication moved toward digitization and cloud-based solutions. Sales to these customers are made through e-commerce and direct interaction with a salesperson, and often involve specific pricing, multiple line subscriptions, API connections, and/or commercial grade security. Sales channels include e-commerce, direct sales and sales through or referred by channel and strategic partners.
Removed
We currently serve approximately 747 thousand small office/home office (“SoHo”) online fax customers, generally consumers and SoHo users, but also single corporate users who acquire a pre-defined subscription through an e-commerce website without direct interaction with a salesperson. Approximately 74% of our SoHo base have been customers for more than two years.
Added
Our Corporate business has grown from $170 million of revenue in 2021 to approximately $223 million of revenue in 2025, representing a 7% compound annual growth rate. We currently serve approximately 65 thousand Corporate customers, ranging from small/medium businesses to large enterprises and government agencies.
Removed
Our Industry Secure Information Communication Our products and services are a component of the secure information transmission market, which is part of the broader public cloud services market, for which demand for cloud services is expected to accelerate in the future. Fax remains one of the most ubiquitous technologies to transmit documents securely.
Added
Our focused strategy on achieving an industry leading security and compliance posture has been a critical driver of growth in our Corporate and healthcare-focused businesses over the past several years and we have strategically invested in people, processes, and tools to this effect.
Removed
The use of fax is particularly high in industries subject to data protection laws such as the Health Insurance Portability and Accountability Act (“HIPAA”), as fax offers safety of transmission and nearly universal legal acceptance.
Added
Our key accomplishments include becoming the first Health Information Trust Alliance (“HITRUST”) certified digital cloud fax provider and the first Federal Risk and Authorization Management Program (“FedRAMP”) authorized cloud fax provider. These efforts have made it possible for us to service the Public Sector and other heavily regulated industries.
Removed
According to market research “Global Fax Services Market – Focused Insights 2024-2029” conducted by Arizton Advisory & Intelligence, industry analysts expect the global fax services market to grow at a compound annual growth rate of 11.06% from 2023 to 2029. Additionally, cloud adoption has grown quickly in secure transmission, taking share from on-premises solutions over the past decade.
Added
SoHo Fax Solutions We also cater to individuals and small businesses with predefined subscriptions and e-commerce convenience through our small office/home office (“SoHo”) online brands, including but not limited to eFax®, our global online faxing servicing customers worldwide, jSign®, MyFax®, SFax®, MetroFax®, SRFax® and multiple others.
Removed
Key drivers to cloud adoption include: • Digitization : Key industry verticals such as healthcare, government, financial services and law have been heavily investing in digitization of information and the online fax industry has significantly benefited from the trend. • Data security and data privacy awareness: Digital cloud fax technology is demonstrably more secure than traditional email and traditional fax machines, which are vulnerable to physical security threats and retrieval problems. -3- • Regulatory tailwinds: eFax® meets or exceeds the requirements of various regulations for data security and remains ubiquitous in highly regulated industries, such as healthcare and other sectors where large volumes of sensitive or regulated information is exchanged. • Cost efficiency : Cloud-based solutions have minimal installation costs and are highly efficient to scale as the needs of the organization fluctuate. • Green initiatives: Cloud-based solutions appeal to customers engaging in “green” initiatives to reduce their impact on the environment because they rely less on paper for printing documents.
Added
Our extensive focus on security and compliance is a significant and unique enabler in our effort to service customers in heavily regulated industries with sensitive and mission-critical communications requirements, such as the Public Sector and those in Healthcare, Financial Services, Legal, and Manufacturing. Position in the Growing Enterprise Cloud Fax Market.
Removed
Healthcare Interoperability In the healthcare industry, interoperability is defined as the ability of different information systems, devices and applications (“systems”) to access, exchange, integrate and cooperatively use data in a coordinated manner, within and across organizational, regional and national boundaries, to provide timely and seamless portability of information and optimize the health of individuals and populations globally.
Added
Our revenues consist of monthly recurring subscription and usage-based fees, with monthly recurring subscription revenue representing approximately 67% of our total subscription revenue for 2025.
Removed
In the increasingly data-driven healthcare industry, interoperability is essential to ensuring quality care delivery and safeguarding patient information.
Added
These include, among others, laws and regulations addressing privacy, data storage, retention and security, freedom of expression, content, use of artificial intelligence, taxation, fax numbers, advertising and intellectual property.
Removed
To address market demand for effective interoperability solutions, Consensus is concentrating its development efforts in tools capable of integrating with existing healthcare IT infrastructure to facilitate timely and accurate communication between providers and allow use of multiple transmission protocols within a single cloud-based platform.
Added
For more information regarding the competition that we face, see “Risk Factors—Risks Related to Our Business—The markets in which we operate are highly competitive, and our competitors may have greater resources to commit to growth, superior technologies, cheaper pricing or more effective marketing strategies. Also, we face significant competition for users, developers and distributors”. Consensus Cloud Solutions, Inc.
Removed
Conductor: Conductor is a r obust interface engine and complete interoperability platform that provides seamless integration technology supporting all the latest standards for connectivity and data formats (API/FHIR, HL7, Direct Secure Messaging, web services, message queues, etc.), addressing a wide range of interoperability challenges from the simple to the extremely complex.
Removed
Clarity: Using Natural Language Processing and Artificial Intelligence (“NLP/AI”), the Clarity platform can transform unstructured documents into structured actionable data. Clarity’s intelligent data extraction allows data to be sent to the right person, at the right place, at the right time - to accelerate patient treatment across the continuum of care.
Removed
In addition to eFax®, we offer a variety of brands for subscription, including but not limited to MyFax®, Sfax®, Metrofax®, and SRfax®. -4- Customers We have a diverse set of customers globally, using cloud fax, electronic signature and interoperability products.
Removed
Employee Compensation & Benefits Compensation is an important consideration for all of our employees and we strive to pay competitive compensation packages that reflect the success of the business and the individual contributions of each colleague. We are committed to fair pay practices and roles are periodically benchmarked to help inform where adjustments may be needed.
Removed
Also, we face significant competition for users, developers and distributors”. Consensus Cloud Solutions, Inc. Spin-Off On October 7, 2021, J2 Global, Inc.
Removed
(now known as "Ziff Davis”, “Former Parent Company” or “Former Parent”) completed its previously announced plans to separate into two leading publicly traded companies: one addressing healthcare interoperability and comprising the Cloud Fax business, which does business as Consensus Cloud Solutions, Inc., and one that will continue the Former Parent’s strategy of building a leading internet platform focused on key verticals, including technology & gaming, shopping, health, cybersecurity and martech, which will do business as Ziff Davis.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

61 edited+18 added−27 removed247 unchanged
Biggest changeIf the market does not develop further, develops more slowly, or in a way that we do not expect, our business will be adversely affected. • There are particular challenges in addressing the market for healthcare interoperability solutions. • Our industry is undergoing rapid technological changes, including with the introduction of artificial intelligence (“AI”), and we may not be able to keep up. • We have made and expect to continue to make acquisitions that could disrupt our operations and harm our operating results. • Current or future pandemics or global health crises, and related governmental responses could negatively affect our business, operations and financial performance. • Our business could suffer if providers of broadband Internet access services block, impair or degrade our services. • Our business is dependent on a small number of telecommunications carriers in each region and our inability to maintain agreements at attractive rates with such carriers may negatively impact our business. • The successful operation of our business depends on the supply of critical business elements from other companies, including data center services. • Our sales cycle with enterprise and commercial customers can be long and unpredictable, and our sales efforts require considerable time and expense. • We face risks associated with system failures, cybersecurity breaches and other technological issues. • The markets in which we operate are highly competitive, and we may not be successful in growing our brands or revenue. • We may be found to infringe the intellectual property rights of others, and we may be unable to adequately protect of our own intellectual property rights. • We may be subject to risks from international operations, including risks associated with currency fluctuations and foreign exchange controls and adverse changes in global financial markets. • We may be engaged in legal proceedings that could cause us to incur unforeseen expenses and could divert significant operational resources and our management’s time and attention. • Our business is highly dependent on our billing systems functioning properly, and we face risks associated with card declines and merchant standards imposed by card companies. • Changes in our tax rates, changes in tax treatment of companies engaged in e-commerce, the adoption of new U.S. or international tax legislation, or exposure to additional tax liabilities may adversely impact our financial results. • We face risks associated with political instability and volatility in the economy. -9- Risks Related To Regulation, Including Taxation • Changes in regulations relating to health information communication protocols could affect our business. • Our services may become subject to burdensome regulation, which could increase our costs or restrict our service offerings. • Changes in our tax rates, changes in tax treatment of companies engaged in e-commerce, the adoption of new U.S. or international tax legislation, or exposure to additional tax liabilities may adversely impact our financial results. • Taxing authorities may successfully assert that we should have collected, or in the future should collect sales and use, telecommunications or similar taxes, and we could be subject to liability with respect to past or future tax, which could adversely affect our operating results. • We are subject to a variety of new and existing laws and regulations which could subject us to claims, judgments, monetary liabilities, and other remedies, and to limitations on our business practices.
Biggest changeIf the market does not develop further, develops more slowly, or in a way that we do not expect, our business will be adversely affected. • There are particular challenges in addressing the market for healthcare interoperability solutions. • Our industry is undergoing rapid technological changes, including with the introduction of artificial intelligence (“AI”), and we may not be able to keep up. • We use AI in our business, and challenges with properly maintaining its use could result in harm to our brand, reputation, business or customers, and adversely affect our results of operations. • We have made and expect to continue to make acquisitions and investments that could disrupt our operations and harm our operating results. • Current or future pandemics or global health crises, and related governmental responses could negatively affect our business, operations and financial performance. • Our business could suffer if providers of broadband Internet access services block, impair or degrade our services. • Our business is dependent on a small number of telecommunications carriers in each region and our inability to maintain agreements at attractive rates with such carriers may negatively impact our business. • The successful operation of our business depends on the supply of critical business elements from other companies, including data center services. • Our sales cycle with enterprise and commercial customers can be long and unpredictable, and our sales efforts require considerable time and expense. • We face risks associated with system failures, cybersecurity breaches and other technological issues. • The markets in which we operate are highly competitive, and we may not be successful in growing our brands or revenue. • We may be found to infringe the intellectual property rights of others, and we may be unable to adequately protect our own intellectual property rights. • We may be subject to risks from international operations, including risks associated with currency fluctuations and foreign exchange controls and adverse changes in global financial markets. • We may be engaged in legal proceedings that could cause us to incur unforeseen expenses and could divert significant operational resources and our management’s time and attention. -9- • Our business is highly dependent on our billing systems functioning properly, and we face risks associated with card declines and merchant standards imposed by card companies. • We face risks associated with political instability and volatility in the economy.
To the extent we expand our business operations in countries outside the U.S., our future results could be materially adversely affected by a variety of uncontrollable and changing factors including, among others: foreign currency exchange rates; political or social unrest, economic instability, geopolitical tensions or war in a specific country or region (including the invasion of Ukraine by Russia and the conflict in the Middle East); trade protection measures and other regulatory requirements, such as U.S. imposed tariffs along with retaliatory measures taken by other nations in response to these tariffs, which may affect our ability to provide our services; difficulties in staffing and managing international operations; and adverse tax consequences, including imposition of withholding or other taxes on payments by subsidiaries and affiliates and transfer pricing implications.
To the extent we expand our business operations in countries outside the U.S., our future results could be materially adversely affected by a variety of uncontrollable and changing factors including, among others: foreign currency exchange rates; political or social unrest, economic instability, geopolitical tensions or war in a specific country or region (including the invasion of Ukraine by Russia and the conflict in the Middle East); trade protection measures and other regulatory requirements, such as U.S. imposed tariffs and other trade restrictions along with retaliatory measures taken by other nations in response to these tariffs, which may affect our ability to provide our services; difficulties in staffing and managing international operations; and adverse tax consequences, including imposition of withholding or other taxes on payments by subsidiaries and affiliates and transfer pricing implications.
Any system failure or security breach that causes interruptions or data loss in our operations, our partners, vendors, or other third parties, or in the computer systems of our customers or leads to the misappropriation of our or our customers’ confidential information could result in a significant liability to us (including in the form of judicial decisions and/or settlements, regulatory findings and/or forfeitures, and other means), cause considerable harm to us and our reputation (including requiring notification to customers, regulators, and/or the -15- media), cause a loss of confidence in our products and services, and deter current and potential customers from using our services.
Any system failure or security breach that causes interruptions or data loss in our operations, our partners, vendors, or other third parties, or in the computer systems of our customers or leads to the misappropriation of our or our customers’ confidential information could result in a significant liability to us (including in the form of judicial decisions and/or settlements, regulatory findings and/or forfeitures, and other means), cause considerable harm to us and our reputation (including requiring notification to customers, regulators, and/or the media), cause a loss of confidence in our products and services, and deter current and potential customers from using our services.
Acquisitions involve numerous risks, including the following: • difficulties in integrating the operations, systems, controls, technologies, products and personnel of the acquired businesses; • difficulties in entering markets in which we have no or limited direct prior experience and where competitors in such markets may have stronger market positions; • diversion of management’s attention from normal daily operations of the business and the challenges of managing larger and more widespread operations resulting from acquisitions; and • the potential loss of key employees, customers, distributors, vendors and other business partners of the businesses we acquire.
Acquisitions involve numerous risks, including the following: • difficulties in integrating the operations, systems, controls, technologies, products and personnel of the acquired businesses; -12- • difficulties in entering markets in which we have no or limited direct prior experience and where competitors in such markets may have stronger market positions; • diversion of management’s attention from normal daily operations of the business and the challenges of managing larger and more widespread operations resulting from acquisitions; and • the potential loss of key employees, customers, distributors, vendors and other business partners of the businesses we acquire.
Any damage to or disruption in the services provided by any of these suppliers, any adverse change in access to their platforms or services or in their terms and conditions of use or services, any cybersecurity or physical breach of their facilities, or any failure by them to handle current or higher volumes of activity could have a material adverse effect on our customer relations, business, prospects, financial condition, operating results and cash flows.
Any damage to or disruption in the services provided by any of these suppliers, any adverse change in access to their platforms or services or in their terms and conditions of use or services, any cybersecurity or physical breach of their facilities, or any failure by them to handle current or higher volumes of activity could have a material adverse effect on our customer relations, business, prospects, financial condition, -14- operating results and cash flows.
These provisions will, among other things: • permit our Board of Directors to issue one or more series of preferred stock with such powers, rights and preferences as the Board of Directors shall determine; -25- • subject to a five-year sunset from the date of the distribution, provide for a classified Board of Directors, with each class serving a staggered three-year term, which could have the effect of making the replacement of incumbent directors more time consuming and difficult; • provide that, as long as our Board of Directors is classified, our directors can be removed for cause only; • prohibit stockholder action by written consent; • limit the ability of stockholders to call a special meeting of stockholders; • provide that vacancies on the Board of Directors could be filled only by a majority vote of directors then in office, even if less than a quorum, or by a sole remaining director; and • establish advance notice requirements for stockholder proposals and nominations of candidates for election as directors.
These provisions will, among other things: • permit our Board of Directors to issue one or more series of preferred stock with such powers, rights and preferences as the Board of Directors shall determine; • subject to a five-year sunset from the date of the distribution, provide for a classified Board of Directors, with each class serving a staggered three-year term, which could have the effect of making the replacement of incumbent directors more time consuming and difficult; • provide that, as long as our Board of Directors is classified, our directors can be removed for cause only; • prohibit stockholder action by written consent; -26- • limit the ability of stockholders to call a special meeting of stockholders; • provide that vacancies on the Board of Directors could be filled only by a majority vote of directors then in office, even if less than a quorum, or by a sole remaining director; and • establish advance notice requirements for stockholder proposals and nominations of candidates for election as directors.
Several states have enacted additional, more -22- restrictive and punitive laws regulating commercial email. Foreign legislation exists as well, including Canada’s Anti-Spam Legislation and the European laws that have been enacted pursuant to the GDPR and European Union Directive 2002/58/EC and its amendments. We use email as a significant means of communicating with our existing and potential users.
Several states have enacted additional, more restrictive and punitive laws regulating commercial email. Foreign legislation exists as well, including Canada’s Anti-Spam Legislation and the European laws that have been enacted pursuant to the GDPR and European Union Directive 2002/58/EC and its amendments. We use email as a significant means of communicating with our existing and potential users.
There are ongoing efforts by governmental and nongovernmental entities to create a universally accepted method for electronically signing documents. Widespread adoption of so-called “digital signatures” have reduced, and could continue to in the future reduce demand for our fax services where the fax service is primarily being used to evidence a wet signature.
There are ongoing efforts by governmental and nongovernmental entities to create a universally accepted method for electronically signing documents. Widespread adoption of so-called “digital signatures” have reduced, and could continue to in the future reduce demand for our fax services where the fax service is primarily being used to -10- evidence a wet signature.
Changes to information exchange requirements could impact the use of cloud fax as a communication choice for healthcare entities and have a material impact on our business, prospects, financial condition, operating results and cash flows. We face potential liability related to the privacy and security of health-related information we collect from, or on behalf of, our consumers and customers.
Changes to information exchange requirements could impact the use of cloud fax as a communication choice for healthcare entities and have a material impact on our business, prospects, financial condition, operating results and cash flows. -20- We face potential liability related to the privacy and security of health-related information we collect from, or on behalf of, our consumers and customers.
Any of these results could lead to a decrease in our revenues and net income and could materially adversely affect our business, prospects, financial condition, operating results and cash flows. The Telephone Consumer Protection Act (the “TCPA”) and FCC rules implementing the TCPA, as amended by the Junk Fax Act, prohibit sending unsolicited facsimile advertisements to telephone fax machines.
Any of these results could lead to a decrease in our revenues -21- and net income and could materially adversely affect our business, prospects, financial condition, operating results and cash flows. The Telephone Consumer Protection Act (the “TCPA”) and FCC rules implementing the TCPA, as amended by the Junk Fax Act, prohibit sending unsolicited facsimile advertisements to telephone fax machines.
There can be no assurance that our existing and planned precautions of backup systems, regular data backups, security protocols and other procedures will be adequate to prevent significant damage, system failure or data loss and the same is true for our partners, vendors and other third parties on which we rely.
There can be no assurance that our existing and planned precautions of backup systems, regular data backups, security protocols and other procedures will be adequate to prevent significant damage, system failure or data loss and the same -15- is true for our partners, vendors and other third parties on which we rely.
Many of our competitors have access to considerable financial and technical resources with which to compete aggressively, including by funding future growth and expansion and investing in acquisitions, technologies, and research and development. Further, emerging start-ups may be able to innovate and provide new products and -16- services faster than we can.
Many of our competitors have access to considerable financial and technical resources with which to compete aggressively, including by funding future growth and expansion and investing in acquisitions, technologies, and research and development. Further, emerging start-ups may be able to innovate and provide new products and services faster than we can.
This wide variety of definitions has the potential to create a risk of confusion in the market, or allow competitors to reframe the problem to their advantage in a competitive situation, potentially -11- allowing less robust solutions to hold themselves out as healthcare interoperability solutions. We expect to encounter significant competition for customers as the healthcare interoperability market develops.
This wide variety of definitions has the potential to create a risk of confusion in the market, or allow competitors to reframe the problem to their advantage in a competitive situation, potentially allowing less robust solutions to hold themselves out as healthcare interoperability solutions. We expect to encounter significant competition for customers as the healthcare interoperability market develops.
Increased prices could, in turn, cause us to lose customers, or, if we do not pass on such higher costs to our customers, our profit margins may decrease. -14- Increased cost of email transmissions could have a material adverse effect on our business. We rely on email for the delivery of certain cloud fax services.
Increased prices could, in turn, cause us to lose customers, or, if we do not pass on such higher costs to our customers, our profit margins may decrease. Increased cost of email transmissions could have a material adverse effect on our business. We rely on email for the delivery of certain cloud fax services.
Customers or vendors could use any of these four components to define their particular “interoperability solution.” Separately, the Center for Medicare and Medicaid Services further defined a fifth component of interoperability that includes patients, which is not included in the HIMSS definition.
Customers or vendors could use any of these four components to define their particular “interoperability solution.” Separately, the Center for Medicare and -11- Medicaid Services further defined a fifth component of interoperability that includes patients, which is not included in the HIMSS definition.
Changes in these or any other laws and regulations or the -23- interpretation of them could increase our future compliance costs, limit the amount and type of data we can collect, transfer, share, or sell, make our products and services less attractive to our users, or cause us to change or limit our business practices.
Changes in these or any other laws and regulations or the interpretation of them could increase our future compliance costs, limit the amount and type of data we can collect, transfer, share, or sell, make our products and services less attractive to our users, or cause us to change or limit our business practices.
If future adoption of digital signature products results in a reduction for our fax services without a corresponding adoption of our digital signature or other products, it could have a material adverse effect on our business, prospects, financial condition, operating results and cash flows. -10- Developments in the healthcare industry could adversely affect our business.
If future adoption of digital signature products results in a reduction for our fax services without a corresponding adoption of our digital signature or other products, it could have a material adverse effect on our business, prospects, financial condition, operating results and cash flows. Developments in the healthcare industry could adversely affect our business.
This or any other litigation to enforce or defend our intellectual property rights may be expensive and time consuming, could divert management resources and may not be adequate to protect our business. We may be found to have infringed the intellectual property rights of others, which could expose us to substantial damages or restrict our operations.
This or any other litigation to enforce or defend our intellectual property rights may be expensive and time consuming, could divert management resources and may not be adequate to protect our business. -18- We may be found to have infringed the intellectual property rights of others, which could expose us to substantial damages or restrict our operations.
From time to time, we may be subject to litigation or claims or become involved in other legal disputes or regulatory inquiries, including in the areas of patent infringement and anti-trust that could negatively affect our business operations and -18- financial condition.
From time to time, we may be subject to litigation or claims or become involved in other legal disputes or regulatory inquiries, including in the areas of patent infringement and anti-trust that could negatively affect our business operations and financial condition.
Internet access providers and Internet backbone providers may be able to block, degrade or charge for access or bandwidth use of certain of our products and services, which could lead to additional expenses and the loss of users. Our products and services depend on the ability of our users to access the Internet.
Internet access providers and Internet backbone providers may be able to block, degrade or charge for access or bandwidth use of certain of our products and services, which could lead to additional expenses and the loss of users. -13- Our products and services depend on the ability of our users to access the Internet.
As a result, our -21- future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretation.
As a result, our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretation.
Our ability to procure and distribute numbers depends on factors such as -13- applicable regulations, the practices of telecommunications carriers that provide numbers, the cost of these numbers and the level of demand for new numbers.
Our ability to procure and distribute numbers depends on factors such as applicable regulations, the practices of telecommunications carriers that provide numbers, the cost of these numbers and the level of demand for new numbers.
The applications underlying our products and services are inherently complex and may contain material defects or errors, which may cause disruptions in availability or other performance problems.
The applications underlying our products and services are inherently complex and may contain material defects or -16- errors, which may cause disruptions in availability or other performance problems.
We have made and expect to continue to make acquisitions that could disrupt our operations and harm our operating results. We intend to continue to develop new products and services and enhance existing products and services through acquisitions of other companies, technologies and personnel.
We have made and expect to continue to make acquisitions and investments that could disrupt our operations and harm our operating results. We intend to continue to develop new products and services and enhance existing products and services through acquisitions of and investments in other companies, technologies and personnel.
If we are unable to obtain, maintain or protect trademark rights covering our brands across the territories in which they are or may be offered, the value of these brands may be diminished, competitors may be able to dilute, harm, or take advantage of our brand recognition and reputation, and our ability to attract customer may be adversely affected.
If we are unable to obtain, maintain or protect trademark rights covering our brands across the territories in which they are or may be offered, the -17- value of these brands may be diminished, competitors may be able to dilute, harm, or take advantage of our brand recognition and reputation, and our ability to attract customers may be adversely affected.
Furthermore, the Office of the National Coordinator for Health Information Technology (the “ONC”) has developed another definition that is included in the 21st Century Cures Act, which includes the concept of “information blocking” as a component of healthcare interoperability.
Furthermore, the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health Information Technology (the “ONC”) has developed another definition that is included in the 21st Century Cures Act, which includes the concept of “information blocking” as a component of healthcare interoperability.
Acquisitions may also cause us to: • use a substantial portion of our cash resources or incur debt; • significantly increase our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition; • assume liabilities; • issue common stock that would dilute our current stockholders’ percentage ownership; • record goodwill and intangible assets that are subject to impairment testing on a regular basis and potential periodic impairment charges; • incur amortization expenses related to certain intangible assets; and • become subject to intellectual property or other litigation. -12- Mergers and acquisitions are inherently risky and subject to many factors outside of our control.
Acquisitions may also cause us to: • use a substantial portion of our cash resources or incur debt; • significantly increase our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition; • assume liabilities; • issue common stock that would dilute our current stockholders’ percentage ownership; • record goodwill and intangible assets that are subject to impairment testing on a regular basis and potential periodic impairment charges; • incur amortization expenses related to certain intangible assets; and • become subject to intellectual property or other litigation.
The occurrence of a natural disaster, a pandemic (such as COVID-19) or an act of terrorism, a decision to close the facilities without adequate notice, or other unanticipated problems at these facilities could result in lengthy interruptions in our services.
The occurrence of a natural disaster, a pandemic or an act of terrorism, a decision to close the facilities without adequate notice, or other unanticipated problems at these facilities could result in lengthy interruptions in our services.
The Office of the National Coordinator for Health Information Technology (“ONC”) is the principal U.S. federal entity charged with the coordination of nationwide efforts to implement and use health IT for the electronic exchange of health information. ONC regularly proposes legislative changes to incentivize the healthcare industry to adopt specific electronic tools to exchange health information.
The ONC is the principal U.S. federal entity charged with the coordination of nationwide efforts to implement and use health IT for the electronic exchange of health information. ONC regularly proposes legislative changes to incentivize the healthcare industry to adopt specific electronic tools to exchange health information.
It is possible that these potential liabilities could cause a material adverse effect on our operations and harm our business reputation. As of May 25, 2018, certain data transfers from and between the European Union (“EU”) are subject to the GDPR.
It is possible that these potential liabilities could cause a material adverse effect on our operations and harm our business reputation. Certain data transfers from and between the European Union (“EU”) are subject to the GDPR.
The CPRA significantly amends the CCPA and imposes additional data protection obligations on companies doing business in California, including additional consumer rights processes and opt outs for certain uses of sensitive data.
The CPRA significantly amended the CCPA and imposed additional data protection obligations on companies doing business in California, including additional consumer rights processes and opt outs for certain uses of sensitive data.
The CCPA, which covers businesses that obtain or access personal information on California resident consumers grants consumers enhanced privacy rights and control over their personal information and imposes significant requirements on covered companies with respect to consumer data privacy rights.
The Company is also subject to the California Consumer Privacy Act (“CCPA”), which covers businesses that obtain or access personal information on California resident consumers grants consumers enhanced privacy rights and control over their personal information and imposes significant requirements on covered companies with respect to consumer data privacy rights.
The market price of our common stock has in the past, and may continue to, fluctuate significantly due to a number of factors, some of which may be beyond our control, including: • actual or anticipated fluctuations in our operating results; • changes in earnings estimated by securities analysts or our ability to meet those estimates; • the operating and stock price performance of comparable companies; • changes to the regulatory and legal environment in which we operate; and • domestic and worldwide economic conditions. -24- Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company.
The market price of our common stock has in the past, and may continue to, fluctuate significantly due to a number of factors, some of which may be beyond our control, including: • actual or anticipated fluctuations in our operating results; • changes in earnings estimated by securities analysts or our ability to meet those estimates; • the operating and stock price performance of comparable companies; • changes to the regulatory and legal environment in which we operate; and • domestic and worldwide economic conditions.
Ziff Davis is also required to indemnify us for certain liabilities. If Ziff Davis were to make an indemnification claim, or if Ziff Davis is unable to pay the taxes for which we may be severally liable, we could incur significant liabilities.
Ziff Davis is also required to indemnify us for certain liabilities. If Ziff Davis were to make an indemnification claim, or if Ziff Davis is unable to pay the taxes for which we may be severally liable, we could incur significant liabilities. -28- Item 1B. Unresolved Staff Comments None.
The terms of our outstanding indebtedness limit, but do not prohibit, us from incurring additional indebtedness, and the additional indebtedness incurred in compliance with these restrictions could be substantial.
Furthermore, we may be able to incur substantial additional indebtedness in the future. The terms of our outstanding indebtedness limit, but do not prohibit, us from incurring additional indebtedness, and the additional indebtedness incurred in compliance with these restrictions could be substantial.
Any failure or perception of failure of our products or services to meet HIPAA, HITECH and related regulatory requirements could expose us to risks of investigation, notification, litigation, penalty or enforcement, adversely affect demand for our products and services and force us to expend significant capital and other resources to modify our products or services to address the privacy and security requirements of our clients and HIPAA and HITECH. -20- Our services may become subject to burdensome regulation, which could increase our costs or restrict our service offerings.
Any failure or perception of failure of our products or services to meet HIPAA, HITECH and related regulatory requirements could expose us to risks of investigation, notification, litigation, penalty or enforcement, adversely affect demand for our products and services and force us to expend significant capital and other resources to modify our products or services to address the privacy and security requirements of our clients and HIPAA and HITECH.
It is possible that a court could find these exclusive forum provisions inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, and we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and Board of Directors. -26- If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business, our stock price and trading volume could decline.
It is possible that a court could find these exclusive forum provisions inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, and we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and Board of Directors.
If one or more of the analysts downgrades our stock or publishes misleading or unfavorable research about our business, our stock price would likely decline.
We currently have multiple research analysts covering Consensus’ common stock. If one or more of the analysts downgrades our stock or publishes misleading or unfavorable research about our business, our stock price would likely decline.
If our business experiences excessive fraudulent activity or cannot meet evolving credit card company merchant standards, we could incur substantial costs and lose the right to accept credit cards for payment and our customer base could decrease significantly.
Rejected credit or debit card payments, customer cancellations and decreased customer sign up may adversely impact our revenues and profitability. If our business experiences excessive fraudulent activity or cannot meet evolving credit card company merchant standards, we could incur substantial costs and lose the right to accept credit cards for payment and our customer base could decrease significantly.
Weakness in certain segments of the credit markets and in the U.S. and global economies could result in increased numbers of rejected credit and debit card payments. We believe this could result in increased customer cancellations and decreased customer signups. Rejected credit or debit card payments, customer cancellations and decreased customer sign up may adversely impact our revenues and profitability.
Weakness in certain segments of the credit markets and in the U.S. and global economies could result in increased numbers of rejected credit and debit card payments. We believe this could result in increased customer cancellations -19- and decreased customer signups.
In addition, Ziff Davis, Consensus and their respective subsidiaries may incur certain tax costs in connection with the separation, including non-U.S. tax costs resulting from separations in multiple non-U.S. jurisdictions that do not legally provide for tax-free separations, which may be material. -27- Our debt obligations could adversely affect our business and our ability to meet our obligations and pay dividends.
Any such indemnity obligations could be material. In addition, Ziff Davis, Consensus and their respective subsidiaries may incur certain tax costs in connection with the separation, including non-U.S. tax costs resulting from separations in multiple non-U.S. jurisdictions that do not legally provide for tax-free separations, which may be material.
As a result, we may not be able to effectively prevent competitors in these regions from utilizing our intellectual property, which could reduce our competitive advantage and ability to compete in those regions and negatively impact our business. -17- We also strive to protect our intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions.
As a result, we may not be able to effectively prevent competitors in these regions from utilizing our intellectual property, which could reduce our competitive advantage and ability to compete in those regions and negatively impact our business.
Risks Related To the Separation If the distribution, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, Ziff Davis, Consensus and Ziff Davis stockholders could be subject to significant tax liabilities, and, in certain circumstances, Consensus could be required to indemnify Ziff Davis for material taxes and other related amounts pursuant to indemnification obligations under the tax matters agreement.
If one or more of the analysts ceases coverage of Consensus’ common stock or fails to publish reports on us regularly, demand for Consensus’ common stock could decrease, which could cause Consensus’ common stock price or trading volume to decline. -27- Risks Related To the Separation If the distribution, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, Ziff Davis, Consensus and Ziff Davis stockholders could be subject to significant tax liabilities, and, in certain circumstances, Consensus could be required to indemnify Ziff Davis for material taxes and other related amounts pursuant to indemnification obligations under the tax matters agreement.
Risks Related To Our Stock The trading market for our common stock has existed for a relatively short time since the distribution. Our stock price may fluctuate significantly. Prior to the distribution, there was no public market for our common stock. An active trading market for our common stock commenced only following the distribution and may not be sustainable.
Prior to the distribution, there was no public market for our common stock. An active trading market for our common stock commenced only following the distribution and may not be sustainable.
Taxing authorities may successfully assert that we should have collected, or in the future should collect sales and use, telecommunications or similar taxes, and we could be subject to liability with respect to past or future tax, which could adversely affect our operating results.
If a material indirect tax liability associated with prior periods were to be recorded, for which there is not a reserve, it could materially affect our financial results for the period in which it is recorded. -22- Taxing authorities may successfully assert that we should have collected, or in the future should collect sales and use, telecommunications or similar taxes, and we could be subject to liability with respect to past or future tax, which could adversely affect our operating results.
If we cannot make payments on our debt obligations, we will be in default and all outstanding principal and interest on our debt may be declared due and payable and we could be forced into bankruptcy or liquidation. -28- In addition, any event of default or declaration of acceleration under one debt instrument could result in an event of default under one or more of our other debt instruments.
If we cannot make payments on our debt obligations, we will be in default and all outstanding principal and interest on our debt may be declared due and payable and we could be forced into bankruptcy or liquidation.
Pandemics or global health crises, and related governmental responses could negatively affect our business, operations and financial performance. The impact of pandemics and global health crises, such as the COVID-19 pandemic, has in the past had, and may in the future have, a negative effect on the global economy, disrupting the financial markets and creating increasing volatility and overall uncertainty.
The impact of pandemics and global health crises has in the past had, and may in the future have, a negative effect on the global economy, disrupting the financial markets and creating increasing volatility and overall uncertainty.
These broad market fluctuations could also adversely affect the trading price of our common stock. We do not intend to pay dividends on our common stock. We have no present intention to pay cash dividends on our common stock.
Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations could also adversely affect the trading price of our common stock. -25- We do not intend to pay dividends on our common stock. We have no present intention to pay cash dividends on our common stock.
The trading market for Consensus’ common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. We currently have multiple research analysts covering Consensus’ common stock.
If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business, our stock price and trading volume could decline. The trading market for Consensus’ common stock depends in part on the research and reports that securities or industry analysts publish about us or our business.
Any of these events could have a material adverse effect on our business, prospects, financial condition, operating results and cash flows, or cause us to suffer other negative consequences.
We maintain insurance related to cybersecurity risks, but this insurance may not be sufficient to cover all of our losses from any breaches or other adverse consequences related to a cybersecurity-event. Any of these events could have a material adverse effect on our business, prospects, financial condition, operating results and cash flows, or cause us to suffer other negative consequences.
We cannot give assurance that our previous or future acquisitions will be successful and will not materially adversely affect our business, operating results or financial condition. Failure to manage and successfully integrate acquisitions could materially harm our business and operating results. In addition, our effective tax rate for future periods is uncertain and could be impacted by mergers and acquisitions.
Mergers and acquisitions are inherently risky and subject to many factors outside of our control. We cannot give assurance that our previous or future acquisitions will be successful and will not materially adversely affect our business, operating results or financial condition. Failure to manage and successfully integrate acquisitions could materially harm our business and operating results.
In our effort to attract and retain key personnel, we may experience increased compensation costs that are not offset by either improved productivity or higher prices for our products or services. -19- Changes in the labor market, employee turnover, changes in the availability of our employees and labor shortages more generally could result in, increased costs, and could adversely impact the efficiency of our operations.
In our effort to attract and retain key personnel, we may experience increased compensation costs that are not offset by either improved productivity or higher prices for our products or services.
Further, our current internal control over financial reporting and any additional internal control over financial reporting that we develop may become inadequate because of changes in conditions in our business. We also cannot assure you that a material weakness will not be discovered with respect to a prior period for which we had previously believed that internal controls were effective.
We also cannot assure you that a material weakness will not be discovered with respect to a prior period for which we had previously believed that internal controls were effective.
As discussed in more detail below, the GDPR prohibits data transfers from the EU to other countries outside of the EU, including the U.S., without appropriate security safeguards and practices in place. Previously, for certain data transfers from and between the EU and the U.S., we, like many other companies, had relied on what is referred to as the “EU-U.S.
As discussed in more detail below, the GDPR prohibits data transfers from the EU to other countries outside of the EU, including the U.S., without appropriate security safeguards and practices in place. With respect to data transfers from the E.U. to the U.S., the European Commission adopted the adequacy decision for the EU-U.S.
In addition, the indentures governing our indebtedness contain, and the agreements governing any future indebtedness may contain, restrictive covenants that may limit our ability to engage in activities that may be in our long-term best interest.
In addition, the indentures governing our indebtedness contain, and the agreements governing any future indebtedness may contain, restrictive covenants that may limit our ability to engage in activities that may be in our long-term best interest. -24- Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of substantially all of our debt.
In that event, the market price of our common stock will likely decline and you may lose part or all of your investment. Risk Factors Summary The following is a summary of the principal risks that could adversely affect our business, operations and financial results.
In that event, the market price of our common stock will likely decline and you may lose part or all of your investment. The disclosures in this section reflect our beliefs and opinions as to factors that could materially and adversely affect us in the future.
We completed remediation measures related to the material weaknesses and concluded that our internal control over financial reporting was effective as of December 31, 2023. Completion of remediation does not provide assurance that our remediation or other controls will continue to operate properly or remain adequate.
Completion of remediation does not provide assurance that our remediation or other controls will continue to operate properly or remain adequate. Further, our current internal control over financial reporting and any additional internal control over financial reporting that we develop may become inadequate because of changes in conditions in our business.
It also creates a new California data protection agency specifically tasked to enforce the law, which could result in increased regulatory scrutiny of California businesses in the areas of data protection and security. The substantive requirements for businesses subject to the CPRA went into effect on January 1, 2023 and became enforceable on July 1, 2023.
It also created a new California data protection agency specifically tasked to enforce the law, which could result in increased regulatory scrutiny of California businesses in the areas of data protection and security. Similar laws have been passed in several other states and have been proposed in additional states and at the federal level.
We use vendors to assist with cybersecurity risks, but these vendors may not be able to assist us adequately in preparing for or responding to a cybersecurity incident. We maintain insurance related to cybersecurity risks, but this insurance may not be sufficient to cover all of our losses from any breaches or other adverse consequences related to a cybersecurity-event.
These factors may inhibit our ability to provide prompt, full, and reliable information about the incident to customers, partners, regulators, and the public. We use vendors to assist with cybersecurity risks, but these vendors may not be able to assist us adequately in preparing for or responding to a cybersecurity incident.
As reported elsewhere in this Annual Report on Form 10-K, we previously identified material weaknesses in our internal control over financial reporting.
We have previously identified material weaknesses in our internal control over financial reporting, although all such material weaknesses have been remediated.
As of December 31, 2024, Consensus has total outstanding indebtedness of approximately $598 million, of which $249 million will mature on October 15, 2026 and the remainder with mature on October 15, 2028. We may also incur additional indebtedness in the future.
Our debt obligations could adversely affect our business and our ability to meet our obligations and pay dividends. As of December 31, 2025, Consensus has total outstanding indebtedness of approximately $562.2 million, of which $7.5 million will mature in each of the years 2026 and 2027, and the remainder will mature in 2028.
Removed
If a material indirect tax liability associated with prior periods were to be recorded, for which there is not a reserve, it could materially affect our financial results for the period in which it is recorded.
Added
References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past. Risk Factors Summary The following is a summary of the principal risks that could adversely affect our business, operations and financial results.
Removed
Safe Harbor,” in order to comply with privacy obligations imposed by EU countries. The European Court of Justice invalidated the EU-U.S. Safe Harbor. Additionally, other countries that relied on the EU-U.S.
Added
Risks Related To Regulation, Including Taxation • Changes in regulations relating to health information communication protocols could affect our business. • Our services may become subject to burdensome regulation, which could increase our costs or restrict our service offerings. • Changes in our tax rates, changes in tax treatment of companies engaged in e-commerce, the adoption of new U.S. or international tax legislation, or exposure to additional tax liabilities may adversely impact our financial results. • Taxing authorities may successfully assert that we should have collected, or in the future should collect sales and use, telecommunications or similar taxes, and we could be subject to liability with respect to past or future tax, which could adversely affect our operating results. • We are subject to a variety of new and existing laws and regulations which could subject us to claims, judgments, monetary liabilities, and other remedies, and to limitations on our business practices.
Removed
Safe Harbor that were not part of the EU have also found that data transfers to the U.S. are no longer valid based on the European Court of Justice ruling.
Added
We use artificial intelligence in our business, and challenges with properly managing its use could result in harm to our brand, reputation, business or customers, and adversely affect our results of operations.
Removed
Although U.S. and EU policymakers approved a new framework known as “Privacy Shield” that would allow companies like us to continue to rely on some form of a safe harbor for the transfer of certain data from the EU to the U.S., on July 16, 2020, the Court of Justice of the European Union issued a judgment declaring as “invalid” the European Commission’s Decision (EU) 2016/1250 on the adequacy of the protection provided by the EU-U.S.
Added
We are implementing the use of artificial intelligence (“AI”) solutions, including machine learning and generative AI tools, in our products and services and in internal tools that support our business. These applications may become increasingly important in our operations over time. This emerging technology presents a number of risks inherent in its use.
Removed
Privacy Shield, rendering it invalid. We cannot predict how or if these issues will be resolved nor can we evaluate any potential liability at this time. While the EU policymakers approved a new EU-U.S.
Added
AI algorithms are based on machine learning and predictive analytics, which can create accuracy issues, unintended biases, and discriminatory outcomes that could harm our brand, reputation, business, or customers. Additionally, no assurance can be made that the usage of AI will assist us in being more efficient or offset the costs of its implementation.
Removed
Data Privacy Framework in 2023, the validity of data transfer mechanisms and additional safeguards remains subject to legal, regulatory, and political review and developments in both Europe and the U.S.
Added
Further, dependence on AI without adequate safeguards to make certain business decisions may introduce additional operational vulnerabilities by producing inaccurate outcomes, recommendations, or other suggestions based on flaws in the underlying data or other unintended results.
Removed
On June 28, 2018, the California legislature enacted the California Consumer Privacy Act (“CCPA”), which took effect on January 1, 2020 and became enforceable starting July 1, 2020.
Added
Our obligation to comply with emerging AI initiatives, laws, and regulations, including under proposed or enacted legislation regulating AI in jurisdictions such as the U.S. and European Union, could entail significant costs, negatively affect our business, or limit our ability to incorporate certain AI capabilities into our business.
Removed
Similar laws have been passed in several other states and have been proposed in additional states and at the federal level.
Added
In addition, our effective tax rate for future periods is uncertain and could be impacted by mergers and acquisitions. From time to time we also make strategic investments.
Removed
The requirements of being a public company, including developing and maintaining proper and effective disclosure controls and procedures and internal control over financial reporting, may strain our resources and divert management’s attention away from other business concerns.
Added
These investments typically involve many of the same risks posed by acquisitions, particularly those risks associated with the diversion of our resources, the inability of the new venture to be successful, the management of relationships with third parties, and potential expenses.
Removed
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq and other applicable securities rules and regulations that impose various requirements on public companies.

… 26 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

7 edited+1 added−0 removed21 unchanged
Biggest changeCybersecurity We have implemented a cybersecurity program to assess, identify, and manage risks from cybersecurity threats that may result in material adverse effects on the confidentiality, integrity, and availability of our information systems. -29- Information Security Team and Governance Board of Directors Our Board of Directors, in coordination with the Audit Committee of the Board of Directors (the “Audit Committee”), oversees the Company’s enterprise risk management process, including the management of risks arising from cybersecurity threats.
Biggest changeItem 1C. Cybersecurity We have implemented a cybersecurity program to assess, identify, and manage risks from cybersecurity threats that may result in material adverse effects on the confidentiality, integrity, and availability of our information systems.
The Policy applies to all employees, consultants, contractors, and other such persons (“Personnel”) with access to the aforementioned processes, equipment, hardware, and software. The Policy requires that Personnel agree to and are -30- trained annually on all components of the Policy as a condition of employment, partnership, or temporary affiliation with the Company.
The Policy applies to all employees, consultants, contractors, and other such persons (“Personnel”) with access to the aforementioned processes, equipment, hardware, and software. The Policy requires that Personnel agree to and are trained annually on all components of the Policy as a condition of employment, partnership, or temporary affiliation with the Company.
Additional information on cybersecurity risks we face can be found in Part I, Item 1A “Risk Factors” of this Form 10-K under the heading “Risks Related to our Business,” which should be read in conjunction with the foregoing information.
Additional information on cybersecurity risks we face can be found in Part I, Item 1A “Risk Factors” of this Form 10-K under the heading “Risks Related to our Business,” which should be read in conjunction with the foregoing information. -30-
Employee Trainings All Company employees must complete trainings at least annually on various security threats and best practices including, but not limited to, trainings on the following topics: the Company’s Information Security Policy; Information Security Incident Response Plan; HIPAA, PCI Compliance; General Data Protection Regulation (“GDPR”) and CCPA; Security Awareness and Incident Response Training covering Social Engineering Phishing (identification and common red flags), Social Media safety best practices, Internet Security best practices, and Incident response training for end-users; and Phishing.
Employee Trainings All Company employees are required to complete trainings at least annually on various security threats and best practices including, but not limited to, trainings on the following topics: the Company’s Information Security Policy; Information Security Incident Response Plan; HIPAA, PCI Compliance; General Data Protection Regulation (“GDPR”) and CCPA; Security Awareness and Incident Response Training covering Social Engineering Phishing (identification and common red flags), Social Media safety best practices, Internet Security best practices, and Incident response training for end-users; and Phishing.
Third-Party Certifications and Audits In addition to our internal cybersecurity capabilities, we regularly engage with consultants, and other third parties to assist with assessing, identifying, and managing cybersecurity risks. Specifically, the Company is engaged with third-party auditors for HITRUST, PCI, and SOC 2 Type 2 for annual certification.
Third-Party Certifications and Audits In addition to our internal cybersecurity capabilities, we regularly engage with consultants, and other third parties to assist with assessing, identifying, and managing cybersecurity risks. Specifically, the Company is engaged with third-party auditors for HITRUST, PCI, ISO 27001, FedRamp (High Impact), and SOC 2 Type 2 for annual certification.
Information Security Policy and Requirements The Company’s Information Security Policy (“Policy”) is based upon the International Organization for Standardization (“ISO”) 27001, Health Information Trust Alliance (“HITRUST”) Common Security Framework (“CSF”), System and Organization Controls 2 Type 2 (“SOC 2 Type 2”), and Payment Card Industry Data Security Standard (“PCI DSS”) frameworks and standards and provides specific and detailed direction and support for appropriately maintaining the overall security, confidentiality, integrity, and availability of information within the Company.
Information Security Policy and Requirements The Company’s Information Security Policy (“Policy”) is based upon the International Organization for Standardization (“ISO”) 27001, HITRUST Common Security Framework (“CSF”), System and Organization Controls 2 Type 2 -29- (“SOC 2 Type 2”), FedRAMP, and Payment Card Industry Data Security Standard (“PCI DSS”) frameworks and standards and provides specific and detailed direction and support for appropriately maintaining the overall security, confidentiality, integrity, and availability of information within the Company.
Our Board of Directors has delegated the primary responsibility to oversee cybersecurity matters to the Audit Committee. The Audit Committee regularly reviews the measures implemented by the Company to identify and mitigate data protection and cybersecurity risks.
The Audit Committee regularly reviews the measures implemented by the Company to identify and mitigate data protection and cybersecurity risks.
Added
Information Security Team and Governance Board of Directors Our Board of Directors, in coordination with the Audit Committee of the Board of Directors (the “Audit Committee”), oversees the Company’s enterprise risk management process, including the management of risks arising from cybersecurity threats. Our Board of Directors has delegated the primary responsibility to oversee cybersecurity matters to the Audit Committee.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed0 unchanged
Biggest changeWe believe that our existing facilities are adequate to meet our current requirements. -31- Item 3. Legal Proceedings See Note 10 - Commitments and Contingencies to our accompanying consolidated financial statements for a description of our legal proceedings. Item 4. Mine Safety Disclosures Not applicable. -32- PART II
Biggest changeItem 3. Legal Proceedings See Note 9 - Commitments and Contingencies to our accompanying consolidated financial statements for a description of our legal proceedings. Item 4. Mine Safety Disclosures Not applicable. -31- PART II
Item 2. Properties Principal Executive Offices Our principal executive offices, including our global headquarters, are located at 700 S. Flower Street, Los Angeles, California 90017. This location is under a lease that expires on January 31, 2031 and has approximately 48,000 square feet of office space.
Item 2. Properties Principal Executive Offices Our principal executive offices, including our global headquarters, are located at 700 S. Flower Street, Los Angeles, California 90017. This location is under a lease that expires on January 31, 2031 and has approximately 48,000 square feet of office space. We believe that our existing facilities are adequate to meet our current requirements.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+2 added−0 removed3 unchanged
Biggest changeConsensus common stock has been listed on the Nasdaq under the symbol “CCSI” since October 8, 2021. Prior to that time, there was no public market for our common stock. Measurement points for the performance graph are October 8, 2021 and the last trading day of each quarter from October 2021 to December 2024.
Biggest changePrior to that time, there was no public market for our common stock. Measurement points for the performance graph are October 8, 2021 and the last trading day of each quarter from October 2021 to December 2025. The graph assumes that $100 was invested on October 8, 2021 in Consensus’ common stock and in each of the indices.
The following table summarizes the share repurchase activity for the three months ended December 31, 2024: Total Number of Shares Purchased Average Price Paid Per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program (in thousands) October 1 - 31, 2024 400 $ 20.02 400 $ 68,202 November 1 - 30, 2024 — — — 68,202 December 1 - 31, 2024 13,701 23.02 13,701 67,887 14,101 14,101 67,887 (1) Average price paid per share includes costs associated with the repurchases, but excludes the 1% excise tax accrued on our share repurchases as a result of the Inflation Reduction Act of 2022. -33- Performance Graph This performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act of 1934, or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Consensus under the Securities Act of 1933, as amended, or the Exchange Act.
The following table summarizes the share repurchase activity for the three months ended December 31, 2025: Total Number of Shares Purchased Average Price Paid Per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program (in thousands) October 1 - 31, 2025 — $ — — $ 52,853 November 1 - 30, 2025 — — — 52,853 December 1 - 31, 2025 344,089 23.21 344,089 44,867 344,089 344,089 44,867 (1) Average price paid per share includes costs associated with the repurchases, but excludes the 1% excise tax accrued on our share repurchases as a result of the Inflation Reduction Act of 2022. -32- Performance Graph This performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act of 1934, or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Consensus under the Securities Act of 1933, as amended, or the Exchange Act.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “CCSI ”. Holders We have 161 registered stockholders as of February 14, 2025.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “CCSI”. Holders We have 137 registered stockholders as of February 9, 2026.
The graph assumes that $100 was invested on October 8, 2021 in Consensus’ common stock and in each of the indices. The stock price performance on the following graph is not necessarily indicative of future stock price performance. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] -34- Item 6. [Reserved]
The stock price performance on the following graph is not necessarily indicative of future stock price performance. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] -34- Item 6. [Reserved]
The following graph compares the cumulative total stockholder return for Consensus, the Nasdaq Composite and an index of companies that Consensus has selected as its peer group in the cloud services for business space. Consensus’ peer group index consists of Box, Inc. CommonVault Systems, Inc., TruBridge, Inc.
The following graph compares the cumulative total stockholder return for Consensus, the Nasdaq Composite and an index of companies that Consensus has selected as its peer group in the cloud services for business space. During 2025, the Company completed a comprehensive review of its peer group to better align with its current business scale and software-as-a-service (SaaS) revenue model.
The timing and amounts of purchases are determined by the Company, depending on market conditions and other factors it deems relevant. For further information on our share repurchases refer to Note 13 - Stockholders' Deficit of the Notes to the Consolidated Financial Statements (Part II, Item 8).
For further information on our share repurchases refer to Note 12 - Stockholders' Equity (Deficit) of the Notes to the Consolidated Financial Statements (Part II, Item 8).
(formerly Computer Programs and Systems, Inc.), Evolent Health, Inc., HealthStream, Inc., Omnicell, Inc., OneSpan, Inc., Phreesia, Inc., Progress Software Corp., SecureWorks Corp., Verint Systems, Inc. and Yext, Inc. Ebix, Inc., Veradigm, Inc. and R1 Rcm Holdco, Inc. were removed because they were acquired or went private during 2024.
(formerly Computer Programs and Systems, Inc.), Evolent Health, Inc., HealthStream, Inc., Omnicell, Inc., OneSpan, Inc., Phreesia, Inc., Progress Software Corp., and Yext, Inc. During 2025, SecureWorks Corp. and Verint Systems, Inc. were removed because they were acquired or went private. -33- Consensus common stock has been listed on the Nasdaq under the symbol “CCSI” since October 8, 2021.
Under this program, the Company may purchase in the public market or in off-market transactions up to $100.0 million worth of the Company’s common stock through February 2025 which was subsequently extended through February 2028 (see Note 20 - Subsequent Events of the Notes to the Consolidated Financial Statements (Part II, Item 8).
Under this program, the Company was authorized to purchase in the public market or in off-market transactions up to $100.0 million worth of the Company’s common stock through February 2025, which was subsequently extended through February 2028. The timing and amounts of purchases are determined by the Company, depending on market conditions and other factors it deems relevant.
Added
As a result of this review, the Company adopted a new peer group (the “2025 Peer Group”) which replaces the peer group used in the prior year (the “2024 Peer Group”).
Added
The 2025 Peer Group consists of A10 Networks, Inc., Agilysys, Inc., Certara, Inc., Definitive Healthcare Corp., DoubleVerify Holdings, Inc., EverCommerce Inc., Evolent Health, Inc., Mitek Systems, Inc., Omnicell, Inc., OneSpan Inc., PowerFleet, Inc., Progyny, Inc., and RingCentral, Inc. The 2024 Peer Group consists of Box, Inc. CommVault Systems, Inc., TruBridge, Inc.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

57 edited+25 added−16 removed43 unchanged
Biggest changeOperating Expenses Sales and Marketing (in thousands, except percentages) 2024 2023 2022 Percentage Change 2024 versus 2023 Percentage Change 2023 versus 2022 Sales and marketing $ 51,065 $ 65,084 $ 64,413 (22)% 1% As a percent of revenues 15 % 18 % 18 % Our sales and marketing costs consist primarily of personnel costs, internet-based advertising and other business development-related expenses.
Biggest changeThe increase in cost of revenues for the year ended December 31, 2024 over the prior comparable period was primarily due to an increase of $3.1 million in depreciation associated with platform development costs, partially offset by decreases of $0.7 million in online processing fees, $0.4 million in data transmission costs and $0.2 million in personnel-related expenses. -40- Operating Expenses Sales and Marketing (in thousands, except percentages) 2025 2024 2023 Percentage Change 2025 versus 2024 Percentage Change 2024 versus 2023 Sales and marketing $ 51,548 $ 51,065 $ 65,084 1% (22)% As a percent of revenues 15 % 15 % 18 % Our sales and marketing costs consist primarily of personnel costs (inclusive of share-based compensation), internet-based advertising and other business development-related expenses.
On a quarterly basis, we evaluate uncertain income tax positions and establish or release reserves as appropriate under GAAP. As a multinational corporation, we are subject to taxation in many jurisdictions, and the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions.
On a quarterly basis, we evaluate uncertain income tax positions and establish or release reserves as appropriate under GAAP. As a multinational corporation, we are subject to taxation in many jurisdictions, and the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in various taxing -38- jurisdictions.
The measurement of share-based compensation expense is based on several criteria including, but not limited to, the valuation model used and associated input factors, such as the stock price on the date of grant, expected term of the award, stock price volatility, risk free interest rate, dividend rate and forfeiture rate.
The measurement of share-based compensation expense is based on several criteria -37- including, but not limited to, the valuation model used and associated input factors, such as the stock price on the date of grant, expected term of the award, stock price volatility, risk free interest rate, dividend rate and forfeiture rate.
During the year ended December 31, 2024, interest expense decreased $11.4 million compared to the prior year, which included a decrease of $9.6 million in interest expense as debt repurchases lowered our outstanding debt balance, as well as a $1.8 million favorable increase in debt extinguishment gain compared to 2023.
During the year ended December 31, 2024, interest expense decreased $11.4 million compared to the prior year, which included a decrease of $9.6 million in interest expense as debt repurchases lowered our outstanding debt balance, as well as a $1.8 million favorable increase in debt extinguishment gain compared to 2023. Interest income .
As a result, the number of -43- shares issued upon vesting for these awards is net of the statutory withholding requirements that the Company pays on behalf of its employees.
As a result, the number of shares issued upon vesting for these awards is net of the statutory withholding requirements that the Company pays on behalf of its employees.
In assessing this valuation allowance, we review historical and future expected operating results and other factors to determine whether it is more likely than not that deferred tax assets are realizable. See Note 12 - Income Taxes of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.
In assessing this valuation allowance, we review historical and future expected operating results and other factors to determine whether it is more likely than not that deferred tax assets are realizable. See Note 11 - Income Taxes of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.
See Note 14 - Equity Incentive and Employee Stock Purchase Plan of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K. Income Taxes Our income is subject to taxation in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes.
See Note 13 - Equity Incentive and Employee Stock Purchase Plan of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K. Income Taxes Our income is subject to taxation in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes.
The following table sets forth information derived from our Consolidated Statements of Income as a percentage of revenues for the years ended December 31, 2024, 2023 and 2022. This information should be read in conjunction with the accompanying financial statements and the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.
The following table sets forth information derived from our Consolidated Statements of Income as a percentage of revenues for the years ended December 31, 2025, 2024 and 2023. This information should be read in conjunction with the accompanying financial statements and the Notes to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.
A significant change in the time spent on each project could have a material impact on the amount capitalized and related amortization expense in subsequent periods. See Note 6 - Property and Equipment of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.
A significant change in the time spent on each project could have a material impact on the amount capitalized and related amortization expense in subsequent periods. See Note 5 - Property and Equipment of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.
We currently anticipate that our existing cash and cash equivalents and cash generated from operations and financing activities will be sufficient to fund our anticipated needs for working capital, capital expenditures and stock repurchases, if any, for at least the next 12 months from the issuance of this Annual Report on Form 10-K and the foreseeable future.
We currently anticipate that our existing cash and cash equivalents and cash generated from operations and financing activities will be sufficient to fund our anticipated needs for working capital, capital expenditures, principal payments on our debt and stock repurchases, if any, for at least the next 12 months from the issuance of this Annual Report on Form 10-K and the foreseeable future.
The 2028 Senior Notes are presented as current portion of long-term debt and long-term debt, net of current portion, both of which are net of deferred issuance costs, on the Consolidated Balance Sheets as of December 31, 2024 and 2023.
The 2028 Senior Notes are presented as current portion of long-term debt and long-term debt, net of current portion, both of which are net of deferred issuance costs, on the Consolidated Balance Sheets as of December 31, 2025 and 2024.
Net cash provided by operating activities was $121.7 million, $114.1 million and $83.1 million for the years ended December 31, 2024, 2023 and 2022, respectively. Our operating cash flows resulted primarily from cash received from our customers offset by cash payments we made to third parties for their services, employee compensation and lease payments for our offices.
Net cash provided by operating activities was $136.1 million, $121.7 million and $114.1 million for the years ended December 31, 2025, 2024 and 2023, respectively. Our operating cash flows resulted primarily from cash received from our customers offset by cash payments we made to third parties for their services and employee compensation and lease payments for our offices.
General and Administrative (in thousands, except percentages) 2024 2023 2022 Percentage Change 2024 versus 2023 Percentage Change 2023 versus 2022 General and administrative $ 72,546 $ 74,203 $ 74,122 (2)% —% As a percent of revenues 21 % 20 % 20 % Our general and administrative costs consist primarily of personnel-related expenses (inclusive of share-based compensation), professional fees, depreciation and amortization, bad debt expense and non-income related tax expenses.
General and Administrative (in thousands, except percentages) 2025 2024 2023 Percentage Change 2025 versus 2024 Percentage Change 2024 versus 2023 General and administrative $ 69,844 $ 72,546 $ 74,203 (4)% (2)% As a percent of revenues 20 % 21 % 20 % Our general and administrative costs consist primarily of personnel-related expenses (inclusive of share-based compensation), depreciation and amortization, professional fees, bad debt expense and non-income related tax expenses.
During the years ended December 31, 2024, 2023 and 2022 the Company withheld shares on its vested restricted stock units and restricted stock awards relating to its share-based compensation plans of 122,406, 61,878 and 71,509 shares, respectively. Cash Flows Our primary sources of liquidity are cash flows generated from operations, together with cash and cash equivalents.
During the years ended December 31, 2025, 2024 and 2023 the Company withheld shares on its vested restricted stock units and restricted stock awards relating to its share-based compensation plans of 173,276, 122,406 and 61,878 shares, respectively. Cash Flows Our primary sources of liquidity are cash flows generated from operations, together with cash and cash equivalents.
Years Ended December 31, 2024 2023 2022 Revenues 100% 100% 100% Cost of revenues 20 19 17 Gross profit 80 81 83 Operating expenses: Sales and marketing 15 18 18 Research, development and engineering 2 2 3 General and administrative 21 20 20 Total operating expenses 38 40 41 Income from operations 42 41 42 Interest expense (10) (13) (14) Interest income 1 1 — Other income (expense), net 1 (1) — Income before income taxes 34 28 28 Income tax expense 9 7 7 Net income 25% 21% 21% Revenues (in thousands, except percentages) 2024 2023 2022 Percentage Change 2024 versus 2023 Percentage Change 2023 versus 2022 Revenues $ 350,382 $ 362,562 $ 362,422 (3)% —% Consensus revenues primarily consist of revenues from “fixed” customer subscription revenues and “variable” revenues generated from actual usage of our services.
Years Ended December 31, 2025 2024 2023 Revenues 100% 100% 100% Cost of revenues 20 20 19 Gross profit 80 80 81 Operating expenses: Sales and marketing 15 15 18 Research, development and engineering 2 2 2 General and administrative 20 21 20 Total operating expenses 37 38 40 Income from operations 43 42 41 Interest expense (10) (10) (13) Interest income 1 1 1 Other (expense) income, net (1) 1 (1) Income before income taxes 33 34 28 Income tax expense 8 9 7 Net income 25% 25% 21% -39- Revenues (in thousands, except percentages) 2025 2024 2023 Percentage Change 2025 versus 2024 Percentage Change 2024 versus 2023 Revenues $ 349,696 $ 350,382 $ 362,562 —% (3)% Consensus revenues primarily consist of revenues from “fixed” customer subscription revenues and “variable” revenues generated from actual usage of our services.
As of December 31, 2024, cash and cash equivalents held within domestic and foreign jurisdictions were $27.6 million and $6.0 million, respectively. On October 7, 2021, the Company issued $305 million of 6.0% senior notes due in 2026 (the “2026 Senior Notes”), in a private placement offering exempt from the registration requirements of the Securities Act of 1933.
As of December 31, 2025, cash and cash equivalents held within domestic and foreign jurisdictions were $8.9 million and $65.8 million, respectively. 2026 Senior Notes On October 7, 2021, Consensus issued $305.0 million of 6.0% senior notes due in 2026 (the “2026 Senior Notes”), in a private placement offering exempt from the registration requirements of the Securities Act of 1933.
Readers should carefully review the Risk Factors and the risk factors set forth in other documents we file from time to time with the SEC. Overview Consensus is a leading provider of secure information delivery services with a scalable Software-as-a-Service (“SaaS”) platform.
Readers should carefully review the Risk Factors and the risk factors set forth in other documents we file from time to time with the SEC. Overview Consensus is a leading provider of secure information delivery services.
(4) Monthly churn represents paid monthly SoHo and Corporate customer accounts that were cancelled during each month of the annual period divided by the average number of customers during each month of the same annual period, including the paid adds.
(3) Paid Adds represents paying new Consensus customer accounts added during the annual period. -36- (4) Monthly churn represents paid monthly Corporate and SoHo customer accounts that were cancelled during each month of the annual period, divided by the average number of customers during each month of the same annual period (including the paid adds).
Ziff Davis then exchanged the 2028 Senior Notes with lenders under its credit agreement (or their affiliates) in exchange for extinguishment of a similar amount indebtedness under such credit agreement.
In exchange for the equity interest in the Company, Consensus issued the 2028 Senior Notes to Ziff Davis. Ziff Davis then exchanged the 2028 Senior Notes with lenders under its credit agreement (or their affiliates) in exchange for extinguishment of a similar amount indebtedness under such credit agreement.
The increase in our net cash provided by operating activities in 2024 compared to 2023 was primarily attributable to increased income after excluding noncash items, partially offset by an increase in cash outflows resulting from changes in our working capital accounts.
The increase in our net cash provided by operating activities in 2025 compared to 2024 was primarily attributable to increased income after excluding noncash items, partially offset by a decrease in cash inflows resulting from changes in our working capital accounts.
Net cash used in investing activities was $33.4 million, $40.5 million and $43.3 million for the years ended December 31, 2024, 2023 and 2022, respectively. Net cash used in investing activities in 2024 included capital expenditures, primarily capitalized software development costs.
Net cash used in investing activities was $35.2 million, $33.4 million and $40.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. Net cash used in investing activities in 2025 included capital expenditures, primarily capitalized software development costs, and cash paid for investments.
During the years ended December 31, 2024 and 2023, the Company retired $144.3 million and $62.6 million, respectively, in principal of its senior notes under this program. Cumulatively as of December 31, 2024, $206.9 million in principal of the Company’s senior notes has been retired under this program.
During the years ended December 31, 2025 and 2024, the Company retired $15.7 million and $144.3 million, respectively, in principal of its senior notes under this program. Cumulatively as of December 31, 2025, $222.6 million in principal of the Company’s senior notes has been retired under this program.
The period measured is annual and expressed as a monthly churn rate over the annual period. -36- Critical Accounting Policies and Estimates We prepare our consolidated financial statements and related disclosures in accordance with U.S. generally accepted accounting principles (“GAAP”) and our discussion and analysis of our financial condition and operating results requires us to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes.
Critical Accounting Policies and Estimates We prepare our consolidated financial statements and related disclosures in accordance with U.S. generally accepted accounting principles (“GAAP”) and our discussion and analysis of our financial condition and operating results requires us to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes.
The increase in our net cash provided by operating activities in 2023 compared to 2022 was primarily attributable to increased income after excluding noncash items, partially offset by a net decrease in our working capital accounts. Our prepaid tax payments were $2.1 million and $3.7 million at December 31, 2024 and 2023, respectively.
The increase in our net cash provided by operating activities in 2024 compared to 2023 was primarily attributable to increased income after excluding noncash items, partially offset by an increase in cash outflows resulting from changes in our working capital accounts. Our prepaid tax payments were $5.5 million and $2.1 million at December 31, 2025 and 2024, respectively.
Cumulatively as of December 31, 2024, 1,085,725 shares have been repurchased at an aggregate cost of $32.3 million (inclusive of excise tax of $0.2 million). The excise tax is assessed at 1% of the fair market value of net stock repurchases after December 31, 2022.
Cumulatively as of December 31, -44- 2025, 2,098,810 shares have been repurchased at an aggregate cost of $55.5 million (inclusive of excise tax of $0.3 million). The excise tax is assessed at 1% of the fair market value of net stock repurchases after December 31, 2022.
Research, Development and Engineering (in thousands, except percentages) 2024 2023 2022 Percentage Change 2024 versus 2023 Percentage Change 2023 versus 2022 Research, development and engineering $ 7,683 $ 7,727 $ 10,018 (1)% (23)% As a percent of revenues 2 % 2 % 3 % Our research, development and engineering costs consist primarily of personnel-related expenses.
Research, Development and Engineering (in thousands, except percentages) 2025 2024 2023 Percentage Change 2025 versus 2024 Percentage Change 2024 versus 2023 Research, development and engineering $ 7,464 $ 7,683 $ 7,727 (3)% (1)% As a percent of revenues 2 % 2 % 2 % Our research, development and engineering costs consist primarily of personnel-related expenses (inclusive of share-based compensation).
When necessary, we establish valuation allowances to reduce our deferred tax assets to an amount that will more likely than not be realized. As of December 31, 2024 and 2023, the Company has interest expense limitation carryforwards of $32.9 million and $30.4 million, respectively, which last indefinitely.
When necessary, we establish valuation allowances to reduce our deferred tax assets to an amount that will more likely than not be realized. As of December 31, 2025 and 2024, the Company had an interest expense limitation carryforward of $40.8 million and $32.9 million, respectively, which carries forward indefinitely.
Our interest expense is due to outstanding debt and is offset by any extinguishment gain or losses and capitalized interest. Interest expense was $34.0 million, $45.4 million and $51.4 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Our interest expense is due to outstanding debt and is offset by any extinguishment gain or losses and capitalized interest. Interest expense was $35.5 million, $34.0 million and $45.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. During the year ended December 31, 2025, interest expense increased by $1.5 million compared to the prior year.
As of December 31, 2024 and 2023, the Company has $1.7 million and $1.3 million, respectively, of foreign tax credit carryforwards that begin to expire in 2031, and $1.7 million and $1.8 million, respectively, of state research and development tax credits carryforwards that can be carried over indefinitely.
As of December 31, 2025 and 2024, the Company had $2.1 million and $1.7 million, respectively, of foreign tax credit carryforwards that begin to expire in 2031, and $1.9 million and $1.7 million, respectively, of state research and development -42- tax credits carryforwards that can be carried forward indefinitely.
Net cash used in investing activities in 2023 included capital expenditures, primarily capitalized software development costs, and cash paid for investments. Net cash used in investing activities in 2022 was primarily comprised of capital expenditures, primarily capitalized software development costs and business acquisitions.
Net cash used in investing activities in 2024 included capital expenditures, primarily capitalized software development costs. Net cash used in investing activities in 2023 included capital expenditures, primarily capitalized software development costs, and cash paid for investments.
As ARPA varies based on fixed subscription fee and variable usage components, we believe it can serve as a measure by which investors can evaluate trends in the types of services, levels of services and the usage levels of those services across Consensus’ customers. (3) Paid Adds represents paying new Consensus customer accounts added during the annual period.
As ARPA varies based on fixed subscription fee and variable usage components, we believe it can serve as a measure by which investors can evaluate trends in the types of services, levels of services and the usage levels of those services across Consensus’ customers.
The 2028 Senior Notes bear interest at a rate of 6.5% per annum, payable semi-annually in arrears on April 15 and October 15 of each year, which commenced on April 15, 2022. On March 4, 2022, the Company entered into a Credit Agreement with certain lenders party thereto (collectively, the “Lenders”) and MUFG Union Bank, N.A., as agent (the “Agent”).
The 2028 Senior Notes bear interest at a rate of 6.5% per annum, payable semi-annually in arrears on April 15 and October 15 of each year, which commenced on April 15, 2022. 2025 Credit Agreement On July 9, 2025, the Company entered into a Credit Agreement (the “2025 Credit Agreement”) with certain lenders party thereto (collectively, the “Lenders”) and U.S.
As of December 31, 2024, we had outstanding $598.1 million in aggregate principal amount of indebtedness, total minimum lease payments of $17.0 million and a liability for uncertain tax positions of $13.2 million (see Note 8 - Long-Term Debt, Note 9 - Leases and Note 12 - Income Taxes of the Notes to the Consolidated financial statements in Part II, Item 8 of this Form 10-K, respectively).
As of December 31, 2025, we had outstanding $562.2 million in aggregate principal amount of indebtedness (of which $7.5 million is payable within the next 12 months), total minimum lease payments of $14.4 million and a liability for uncertain tax positions of $14.5 million (see Note 7 - Long-Term Debt, Note 8 - Leases and Note 11 - Income Taxes of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K, respectively).
Our internet-based advertising relationships consist primarily of fixed cost and performance-based (cost-per-impression, cost-per-click and cost-per-acquisition) advertising relationships with an array of online service providers. Our sales personnel consist of a combination of inside sales and outside sales professionals.
Our internet-based advertising relationships consist primarily of fixed cost and performance-based (cost-per-impression, cost-per-click and cost-per-acquisition) advertising relationships with an array of online service providers. Our sales personnel consist of a combination of inside sales and outside sales professionals. Sales and marketing expenses for the year ended December 31, 2025 were consistent with the prior comparable period.
The increase in cost of revenues for the year ended December 31, 2024 over the prior comparable period was primarily due to an increase of $3.1 million in depreciation associated with platform development costs, partially offset by decreases of $0.7 million in online processing fees, $0.4 million in data transmission costs and $0.2 million in personnel-related expenses.
The increase in cost of revenues for the year ended December 31, 2025 over the prior comparable period was primarily due to an increase of $1.5 million in data transmission costs, partially offset by a decrease of $0.5 million in depreciation associated with platform development costs.
The Company entered into Rule 10b-18 and Rule 10b5-1 trading plans and during the years ended December 31, 2024 and 2023, the Company repurchased 57,063 and 839,548 shares, respectively, at an aggregate cost of $1.0 million and $23.7 million (inclusive of excise tax of $0.2 million), respectively, under this program.
During the years ended December 31, 2025 and 2024, the Company repurchased 1,013,085 and 57,063 shares, respectively, at an aggregate cost of $23.2 million (inclusive of excise tax of $0.1 million) and $1.0 million, respectively, under this program.
The decrease in general and administrative expense of $1.7 million for the year ended December 31, 2024 over the prior comparable period was primarily due to decreases of $2.5 million in professional fees and $0.8 million in bad debt expense, partially offset by an increase of $1.7 million in computer-related equipment costs.
The decrease in general and administrative expense of $2.7 million for the year ended December 31, 2025 over the prior comparable period was primarily due to decreases of $1.3 million in depreciation and amortization expense, $0.9 million in non-income related tax expenses and $0.9 million in bad debt expense, partially offset by an increase of $0.7 million in personnel-related expenses.
We believe our tax positions, including intercompany transfer pricing policies, are consistent with the tax laws in the jurisdictions in which we conduct our business. Certain of these tax positions have in the past been, and may be challenged in the future, and this may have a significant impact on our effective tax rate if our tax reserves are insufficient.
Certain of these tax positions have in the past been, and may be challenged in the future, and this may have a significant impact on our effective tax rate if our tax reserves are insufficient.
Income tax expense amounted to $32.8 million, $25.9 million and $26.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. Our effective tax rates for the year ended December 31, 2024, 2023 and 2022 were 26.8%, 25.1% and 26.5%, respectively.
Our effective tax rates for the year ended December 31, 2025, 2024 and 2023 were 25.9%, 26.8% and 25.1%, respectively.
The timing and amounts of purchases are determined by the Company, depending on market conditions and other factors it deems relevant.
The timing and amounts of purchases are determined by the Company, depending on market conditions and other factors it deems relevant. The Company entered into Rule 10b-18 and Rule 10b5-1 trading plans under this program.
As of December 31, 2024, no amount had been drawn down on the Credit Facility. Material Cash Requirements Our long-term contractual obligations generally include our debt and related interest payments, noncancellable operating leases as well as other commitments.
Material Cash Requirements Our long-term contractual obligations generally include our debt and related interest payments, noncancellable operating leases as well as other commitments.
We continue to actively monitor the situation and will continue to adapt our business operations as necessary. -35- Key Performance Metrics We use the following metrics to generally assess the operational and financial performance of our business, including the growth of our business, the value provided by customers to our business and our customer retention that provide insights that contribute to certain of our business planning decisions.
Sales channels include e-commerce, direct sales and sales through or referred by channel and strategic partners. -35- Key Performance Metrics We use the following metrics to generally assess the operational and financial performance of our business, including the growth of our business, the value provided by customers to our business and our customer retention that provide insights that contribute to certain of our business planning decisions.
On October 7, 2021, Consensus issued $500 million of 6.5% senior notes due in 2028 (the “2028 Senior Notes”), in a private placement offering exempt from the registration requirements of the Securities Act of 1933. In exchange for the equity -42- interest in the Company, Consensus issued the 2028 Senior Notes to Ziff Davis.
During the year ended December 31, 2025, the Company redeemed the remaining outstanding principal balance of the 2026 Senior Notes in full. 2028 Senior Notes On October 7, 2021, Consensus issued $500 million of 6.5% senior notes due in 2028 (the “2028 Senior Notes”), in a private placement offering exempt from the registration requirements of the Securities Act of 1933.
Interest income was $2.5 million and $3.7 million for the years ended December 31, 2024 and 2023, respectively. The decrease in 2024 from 2023 was primarily attributable to a lower average cash and cash equivalents balance primarily due to the repurchase of our debt, which resulted in lower money market investments throughout 2024.
The decrease in interest income in 2024 compared to 2023 was primarily attributable to a lower average cash and cash equivalents balance primarily due to the repurchase of our debt, which resulted in lower money market investments throughout 2024. Other (expense) income, net . Our other (expense) income, net is generated primarily from foreign currency and miscellaneous items.
The following table sets forth certain key performance metrics for our operations for the years ended December 31, 2024, 2023 and 2022 (in thousands, except for percentages and Average Revenue per Customer Account): Years Ended December 31, 2024 2023 2022 Revenue Corporate $ 209,112 $ 199,621 $ 192,195 SoHo 141,258 162,916 170,199 Total 350,370 362,537 362,394 Other revenues 12 25 28 Consolidated $ 350,382 $ 362,562 $ 362,422 Average Revenue per Customer Account (“ARPA”) (1)(2) Corporate $ 310.67 $ 315.51 $ 331.77 SoHo $ 14.92 $ 15.31 $ 14.32 Consolidated $ 34.56 $ 32.16 $ 29.07 Customer Accounts (1) Corporate 59 54 52 SoHo 747 831 942 Consolidated 806 885 994 Paid Adds (3) Corporate 18 12 15 SoHo 247 274 364 Consolidated 265 286 379 Monthly Churn % (4) Corporate 2.36 % 1.49 % 1.78 % SoHo 3.40 % 3.54 % 3.70 % Consolidated 3.33 % 3.43 % 3.61 % (1) Consensus customers are defined as paying Corporate and SoHo customer accounts.
The following table sets forth certain key performance metrics for our operations for the years ended December 31, 2025, 2024 and 2023 (in thousands, except for percentages and Average Revenue per Customer Account): Years Ended December 31, 2025 2024 2023 Revenue Corporate $ 222,682 $ 209,112 $ 199,621 SoHo 127,002 141,258 162,916 Total 349,684 350,370 362,537 Other revenues 12 12 25 Consolidated $ 349,696 $ 350,382 $ 362,562 Average Revenue per Customer Account (“ARPA”) (1)(2) Corporate $ 300.03 $ 310.67 $ 315.51 SoHo $ 15.58 $ 15.39 $ 15.64 Consolidated $ 39.32 $ 35.57 $ 32.82 Customer Accounts (1) Corporate 65 59 54 SoHo 638 721 809 Consolidated 703 780 863 Paid Adds (3) Corporate 27 18 12 SoHo 217 247 274 Consolidated 244 265 286 Monthly Churn % (4) Corporate 3.03 % 2.36 % 1.49 % SoHo 3.64 % 3.56 % 3.66 % Consolidated 3.59 % 3.48 % 3.54 % (1) Consensus customers are defined as paying Corporate and SoHo customer accounts.
Share-Based Compensation The following table represents share-based compensation expense included in cost of revenues and operating expenses in the accompanying Consolidated Statements of Income for the years ended December 31, 2024, 2023 and 2022 (in thousands): Years Ended December 31, 2024 2023 2022 Cost of revenues $ 2,138 $ 1,400 $ 874 Operating expenses: Sales and marketing 2,750 1,679 988 Research, development and engineering 622 379 746 General and administrative 11,254 14,705 17,447 Total $ 16,764 $ 18,163 $ 20,055 Non-Operating Income and Expenses Interest expense .
The decrease in general and administrative expense of $1.7 million for the year ended December 31, 2024 over the prior comparable period was primarily due to decreases of $2.5 million in professional fees and $0.8 million in bad debt expense, partially offset by an increase of $1.7 million in computer-related equipment costs. -41- Share-Based Compensation The following table represents share-based compensation expense included in cost of revenues and operating expenses in the accompanying Consolidated Statements of Income for the years ended December 31, 2025, 2024 and 2023 (in thousands): Years Ended December 31, 2025 2024 2023 Cost of revenues $ 2,094 $ 2,138 $ 1,400 Operating expenses: Sales and marketing 3,071 2,750 1,679 Research, development and engineering 702 622 379 General and administrative 11,826 11,254 14,705 Total $ 17,693 $ 16,764 $ 18,163 Non-Operating Income and Expenses Interest expense .
Recent Accounting Pronouncements See Note 2 - Basis of Presentation and Summary of Significant Accounting Policies, to our accompanying consolidated financial statements for a description of recent accounting pronouncements and our expectations of their impact on our consolidated financial position and results of operations. -38- Results of Operations Years Ended December 31, 2024, 2023 and 2022 The main strategic focus of our offerings is to enable our customers to securely and cooperatively access, exchange and use information across organizational, regional and national boundaries.
Results of Operations Years Ended December 31, 2025, 2024 and 2023 The main strategic focus of our offerings is to enable our customers to securely and cooperatively access, exchange and use information across organizational, regional and national boundaries.
Total revenues increased $0.1 million as a result of an increase in Corporate revenues of $7.4 million due to organic growth in customer usage and new customer acquisitions, partially offset by a $7.3 million decline in SoHo revenues. -39- Cost of Revenues (in thousands, except percentages) 2024 2023 2022 Percentage Change 2024 versus 2023 Percentage Change 2023 versus 2022 Cost of revenues $ 69,688 $ 68,319 $ 61,951 2% 10% As a percent of revenues 20 % 19 % 17 % Cost of revenues is primarily comprised of costs associated with personnel costs, data transmission, online processing fees, network operations as well as capitalized software amortization and equipment depreciation.
Cost of Revenues (in thousands, except percentages) 2025 2024 2023 Percentage Change 2025 versus 2024 Percentage Change 2024 versus 2023 Cost of revenues $ 70,601 $ 69,688 $ 68,319 1% 2% As a percent of revenues 20 % 20 % 19 % Cost of revenues is primarily comprised of costs associated with personnel costs (inclusive of share-based compensation), data transmission, online processing fees, network operations as well as capitalized software amortization and equipment depreciation.
Net cash used in financing activities was $138.6 million, $81.7 million and $10.6 million for the years ended December 31, 2024, 2023 and 2022, respectively. Net cash used in financing activities in 2024 primarily relates to the repurchases of debt. Net cash used in financing activities in 2023 primarily relates to the repurchases of debt and common stock.
Net cash used in financing activities was $63.3 million, $138.6 million and $81.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. Net cash used in financing activities in 2025 primarily relates to the repayment of our 2026 Senior Notes, partially offset by borrowings made under our 2025 Credit Facility.
These inputs are subjective and are determined using management’s judgment. If differences arise between the assumptions used in determining share-based compensation expense and the actual factors, which become known over time, we may change the input factors -37- used in determining future share-based compensation expense.
The effect of a change in the estimated number of performance-based awards expected to be earned is recognized in the period those estimates are revised. If differences arise between the assumptions used in determining share-based compensation expense and the actual factors, which become known over time, we may change the input factors used in determining future share-based compensation expense.
The change between periods was primarily attributable to exchange rate fluctuations on inter-company balances between periods in foreign subsidiaries that were in functional currencies other than the U.S. Dollar. Income Taxes Significant judgment is required in determining our provision for income taxes and in evaluating our tax positions on a worldwide basis.
Other (expense) income, net was $(3.2) million, $4.3 million and $(2.4) million for the years ended December 31, 2025, 2024 and 2023, respectively. The change between periods was primarily attributable to exchange rate fluctuations on inter-company balances between periods in foreign subsidiaries that were in functional currencies other than the U.S. Dollar.
Liquidity and Capital Resources Cash and Cash Equivalents At December 31, 2024, we had cash and cash equivalents of $33.5 million compared to $88.7 million at December 31, 2023. The decrease in cash and cash equivalents resulted primarily from cash used to repurchase our debt, capitalized expenditures and common stock repurchases, partially offset by cash provided by operations.
The increase in cash and cash equivalents resulted primarily from cash provided by operations, partially offset by cash used to pay down and/or repurchase our debt, capitalized expenditures, common stock repurchases and investments.
Common Stock Repurchase Program On March 1, 2022, the Company’s Board of Directors approved a share buyback program.
Common Stock Repurchase Program On March 1, 2022, the Company’s Board of Directors approved a share buyback program. Under this program, the Company may purchase, in the public market, or in off-market transactions, up to $100.0 million of the Company’s common stock through February 2025.
The decrease in our annual effective income tax rate from 2022 to 2023 was primarily attributable to a decrease in tax expense relating to the lower amount of certain non-deductible expenses incurred in the year, such as share-based compensation, officer’s compensation, a decrease in the foreign income currently taxed in the U.S. and the impact of the change in the geographical mix of the income, partially offset by an increase in the reserves for uncertain tax positions.
The decrease in our annual effective income tax rate from 2024 to 2025 was primarily attributable to a decrease in tax expense relating to intercompany dividends received from controlled foreign subsidiaries during the year, lower research and development credits, a decrease in tax expense relating to uncertain tax positions and the impact of the change in the geographical mix of the income.
Revenues remained consistent for the year ended December 31, 2023 compared to the prior comparable period.
Research, development and engineering costs for the years ended December 31, 2025, 2024, and 2023 remained consistent year-to-year.
Interest income was not material for the year ended December 31, 2022. -41- Other income (expense), net . Our other income (expense), net is generated primarily from foreign currency and miscellaneous items. Other income (expense), net was $4.3 million, $(2.4) million and $(1.6) million for the years ended December 31, 2024, 2023 and 2022, respectively.
Our interest income is generated from interest earned on cash and cash equivalents. Interest income was $2.5 million, $2.5 million and $3.7 million for the years ended December 31, 2025, 2024, and 2023, respectively. Interest income in 2025 was consistent with 2024.
The increase in sales and marketing expenses of $0.7 million for the year ended December 31, 2023 over the prior comparable period was primarily due to an increase of $4.4 million in personnel-related expenses due to continued investment in the Corporate sales team and a $0.6 million increase in computer-related costs, partially offset by a reduction in third-party advertising spend of $4.5 million, primarily in SoHo.
Revenues decreased by $0.7 million for the year ended December 31, 2025 compared to the prior comparable period. The reduction is the result of a $14.3 million decline in SoHo revenues, partially offset by an increase in Corporate revenues of $13.6 million, due to organic growth in customer usage and new customer acquisitions.
Removed
Consensus serves approximately 800 thousand customers of all sizes, from enterprises to individuals, across approximately 46 countries and multiple industry verticals including healthcare, government, financial services, law and education. Our top 10 customers represent approximately 8% of total revenues and approximately 74% of our Small office home office (“SoHo”) customer accounts are older than 2 years.
Added
With our most prominent brand eFax® established over twenty-five years ago, Consensus has now evolved the service platform from pure cloud Fax to efficient and secure information exchange featuring solutions for data extraction, comprehension and transformation, facilitating interoperability and process improvement.
Removed
Beginning as an online fax company over two decades ago, Consensus has evolved into a leading global provider of enterprise secure communication solutions. Consensus is well positioned to capitalize on advancements in how people and businesses share private documents and information. Its mission is to democratize secure information interchange across technologies and industries and solve the healthcare interoperability challenge.
Added
Consensus is committed to security and compliance in data exchange, and our scalable Software-as-a-Service (“SaaS”) platform is particularly attractive to regulated industries like healthcare and healthcare technology, public sector, financial services, law, and education. We offer local phone numbers in 46 countries and/or territories, servicing approximately 703 thousand customers ranging from small businesses to large enterprises and the federal government.
Removed
Consensus’s communication and interoperability solutions enable its customers to securely and cooperatively access, exchange and use information across organizational, regional and national boundaries.
Added
Each customer cohort has unique needs and engagement preferences, and our go-to-market and customer service offerings are adapted across this continuum to serve each appropriately. Our top 10 customers represent approximately $32.7 million or 9% of total revenues. Over the past decade, Consensus has increasingly focused on larger commercial customers (“Corporate”) and public sector customers.
Removed
The global economy continues to be impacted by macroeconomic uncertainty and volatility resulting from recent global conflicts, inflationary pressures, higher interest rates, supply chain disruptions and challenges as well as labor market pressures, all of which could adversely impact the efficiency of our operations.
Added
This shift occurred as enterprise data communication moved toward digitization and cloud-based solutions. Sales to these customers are made through e-commerce and direct interaction with a salesperson, and often involve specific pricing, multiple line subscriptions, API connections, and/or commercial grade security.
Removed
Internal Revenue Service (“IRS”) and other domestic and foreign tax authorities.
Added
In the second quarter of 2025, we eliminated dormant accounts not contributing to revenue from the number of SoHo customer accounts. The prior year periods have been revised for consistency with the current year, and all metrics calculated based on the number of customer accounts (including ARPA and Monthly Churn %) are calculated based on the revised numbers.
Removed
The increase in cost of revenues for the year ended December 31, 2023 over the prior comparable period was primarily due to increases of $4.1 million in personnel-related expenses and $1.8 million in depreciation associated with platform development costs.
Added
As a result of this change, the number of SoHo customer accounts for 2024 and 2023 decreased by 26 thousand and 22 thousand, respectively.
Removed
Research, development and engineering costs for the year ended December 31, 2024 remained consistent with the prior year. -40- The decrease in research, development and engineering costs for the year ended December 31, 2023 over the prior comparable period was primarily attributable to increased capitalization of personnel-related expenses due to our continued focus on internally developing our platform, products and solutions as well as a reduction in external development costs.
Added
The period measured is annual and expressed as a monthly churn rate over the annual period.
Removed
The increase in capitalization resulted in a decrease in personnel-related expenses of $2.1 million.
Added
These inputs are subjective and are determined using management’s judgment. For awards with performance-based conditions, share-based compensation expense is recognized using the graded-vesting method over the requisite service period if it is probable that the performance condition will be satisfied. The share-based compensation expense for performance-based awards is evaluated each quarter based on the achievement of the performance conditions.
Removed
General and administrative expense remained consistent for the year ended December 31, 2023 over the prior comparable period. The increase is primarily due to increases in the following: $4.5 million in bad debt expense, $1.7 million in professional fees and $1.3 million in computer-related equipment costs, partially offset by a decrease in non-income related tax expenses of $7.4 million.
Added
Internal Revenue Service (“IRS”) and other domestic and foreign tax authorities. Recent Accounting Pronouncements See Note 2 - Basis of Presentation and Summary of Significant Accounting Policies, to our accompanying consolidated financial statements for a description of recent accounting pronouncements and our expectations of their impact on our consolidated financial position and results of operations.
Removed
The decrease in 2023 from 2022 is primarily due to the partial extinguishment of debt in 2023, resulting in a gain of $4.8 million, as well as an increase in capitalized interest of $1.2 million. Interest income . Our interest income is generated from interest earned on cash and cash equivalents.
Added
Interest expense increased due to a net loss on debt extinguishment of $0.9 million in the current period compared to a net gain on debt extinguishment of $6.6 million in the prior year.
Removed
The Company has no federal net operating loss or capital loss limitation carryforwards as of December 31, 2024 or 2023.
Added
This increase to interest expense was partially offset by a favorable decrease of $5.9 million in interest expense as debt repurchases and redemption lowered our outstanding debt balance.
Removed
Consensus received proceeds of $301.2 million, after deducting the initial purchasers’ discounts, commissions and offering expenses. The 2026 Senior Notes are presented as current portion of long-term debt and long-term debt, net of current portion, both of which are net of deferred issuance costs, on the Consolidated Balance Sheets as of December 31, 2024 and 2023.

… 18 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+2 added−1 removed7 unchanged
Biggest changeAs of December 31, 2024 and 2023, we had cash and cash equivalent investments, primarily in money market funds and cash held in foreign and domestic bank accounts, of $33.5 million and $88.7 million, respectively. We do not have interest rate risk on our outstanding long-term debt as these arrangements have fixed interest rates.
Biggest changeOur return on these investments is subject to interest rate fluctuations. -45- As of December 31, 2025 and 2024, we had cash and cash equivalent investments, primarily in money market funds and cash held in foreign and domestic bank accounts, of $74.7 million and $33.5 million, respectively.
Readers should carefully review the risk factors described in this document as well as in other documents we file from time to time with the SEC, including the Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K filed or to be filed by us in 2025.
Readers should carefully review the risk factors described in this document as well as in other documents we file from time to time with the SEC, including the Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K filed or to be filed by us in 2026.
For the years ended December 31, 2024, 2023 and 2022, foreign exchange gain (loss) amounted to $4.3 million, $(2.4) million and $(1.6) million, respectively. The change in foreign exchange gain (loss) in all comparable periods was primarily attributable to the translation of certain intra-entity balances in foreign currencies.
For the years ended December 31, 2025, 2024 and 2023, foreign exchange (loss) gain amounted to $(3.2) million, $4.3 million and $(2.4) million, respectively. The change in foreign exchange (loss) gain in all comparable periods was primarily attributable to the translation of certain intra-entity balances in foreign currencies.
Cumulative translation (loss) gain included in other comprehensive income for the years ended December 31, 2024, 2023 and 2022 was $(9.9) million, $5.9 million and $(2.3) million, respectively. -45-
Cumulative translation gain (loss) included in other comprehensive income (loss) for the years ended December 31, 2025, 2024 and 2023 was $14.3 million, $(9.9) million and $5.9 million, respectively. -46-
Interest Rate Risk Our cash and cash equivalents are not subject to significant interest rate risk due to the short maturities of these instruments. As of December 31, 2024, the carrying value of our cash and cash equivalents approximated fair value. Our return on these investments is subject to interest rate fluctuations.
Interest Rate Risk Our cash and cash equivalents are not subject to significant interest rate risk due to the short maturities of these instruments. As of December 31, 2025, the carrying value of our cash and cash equivalents approximates fair value.
We cannot ensure that future interest rate movements will not have a material adverse effect on our future business, prospects, financial condition, operating results and cash flows.
We cannot ensure that future interest rate movements will not have a material adverse effect on our future business, prospects, financial condition, operating results and cash flows. To date, we have not entered into interest rate hedging transactions. Foreign Currency Risk We conduct business in certain foreign markets, primarily in Canada, Australia, the European Union and Japan.
Removed
To date, we have not entered into interest rate hedging transactions to control or minimize certain of these risks. -44- Foreign Currency Risk We conduct business in certain foreign markets, primarily in Canada, Australia, the European Union and Japan.
Added
We do not have interest rate risk on our 2028 Senior Notes as these notes have a fixed interest rate. Borrowings made under our recently entered into 2025 Credit Facility will incur interest at a variable interest rate based on SOFR plus an applicable margin and therefore are subject to interest rate risk.
Added
As of December 31, 2025, assuming the outstanding balance on our variable rate debt remains constant, we estimate that a hypothetical 100 basis point increase or decrease in the applicable SOFR rate would result in an increase or decrease of approximately $2.1 million in our interest expense for the next 12 months.

Other CCSI 10-K year-over-year comparisons