Good day, ladies and gentlemen, and welcome to the Consensus Q2 2025 Earnings Call. My name is Tom, and I will be the operator assisting you today. [Operator Instructions] On this call from Consensus will be Scott Turicchi, CEO; Jim Malone, CFO; Johnny Hecker, CRO and Executive Vice President of Operations; and Adam Varon, Senior Vice President of Finance. I will now turn the call over to Adam Varon, Senior Vice President of Finance at Consensus. Thank you. You may begin.

Good afternoon, and welcome to the Consensus investor call to discuss our Q2 2025 financial results, other key information and our 2025 full year and Q3 2025 quarterly guidance. Joining me today are Scott Turicchi, CEO; Johnny Hecker, CRO and EVP of Operations; and Jim Malone, CFO. The earnings call will begin with Scott providing opening remarks. Johnny will give an update on operational progress since our Q1 2025 investor call. Then Jim will provide Q2 2025 financial results and our full year 2025 and Q3 2025 guidance range. After we finish our prepared remarks, we will conduct a Q&A session. At that time, the operator will instruct you on the procedures for asking a question. Before we begin our prepared remarks, allow me to direct you to our forward-looking statements and risk factors on Slide 2 of our investor presentation. As you know, this call and the webcast will include forward-looking statements. Such statements may involve risks and uncertainties that would cause actual results to differ materially from the anticipated results. Some of those risks and uncertainties include, but are not limited to, the risk factors that we have disclosed in our regulatory filings, including our annual 10-K and quarterly 10-Q SEC filings. Now let me turn the call over to Scott for his opening remarks.

Thank you, Adam. We had a strong Q2, returning us to total revenue growth earlier than anticipated. The continuing improvement in our corporate revenue growth demonstrates both the necessity and value proposition of our solutions. We exceeded our revenue objective, driven by corporate revenue growth posting 6.9% over Q2 2024, ahead of our forecast and the best growth year-over-year in 10 quarters on a normalized basis. So, revenue was in line with our expectations and below a 10% year-over-year decline for the first time since we began the reduced marketing in late 2023. We carefully monitored our cost structure and exceeded our adjusted EBITDA expectations by more than the outperformance on revenue. We delivered a robust 54.8% adjusted EBITDA margin near the top end of our 50% to 55% range. We remain committed to our goals that we outlined in February of this year, which include pursuing the acquisition of customers, primarily in the health care space for our corporate channel and driving revenue growth in excess of 6.25% this year; two, manage our corporate cost structure while making modest investments primarily in our go-to-market operations for the benefit of 2026 and beyond; three, putting a bank loan in place for the retirement of the remaining 6% notes due October 2026; and finally, managing the SoHo channel for cash flow efficiency, which we began last year. As previously announced, we concluded in early July a $225 million bank facility that we will utilize to retire the 6% notes in part due October 2026. The loan consists of two pieces: a $75 million revolver and $150 million term loan. We expect that our borrowing costs, which are SOFR-based, will be similar to the current cost of the 6% notes. Johnny will provide more detail in his portion of the presentation regarding…

Thank you, Scott, and hello, everyone. In my remarks, I will cover key performance indicators, including revenue and customer metrics as well as our go-to-market strategies for the corporate and SoHo channels. I'll also touch on operational updates and provide some key highlights for the quarter. Our corporate channel continues to show robust performance and positive momentum. In Q2 2025, we saw revenue reach a record $55.3 million, a 6.9% increase over $51.7 million in Q2 of 2024 and another sequential increase from $54.3 million in revenue we reported in Q1 of 2025. This was an exceptional quarter. While we anticipate continued growth, we don't expect it to maintain this accelerated year-over-year growth pace, especially considering our strong performance in Q3 of 2024. Nevertheless, this quarter's results, coupled with a strong sales pipeline across our entire portfolio of services reinforce our confidence that we are well on our path to achieving double-digit growth for this business channel. Our Q2 growth is driven by several key factors. As a direct result of our focus on the health care industry, we're experiencing sustained and impressive growth within the health care vertical, which is becoming an ever-larger portion of our total corporate revenue. Our strategic partnerships continue to yield significant contributions to our growth. Furthermore, we are particularly encouraged by the sustained expansion within our largest account cohorts, including both strategic and public sector clients. I am pleased to announce that our trailing 12-month revenue retention rate has reached 102%. This is up from 101% in the previous quarter, keeping us on track with our 100% target and marking a substantial year-over-year increase from 99% in Q2 of 2024. Our corporate customer base has grown to a record approximately 63,000 at the close of Q2, up 11% year-over-year. This is an increase from…

Thank you, Johnny, and good afternoon, everyone. In our press release and on this call today, we are discussing Q2 '25 results and guidance for Q3 '25 and full year '25. We expect to file our 10-Q by close of business today. I'll begin with our corporate business results. Q2 '25 was another strong quarter for corporate with revenue of $55.3 million, an increase of $3.6 million or 6.9% versus prior year, performing ahead of our expectations. This represents the highest corporate growth year-over-year in the past 10 quarters on a normalized basis. As Johnny stated, we continue to see growth in our health care vertical and strong demand for our core digital fax product. Q2 '25 corporate ARPA of $301 from $307 in Q1 '25 and $310 in Q2 '24 is in line with expectations. Corporate ARPA varies across our customer continuum based on the mix of customers that range from the lower end of the continuum through large enterprise clients, such as the VA. Therefore, ARPA is pressured as the eFax Protect base continues to grow within the lower SMB cohort base. Our record Q2 '25 corporate revenue delivered a trailing 12-month retention rate of 102%, 300 basis points and 100 basis points improvement from the prior comparable period and Q1 '25, respectively. Moving to SoHo. Q2 '25 revenue of $32.4 million compared to $35.8 million over the prior year represents a planned decrease of $3.4 million or 9.4%. We continue our strategic focus on optimizing advertising spend and profitability in the SoHo revenue channel. I would like to note that in the current period, we eliminated dormant accounts not contributing to revenue from the number of SoHo customer accounts. The prior year period has been revised for consistency with the current year and all metrics calculated based…

And the first question today is coming from David Larsen from BTIG.

This is Jenny Shen on for Dave. Congrats on the quarter. I was just wanting to know more of your thoughts on demand and the pipeline. We've seen all the major hospital systems report and they faced some tough quarters. They're seeing a slowdown in year- over-year growth in volumes. Just any of your thoughts on discussions with the hospitals? Is this translating into more cautious spending, more cautious budgets? Or have you not seen that impact at all?

Jenny, this is John, and thanks for the question. I think it's a really good question. Currently, we're not experiencing what you're seeing. So actually, we were able to close some significant deals just very recently with large health systems and hospitals. So we're not experiencing that they're slowing down. As I mentioned on the call, there's really two things that are important to say here. One is -- first of all, we're serving a very, very broad spectrum of health care customers across multiple sub verticals. So on the one side, it's health care providers really starting from single physician offices all the way up to large health systems and everything in between. But then it's also payers, it's also PBMs and pharma distribution customers and a lot of our customers are also in the health care IT space. So, it's a very broad spectrum across any size of customer you can imagine. So, we're not particularly impacted if one piece or one cohort of that market is potentially suffering a little bit at the moment. That's the one thing. The other thing is with our services and what we're providing, we're really driving efficiency. There's oftentimes a clear ROI for those customers. They go through a POC, they test the product and then they roll it out. So, I think with lowering that administrative burden with increasing efficiencies and with saving costs, we are an attractive service even for providers that are suffering from a little bit more financial strain, as you just mentioned.

Okay. We have a couple of questions by e-mail, and then we'll go back to live questions. It was noted in this e-mail question that our revenue retention rate had improved to 102% and the question is what are the drivers behind that in terms of the customer types and sizes and our expectations for that trend as we go into the back half of the year.

I think Johnny, once again, that's a good one for you because -- dealing with that every day.

Yes, there's multiple drivers for this, right? And as we noted, the retention rate has significantly improved. This doesn't happen overnight. One of the key drivers is obviously our very large and strategic accounts in public sector, our EC Fax offering is definitely contributing to that retention rate. But also in the enterprise space and in the large account space, we have -- with the go-to-market realignment a couple of years ago, really changed our approach and how we service those customers. So we're very close. We have assigned these books of business to our sales teams -- we have rolled out different kind of sales methodologies, and we're up and cross-selling into those existing accounts. We're making sure that we're not losing that business. But on the flip side, we're trying to grow it and expanding in those accounts. And then lastly, I think on the lower end of the customer continuum in the SMB world, we have multiple different programs that we have launched in order to improve our retention rate and really tackle churn. And those programs are showing success and are bearing fruit as well. So we're our offering, our product offering, the way we monitor our customers, the way we look for churn signals, all of those things are being considered and are being worked on and have been rolled out into programs, and that is driving retention really across the entire customer continuum. Now that said, we're expecting that retention rate to stay above the 100% mark. That is definitely our goal, and we're working very hard to sustain that ideally grow it.

Okay. We'll take another question by e-mail, which is a pivot to the public sector pipeline that you mentioned, Johnny, in your prepared remarks. And I think there's really a couple of embedded questions here. One is the length of the sales cycle that we're experiencing in the public sector. And then the second is the partnerships we have in terms of approaching that sector, particularly Cognizant now owned by Accenture.

Yes. So first thing, I mentioned part of this on the call, these are very diverse deal sizes in the public sector. They can be very, very small. That's a few thousand bucks a month for customers that still need that high level of security. Obviously, those sales cycles are a lot faster, and we can bring those customers. It's a couple of months, just like in the commercial space to get through. We have very standardized contract terms, pricing and all those kind of things. So we're able to process them quickly. That was the deal that we just recently closed. So an additional customer on that platform, which is a big win for us. There's others that we're working on that are at the same speed. Once they get larger and you talk to very large government agencies, they go through an RFI and RFP process and sometimes go silent for 6, 12 months, they wait until the next budgeting cycle. So, these sales cycles, just like with the VA, it was multiple years until we were able to close that deal and then eventually roll it out and really vary tremendously from a few couple of months to multiple years. Now the size is not the only thing that matters. Sometimes these larger deals can also move faster, but we're still early in our federal government sales program and learning as we go. But we do have a few RFPs that we have responded to, and we're hoping to close some more deals in the near future. And with regards to our partnership with Accenture and former Cognizant, Accenture Cal Services. That is working really well. We -- if you have noticed the cloud service provider ship was transferred over to us. We're now the listed cloud service provider on the FedRAMP marketplace. This makes sense because we're actually the owner of the IP and the inventor of the technology. But besides that, partnership is working really well. We're working very closely still with Accenture on many of these larger government deals. And on the smaller ones where it doesn't make sense for a large system integrator to participate, we do it by ourselves.

Tom, do you want to see if there's any other live questions?

Certainly. [Operator Instructions] And there are no further questions in queue at this time. As such, I would like to turn the floor back to Scott Turicchi, CEO of Consensus for closing remarks.

Great. Well, we appreciate you joining us today for the results of our second fiscal quarter and our outlook for the balance of the year. Keep posted. We do have, I know a virtual conference we'll be participating in, in about actually next week. So stay tuned for that and other conferences that we have between now and November. We'll announce by press release. And then in early November, we'll have our Q3 earnings call. So thank you. And if you have any other further questions that you didn't have a chance to ask now, you can e-mail us, and we'll get back to you.

Thank you. This does conclude today's conference call. You may disconnect at this time, and have a wonderful day. Thank you once again for your participation.