CCSI 10-K & 10-Q changes, risk factors and insider trading

Before deciding to invest in Consensus or to maintain or increase your investment, you should carefully consider the risks described below in addition to the other cautionary statements and risks described elsewhere in this Annual Report on Form 10-K and our other filings with the SEC, including our subsequent reports on Forms 10-Q and 8-K. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may affect our business. If any of these known or unknown risks or uncertainties actually occurs, our business, prospects, financial condition, operating results and cash flows could be materially adversely affected. 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. 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.

•We have made and expect to continue to make acquisitions and investments that could disrupt our operations and harm our operating results.

•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.

A wide variety of providers are working on solutions to address healthcare interoperability challenges, and interoperability can be defined in a variety of ways. For example, the Health Information Systems Management Society (“HIMSS”), which is generally recognized as an authority on health information technology, released its definition of interoperability and defined it four ways: foundational, structural, semantic and organizational. 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. 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. 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. Our current competitors in the healthcare interoperability space currently consist mostly of point solutions rather than full suites of healthcare interoperability solutions. If other companies develop solutions to address healthcare operability challenges more successfully than we do, or if customers otherwise adopt competing solutions rather than our solutions, it will adversely affect our business and operating results.

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.

The impact of pandemics and global health crises, such as the COVID-19 pandemic,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. Among other things, pandemics and global health crises have resulted in, and may in the future result in, travel bans around the world, declarations of states of emergency, stay- or shelter-at-home requirements, business and school closures and manufacturing restrictions. In addition, pandemics and global health crises have in the past, and may in the future, contribute to (i) increased unemployment and decreased consumer confidence and business generally; (ii) sudden and significant declines, and significant increases in volatility, in financial and capital markets; (iii) increased spending on our business continuity efforts, which has required and may further require that we cut costs or investments in other areas; and (iv) heightened cybersecurity, information security and operational risks as a result of work-from-home arrangements.

Our business is dependent on the ability of our customers to access our services and applications over broadband Internet connections. 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. Use of our products and services through mobile devices, such as smartphones and tablets, must have a high-speed data connection. Broadband Internet access services, whether wireless or landline, are provided by companies with significant market power. Many of these providers offer products and services that directly compete with ours.

We depend upon third parties for critical elements of our business, and we do not control the operations of these parties or their facilities on which we depend. We rely on private third-party providers for our Internet, telecommunications and other connections and for data center hosting facilities and cloud computing needs. We have from time to time experienced interruptions in our services and such interruptions may occur in the future. 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. Our arrangements with these third parties typically are not exclusive and do not extend over a significant period of time. Failure to continue these relationships on terms that are acceptable to us or to continue to create additional relationships could have a material adverse effect on our business, prospects, financial condition, operating results and cash flows. We do not control the operation of third-party facilities, and they may be vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunications failures, and similar events. They may also be subject to break-ins, sabotage, intentional acts of vandalism, and similar misconduct, as well as local administrative actions, changes to legal or permitting requirements, and litigation to stop, limit, or delay operation. 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.

A significant portion of our operations relies heavily on the secure processing, storage and transmission of confidential and other sensitive data. For example, a significant number of our customers authorize us to bill their credit or debit card accounts directly for all transaction fees charged by us. We rely on encryption and authentication technology to effect secure transmission of confidential information, including customer credit and debit card numbers. Advances in computer capabilities, new discoveries in the field of cryptography or other developments, including the use of increasingly sophisticated and evolving artificial intelligence and machine learning tools, may result in a material compromise or breach of the technology used by us, our partners, vendors, or other third parties, to protect transaction and other confidential data. Additionally, due to geopolitical tensions related to Russia’s invasion of Ukraine and the conflict in the Middle East, the risk of cyber-attacks may be elevated. Moreover, these threats are constantly evolving, thereby making it more difficult to successfully defend against them or to implement adequate preventative measures. We may not have the current capability to detect certain vulnerabilities, which may allow those vulnerabilities to persist in our systems over long periods of time. 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. Additionally, it may be difficult to determine the best way to investigate, mitigate, contain, and remediate the harm caused by a cybersecurity breach. Such efforts may not be successful, and we may make errors or fail to take necessary actions. It may take considerable time for us to investigate and evaluate the full impact of incidents, particularly for sophisticated attacks. These factors may inhibit our ability to provide prompt, full, and reliable information about the incident to customers, partners, regulators, and the public.

Our operations are dependent upon our ability to prevent system interruptions and, as we continue to grow, we will need to devote additional resources to improving our infrastructure in order to maintain the performance of our products and services. 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. We havehave, from time to timetime, found defects in our products and services and may discover additional defects in the future that could result in data unavailability or unauthorized access or other harm to, or loss or corruption of, our customers’ data. While we implement bug fixes and upgrades as part of our regularly scheduled system maintenance, we may not be able to detect and correct defects or errors before implementing our products and services. Consequently, we or our customers may discover defects or errors after our products and services have been employed. If we fail to perform timely maintenance or if customers are otherwise dissatisfied with the frequency and/or duration of our maintenance services and related system outages, our existing customers could elect not to renew their subscriptions, delay or withhold payment to us, or cause us to issue credits, make refunds or pay penalties, potential customers may not adopt our products and services and our brand and reputation could be harmed. In addition, the occurrence of any material defects, errors, disruptions in service or other performance problems with our software could result in warranty or other legal claims against us and diversion of our resources. The costs incurred in addressing and correcting any material defects or errors in our software and expanding our infrastructure and architecture in order to accommodate increased demand for our products and services may be substantial and could adversely affect our operating results.

Our brand recognition depends, in part, on our ability to protect our trademark portfolio and establish trademark rights covering new brands and territories. Some regulators and competitors have taken the view that certain of our brands, such as eFax, are descriptive or generic when applied to the products and services we offer. Nevertheless, we have obtained U.S. and foreign trademark registrations for our brand names, logos, and other brand identifiers, including eFax. 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 customercustomers may be adversely affected.

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 or all of these factors could have a material adverse impact on our future business, prospects, financial condition, operating results and cash flows.

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. 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.

OnThe JuneCompany 28,is 2018,also thesubject California legislature enactedto the California Consumer Privacy Act (“CCPA”), which took effect on January 1, 2020 and became enforceable starting July 1, 2020. 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 CCPA provides consumers with the right to opt out of the sale of their personal information including the requirement to include a “Do Not Sell” link on our websites and applications that sell personal data of California resident consumers. We believe we have implemented such links to the extent necessary and our privacy policies have been updated and posted on our websites. Further, on November 3, 2020, the California Privacy Rights Act (the “CPRA”) was voted into law by California residents. The CPRA significantly amendsamended the CCPA and imposesimposed additional data protection obligations on companies doing business in California, including additional consumer rights processes and opt outs for certain uses of sensitive data. It also createscreated 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. Similar laws have been passed in several other states and have been proposed in additional states and at the federal level.

As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the Dodd-Frank Act and are required to prepare our financial statements according to the rules and regulations required by the SEC. In addition, the Exchange Act requires that we file annual, quarterly and current reports. Our failure to prepare and disclose this information in a timely manner or to otherwise comply with applicable law could subject us to penalties under federal securities laws, expose us to lawsuits and restrict our ability to access financing. In addition, the Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting and disclosure purposes. Internal control over financial reporting is complex and may be revised over time to adapt to changes in our business, or changes in applicable accounting rules. AsWe reported elsewhere in this Annual Report on Form 10-K, wehave previously identified material weaknesses in our internal control over financial reporting.reporting, although all such material weaknesses have been remediated. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our consolidated financial statements will not be prevented or detected on a timely basis.

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. 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. If we are not able to maintain effective internal control over financial reporting, our independent registered public accounting firm will not be able to certify as to the effectiveness of our internal control over financial reporting, if and when required.

(2)Represents a monthly ARPA for the yearyear, calculated as follows: monthly ARPA on an annual basis is calculated by dividing revenue for the year by the average customer base for the applicable period and dividing that amount by 12 months. We believe ARPA provides investors an understanding of the average monthly revenues we recognize per account associated within Consensus’ customer base. 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.

(4)Monthly churn represents paid monthly SoHoCorporate and CorporateSoHo customer accounts that were cancelled during each month of the annual periodperiod, divided by the average number of customers during each month of the same annual period,period (including the paid adds.adds). The period measured is annual and expressed as a monthly churn rate over the annual period.

We account for share-based awards to employees and non-employees in accordance with the provisions of FASB ASC Topic No. 718, Compensation - Stock Compensation (“ASC 718”). Accordingly, we measure share-based compensation expense at the grant date, based on the fair value of the award, and recognize the expense over the employee’s requisite service period using the straight-line method. 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. 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 used in determining future share-based compensation expense. Any such changes could materially impact our results of operations in the period in which the changes are made and in periods thereafter. The Company estimates the expected term based upon the contractual term of the award. 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.

Cost of revenues is primarily comprised of costs associated with personnel costs,costs (inclusive of share-based compensation), data transmission, online processing fees, network operations as well as capitalized software amortization and equipment depreciation.

Our sales and marketing costs consist primarily of personnel costs,costs (inclusive of share-based compensation), internet-based advertising and other business development-related expenses. 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 research, development and engineering costs consist primarily of personnel-related expenses.expenses (inclusive of share-based compensation).

Research, development and engineering costs for the yearyears ended December 31, 20242025, 2024, and 2023 remained consistent with the prior year.year-to-year.

Our general and administrative costs consist primarily of personnel-related expenses (inclusive of share-based compensation), professional fees, depreciation and amortization, professional fees, bad debt expense and non-income related tax expenses.

Interest expense. 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$35.5 million, $45.4$34.0 million and $51.4$45.4 million for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. During the year ended December 31, 2025, interest expense increased by $1.5 million compared to the prior year. 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. 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. 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. 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. Interest income was $2.5 million, $2.5 million and $3.7 million for the years ended December 31, 20242025, 2024, and 2023, respectively. Interest income in 2025 was consistent with 2024. The decrease in interest income in 2024 fromcompared 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. Interest income was not material for the year ended December 31, 2022.

Other income (expense), income, net. Our other income (expense), income, net is generated primarily from foreign currency and miscellaneous items. Other income (expense), income, net was $4.3$(3.2) million, $(2.4)$4.3 million and $(1.62.4) million for the years ended December 31, 2024,2025, 20232024 and 2022,2023, 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.

As of December 31, 20242025 and 2023,2024, the Company hashad interest expense limitation carryforwards of $32.9$2.1 million and $30.4 million, respectively, which last indefinitely. The Company has no federal net operating loss or capital loss limitation carryforwards as of December 31, 2024 or 2023. 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$1.9 million and $1.8$1.7 million, respectively, of state research and development tax credits carryforwards that can be carried overforward indefinitely. As of December 31, 2025, the Company also had $1.7 million of state net operating loss carryforwards that will expire in 2044, if unused.

At December 31, 2024,2025, we had cash and cash equivalents of $33.5$74.7 million compared to $88.7$33.5 million at December 31, 2023.2024. The decreaseincrease 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 andexpenditures, common stock repurchases,repurchases partiallyand offset by cash provided by operations.investments. As of December 31, 2024,2025, cash and cash equivalents held within domestic and foreign jurisdictions were $27.6$8.9 million and $6.0$65.8 million, respectively.

Our long-term contractual obligations generally include our debt and related interest payments, noncancellable operating leases as well as other commitments. As of December 31, 2024,2025, we had outstanding $598.1$562.2 million in aggregate principal amount of indebtedness,indebtedness (of which $7.5 million is payable within the next 12 months), total minimum lease payments of $17.0$14.4 million and a liability for uncertain tax positions of $13.2$14.5 million (see Note 87 - Long-Term Debt, Note 98 - Leases and Note 1211 - Income Taxes of the Notes to the Consolidated financialFinancial statementsStatements in Part II, Item 8 of this Form 10-K, respectively). Due to uncertainties in the timing of the amounts and timing of cash settlement with the taxing authorities, we are unable to make a reasonably reliable estimate of the timing of payments.

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 expendituresexpenditures, 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.

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. In February 2025, whichthe wasCompany’s subsequentlyBoard extendedof Directors authorized and approved a three-year extension of the share repurchase program through February 20282028. (seeThe Noteshare 20buyback -program Subsequentmay Eventsend before this date if the maximum amount of repurchases has been reached or at the discretion of the NotesCompany’s toBoard theof Consolidated Financial Statements (Part II, Item 8)).Directors. 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 andunder duringthis program. During the years ended December 31, 20242025 and 2023,2024, the Company repurchased 57,0631,013,085 and 839,54857,063 shares, respectively, at an aggregate cost of $1.0 million and $23.7$23.2 million (inclusive of excise tax of $0.2$0.1 million), and $1.0 million, respectively, under this program. Cumulatively as of December 31, 2024,2025, 1,085,7252,098,810 shares have been repurchased at an aggregate cost of $32.3$55.5 million (inclusive of excise tax of $0.2$0.3 million). The excise tax is assessed at 1% of the fair market value of net stock repurchases after December 31, 2022.

Our primary sources of liquidity are cash flows generated from operations, together with cash and cash equivalents. Net cash provided by operating activities was $121.7$136.1 million, $114.1$121.7 million and $83.1$114.1 million for the years ended December 31, 2024,2025, 20232024 and 2022,2023, 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,services and employee compensation and lease payments for our offices. 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. 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 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$5.5 million and $3.7$2.1 million at December 31, 20242025 and 2023,2024, respectively.

Net cash used in investing activities was $33.4$35.2 million, $40.5$33.4 million and $43.3$40.5 million for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. Net cash used in investing activities in 2025 included capital expenditures, primarily capitalized software development costs, and cash paid for investments. 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. 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 financing activities was $138.6$63.3 million, $81.7$138.6 million and $10.6$81.7 million for the years ended December 31, 2024,2025, 20232024 and 2022,2023, 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. In addition, financing activities in 2025 also included repurchases of debt and common stock and a payment made on our Revolving Credit Facility. 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 in 2022 included the repurchase of common stock and shares withheld to cover employee income taxes.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part 1,I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, as well as in other documents we file from time to time. ThereExcept as set forth below, there have been no material changes to the risk factors from those described in our Annual Report on Form 10-K for the year ended December 31, 2025.

For purposes of this management’s discussion and analysis of the results of operations and financial condition of Consensus (“MD&A”) section, we use the terms “the Company,Company”, “we,we”, “us” and “our” to refer to Consensus.

The following table sets forth certain key performance metrics for our operations for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands, except for percentages and Average Revenue per Customer Account):

(1)Consensus customers are defined as paying Corporate and SoHo customer accounts. In the first quarter of 2026, we removed duplicate accounts from the number of Corporate customer accounts. As previously disclosed, in the second quarter of 2025, 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 on the number of customer accounts (including ARPA and Monthly Churn %) are calculated based on the revised number. As a result of these changes, the prior year period Corporate and SoHo customer accounts decreased by a2 nominal amount and 29 thousand, respectively.thousand.

(2)Represents a monthly ARPA for the quarter-to-datequarter or year-to-date period, calculated as follows: Monthly ARPA on a quarterly basis is calculated using our standard convention of dividing revenue for the quarter by the average of the quarter’s beginning and ending customer base and dividing that amount by 3 months. Monthly ARPA on a year-to-date basis is calculated by dividing revenue for the year-to-date period by the average customer base for the applicable period and dividing that amount by the respective period. We believe ARPA provides investors an understanding of the average monthly revenues we recognize per account associated within Consensus’ customer base. 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.

(4)Monthly churn represents paid monthly Corporate and SoHo customer accounts that were cancelled during each month of the quarter-to-datequarter or year-to-date period, divided by the average number of customers during each month of the same quarter-to-datequarter or year-to-date period (including the paid adds). The period measured is the quarter-to-datequarter or year-to date period and expressed as a monthly churn rate over the quarter-to-daterespective period.

In the ordinary course of business, we have made a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of our financial statements. Actual results could differ significantly from those estimates under different assumptions and conditions. Our critical accounting policies are described in our 2025 Annual Report on Form 10-K filed with the SEC on February 13, 2026. During the threesix months ended MarchJune 31,30, 2026, there were no significant changes in our critical accounting policies and estimates.

Results of Operations for the Three and Six Months Ended MarchJune 31,30, 2026 and 2025

Revenues increased by $1.3$3.6 million for the three months ended MarchJune 31,30, 2026 over the prior year comparable period. The increase was due to an increase of $4.4$5.2 million or 8%9% in our Corporate business, partially offset by a decline of $3.1$1.5 million or 9%5% in our SoHo business.

The decreaseincrease in cost of revenues of $1.2$0.7 million for the three months ended MarchJune 31,30, 2026 over the prior year comparable period was primarily due to decreasesincreases of $0.8$0.3 million in datapersonnel-related transmission costsexpenses, and $0.6$0.2 million in each of depreciation and amortization expense.expense and processing fees.

The increase in sales and marketing expenses of $1.0$1.1 million for the three months ended MarchJune 31,30, 2026 over the prior year comparable period was primarily due to anincreases increaseof $0.6 million in third-party advertising spend.spend and $0.3 million in personnel-related expense.

The increase in research, development and engineering costs of $0.2$0.6 million for the three months ended MarchJune 31,30, 2026 over the prior year comparable period was primarily due to an increase in personnel-related expenses.

The increase in general and administrative expenses of $1.0$3.5 million for the three months ended MarchJune 31,30, 2026 over the prior year comparable period was primarily due to increases of $0.8$1.7 million in personnel-related expensesexpenses, and $0.3$1.0 million in depreciation and amortization expense,expense partiallyand offset by a decrease of $0.1$1.0 million in bad debt expense.

The following table represents share-based compensation expense included in cost of revenues and operating expenses in the accompanying Condensed Consolidated Statements of Income for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands):

Interest expense. Our interest expense is due to outstanding debt and is offset by any extinguishment gain or losses and capitalized interest. Interest expense was $7.8$7.9 million and $9.0$8.7 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $15.7 million and $17.6 million for the six months ended June 30, 2026 and 2025, respectively. During the three and six months ended MarchJune 31,30, 2026, interest expense decreased primarily due to debt repurchases and redemption that lowered our outstanding debt balance compared to the prior year comparable period.

Interest income. Our interest income is generated from interest earned on cash and cash equivalents. Interest income was $0.7$0.8 million and $0.5 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $1.4 million and $0.9 million for the six months ended June 30, 2026 and 2025, respectively. Interest income for the three and six months ended MarchJune 31,30, 2026 was higher compared to the prior year comparable periodperiods due to a higher average investment in money market funds.

Other income (expense), net. Our other income (expense), net is generated primarily from investment gains or losses, foreign currency and miscellaneous items. Other income (expense), net was $1.4$6.0 million and $(1.12.3) million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The change between periods was primarily attributable to a $5.3 million unrealized net gain on our investments, as well as a $2.9 million favorable change due to exchange rate fluctuations on intercompany balances between periods in foreign subsidiaries that were in functional currencies other than the U.S. Dollar.

On July 4, 2025, the budget reconciliation bill H.R. 1, referred to as the One Big Beautiful Bill Act (“OBBBA”), was signed into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions, including modifications to capitalization of research and development expenses, limitations on deductions for interest expense and accelerated fixed asset depreciation. In addition to the OBBBA rules adopted in 2025, the Company implemented the new provisions effective for 2026 in the first quarter ended March 31,of 2026.

The provision for income taxes was $7.4$8.3 million and $6.7$7.8 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $15.7 million and $14.5 million for the six months ended June 30, 2026 and 2025, respectively.

Our effective tax rate was 23.0%23.3% and 24.1%27.2% for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and 23.2% and 25.7% for the six months ended June 30, 2026 and 2025, respectively. The decrease in our effective income tax rate for the three months ended MarchJune 31,30, 2026 was primarily due to the impact of the OBBBA changes on international taxes as well as research and developmentexcess tax creditsbenefits andrelated ato changeshare-based in the geographical mix of income,compensation, partially offset by an increase in the officer’s compensation limitation. The decrease in our effective income tax rate for the six months ended June 30, 2026 was primarily due to the impact of the OBBBA changes on international taxes as well as excess tax benefits related to share-based compensation, partially offset by an increase in the officer’s compensation limitation.

As of MarchJune 31,30, 2026, we had cash and cash equivalents of $92.3$98.9 million compared to $74.7 million as of December 31, 2025. The increase in cash and cash equivalents resulted primarily from cash provided by operations, partially offset by cash used for share repurchases and capitalized expenditures. As of MarchJune 31,30, 2026, cash and cash equivalents held within domestic and foreign jurisdictions were $25.5$24.7 million and $66.8$74.2 million, respectively.

On October 7, 2021, Consensus issued $500.0 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 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 of indebtedness under such credit agreement. The 2028 Senior Notes are presented as long-term debt, net of current portion, which is net of deferred issuance costs, on the Condensed Consolidated Balance Sheets as of MarchJune 31,30, 2026 and December 31, 2025. 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 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. Bank National Association, as agent (the “Agent”).agent. Pursuant to the 2025 Credit Agreement, the Lenders have provided the Company with a senior secured revolving credit facility of $75.0 million (the “Revolving Credit Facility”) and a senior secured delayed-draw term loan facility of $150.0 million (the “DDTL Facility” and together with the Revolving Credit Facility, the “2025 Credit Facility”). The Company may borrow, repay and reborrow revolving loans at any time during the term of the facility. Borrowings under the DDTL Facility that are prepaid or repaid may not be reborrowed. The final maturity of the 2025 Credit Facility is scheduled to occur on July 10, 2028. The interest rates applicable to the loans made under the 2025 Credit Facility are, at the Company’s option, equal to either a base rate or the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin based on the total net leverage ratio (0.50% - 1.25% in the case of base rate loans and 1.50% - 2.25% in the case of SOFR loans).

As of MarchJune 31,30, 2026, the Company had $148.1$146.3 million outstanding under the DDTL Facility and $64.0 million outstanding under the Revolving Credit Facility. As of MarchJune 31,30, 2026, the Company had $11.0 million available for future borrowing under the Revolving Credit Facility.

Our long-term contractual obligations generally include our debt and related interest payments, noncancellable operating leases as well as other commitments. As of MarchJune 31,30, 2026, we had $560.4$558.5 million in aggregate principal amount of indebtedness outstanding (see Note 78 - Long-Term Debt of the Notes to the Condensed Consolidated Financial Statements) and total minimum lease payments of $13.5$12.3 million, which had a weighted average remaining lease term of 4.54.3 years. As of MarchJune 31,30, 2026, our liability for uncertain tax positions was $14.9$15.3 million. Due to uncertainties in the timing of the amounts and timing of cash settlement with the taxing authorities, we are unable to make a reasonably reliable estimate of the timing of payments.

On November 9, 2023, the Board of Directors approved a debt repurchase program, pursuant to which Consensus may reduce, through redemptions, open market purchases, tender offers, privately negotiated purchases or other retirements, a combination of the outstanding principal balance of the previously outstanding senior notes that were due in 2026 and 2028 Senior Notes (“Debt Repurchase Program”). The authorization permits an aggregate principal amount reduction of up to $300.0 million and expires on November 9, 2026. The timing and amounts of purchases will be determined by the Company, depending on market conditions and other factors it deems relevant. Any gains or losses on extinguishment of debt are recognized in interest expense on the Condensed Consolidated Statements of Income. As of MarchJune 31,30, 2026, the Company had retired an aggregate of $222.6 million in principal of its senior notes under this program.

In March 2022, the Company’s Board of Directors approved a share buyback program, under which 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. In February 2025, theThe Company’s Board of Directors authorized and approved a three-year extension of the share repurchase program through February 2028.2028 in February 2025 and an increase in the total authorization to $200.0 million in August 2026. The share buyback program may end before this date if the maximum amount of repurchases has been reached or at the discretion of the Company’s Board of Directors. The timing and amounts of purchases are determined by the Company, depending on market conditions and other factors it deems relevant. Shares may be repurchased through open market purchases or privately negotiated transactions, including through Rule 10b5-1 trading plans. During the three months ended MarchJune 31,30, 2026,2026 and 2025, the Company repurchased 600,497300,868 sharesand 551,873 shares, respectively, under this program at an aggregate cost of $17.2$9.7 million and $12.5 million (inclusive of excise tax of $0.1 million), respectively. During the six months ended June 30, 2026 and 2025, the Company repurchased 901,365 and 553,344 shares, respectively, under this program at an aggregate cost of $26.8 million (inclusive of excise tax of $0.2 million). Duringand the$12.6 threemillion months(inclusive endedof Marchexcise 31,tax 2025,of the$0.1 Companymillion), repurchased 1,471 shares under this program for a minimal amount.respectively. Cumulatively as of MarchJune 31,30, 2026, 2,699,3073,000,175 shares have been repurchased under this program at an aggregate cost of $72.6$82.3 million (inclusive of excise tax of $0.5 million). The excise tax is assessed at 1% of the fair market value of net stock repurchases after December 31, 2022.

At the time of certain vesting events related to restricted stock units that are held by participants in Consensus’ Equity Incentive Plan, a portion of the awards subject to vesting are withheld by the Company to satisfy the employees’ tax withholding obligations that arise upon the vesting of restricted stock. 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. Although shares withheld are not issued, they are treated as common share repurchases in the Company’s condensed consolidated financial statements, as they reduce the number of shares that would have been issued upon vesting. These shares do not count against the authorized capacity under the Company’s share repurchase program described above. During the three months ended MarchJune 31,30, 2026 and 2025, the Company withheld shares on its vested restricted stock units relating to its share-based compensation plans of 24,759121,768 shares and 13,47737,568 shares, respectively. During the six months ended June 30, 2026 and 2025, the Company withheld shares on its vested restricted stock units relating to its share-based compensation plans of 146,527 shares and 51,045 shares, respectively.

Our primary sources of liquidity are cash flows generated from operations, together with cash and cash equivalents. Net cash provided by operating activities was $45.8$79.1 million and $40.9$69.2 million for the threesix months ended MarchJune 31,30, 2026 and 2025, 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. The increase in net cash provided by operating activities over the prior year comparable period was primarily attributable to increased income after excluding noncash items.

Net cash used in investing activities was $7.4$19.0 million and $12.2$20.2 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. For the threesix months ended MarchJune 31,30, 2026, net cash used in investing activities consisted of capital expenditures, primarily capitalized software development costs.costs, a business acquisition (see Note 4 - Business Acquisitions), and cash paid for investments. For the threesix months ended MarchJune 31,30, 2025, net cash used in investing activities consisted of capital expenditures, primarily capitalized software development costs, and cash paid for investments. The decrease in our net cash used in investing activities over the prior year comparable period was attributable to thea purchasedecrease ofin investmentscash paid for investments, partially offset by business acquisition costs in the priorcurrent year period.

Net cash used in financing activities was $19.6$34.3 million and $10.1$28.6 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. For the threesix months ended MarchJune 31,30, 2026, net cash used in financing activities is primarily attributable to our repurchases of common stock and our quarterly principal repayment of the DDTL Facility.stock. For the threesix months ended MarchJune 31,30, 2025, net cash used in financing activities is primarily attributable to our repurchases of debt.debt and common stock. The increase in net cash used in financing activities over the prior year comparable period was primarily attributable to an increase in repurchases of our common stockstock, as well as principal repayments on our debt, in the current year period, partially offset by cash outflows related to the repurchase of our debt in the prior year period.