Consensus Cloud (CCSI) Q3 2026 Earnings Call Transcript

DATE

Thursday, Nov. 5, 2026

CALL PARTICIPANTS

• Senior Vice President of Finance - Kip Killpack
• Chief Executive Officer - R. Scott Turicchi
• Chief Revenue Officer and Executive Vice President Operations - Johnny Hecker
• Chief Financial Officer - Adam Varon

TAKEAWAYS

• Revenue -- $91.0 million, representing 3.7% growth driven by the performance of the corporate channel.
• Corporate Revenue -- $61.4 million, increasing 9.1% year over year due to strong usage, increased revenue retention, and new customer acquisition.
• SOHO Revenue -- $29.6 million, declining 6% year over year as the company manages the channel for cash optimization and efficiency rather than subscriber volume.
• Adjusted EBITDA -- $47.6 million, representing 2.7% growth compared to $46.4 million in the prior year period.
• Adjusted EBITDA Margin -- 52.3%, a slight decrease from 52.8% in the prior year period, reflecting higher operating expenses.
• Adjusted Non-GAAP EPS -- $1.50, up from $1.38 in the prior year period, driven by operational results, a favorable tax rate, and a lower share count.
• Free Cash Flow -- $38.6 million, down 13.2% year over year due to timing differences in interest and tax payments following last year's refinancing.
• Corporate Net Revenue Retention -- 104.5%, representing a year-over-year increase of approximately 260 basis points.
• Corporate Customer Accounts -- Approximately 69,000, growing 7.9% year over year as the company expanded its account base.
• Corporate ARPA -- $301.42, increasing 0.4% year over year as reliance on the company's infrastructure deepened among scaling clients.
• Stock Repurchases -- $20.7 million, representing the purchase of 551,000 shares during the quarter.
• Total Debt -- Approximately $552 million, comprising $348 million in 6.5% notes and $204 million on the revolver.
• Debt Leverage -- 2.92x gross debt to EBITDA, an improvement from 4.0x at the time of the company's spin-off five years ago.
• Q4 2026 Revenue Guidance -- $88.9 million to $92.9 million, with a midpoint of $90.9 million.
• Q4 2026 Adjusted EBITDA Guidance -- $44.7 million to $47.7 million, with a midpoint of $46.2 million.
• Q4 2026 Adjusted EPS Guidance -- $1.48 to $1.58, with a midpoint of $1.53.
• Full-Year 2026 Revenue Guidance -- $360 million to $364 million, narrowed toward the high end of the previous range.
• Full-Year 2026 Adjusted EBITDA Guidance -- $188 million to $192 million, narrowed from previous expectations.
• Full-Year 2026 Adjusted EPS Guidance -- $6.00 to $6.10, representing an increase from the previous range of $5.55 to $5.95.
• Department of Veterans Affairs Revenue -- On track to exceed $9 million in 2026, driven by the mandate to use ECFax.

Need a quote from a Motley Fool analyst? Email pr@fool.com

RISKS

• Hecker stated, "customers are just slower, in deciding on larger projects," noting that increased committee review and onboarding times have extended conversion cycles.
• Hecker indicated that for the SOHO business, management expects "ongoing volatility in paid ads and other metrics" as they prioritize cash flow over subscriber growth.
• Turicchi noted that the company must maintain cash balances "generally in excess of $75 million" as a requirement of the 6.5% notes until they are retired.

SUMMARY

Consensus Cloud Solutions, Inc. (NASDAQ:CCSI) reported a fourth consecutive quarter of year-over-year growth in revenue, adjusted EBITDA, and adjusted EPS, primarily supported by a corporate channel that now accounts for approximately two-thirds of total revenue. Management reported that the business transformation over the five years since its spin-off has resulted in a debt reduction of approximately $250 million and cumulative free cash flow generation of $476 million. The company is currently prioritizing the retirement of its 6.5% notes, which are expected to be called in Oct. 2027, while focusing capital allocation on mandatory debt repayment and share buybacks. Strategic growth is increasingly centered on healthcare and the public sector, with revenue from the company's Harmony initiative expected to begin contributing in 2028.

• Management amended its credit facility to a five-year, $525 million loan to facilitate the planned retirement of 6.5% senior notes in Oct. 2027.
• The company increased its full-year adjusted EPS guidance to a range of $6.00 to $6.10, reflecting a lower estimated Q4 tax rate of 11% to 13% due to the release of tax position reserves.
• CEO Turicchi stated, "In 2027, you will hear more about the solutions this team is developing which is fulfilling the vision of Harmony that we articulated when we became public 5 years ago."
• The Harmony platform is shifting focus from document transport to active workflow management, with one early adopter reducing patient triage time from 40 days to two days.
• Management indicated that substantive M&A activity is unlikely in the near term, with larger deals potentially deferred until 2028 or 2029 as the healthcare solutions group matures.
• The corporate channel reached a net revenue retention rate of 104.5%, up from 101.9% in the prior year period, indicating increased client reliance on the cloud fax infrastructure.

INDUSTRY GLOSSARY

• ARPA: Average Revenue per Customer Account, a metric used to track the monthly revenue generated per client account.
• ECFax: A specialized cloud-fax solution utilized by government agencies, including the Department of Veterans Affairs.
• Harmony: The company's strategic initiative to move beyond document transport into healthcare workflow management.
• NRR: Net Revenue Retention, a measure of the percentage of recurring revenue retained from existing customers over a set period.
• SOHO: Small Office/Home Office, a customer segment comprised of individuals and small businesses.
• SOFR: Secured Overnight Financing Rate, a benchmark interest rate for dollar-denominated derivatives and loans.

Full Conference Call Transcript

Operator: Good day, everyone, and welcome to the Consensus Cloud Solutions Third Quarter 2026 Earnings Call. At this time, all participants are placed on a listen-only mode. If you have any questions or comments during the presentation, you may press star 1 on your phone to enter the question queue at any time. And we will open the floor for your questions and comments after the presentation. It is now my pleasure to hand the floor over to your host, Kip Killpack, SVP of Finance. Sir, the floor is yours.

Kip Killpack: Good afternoon. Welcome to the Consensus Investor Call to just discuss our Q3 26 financial results, other key information, and our Q4 26 guidance. Joining me today are Scott Turicchi, CEO Johnny Hecker, CRO and EVP operations and Adam Varon, CFO. The earnings call will begin with Scott providing opening remarks. Johnny will give an update on operational progress since our Q2 26 investor call. Then Adam will provide Q3 26 financial results and our Q4 26 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 the 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.

R. Scott Turicchi: Thank you, Kip. We continue the trend of excellent financial results in Q3 delivering 3.7% year-over-year consolidated revenue growth and maintain year over year total consolidated revenue growth for the 6th straight quarter. In addition, this was the 4th consecutive quarter that we had year over year growth in the following key financial metrics. First, consolidated revenue, second, adjusted EBITDA, and third, adjusted non GAAP EPS. Our increase in revenue was driven by the corporate channel, which experienced its second consecutive quarter of 9%-plus revenue growth. This was driven primarily by our fax solutions, once again demonstrating their necessity and value proposition. This success was propelled by record strong usage, increased revenue retention, and new customer acquisition.

In addition, the VA continue to see more facilities come online and generate a record level of usage. All of these contributed to the stellar year over year growth. 52.3%. In 2027, you will hear more about the solutions this team is developing which is fulfilling the vision of Harmony that we articulated when we became public 5 years ago. We continue to expect that revenue contribution from this initiative will begin in 2028. Johnny will provide more detail in his portion of the presentation regarding the operational results for Q3. Free cash flow was $38.6 million in the quarter, it was down relative to Q3 25, as expected, but ahead of our forecast.

This is due primarily to timing differences on the cash payment of taxes as well as interest in Q3 26, that was not present in Q3 25, due to the timing of the refinancing last year to retire the 6% notes. Our team has done an excellent job managing our working capital especially in the area of receivable collections. We continue to expect our free cash flow in 2026 to approximate $106 million of free cash flow in 2025. Additionally, we repurchased more than $20 million of stock during the quarter or approximately 550 thousand shares. As we previously announced, we have amended our credit agreement to accommodate the retirement of the 6.5% notes due 10/15/2028.

The current intention is to call them on or about the par call date of 10/15/2027. However, we will carefully watch interest rates to determine the exact timing of the call and we will continue to look to buy the notes in the open market. While the notes became callable this past October 15th, the call price is not attractive. Before turning the call over to Johnny, I would like to spend a few minutes reviewing the transformation this company has had in the 5 years since the spin and thanking all of our employees responsible for this dramatic evolution.

In 2021, the company had revenue that was a majority SOHO, an emerging presence in the healthcare ecosystem, a thin staffing of 450 people, and $805 million of debt, which was 4x our gross debt to EBITDA. In those 5 years, we have flipped the business to approximately 2/3 corporate and 1-third SOHO, while maintaining an adjusted EBITDA margin of more than 50%. Almost 2/3 of our corporate business is from the healthcare ecosystem. Almost doubled our rate of investment into the business from pre spin levels yet still generated approximately $476 million in cumulative free cash flow.

This has allowed us to reduce our debt by approximately $250 million and as a result, bring our gross debt to EBITDA ratio under 3x. In addition, we have been able to repurchase more than $100 million of our common stock at an average price of $28.84 as well as acquire 2 companies with great people. We have set up new talent teams to address our non-fax healthcare solutions as well as the public sector. I want to thank all 550 Consensus employees for their hard work and dedication that positions us for a bright and exciting future. I will now turn the call over to Johnny to provide you more operational updates.

Johnny Hecker: Thank you, Scott, and hello, everyone. This quarter's results reaffirm the core premise of our growth model. We generated $91 million in consolidated revenue, driven by the momentum of our corporate business, most explicitly from healthcare and the public sector, which serve as the 2 core pillars of our future expansion. Secure CloudFax remains our foundation, the network we continue to expand to support our push into healthcare solutions. The demand for digital transformation in highly regulated industries is not slowing down, and we continue to capitalize on that momentum. Within the corporate channel, we reached another all time high.

Revenue hit $61.4 million, representing a 9.1% year-over-year increase and adding roughly $1 million sequentially, while our corporate customer base expanded to approximately 69 thousand accounts. More importantly, we are growing the lifetime value of the customers we bring on board. Our net revenue retention rate climbed to 104.5%, up from 103.1% last quarter and 101.9% in the prior year period, keeping us well above our 100% target. This NRR performance is grounded in the underlying health of our core upmarket business. Excluding e commerce, our corporate account base and churn remain remarkably stable, while upmarket ARPA consistently increases.

As our clients scale, their reliance on our infrastructure deepens, route more volume through our network and embed our platform deeper into their daily operations. Q3 was marked by strong baseline expansion, coupled with adding new customers and endpoints to our network. We saw notable sales success with large new and existing accounts across healthcare, healthcare IT, and government. This momentum is a direct result of our focused execution, which continues to offset slower decision making we are seeing across the customer continuum due to broader macroeconomic uncertainty. This brings me to our 2 primary areas of strategic investment. Health care and the public sector.

On the healthcare side, our dedicated strategy and solutions group continues to evolve our Harmony offering. We are moving beyond basic document transport into active workflow management converting unstructured data into structured actionable clinical tasks. By ingesting documents from eFax and other sources, Harmony, built on Clarity and DocHealth, manages essential workflows outside the EHR, prior authorizations and referral follow ups. While still in its infancy stage, the initial results are compelling. 1 early adopter customer reduced patient triage time from up to 40 days down to an average of just 2. Exceeded their original target of 4 to 5 days driving massive improvement in both speed to care and provider economics.

Our second major investment area is the public sector. At the Department of Veterans Affairs, we are in the final stages of our rollout, which accelerated following the VA's mandate, to use ECFax. I am pleased to share that we are on track to exceed $9 million in revenue from this account for 2026. Beyond the VA, we remain highly bullish. The broader government ecosystem, including federal, state, local, education, and regulated contractors. To capture this growing demand, we have successfully expanded our dedicated public sector team and strategic partnerships. While our enterprise and government teams drive these complex deployments, we are simultaneously optimizing our high volume digital acquisition engine.

Over the last 2 years, we expanded ecommerce for eFax from just SOHO into the corporate channel, and we continue to build out that motion. The new eFax platform is contributing meaningfully to this success. Coupled with adjusting our digital marketing posture, the new platform is driving tangible customer acquisition results. In our SOHO business, we generated $29.6 million in revenue this quarter, reflecting a managed 6% year-over-year decline. Our operating philosophy here remains unchanged. This channel is managed for cash optimization, yield, and efficiency to fund our upmarket expansion. We are not interested in chasing unprofitable subscriber volume. And we fully expect ongoing volatility in paid ads and other metrics.

As long as SOHO produces robust, highly efficient cash flow, it is fulfilling its exact purpose. To summarize, our team is executing well against our priorities. We are winning upmarket, deploying advanced healthcare workflows, and sustaining the cash generation needed to fund our corporate strategy. We are energized by the operational strides we made this quarter and are well-positioned heading into 2027. I want to thank our employees for their hard work and for their relentless dedication, and our customers and partners for their continued trust. Let me hand the call over to Adam for the financial review. Adam?

Adam Varon: Thank you, Johnny, and good afternoon, everyone. Today, I will discuss our Q3 26 results as well as guidance for Q4 and full year 2026. We expect to file our 10 Q later today. Moving to corporate results. During the third quarter of 26, our corporate business delivered record revenue of $61.4 million representing a 9.1% increase of $5.1 million compared to the previous year and is the second consecutive quarter of corporate growth over 9%. Our record Q3 26 corporate revenue, delivered a trailing 12-month net revenue retention rate of 104.5%. Reflecting a year over year increase of approximately 260 basis points.

Our corporate customer base of approximately 69 thousand was up 7.9% over the prior comparable period, with corporate ARPA increasing year over year by approximately 0.4%. to $301. Moving to SOHO results. As mentioned previously and to be very clear, we manage our SOHO revenue channel as a strategic cash engine to fund our accelerating corporate business growth. Q3 26 SOHO revenue of $29.6 million decreased by $1.9 million or 6% over the prior year and in line with expectations. Moving to the Q3 consolidated results, This quarter, we delivered year over year growth in revenue, adjusted EBITDA and adjusted EPS for the 4th consecutive quarter.

Consolidated revenue of $91 million represents an increase of $3.2 million or 3.7% over Q3 25. Additionally, this represents the 6th consecutive quarter of year over year consolidated growth. Q3 26 adjusted EBITDA of $47.6 million increased $1.3 million or 2.7% year over year from $46.4 million in Q3 25, delivering a 52.3% EBITDA margin. Adjusted net income of $28.7 million is an increase of $2 million or 7.7% over the prior year. Adjusted EPS of $1.50 is favorable to the prior year. by 8.7% or $0.12, driven by operational results and a favorable non GAAP tax rate net interest expense, and a lower share count.

The Q3 26 non GAAP tax rate and share count were 18.8% and approximately 19.1 million shares, respectively. Moving to capital allocation. Free cash flow of $38.6 million decreased $5.9 million or 13.2% year over year, primarily due to the timing of interest and tax expenses in the current quarter, not present in Q3 of 25. Note that Q4 is our seasonally lightest free cash flow quarter, which we expect to continue this year. Our full year free cash flow is estimated to be in line with 2025 free cash flow at approximately $106 million.

We ended Q3 26 with approximately $107 million in cash, an increase of $7.8 million when compared to Q2 26 and in line with expectations amid share repurchases. Q3 CapEx of $7 million was in line with prior year and expectations. In Q3 26, we bought 551 thousand shares for $20.7 million bringing the total equity repurchases to date to approximately 3.6 million shares for $103 million, leaving approximately $97 million available under our $200 million equity repurchase plan. Moving on to debt. As previously announced, we amended and restated our existing credit agreement on 09/30/2026.

Under the amended facility, we extended our tenor to a 5-year, $525 million loan consisting of $300 million delayed-draw term loan and a $225 million revolver. The terms remain substantially consistent with the with the prior facility. With an interest rate of SOFR plus an applicable margin based on total net leverage ratio, and includes standard covenants. We plan to use the $300 million delay-draw term loan to retire our 6.5% notes due 2028 on or about 10/15/2027 when the notes are callable at par. The amended and restated credit agreement will be filed with our 10-Q. This credit facility sets our future capital structure for 5 years through 09/30/2031.

Our Q3 2026 total debt balance under the amended facility stands at approximately $552 million, with $348 million of 6.5% percent notes and $204 million on the revolver. Additionally, the board of directors has terminated our existing 2023 debt repurchase program and approved a new debt repurchase program under the same general terms as the previous program with an authorized amount of up to $348.2 million in aggregate principal to retire the remaining outstanding 2028 notes. This program will expire on 11/05/2027. Finally, our total debt and net debt to EBITDA ratio for Q3 26 improved to 2.92 and 2.35x respectively. Moving to Q4 guidance. We are providing Q4 guidance as follows.

Revenues between $88.9 million and $92.9 million with $90.9 million at the midpoint. Adjusted EBITDA between $44.7 million and $47.7 million with $46.2 million at the midpoint. Adjusted EPS of $1.48 to $1.58 with $1.53 at the midpoint. For Q4 26, our tax rate is estimated to be between 11-13% with 12% at the midpoint. It is important to note that this rate is notably lower than our first 3 quarters due to the estimated release of an uncertain tax position reserve based on the statute of limitations expiring. Which is a common discrete item reported in the 4th quarter. We estimate our Q4 share count to be approximately 19.1 million shares. Moving to full year guidance.

Based on our year to date results plus Q4 guidance mentioned, we are increasing our full year adjusted EPS guidance and narrowing revenues and adjusted EBITDA to above the midpoint to the high end of our initial guidance range as follows. Revenue range between $360 million and $364 million. Adjusted EBITDA range between $188 million and $192 million, and we are increasing our adjusted EPS range between $6.00 and $6.10. We estimate our full year income tax rate will be between 17-19%, with 18% at the midpoint with an approximate 19.1 million share count. This concludes my formal remarks. I would like to turn the call back to the operator for Q&A.

Operator: Thank you. Certainly. Everyone at this time, we will be conducting a question and answer session. If you have any questions or comments, please press 1 on your phone at this time. We do ask that while posing your question, please pick up your handset if you are listening on speakerphone to provide optimum sound quality. And once again, if you have any questions or comments, please press 1 on your phone. Please hold while we poll for questions. Our first question is coming from David Larsen from BTIG. Your line is live.

Jenny Shen: Hi. This is Jenny Shen on for David. Thanks for taking my questions and congrats on a good quarter. When you mentioned a little bit about delayed decision making by some of your customers and prospective customers, Can you elaborate on that? It looks like it has not slowed demand at all for you guys, but we have seen that in the broader hospital and provider facing space. Just any comments there would be helpful. Thank you.

Johnny Hecker: Yeah. Thank you, Jenny. Good question. Yeah. So what we are experiencing is-- and, you know, we indicated this in the last call a little bit that this is increasing is the customers are just slower, in deciding on larger projects. Fortunately, we have had we have had the opportunity to build pipelines throughout the year that we are converting. But it is really twofold. it is on the 1 hand, the customers taking their time to make decisions in broader committees. And then secondly, also on the onboarding side, going live and taking the technology into production is also taking more time.

So we have been through this before, and last time, we said we just need to build more pipeline and we just need to convert more. So that is something that we have done. So we are able to balance that out.

R. Scott Turicchi: And then secondly, I would say, what is balancing that out is our customer continuum. We have. We have a broad spectrum of customers across, you know, many different sizes starting really with a single user and small. In the small office, home office area all the way up to, you know, through enterprise to large federal government customers and, you know, integrated delivery networks with large, you know, health care customers. So we are able to balance a little bit across that customer continuum as well. And let me just add 1 thing. To Johnny's comments.

If you go back to, let's say, approximately 3-plus years ago, we started talking about the slowdown of customer acquisition, which was in the 23 ish time frame. The corporate channel was much smaller. So scale is an advantage for us now. I am not convinced that the decision making slowdown is as bad as it was 3 years ago, but we have many more mitigants today because the base is larger the base itself is growing, and then, as Johnny mentioned, we built the pipeline so as those feather in, it mitigates decisions that we think or hope would have occurred in Q3 that we are seeing occur in Q4.

Johnny Hecker: Yeah. Maybe to add also some of the success you see in the corporate channel and the growth. Is also on retention. on, you know, projects. So we are-- yes, that is good point. You see the net revenue retention rate going up to 104% or over 104% So we are able to retain our customers, and we are able to grow them and extend them. So using our existing customer base to up and cross sell has been successful, and it has helped us on the on the overall revenue growth.

Jenny Shen: that is helpful. And then, if I could ask, a follow-up As you guys are continuing to balance the mix between SOHO and corporate revenue Where do you expect the growth rates for each of those to kind of settle at, or the mix between them in terms of percentage of total revenue? Just any color on where you expect corporate and SOHO to eventually reach? Thanks.

R. Scott Turicchi: Well, I think you are asking both. You are probably asking a multilayer question there, which is partially, you know, what do we see for 2027, which our budgeting process is very active right now, and then I think your question is even looking over a longer time So let's take them as 2 separate questions because we are managing them differently. Obviously, there will be a natural ratio at the end of the day in any given year.

We have continued to see albeit, as you can tell in the quarterly results, not a perfect deceleration of the rate of decline in SOHO, but certainly, the first 9 months of this year are substantially better than last year, which were substantially better than the first 9 months in the preceding year. And we think that trend is going to continue. So we would expect a lesser rate of decline in 2027 in SOHO than in 2026. But at this point, probably still some amount of decline. Corporate I think, is just exactly the flip of that, which is we have honed in on a 9% plus growth rate for a couple of quarters. Which is very good.

Obviously, we are going to see what happens in Q4, which is always a tricky quarter primarily because of the month of December. And even though the business days technically are similar, to Q4 of 25, What we do not know yet is, particularly in December, whether affects May influence people going to hospitals and doctors, which then affects traffic. We have seen that before. So there is always a little bit of volatility in Q4. But I think that we are taking the trends that we are experiencing now, and we are doing a lot of work to see not only how we extrapolate those into 2027, but also layer in some of the newer customer wins.

The challenging part on that piece is, as Johnny mentioned, the pace at which they will ramp. So I think we feel very good about the trend in each of the businesses, but we are not quite yet ready to say, here's a growth rate for corporate and a decline rate for SOHO in 2027 or beyond. But I think as a general matter, our R&D dollars, our emphasis, the health care solutions group, they are all going to corporate. So they are all there over time to aid in the growth of corporate. And if we can get SOHO down to basically a flattish level at some point, that would probably be a victory for us.

Do not expect it to somehow flip into a growth vehicle.

Jenny Shen: That makes sense. you. You are welcome.

Operator: Thank you. That concludes our Q&A session.

R. Scott Turicchi: I will now hand the conference back to Scott Turicchi for closing remarks. Please go ahead.

Operator: So we actually have 1 question before we go before we close.

R. Scott Turicchi: We have 1 question by email which we would like to address. And it had to do with kind of intertwining questions of a couple of different things. It touches basically on capital allocation which we are happy to discuss. And sort of a component of that is those of you that have followed the company will recall that we have had to maintain certain cash balances for the benefit of the 6.5% notes, in order to lean our bank debt. So to be clear, our bank debt is senior secured. it is lean. 6.5 percent notes are unsecured debt.

So, the essence of the question is, when we retire those notes, will that basically free up our cash so we do not have to maintain such large cash balances? And the answer to that question is generally yes. Because we will not have that restriction of 6.5% notes. Now, to be clear, as I stated in the opening remarks, it is probable that it will not occur until 10/15/2027. So meaning until those notes are gone, you will have to maintain cash balances generally in excess of $75 million is a ratio we have to calculate each quarter, but it is in that neighborhood.

So we do have a little bit of cash beyond that Some of that is working capital in foreign jurisdictions. If we were able to retire those notes early, then it would free up that cash early. If it is at the call date, then it would be at that point in time. Then the next layer of question is, okay.

Both as we look forward to 2027 and we look at our free cash flow, and ultimately the freeing up of some of that cash in the future how does that influence our thinking about capital allocation I think, look, we will over time, continue and I do not mean necessarily in 2027, but over the next couple of years, continue to reduce the debt somewhat. I think that we want to get the debt probably at or under 2.5x gross debt to EBITDA. So that implies some amount of debt retirement. By the way, some of that is required in the bank credit facility. So some of that will happen just naturally per its terms.

We continue to think the stock is very attractive at these prices. As you know, we have talked about it on a free cash flow yield basis. Cash flows remain strong and consistent. With what we have been experiencing over the last several quarters. With some seasonality baked into it. So we find the stock attractive. And yes, we started to look a little bit more at M&A there is nothing that is imminent. I do not anticipate in the near to intermediate term any substantive M&A. We have been very pleased with the DocHealth acquisition.

If you go back 4 years ago to the Summit acquisition, those we call more tuck ins because they are generally financed out of literally a quarter's free cash flow. So we do not have to draw on any facility to fund them. I do think that as the debt comes down, as our health care solutions group matures, the aperture of M&A may open up. But that is probably more of a 2028 or even 2029 event. So I think if you are looking at 2027, it is probably more focused on some mandatory debt repayment. Maybe a little bit in excess of that.

We will obviously be looking at the stock price to see how that influences our view on buybacks. And would there be a small M&A deal? Yes. Nothing imminent. Nothing to talk about right now. And I believe that is. Let's see if we have got any more questions by email. I do not believe so. Okay. So if there is no further live questions, then, we would thank you all for participating in our Q3 earnings call. We will have the Q4 earnings call probably in the first half of February. Roughly consistent with what we did last year. And of course, at that time, we will review Q4 results and probably even more importantly, financial guidance for 2027.

As well as some of the operational elements that I mentioned early on, particularly an update from the health care solutions and strategy group in terms of some of the solutions we will be bringing to market. So thank you. And if you have any questions, please feel free to reach out to us. We will be actually on a non deal roadshow. In Portland and Denver, this coming week. Meaning next week. And so we look forward to meeting those investors and we will see you in February. Thank you.

Operator: Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.