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01/11 05:24
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial performance with positive growth in key segments like Data Solutions and Merchant Services. The company's strategic partnerships and acquisitions, such as Check Match, are expected to drive future growth. Despite a decline in the Print segment, overall profitability and cash flow have improved significantly. The Q&A session highlights management's confidence and strategic focus, with no significant negative trends reported. The positive sentiment is reinforced by optimistic guidance and execution on strategic initiatives, suggesting a likely positive stock price movement in the short term.
Revenue $521 million, down 2.5% year-over-year. The decline was attributed to the low-margin promotional portion of print.
Comparable Adjusted EBITDA $106 million, up 4.5% year-over-year. Margin rate expanded by 140 basis points to just above 20%.
Comparable Adjusted EPS $0.88, up 3.5% year-over-year. Driven by improved operating results.
Free Cash Flow (Year-to-Date) Expanded by 200% or more than $34 million compared to the first half of 2024. This was due to strong operating results, lower restructuring spend, and lower year-over-year cash incentive payments.
Leverage Ratio Improved to 3.5x from 3.6x at year-end 2024. The improvement was due to debt reduction.
Data Solutions Segment Revenue $67.8 million, up 18.1% year-over-year. Growth was driven by strong performance across core FI customer campaigns and expansion across non-FI verticals.
Merchant Services Revenue $101.4 million, up 2.9% year-over-year. Growth was driven by new merchant and channel partner additions and planned pricing actions.
B2B Payments Revenue $71 million, up 1.1% year-over-year. Growth was consistent with expectations and driven by efficiencies in lockbox operations and optimized SG&A.
Print Segment Revenue $281.1 million, down 9% year-over-year. Decline was primarily due to a 25.1% drop in the low-margin promotional solutions category.
Print Segment Adjusted EBITDA $90.4 million, down 3.7% year-over-year. Margins remained strong at 32.2%, reflecting a focus on cost efficiencies and stronger margin offerings.
Deluxe Payment Network (DPN): The company announced a small acquisition to enhance the Deluxe Payment Network, which connects physical lockboxes digitally. This acquisition will expand the network's scale and create revenue and cost synergies. It is expected to positively impact the B2B segment starting in 2026.
Data Solutions Segment: Achieved 18% revenue growth in Q2 2025, driven by demand deposit generation campaigns and expansion into non-FI verticals.
Merchant Services: Revenue grew by 2.9% in Q2 2025, supported by new merchant and channel partner additions.
Free Cash Flow: Year-to-date free cash flow increased by 200% or $34 million compared to the first half of 2024.
Leverage Ratio: Improved to 3.5x, with a target to be below 3x by 2026.
Shift to Digital Payments and Data: The company is transitioning from a paper payments company to a digital payments and data company, with payments and data segments growing at a blended rate of 7.5% year-to-date.
Partnership Development: Formed alliances with software vendors and technology providers to embed solutions in partner offerings, supporting growth in payments and B2B segments.
Revenue Decline in Print Segment: The print segment experienced a 9% year-over-year revenue decline, with the branded promotional solutions category declining by 25.1%. This decline is attributed to nonrenewal of large one-time orders and a strategic decision to avoid low-margin deals, which could impact overall revenue.
Macroeconomic Uncertainty: Persistent macroeconomic uncertainty is affecting the broader domestic spending environment, leading to cautious revenue growth expectations, particularly in the Merchant Services and B2B Payments segments.
Dependency on Legacy Print Business: The legacy check business, while maintaining strong margins, continues to decline at a rate of 3.2%, reflecting ongoing challenges in sustaining this traditional revenue stream.
Supply Chain and Cost Management: Efforts to preserve margins in the print segment rely heavily on cost efficiencies and operating expense discipline, which may face challenges if input costs rise or supply chain disruptions occur.
Integration and Scaling of Acquisitions: The announced acquisition of Check Match and its integration into the Deluxe Payment Network (DPN) is expected to scale by 2026. However, there is a risk of delays or challenges in achieving the anticipated revenue and cost synergies.
Economic Sensitivity of Merchant Services: Merchant Services growth is sensitive to discretionary spending and economic conditions, with potential downside if macroeconomic conditions worsen.
Revenue Growth in B2B Payments: B2B Payments segment growth is expected to remain low single-digit, with potential moderation in Q3 due to onboarding timing of deals, which could impact short-term revenue.
Dependency on Partnerships for Growth: The company’s growth strategy heavily relies on partnerships with software vendors and technology providers. Any disruption or underperformance in these partnerships could adversely affect growth.
Revenue Guidance: The company maintains its full-year revenue guidance of $2.09 billion to $2.155 billion, representing a range of negative 1% to positive 2% growth on a comparable adjusted basis.
Adjusted EBITDA Guidance: The company projects adjusted EBITDA of $415 million to $435 million, reflecting 2% to 7% comparable adjusted growth.
Adjusted EPS Guidance: The company expects adjusted EPS of $3.25 to $3.55, a range of flat to 9% comparable adjusted growth.
Free Cash Flow Guidance: The company has increased its free cash flow guidance to $130 million to $150 million.
Leverage Ratio Target: The company aims to achieve a leverage ratio of 3x or better by the end of 2026, with an expectation to end 2025 at roughly 3.3x leverage.
Merchant Services Outlook: Revenue growth for Merchant Services is expected to remain in the low single-digit range for the full year, with adjusted EBITDA margins in the low 20% range.
B2B Payments Outlook: The B2B segment is expected to achieve low single-digit revenue growth for the full year, with adjusted EBITDA margins in the low to mid-20% range. Sequential revenue improvement is expected in Q3, with a strong Q4 exit growth rate anticipated.
Data Solutions Outlook: The Data Solutions segment is expected to achieve low double-digit growth for the full year, although Q4 may see year-over-year revenue declines due to challenging prior-year comparisons.
Print Segment Outlook: The Print segment is expected to experience mid-single-digit or better revenue declines for the full year, with adjusted EBITDA margins remaining in the low-30% range.
Acquisition Impact: The recently announced acquisition is not expected to materially impact 2025 results but is anticipated to contribute to growth in 2026 and beyond, particularly in the B2B segment.
Quarterly Dividend: The Board approved a regular quarterly dividend of $0.30 per share on all outstanding shares. The dividend will be payable on September 2, 2025, to all shareholders of record as of market closing on August 18, 2025.
The earnings call presents a mixed outlook. Strong free cash flow and data segment growth are positives, but declines in B2B payments and print revenue are concerning. The lack of guidance for next year and a decline in some segments suggest caution. Overall, the sentiment is neutral, with no clear catalyst for a significant stock price movement.
The earnings call reveals strong financial performance with positive growth in key segments like Data Solutions and Merchant Services. The company's strategic partnerships and acquisitions, such as Check Match, are expected to drive future growth. Despite a decline in the Print segment, overall profitability and cash flow have improved significantly. The Q&A session highlights management's confidence and strategic focus, with no significant negative trends reported. The positive sentiment is reinforced by optimistic guidance and execution on strategic initiatives, suggesting a likely positive stock price movement in the short term.
The earnings call reflects a mixed sentiment: financial performance shows modest improvement with revenue and EBITDA growth, but guidance indicates flat to slight growth, and uncertainties in the economic environment persist. The Q&A highlights potential growth in the Merchant business and partnerships, yet there's concern over legacy product demand. Dividend consistency and debt reduction are positives, but the overall outlook remains cautious, leading to a neutral sentiment.
The earnings call summary indicates stable financial performance with a slight revenue increase and EBITDA improvement. However, guidance shows potential revenue decline, and there are risks in the Print segment and tariff exposure. The Q&A reveals strong growth in the data segment and partnerships, yet concerns over economic disruptions and unclear management responses persist. The dividend remains steady, and debt reduction is progressing. Overall, the mixed signals and moderate financial results suggest a neutral stock price movement in the next two weeks.
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