MINNEAPOLIS--(BUSINESS WIRE)--Deluxe (NYSE: DLX), a trusted Payments and Data company, today announced an expanded partnership with Peoples Bank, a $9.5 billion financial institution headquartered in Marietta, Ohio. This new engagement will deliver integrated Merchant Services, further strengthening a relationship built on shared values of innovation, service, and community impact. Over the past year, Peoples Bank has been deepening its relationship with Deluxe, choosing to place a portion of i. ...

Group 1 - Deluxe Corporation (NYSE:DLX) is recognized as one of the 13 Best Diversified Stocks to Buy According to Hedge Funds, indicating significant upside potential [1] - CFO William Zint purchased 175 shares of Deluxe Corporation at $19.13 per share, totaling $3,347, reflecting confidence in the company's operations and strategic initiatives [2][3] - Deluxe Corporation provides technology-enabled solutions across various segments including Merchant Services, B2B Payments, Data Solutions, and Print, primarily serving small- and medium-sized businesses and financial institutions [3] Group 2 - While Deluxe Corporation shows potential as an investment, certain AI stocks are noted to offer greater upside potential and less downside risk [4]

Group 1: Stock Performance and Price Targets - Deluxe (DLX) closed at $19.66, with a 26.1% gain over the past four weeks, and a mean price target of $26.75 suggests a 36.1% upside potential [1] - The mean estimate includes four short-term price targets with a standard deviation of $2.75, indicating variability; the lowest estimate is $24.00 (22.1% increase), while the highest is $30.00 (52.6% increase) [2] - A tight clustering of price targets, represented by a low standard deviation, indicates high agreement among analysts about the stock's price movement direction [9] Group 2: Analyst Insights and Earnings Estimates - Analysts have shown increasing optimism about DLX's earnings prospects, with strong agreement in revising EPS estimates higher, which correlates with potential stock upside [11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 5.2%, with one estimate moving higher and no negative revisions [12] - DLX holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, indicating strong potential upside [13] Group 3: Caution on Price Targets - While price targets are sought after by investors, they can often mislead; empirical research shows that they rarely indicate actual stock price movements [7] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [8] - Investors should treat price targets with skepticism and not rely solely on them for investment decisions [10]

Core Viewpoint - Deluxe (DLX) has shown a significant price increase of 21.5% over the past four weeks, with a mean price target of $26.75 indicating a potential upside of 37% from its current price of $19.52 [1] Price Targets and Analyst Estimates - The mean estimate consists of four short-term price targets with a standard deviation of $2.75, where the lowest estimate is $24.00 (23% increase) and the highest is $30.00 (53.7% increase) [2] - A low standard deviation suggests a strong agreement among analysts regarding the stock's price movement, which can serve as a starting point for further research [9] Earnings Estimates and Analyst Sentiment - There is a growing optimism among analysts about DLX's earnings prospects, as indicated by a positive trend in earnings estimate revisions, which historically correlates with stock price movements [11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 5.2%, with one estimate moving higher and no negative revisions [12] Zacks Rank and Investment Potential - DLX holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, indicating a strong potential for upside in the near term [13] - While the consensus price target may not be a reliable indicator of the extent of potential gains, it does provide a useful guide for the direction of price movement [14]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point for fast-moving stocks, which can lose momentum if future growth does not justify high valuations [2] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify potential opportunities [3] Group 2: Deluxe (DLX) Stock Analysis - Deluxe (DLX) has shown significant price momentum with a four-week price change of 21.5% and a 36.9% increase over the past 12 weeks, indicating strong investor interest [4][5] - DLX has a beta of 1.49, suggesting it moves 49% more than the market, which aligns with the characteristics of a momentum stock [5] - The stock has a Momentum Score of B, indicating a favorable time to invest based on momentum trends [6] Group 3: Earnings and Valuation - DLX has received a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investor interest and drive prices higher [7] - The stock is currently trading at a Price-to-Sales ratio of 0.42, suggesting it is undervalued, as investors pay only 42 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides DLX, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting additional investment opportunities [8] - The Zacks Premium Screens offer over 45 different strategies to help investors identify potential winning stocks based on their personal investing styles [9]

[Part I - Financial Information](index=4&type=section&id=Part%20I%20-%20FINANCIAL%20INFORMATION) This section presents the company's unaudited consolidated financial statements, management's analysis of financial condition and operations, market risk disclosures, and internal controls for the period ended June 30, 2025 [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company's unaudited consolidated financial statements for Q2 2025 show a decrease in total assets and revenue, offset by increased net income and stable shareholders' equity Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $345,721 | $611,639 | | Goodwill & Intangibles, net | $1,736,910 | $1,753,790 | | **Total Assets** | **$2,535,034** | **$2,831,036** | | **Total Current Liabilities** | $366,869 | $625,516 | | Long-term Debt | $1,433,459 | $1,466,021 | | **Total Liabilities** | **$1,896,366** | **$2,210,118** | | **Total Shareholders' Equity** | **$638,668** | **$620,918** | Consolidated Statements of Comprehensive Income Highlights (in thousands, except per share) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $521,262 | $537,816 | $1,057,733 | $1,072,770 | | Gross Profit | $279,264 | $288,790 | $560,311 | $572,327 | | Operating Income | $60,791 | $59,309 | $108,859 | $103,530 | | **Net Income** | $22,422 | $20,497 | $36,469 | $31,327 | | **Diluted EPS** | $0.50 | $0.46 | $0.80 | $0.70 | Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $101,374 | $66,222 | | Net cash used by investing activities | ($44,275) | ($43,938) | | Net cash used by financing activities | ($326,257) | ($398,609) | | **Net change in cash & equivalents** | **($267,674)** | **($380,029)** | [Note 2: New Accounting Pronouncements](index=9&type=section&id=Note%202%3A%20New%20Accounting%20Pronouncements) The company is evaluating the impact of new Accounting Standards Updates related to income tax, expense disaggregation, and credit losses, effective in future periods - The company is currently evaluating the potential impact of several new Accounting Standards Updates (ASUs) related to income tax disclosures (ASU 2023-09), disaggregation of income statement expenses (ASU 2024-03), and measurement of credit losses (ASU 2025-05), with these standards effective in future periods (2025, 2027, and 2026, respectively)[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) [Note 6: Acquisition and Divestitures](index=15&type=section&id=Note%206%3A%20Acquisition%20and%20Divestitures) The company acquired JPMorgan Chase Bank's CheckMatch business for $25 million and completed the exit of its U.S. and Canadian payroll services business in 2024 - On August 6, 2025, the company acquired certain assets of JPMorgan Chase Bank's CheckMatch electronic check conveyance service business for **$25 million in cash**, intended to enhance the market position and scale of the B2B Payments segment[31](index=31&type=chunk) - The company substantially completed the exit of its U.S. and Canadian payroll and human resources services business in 2024, resulting in a gain of **$23.0 million** in the first six months of 2024, with no corresponding gain in 2025[33](index=33&type=chunk)[34](index=34&type=chunk) [Note 8: Restructuring and Integration Expense](index=16&type=section&id=Note%208%3A%20Restructuring%20and%20Integration%20Expense) The company's multi-year 'North Star program' aims to accelerate EBITDA growth and reduce debt, incurring $108 million in expenses to date - The company is actively pursuing its "North Star program," a multi-year plan to accelerate EBITDA growth, increase cash flow, and reduce debt, involving organizational redesign, process automation, and consolidating back-office functions[39](index=39&type=chunk) Restructuring and Integration Expense (in thousands) | Period | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Expense** | $4,236 | $11,029 | $12,656 | $25,766 | - To date, approximately **$108 million** in expenses have been incurred for the North Star program, with an additional **$5 million** expected in 2025, and the majority of associated employee reductions are expected to be completed by early 2026[39](index=39&type=chunk)[41](index=41&type=chunk) [Note 11: Debt](index=18&type=section&id=Note%2011%3A%20Debt) The company's total principal debt was $1.49 billion as of June 30, 2025, with compliance across all debt covenants and $390.1 million available under its revolving credit facility Debt Composition (in thousands) | Debt Instrument | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Senior secured term loan facility | $480,167 | $500,000 | | Senior unsecured notes | $475,000 | $475,000 | | Senior secured notes | $450,000 | $450,000 | | **Total Principal Amount** | **$1,487,667** | **$1,521,917** | - As of June 30, 2025, the company was in compliance with all debt covenants, which include maintaining specific consolidated total leverage, secured leverage, and interest coverage ratios[50](index=50&type=chunk)[51](index=51&type=chunk) - The company had **$390.1 million** available for borrowing under its **$400 million** revolving credit facility as of June 30, 2025[53](index=53&type=chunk) [Note 13: Business Segment Information](index=21&type=section&id=Note%2013%3A%20Business%20Segment%20Information) The company operates four reportable segments—Merchant Services, B2B Payments, Data Solutions, and Print—with performance evaluated based on adjusted EBITDA - The company operates four reportable segments: Merchant Services, B2B Payments, Data Solutions, and Print, with performance evaluated by the Chief Operating Decision Maker (CODM) based on adjusted EBITDA[66](index=66&type=chunk)[68](index=68&type=chunk)[70](index=70&type=chunk) Segment Revenue (Six Months Ended June 30, in thousands) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Merchant Services | $199,173 | $195,004 | | B2B Payments | $141,137 | $139,648 | | Data Solutions | $145,056 | $117,104 | | Print | $572,351 | $612,079 | | **Total Reportable Segments** | **$1,057,717** | **$1,063,835** | Segment Adjusted EBITDA (Six Months Ended June 30, in thousands) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Merchant Services | $43,115 | $40,625 | | B2B Payments | $28,937 | $27,273 | | Data Solutions | $40,060 | $30,665 | | Print | $181,186 | $184,819 | | **Total Reportable Segments** | **$293,298** | **$283,382** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes H1 2025 results to North Star initiatives, showing decreased revenue but increased net income and adjusted EBITDA, with strong liquidity [Executive Overview](index=25&type=section&id=Executive%20Overview) The company's strategy, supported by the 'North Star program,' focuses on growth investments to accelerate profit growth, increase cash flow, and reduce debt - The company's strategy is focused on growth investments to drive scale and accelerate profit growth faster than revenue growth, supported by the "North Star program" which aims to enhance shareholder value by accelerating adjusted EBITDA growth, increasing cash flow, reducing debt, and improving the leverage ratio[81](index=81&type=chunk) Financial Highlights (First Half 2025 vs. First Half 2024) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Consolidated Revenue | $1.06 billion | $1.07 billion | ($15 million) | | Net Income | $36 million | $31 million | +$5 million | | Adjusted EBITDA | $207 million | $204 million | +$3 million | | Adjusted EBITDA Margin | 19.5% | 19.0% | +0.5 pts | | Net Cash from Operations | $101 million | $66 million | +$35 million | | Free Cash Flow | $52 million | $18 million | +$34 million | - The company is actively monitoring market conditions, including interest rates (**62% of debt is fixed-rate**), inflation (mitigated by price increases), and trends in consumer spending, which has shown some softness in discretionary categories[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) [Consolidated Results of Operations](index=27&type=section&id=Consolidated%20Results%20of%20Operations) H1 2025 revenue decreased due to business exits and secular declines, while SG&A expenses decreased, and the effective income tax rate improved - Total revenue for H1 2025 decreased by **1.4%** YoY, driven by business exits (**$9 million** impact), soft demand for promotional products, and secular declines in checks and forms, partially offset by strong demand in data-driven marketing services, which grew by **$28 million**[93](index=93&type=chunk)[94](index=94&type=chunk) - SG&A expense decreased by **6.0%** in H1 2025 due to cost management actions, workforce adjustments, lower amortization, and a **$6 million** decrease in bad debt expense[100](index=100&type=chunk) - The effective income tax rate for H1 2025 decreased to **28.4%** from **33.7%** in H1 2024, benefiting from lower tax impacts from foreign operations and non-deductible compensation[106](index=106&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (Six Months Ended June 30, in thousands) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Net income | $36,469 | $31,327 | | Adjustments (Depreciation, Amortization, Interest, Taxes, etc.) | $170,163 | $172,517 | | **Adjusted EBITDA** | **$206,632** | **$203,844** | [Segment Results](index=33&type=section&id=Segment%20Results) Merchant Services, B2B Payments, and Data Solutions segments showed revenue and adjusted EBITDA margin growth, while Print revenue declined but improved its margin - **Merchant Services:** H1 2025 revenue grew **2.1%** to **$199.2 million**, and adjusted EBITDA margin improved to **21.6%** from **20.8%**, driven by pricing actions and volume growth from government and banking clients[123](index=123&type=chunk) - **B2B Payments:** H1 2025 revenue increased **1.1%** to **$141.1 million**, with adjusted EBITDA margin rising to **20.5%** from **19.5%**, due to new client onboarding and price increases[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) - **Data Solutions:** H1 2025 revenue saw strong growth of **23.9%** to **$145.1 million**, and adjusted EBITDA margin expanded to **27.6%** from **26.2%**, fueled by high demand for customer acquisition marketing from financial institutions[128](index=128&type=chunk) - **Print:** H1 2025 revenue declined **6.5%** to **$572.4 million** due to softer demand for promotional products and secular declines in checks, however, adjusted EBITDA margin increased to **31.7%** from **30.2%** due to pricing actions, cost management, and lower bad debt expense[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) [Cash Flows, Liquidity, and Capital Resources](index=35&type=section&id=Cash%20Flows%20and%20Liquidity%20and%20Capital%20Resources) Net cash from operating activities and free cash flow significantly increased in H1 2025, with a stable capital structure and available liquidity - Net cash from operating activities increased by **$35 million** in H1 2025 to **$101.4 million**, driven by pricing and cost actions, a **$15 million** reduction in employee bonuses, and lower restructuring spend[134](index=134&type=chunk) - Free cash flow for H1 2025 was **$52.1 million**, a significant increase from **$17.6 million** in H1 2024[134](index=134&type=chunk) Capital Structure (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Fixed Interest Rate Debt | $925,000 | $925,000 | | Floating Interest Rate Debt | $562,667 | $596,917 | | **Total Debt Principal** | **$1,487,667** | **$1,521,917** | | Shareholders' Equity | $638,668 | $620,918 | | **Total Capital** | **$2,126,335** | **$2,142,835** | [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk from variable-rate debt, with a 1% change impacting interest expense by $3 million, while foreign currency risk is minimal - The company is exposed to interest rate risk from its variable-rate debt, where a one percentage point change in interest rates would result in a **$3 million** change in interest expense for the rest of the year as of June 30, 2025[145](index=145&type=chunk) - Foreign currency exchange rate risk is primarily related to Canadian dollar operations but is not considered material to earnings or cash flows[146](index=146&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[147](index=147&type=chunk) - No material changes to internal control over financial reporting were identified during the quarter ended June 30, 2025[148](index=148&type=chunk) [Part II - Other Information](index=38&type=section&id=Part%20II%20-%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, and other disclosures for the reporting period [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company maintains adequate reserves for legal claims and does not anticipate any material impact on its financial position or results from current litigation - The company believes that recorded reserves for legal matters are adequate and does not expect any currently identified claims to have a material impact on its financial condition or results of operations[149](index=149&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No significant changes to the company's risk factors have occurred since the Annual Report on Form 10-K for December 31, 2024 - No significant changes to the risk factors disclosed in the 2024 Form 10-K have occurred[150](index=150&type=chunk) [Unregistered Sales of Equity Securities and Issuer Purchases of Equity Securities](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company did not repurchase shares in Q2 2025, with $287 million remaining under its share repurchase authorization - No shares were repurchased in Q2 2025, and the company has **$287 million** remaining under its share repurchase authorization as of June 30, 2025[151](index=151&type=chunk) [Other Information](index=40&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the second quarter of 2025 - No directors or officers adopted or terminated a Rule 10b5-1 trading plan during the second quarter of 2025[154](index=154&type=chunk) [Signatures](index=41&type=section&id=Signatures) The report was duly signed on August 7, 2025, by the company's President, CEO, CFO, and Chief Accounting Officer

分组1 - Deluxe reported quarterly earnings of $0.88 per share, exceeding the Zacks Consensus Estimate of $0.71 per share, and showing a slight increase from $0.86 per share a year ago, resulting in an earnings surprise of +23.94% [1] - The company posted revenues of $521.3 million for the quarter ended June 2025, which was below the Zacks Consensus Estimate by 0.61% and a decrease from $537.8 million in the same quarter last year [2] - Over the last four quarters, Deluxe has surpassed consensus EPS estimates four times but has only topped revenue estimates once [2] 分组2 - The stock has underperformed, losing about 28.1% since the beginning of the year, while the S&P 500 has gained 7.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.92 on revenues of $530.6 million, and for the current fiscal year, it is $3.36 on revenues of $2.12 billion [7] - The Zacks Industry Rank for Business - Office Products is in the top 41% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $521 million, down 2.5% year-over-year, attributed mainly to the low-margin promotional portion of Print [4][17] - Comparable adjusted EBITDA increased by 4.5% year-over-year to $106 million, with EBITDA margin expanding by 140 basis points to just above 20% [4][5] - Comparable adjusted EPS rose by 3.5% to $0.88, and year-to-date free cash flow expanded by over 200% to more than $34 million compared to 2024 [5][17] - The leverage ratio improved to 3.5 times, with a target to be below 3 times next year [5][28] Business Segment Data and Key Metrics Changes - Data Solutions segment revenue grew by over 18% in Q2, continuing to be a standout performer [5][22] - Merchant Services revenue increased by 2.9% year-over-year to $101.4 million, with adjusted EBITDA improving by 13% to $21.7 million [18][19] - B2B payments segment revenues were $71 million, up 1.1% year-over-year, with adjusted EBITDA expanding by 11.4% [20] - Print segment revenue declined by 9% year-over-year to $281.1 million, with adjusted EBITDA declining by 3.7% but maintaining a margin of 32.2% [23][26] Market Data and Key Metrics Changes - The overall revenue ratio remains modestly weighted toward Print at 54% to 46% for the year [10] - Payments and Data segments combined have expanded year-over-year by a blended rate of just under 7.5% [10] Company Strategy and Development Direction - The company is focused on transforming from a paper payments company to a digital payments and data company, with ongoing investments in technology and partnerships [15][11] - The acquisition of CheckMatch is expected to enhance the Deluxe Payment Network, creating revenue and cost synergy opportunities [11][12] - The company aims to maintain strong margins in Print while avoiding low-margin promotional deals [8][27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing macroeconomic uncertainty but expressed confidence in affirming revenue and earnings guidance while increasing free cash flow expectations [30][33] - The company expects to see continued growth in the Data Solutions segment and a solid exit growth rate for B2B payments as it enters 2026 [21][30] Other Important Information - The company ended Q2 with a net debt level of $1.44 billion, a reduction from previous levels, and aims for a leverage ratio of three times or better by 2026 [28][29] - A quarterly dividend of $0.30 per share was approved, payable on September 2, 2025 [30] Q&A Session Summary Question: What has driven the efficiency in the merchant business? - Management highlighted a focus on operating efficiency, pricing strategies, and new market expansions as key drivers for margin improvement [35][36] Question: Has Brian Mahoney implemented any ideas in the merchant business? - Management confirmed that Mahoney has made significant progress and is already seeing positive results from his initiatives [37][39] Question: What are the key drivers for the increase in free cash flow? - The increase is attributed to improved profitability, reduced restructuring spend, and better working capital efficiency [40][42] Question: What continues to drive growth in the Data Solutions segment? - Growth is driven by helping financial institutions target low-cost deposits and expanding into non-FI verticals [46][48] Question: What does the CheckMatch acquisition bring to the company? - CheckMatch enhances the existing Deluxe Payment Network by adding more lockboxes, allowing for digital payment processing and improved cash flow [49][51] Question: What is the outlook for future acquisition opportunities? - The company remains disciplined in capital allocation and will consider opportunities that align with its strategy for growth [60][62] Question: How is the company managing macroeconomic challenges? - Management noted a continuation of consumer hesitancy but emphasized good forecast accuracy and performance across the business [55][57]

Q2 2025 Financial Performance - Total revenue was $521.3 million, a decrease of 3.1% compared to Q2 2024[28] - Net income was $22.4 million, or $0.50 per share on a diluted basis, up from $20.5 million, or $0.46 per share in Q2 2024[28] - Adjusted EBITDA increased 4.6% to $106.5 million, with an adjusted EBITDA margin of 20.4%, up 140 basis points versus Q2 2024[28] - Adjusted diluted EPS was $0.88, up 3.5% compared to Q2 2024[28] Segment Performance - Merchant Services revenue increased 2.9% to $101.4 million, with an adjusted EBITDA margin of 21.4%, up 190 basis points year-over-year[29, 31] - B2B Payments revenue increased 1.1% to $71.0 million, with an adjusted EBITDA margin of 22.0%, up 210 basis points year-over-year[32, 34] - Data Solutions revenue increased 18.1% to $67.8 million, with an adjusted EBITDA margin of 30.1%, up 260 basis points year-over-year[35, 37] - Print revenue decreased 9.0%, with an adjusted EBITDA margin of 32.2%, expanding 180 basis points year-over-year[45, 47] Balance Sheet and Cash Flow - Net debt was $1,444.6 million as of June 30, 2025, with a net debt to adjusted EBITDA ratio of 3.5x[49] - Free cash flow for the six months ended June 30, 2025, was $52.1 million, compared to $17.6 million for the same period in 2024[49] 2025 Guidance - Revenue is projected to be between $2.090 billion and $2.155 billion, representing a decline of 1% to an increase of 2%[52] - Adjusted EBITDA is expected to be between $415 million and $435 million, an increase of 2% to 7%[52] - Adjusted EPS is projected to be between $3.25 and $3.55, flat to an increase of 9%[52] - Free cash flow is expected to be between $130 million and $150 million, an increase of 30% to 50%[52]

[Second Quarter 2025 Performance Highlights](index=1&type=section&id=DELUXE%20REPORTS%20SECOND%20QUARTER%202025%20RESULTS) Deluxe reported a 3.1% decrease in Q2 2025 revenue to $521.3 million, but demonstrated improved profitability through effective cost management [Overview of Q2 2025 Results](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Deluxe reported a 3.1% decrease in Q2 2025 revenue to $521.3 million, but demonstrated improved profitability through effective cost management, with net income rising 9.3% to $22.4 million and comparable adjusted EBITDA increasing 4.6% to $106.5 million - Management highlighted strong expansion in core earnings and operating cash flow, driven by double-digit revenue growth in Data Solutions and an improving Merchant Services trajectory, despite headwinds in legacy promotional solutions[3](index=3&type=chunk) Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue (in millions) | $521.3M | $537.8M | (3.1%) | | Comparable Adjusted Revenue (in millions) | $521.3M | $534.9M | (2.5%) | | Net Income (in millions) | $22.4M | $20.5M | 9.3% | | Comparable Adjusted EBITDA (in millions) | $106.5M | $101.8M | 4.6% | | Diluted EPS | $0.50 | $0.46 | 8.7% | | Comparable Adjusted Diluted EPS | $0.88 | $0.85 | 3.5% | - First-half operating cash flow was **$101.4 million**, and free cash flow increased by **$34.5 million** to **$52.1 million** compared to the prior year[4](index=4&type=chunk) [Full-Year 2025 Outlook](index=2&type=section&id=Outlook) The company affirmed its full-year 2025 guidance for revenue, adjusted EBITDA, and adjusted diluted EPS, while raising its free cash flow outlook to a range of $130 million to $150 million Updated Full-Year 2025 Guidance | Metric | Guidance Range | Status | | :--- | :--- | :--- | | Revenue | $2.090 to $2.155 billion | Affirmed | | Adjusted EBITDA | $415 to $435 million | Affirmed | | Adjusted diluted EPS | $3.25 to $3.55 | Affirmed | | Free cash flow | $130 to $150 million | Raised | - The guidance is subject to prevailing macroeconomic conditions, global instability, labor supply challenges, and inflation[6](index=6&type=chunk) [Capital Allocation and Dividend](index=2&type=section&id=Capital%20Allocation%20and%20Dividend) The Board of Directors approved a regular quarterly dividend of $0.30 per share, payable on September 2, 2025, to shareholders of record as of August 18, 2025 - A regular quarterly dividend of **$0.30 per share** has been approved[7](index=7&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) [Consolidated Condensed Statements of Income](index=5&type=section&id=CONSOLIDATED%20CONDENSED%20STATEMENTS%20OF%20INCOME) For the second quarter of 2025, revenue decreased to $521.3 million from $537.8 million in Q2 2024, but operating income increased to $60.8 million and net income attributable to Deluxe rose to $22.4 million due to lower SG&A and restructuring expenses Q2 2025 vs Q2 2024 Income Statement Highlights (in millions) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $521.3 | $537.8 | | Gross profit | $279.3 | $288.8 | | Operating income | $60.8 | $59.3 | | Net income attributable to Deluxe | $22.4 | $20.5 | | Diluted earnings per share | $0.50 | $0.46 | [Consolidated Condensed Balance Sheets](index=6&type=section&id=CONSOLIDATED%20CONDENSED%20BALANCE%20SHEETS) As of June 30, 2025, total assets stood at $2,535.0 million, down from $2,831.0 million at the end of 2024, primarily due to a decrease in 'Other current assets', while net debt saw a slight reduction to $1,444.6 million Balance Sheet Highlights (in millions) | Line Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $26.0 | $34.4 | | Total assets | $2,535.0 | $2,831.0 | | Long-term debt | $1,433.4 | $1,466.0 | | Shareholders' equity | $638.7 | $620.9 | | Net debt | $1,444.6 | $1,468.7 | [Consolidated Condensed Statements of Cash Flows](index=7&type=section&id=CONSOLIDATED%20CONDENSED%20STATEMENTS%20OF%20CASH%20FLOWS) For the first six months of 2025, net cash from operating activities increased significantly to $101.4 million from $66.2 million in the prior year period, driving a substantial increase in free cash flow to $52.1 million Six Months Ended June 30 Cash Flow Highlights (in millions) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $101.4 | $66.2 | | Purchases of capital assets | ($49.3) | ($48.6) | | Net change in debt | ($34.3) | ($37.4) | | Free cash flow | $52.1 | $17.6 | [Segment Performance](index=8&type=section&id=SEGMENT%20INFORMATION) [Segment Revenue and Adjusted EBITDA](index=8&type=section&id=Segment%20Revenue%20and%20Adjusted%20EBITDA) In Q2 2025, revenue growth was led by the Data Solutions segment, which grew 18.1% year-over-year, while all segments saw an improvement in Adjusted EBITDA margin Q2 2025 Segment Revenue (in millions) | Segment | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Merchant Services | $101.4 | $98.5 | +2.9% | | B2B Payments | $71.0 | $70.2 | +1.1% | | Data Solutions | $67.8 | $57.4 | +18.1% | | Print | $281.1 | $308.8 | -9.0% | Q2 2025 Segment Adjusted EBITDA & Margin (in millions) | Segment | Adj. EBITDA | Margin | Q2 2024 Margin | | :--- | :--- | :--- | :--- | | Merchant Services | $21.7 | 21.4% | 19.5% | | B2B Payments | $15.6 | 22.0% | 19.9% | | Data Solutions | $20.4 | 30.1% | 27.5% | | Print | $90.4 | 32.2% | 30.4% | [Reconciliation of GAAP to Non-GAAP Measures](index=9&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20MEASURES) [EBITDA and Adjusted EBITDA](index=9&type=section&id=EBITDA%2C%20ADJUSTED%20EBITDA%2C%20AND%20ADJUSTED%20EBITDA%20MARGIN) This section reconciles GAAP Net Income to non-GAAP Adjusted EBITDA, showing that Q2 2025 Net Income of $22.4 million was reconciled to Adjusted EBITDA of $106.5 million by adding back various non-operating items - Management uses Adjusted EBITDA to assess operating results, perform analytical comparisons, and identify strategies to improve performance, believing it is a useful metric for evaluating operating performance[23](index=23&type=chunk) Q2 2025 Reconciliation of Net Income to Adjusted EBITDA (in millions) | Line Item | Amount | | :--- | :--- | | Net income | $22.4 | | Interest expense | $30.9 | | Income tax provision | $9.3 | | Depreciation and amortization | $33.5 | | EBITDA | $96.1 | | Restructuring and integration | $4.2 | | Share-based compensation | $6.2 | | **Adjusted EBITDA** | **$106.5** | [Adjusted and Comparable Adjusted Diluted EPS](index=10&type=section&id=ADJUSTED%20DILUTED%20EPS%20AND%20COMPARABLE%20ADJUSTED%20DILUTED%20EPS) This section reconciles GAAP Net Income to non-GAAP Adjusted Net Income to calculate Adjusted Diluted EPS, showing that Q2 2025 Net Income of $22.4 million was adjusted to $39.6 million, resulting in an Adjusted Diluted EPS of $0.88 - Management believes Adjusted Diluted EPS provides a useful view of underlying business performance by excluding non-cash items or items not indicative of current period operations[25](index=25&type=chunk) Q2 2025 Reconciliation to Adjusted Diluted EPS | Line Item | Amount (in millions) | | :--- | :--- | | Net income attributable to Deluxe | $22.4 | | Adjustments, net of tax | $17.2 | | Adjusted net income | $39.6 | | Weighted-average dilutive shares | 45.2 | | **Adjusted Diluted EPS** | **$0.88** | [Comparable Adjusted Revenue and EBITDA](index=11&type=section&id=COMPARABLE%20ADJUSTED%20REVENUE%2C%20COMPARABLE%20ADJUSTED%20EBITDA%2C%20AND%20COMPARABLE%20ADJUSTED%20EBITDA%20MARGIN) This section adjusts GAAP Revenue and non-GAAP Adjusted EBITDA to exclude the impact of business exits, providing a comparable year-over-year view where Q2 2024 revenue of $537.8 million is adjusted to $534.9 million and Adjusted EBITDA of $103.4 million to $101.8 million - Management uses comparable measures to evaluate results on a year-over-year basis by excluding the effects of business exits[27](index=27&type=chunk) Q2 2024 Comparable Adjustments (in millions) | Metric | Reported | Business Exits | Comparable Adjusted | | :--- | :--- | :--- | :--- | | Revenue | $537.8 | ($2.9) | $534.9 | | Adjusted EBITDA | $103.4 | ($1.6) | $101.8 | [Net Debt](index=11&type=section&id=NET%20DEBT) Net debt is calculated as total debt minus cash and cash equivalents, showing a decrease to $1,444.6 million as of June 30, 2025, from $1,468.7 million at the end of 2024 Net Debt Calculation (in millions) | Line Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total debt | $1,470.6 | $1,503.1 | | Cash and cash equivalents | ($26.0) | ($34.4) | | **Net debt** | **$1,444.6** | **$1,468.7** | [Free Cash Flow](index=12&type=section&id=FREE%20CASH%20FLOW) Free cash flow is calculated as net cash from operating activities less purchases of capital assets, showing a significant increase to $52.1 million for the six months ended June 30, 2025, from $17.6 million in the prior year period - Management considers free cash flow an important indicator of cash available for servicing debt, paying dividends, and funding strategic investments after necessary capital expenditures[33](index=33&type=chunk) Free Cash Flow Calculation (in millions) | Period | Net cash from operating activities | Purchases of capital assets | Free cash flow | | :--- | :--- | :--- | :--- | | Six Months 2025 | $101.4 | ($49.3) | $52.1 | | Six Months 2024 | $66.2 | ($48.6) | $17.6 |