Core Insights - Deluxe (DLX) reported quarterly earnings of $0.96 per share, exceeding the Zacks Consensus Estimate of $0.83 per share, and showing an increase from $0.84 per share a year ago, resulting in an earnings surprise of +15.21% [1] - The company achieved revenues of $535.3 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 4.33% and up from $520.5 million year-over-year [2] Earnings Performance - Over the last four quarters, Deluxe has consistently surpassed consensus EPS estimates, achieving this four times [2] - The company also topped consensus revenue estimates three times in the last four quarters [2] Stock Performance - Deluxe shares have increased approximately 9.3% since the beginning of the year, outperforming the S&P 500, which gained 1.9% [3] Future Outlook - The future performance of Deluxe's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.74 on revenues of $526.4 million, and for the current fiscal year, it is $3.70 on revenues of $2.13 billion [7] Industry Context - The Business - Office Products industry, to which Deluxe belongs, is currently ranked in the top 41% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Another company in the same industry, HNI, is expected to report quarterly earnings of $0.91 per share, reflecting a year-over-year increase of +4.6% [9]

Financial Data and Key Metrics Changes - Total revenue for 2025 was $2.133 billion, a 0.5% increase compared to 2024, and a 1.1% increase on a comparable adjusted basis [18] - GAAP net income improved to $85.3 million, or $1.87 per share, up from $52.9 million, or $1.18 per share in 2024 [18] - Comparable adjusted EBITDA was $431.5 million, a 6.2% increase from the previous year, with adjusted EBITDA margins expanding by 90 basis points to 20.2% [18][19] - Comparable adjusted EPS grew by 12.6% to $3.67 from $3.26 in 2024 [19] Business Line Data and Key Metrics Changes - Merchant services revenue for 2025 was $398.6 million, growing by 3.8% compared to 2024, with adjusted EBITDA at $85.9 million, a 9.4% increase [19][20] - B2B payment segment revenue finished at $290.5 million, reflecting a 0.9% growth, with adjusted EBITDA at $64.4 million, a 12.8% increase [22][23] - Data-driven marketing business revenue reached $307.3 million, a 31.3% increase year-over-year, with adjusted EBITDA at $86.4 million, reflecting a 28.1% margin rate [25][26] - Print business revenue was $1.14 billion, a decline of 5.7% compared to the previous year, with adjusted EBITDA at $366.9 million, a 2.6% decline [28][29] Market Data and Key Metrics Changes - Payments and data now account for 47% of total revenue, up from 43% a year ago, with expectations to achieve revenue parity with print businesses later in 2026 [5][7] - The data segment expanded its revenue by over 30% year-over-year, indicating strong demand across market verticals [8] - The print segment continues to experience secular decline, with legacy check revenue declining by 1.8% [28] Company Strategy and Development Direction - The company is focused on shifting its revenue mix towards payments and data, aiming for ongoing profitable growth [6][7] - There is a strong emphasis on driving operational efficiencies and improving margins across all business segments [13][14] - The company aims to increase cash flow generation to lower net debt and improve leverage ratios, with a target of achieving a leverage ratio of 3 times or lower [15][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating environment, noting traditional consumer behavior patterns stabilizing [46] - The company anticipates continued growth in the data segment, with expectations for double-digit growth in the first half of 2026 [49] - Management highlighted the importance of executing their strategic priorities to achieve a strong trajectory heading into 2026 [39] Other Important Information - The company generated $175 million of free cash flow in 2025, achieving its 2026 goal a year early [5] - The board approved a regular quarterly dividend of $0.30 per share, payable on February 23, 2026 [34] Q&A Session Summary Question: How is Deluxe positioned to respond to trends in AI and agentic commerce? - Management stated that Deluxe is well-positioned, having applied AI technology across multiple business areas, leading to improved performance and significant revenue growth in the data-driven marketing business [42][44] Question: What are the primary objectives for the business in 2026? - The main objectives include shifting the revenue mix towards payments and data, driving operational efficiency, and generating cash flow to lower debt [55][56] Question: What does the pipeline look like for 2026 in terms of distribution growth? - Management indicated a robust pipeline for the ISV distribution channel, with ongoing investments in improving API suites and reporting tools [57][58] Question: What are the opportunities for build versus buy decisions in investments? - Management emphasized a balanced approach, making responsible acquisitions while also focusing on internal capability development to enhance business growth [65][66]

Financial Data and Key Metrics Changes - Total revenue for 2025 was $2.133 billion, a 0.5% increase compared to 2024, and a 1.1% increase on a comparable adjusted basis [18] - GAAP net income improved to $85.3 million, or $1.87 per share, up from $52.9 million, or $1.18 per share in 2024 [18] - Comparable adjusted EBITDA was $431.5 million, a 6.2% increase from the previous year, with adjusted EBITDA margins expanding by 90 basis points to 20.2% [18][19] - Comparable adjusted EPS grew by 12.6% to $3.67 from $3.26 in 2024 [19] Business Line Data and Key Metrics Changes - Merchant Services revenue reached $398.6 million, growing by 3.8% year-over-year, with adjusted EBITDA at $85.9 million, a 9.4% increase [19][20] - B2B Payment segment revenue was $290.5 million, reflecting a 0.9% growth, with adjusted EBITDA at $64.4 million, a 12.8% increase [22][24] - Data segment revenue finished at $307.3 million, a 31.3% increase year-over-year, with adjusted EBITDA at $86.4 million, reflecting a 42.8% growth [25] - Print business revenue was $1.14 billion, a decline of 5.7% compared to the previous year, with adjusted EBITDA at $366.9 million [28][29] Market Data and Key Metrics Changes - Payments and Data now account for 47% of total revenue, up from 43% a year ago, with expectations to achieve revenue parity with Print businesses later this year [5][7] - The Data segment's revenue growth was driven by strong demand for marketing capabilities, with a significant increase in campaign performance [8][25] Company Strategy and Development Direction - The company is focused on shifting revenue mix towards Payments and Data, driving operational efficiencies, and increasing cash flow to lower net debt and improve leverage ratios [6][14] - The strategic goal is to transform Deluxe into a payments and data company, leveraging its history in paper-based payments to build a leading position in digital payments [7][8] - The company aims to achieve a leverage ratio of 3x or lower, with a year-end leverage ratio of 3.2x achieved ahead of schedule [15][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about consumer health and traditional patterns of consumer behavior stabilizing, which is expected to benefit overall business performance [47][48] - The Data segment is anticipated to maintain double-digit growth in the first half of 2026, despite facing tough comparisons in the second half [50] Other Important Information - Free cash flow for 2025 was $175 million, exceeding the 2026 goal a year early, with net debt reduced by $76 million [5][32] - The company has a strong sales pipeline and is optimistic about growth opportunities in the ISV space [10][22] Q&A Session Summary Question: How is Deluxe positioned to respond to trends in AI and agentic commerce? - Management highlighted that Deluxe has applied AI technology across multiple business areas, improving performance and campaign outcomes [44][45] Question: What are the primary objectives for the business in 2026? - The main objectives include shifting the revenue mix towards Payments and Data, driving operational efficiency, and generating cash flow to reduce debt [55][56] Question: What does the pipeline look like for 2026 in terms of distribution growth? - Management indicated a robust pipeline for the ISV distribution channel, with ongoing investments to enhance API offerings and reporting tools [58][59] Question: What are the opportunities for build versus buy decisions in investments? - Management emphasized a balanced approach, making responsible acquisitions while also focusing on internal capability development [66][67] Question: Are there specific areas where AI is seeing greater client receptivity? - Management noted that AI is applied across various business segments to solve specific customer problems, leading to strong receptivity [75]

Financial Data and Key Metrics Changes - Total revenue for 2025 was $2.133 billion, a 0.5% increase compared to 2024, and a 1.1% increase on a comparable adjusted basis [19] - GAAP net income improved to $85.3 million, or $1.87 per share, up from $52.9 million, or $1.18 per share in 2024 [19] - Comparable adjusted EBITDA was $431.5 million, a 6.2% increase from the previous year, with adjusted EBITDA margins expanding to 20.2% [19][20] - Comparable adjusted EPS grew by 12.6% to $3.67 from $3.26 in 2024 [20] Business Line Data and Key Metrics Changes - Merchant services revenue for 2025 was $398.6 million, growing by 3.8% compared to 2024, with adjusted EBITDA at $85.9 million, a 9.4% increase [20][21] - B2B payment segment revenue finished at $290.5 million, reflecting a 0.9% growth, with adjusted EBITDA at $64.4 million, a 12.8% increase [23][24] - Data-driven marketing business revenue reached $307.3 million, a 31.3% increase year-over-year, with adjusted EBITDA at $86.4 million, reflecting a 28.1% margin [26][27] - Print business revenue declined to $1.14 billion, a 5.7% decrease, with adjusted EBITDA at $366.9 million, a 2.6% decline [28][30] Market Data and Key Metrics Changes - Payments and data now account for 47% of total revenue, up from 43% a year ago, with expectations to achieve revenue parity with print businesses later this year [5][8] - The data segment's revenue growth was particularly strong, expanding over 30% year-over-year, driven by enhanced marketing capabilities and AI tools [9][26] Company Strategy and Development Direction - The company is focused on shifting its revenue mix towards payments and data, aiming for ongoing profitable growth [6][8] - There is a commitment to driving operational efficiencies and improving margins across all business segments [14][15] - The company aims to reduce net debt and improve its leverage ratio, with a target of achieving a leverage ratio of 3 times or lower [16][33] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating environment, noting traditional consumer behavior patterns and stable macroeconomic conditions [46][48] - The company anticipates continued growth in the data segment, although it will face tougher comparisons in the latter half of the year [49] - Overall, management is confident in the company's trajectory heading into 2026, with expectations for significant advances in strategic priorities [39] Other Important Information - Free cash flow for 2025 was $175 million, up from $100 million in 2024, reflecting improved cash generation and operational efficiency [33] - The company has a strong balance sheet, with net debt reduced to $1.39 billion, and a net debt to adjusted EBITDA ratio of 3.2 times [32][33] - A regular quarterly dividend of $0.30 per share was approved, payable on February 23, 2026 [35] Q&A Session Summary Question: How is Deluxe positioned to respond to trends in AI and agentic commerce? - Management highlighted that Deluxe has applied AI technology across multiple business areas, enhancing performance and delivering improved outcomes [42][44] Question: What are the primary objectives for the business in 2026? - The main objectives include shifting the revenue mix towards payments and data, driving operational efficiency, and generating cash flow to reduce debt [55][56] Question: What opportunities exist for growth in the ISV distribution channel? - Management noted a robust pipeline for the ISV distribution channel, with ongoing investments in API and reporting tools to enhance appeal [57][58] Question: What is the company's approach to build versus buy decisions for investments? - The company maintains a balance between building capabilities internally and making strategic acquisitions that enhance performance [66][68]

Fourth Quarter and Full Year 2025 Earnings January 28, 2026 © 2026 Deluxe Corporation Brian Anderson Vice President, Strategy & Investor Relations 2 Today's Presenters Barry McCarthy President and Chief Executive Officer Chip Zint Senior Vice President and Chief Financial Officer Brian Anderson Vice President, Strategy & Investor Relations 3 Cautionary Statement Statements made in this presentation regarding Deluxe, the company's,or management's intentions, expectations, outlook, or predictions about future ...

Financial Performance - Full year reported revenue increased by 0.5% to $2,133.2 million, while comparable adjusted revenue increased by 1.1%[4] - Full year net income rose to $85.3 million, a 61.2% increase from $52.9 million in 2024[5] - Comparable adjusted EBITDA increased by 6.2% to $431.5 million for the full year[4] - Full year GAAP diluted EPS was $1.87, up 58.5% from $1.18 in 2024; comparable adjusted diluted EPS improved by 12.6% to $3.67[5] - Total revenue for the year ended December 31, 2025, was $2,133.2 million, slightly up from $2,121.8 million in 2024, indicating a 0.5% increase[23] - Adjusted EBITDA for the year ended December 31, 2025, rose to $431.5 million from $412.1 million in 2024, reflecting a 4.0% increase[28] - Net income for the year ended December 31, 2025, increased to $85.3 million from $52.9 million in 2024, representing a 61.5% growth[21] Cash Flow and Debt Management - Free cash flow increased by $75.3 million to $175.3 million in 2025[4] - Free cash flow for the year ended December 31, 2025, was $175.3 million, compared to $100.0 million in 2024, marking a 75.3% increase[21] - Net cash provided by operating activities increased to $270.6 million in 2025 from $194.3 million in 2024, reflecting a growth of 39.2%[38] - Total debt reduced by $73.7 million, while net debt decreased by $76.2 million[4] - The company reported a total debt of $1,429.4 million as of December 31, 2025, down from $1,503.1 million in 2024, a reduction of 4.9%[35] - Net debt decreased to $1,392.5 million in 2025 from $1,468.7 million in 2024, indicating a 5.2% decline[35] - Management emphasizes free cash flow as a key indicator for servicing debt and returning value to shareholders after necessary capital investments[37] - The company acknowledges that not all free cash flow is available for discretionary spending due to mandatory debt payments and other cash requirements[37] - Free cash flow provides insight into cash available for dividends, debt reduction, acquisitions, and share repurchases[37] Future Projections - The company expects 2026 revenue to increase by 0.5% and comparable adjusted revenue to rise by 1.1%[7] - For 2026, adjusted diluted EPS is projected to be between $3.90 and $4.30, with free cash flow expected to be approximately $200 million[14] Operational Focus - The comparable adjusted EBITDA margin for 2025 was 20.2%, up 90 basis points from the prior year[7] - The adjusted EBITDA margin for the year ended December 31, 2025, improved to 20.2% from 19.4% in 2024[28] - Merchant Services revenue for the year ended December 31, 2025, increased to $398.6 million, up from $384.0 million in 2024, a growth of 3.8%[23] - Data Solutions revenue for the year ended December 31, 2025, surged to $307.3 million from $234.0 million in 2024, representing a significant increase of 31.3%[23] - The company plans to continue focusing on operational efficiency and strategic decision-making to enhance performance and enterprise value[27] Dividend Declaration - The company declared a quarterly dividend of $0.30 per share, payable on February 23, 2026[10]

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Group 1 - Deluxe will report its fourth quarter and full-year 2025 financial results on January 28, 2026, after market close [1] - An open-access conference call will be held on the same day at 5:00 p.m. ET, allowing interested parties to participate [1] - The audio and slides from the conference call will be available via a webcast on the investor relations website [1] Group 2 - Deluxe is a Trusted Payments and Data company that has been supporting businesses for over 100 years [2] - The company processes more than $2 trillion in annual payment volume, serving millions of small businesses and thousands of financial institutions [2] - Deluxe aims to be the most trusted business partner for its customers by leveraging its scale and distribution channels [2]

Core Insights - Piper Sandler's "Macro Select" stock-picking model significantly outperformed the S&P 500 in 2025, achieving a return of approximately 22% compared to the S&P 500's 16% gain [1] - The updated Macro Select list for 2026 focuses on stocks with strong earnings surprises, earnings revisions, attractive earnings yield, and high return on equity (ROE) [3] Stock Performance - AT&T Inc. (Ticker: T) in the Communication Services sector had a 1-year return of 10% [5] - Graham Holdings (Ticker: GHC) in the Consumer Discretionary sector had a 1-year return of 4% [6] - Par Pacific Holdings (Ticker: EAT) in the Consumer Discretionary sector had a 1-year return of 12% [7] - Deluxe Corporation (Ticker: PARR) in the Energy sector had a 1-year return of 13% [8] - Mueller Water Products (Ticker: MWA) in the Industrials sector had a 1-year return of 14% [10] - Kilroy Realty (Ticker: KRC) in the Real Estate sector had a 1-year return of 6% [11] - UGI Corporation (Ticker: UGI) in the Utilities sector had a 1-year return of 33% [12] - Clearway Energy (Ticker: CWEN) in the Utilities sector had a 1-year return of 23% [13]

Core Insights - Deluxe has announced a collaboration with Visa to implement Visa Direct, introducing dlxFastFunds, a funding solution that allows businesses to bypass the typical one- to two-day settlement delay [1][2]. Group 1: Collaboration and Technology - The combined technology of Deluxe and Visa Direct facilitates near real-time fund delivery to eligible cards and bank accounts, allowing businesses to select settlement options in eligible markets [2]. - This integrated solution aims to enhance operations by providing quicker access to capital, which is beneficial for covering inventory, payroll, or reinvestment opportunities [2][3]. Group 2: Business Impact - The collaboration is designed to empower businesses to manage cash flow effectively, enabling them to access earnings in near real-time, thus enhancing their agility and confidence in seizing opportunities [3]. - The dlxFastFunds solution is seamlessly integrated within the Deluxe Payments Platform, ensuring a straightforward enrollment process without additional systems or complications [3]. Group 3: Industry Context - As digital payments become more prevalent, the ability to send funds efficiently is seen as a competitive advantage for businesses [4]. - The partnership reflects a shared goal of modernizing disbursements, providing organizations with new methods to adapt to changing customer and operational needs [4]. Group 4: Company Overview - Deluxe is a trusted Payments and Data company that has been supporting businesses for over 100 years, processing more than $2 trillion in annual payment volume [4]. - The company serves millions of small businesses and thousands of financial institutions, positioning itself as a reliable partner for businesses at all stages of their lifecycle [4].