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 |

Core Viewpoint - Deluxe (DLX) shares have increased by 7.4% over the past four weeks, closing at $15.23, with a mean price target of $27.60 indicating a potential upside of 81.2% [1] Price Targets and Analyst Consensus - The average price target consists of five estimates ranging from a low of $23 to a high of $32, with a standard deviation of $3.65, suggesting a potential increase of 51% to 110.1% from the current price [2] - A low standard deviation indicates strong agreement among analysts regarding the stock's price movement, which can serve as a starting point for further research [9] Earnings Estimates and Market Sentiment - Analysts have shown increasing optimism about DLX's earnings prospects, as evidenced by a positive trend in earnings estimate revisions, which correlates with near-term stock price movements [11] - Over the last 30 days, one earnings estimate has increased, leading to a 5.1% rise in the Zacks Consensus Estimate for the current year [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 strong potential for upside in the near term [13]

Financial Performance - Consolidated revenue for Q1 2025 increased by $2 million to $536 million, despite a $6 million decrease from business exits, driven by pricing actions and growth in data-driven marketing [79]. - Net income for Q1 2025 increased by $3 million to $14 million, reflecting pricing and cost management actions, and reduced restructuring expenses [79]. - Net income for Q1 2025 was $14,048,000, reflecting a 29.7% increase compared to $10,830,000 in Q1 2024, while diluted EPS rose to $0.31, up 29.2% year-over-year [99]. - Free cash flow for Q1 2025 increased significantly to $24,313,000 from $6,148,000 in Q1 2024, indicating improved cash generation capabilities [101]. - Net cash provided by operating activities increased by $24 million to $50,281,000 in Q1 2025 from $26,590,000 in Q1 2024 [123]. Cost Management - Adjusted EBITDA margin for Q1 2025 was 18.7%, virtually unchanged from 18.8% in Q1 2024, with a 0.5 point decrease attributed to business exits [78]. - SG&A expenses decreased by 3.8% to $225 million, with SG&A as a percentage of total revenue dropping from 43.8% to 42.0% [93]. - Total cost of revenue increased by 1.6% to $255 million, with costs as a percentage of total revenue rising from 47.0% to 47.6% [90]. - Restructuring and integration expenses decreased by 44.5% to $7.7 million, reflecting ongoing initiatives to enhance operational efficiency [95]. - SG&A expenses decreased by 3.8% in Q1 2025 compared to Q1 2024, contributing to overall cost management efforts [109]. Debt and Cash Management - Cash and cash equivalents as of March 31, 2025, were $30 million, with an additional $368 million available under the revolving credit facility [84]. - Total debt as of March 31, 2025, was $1,492,545,000, down from $1,503,151,000 at the end of 2024, resulting in net debt of $1,462,229,000 [102]. - As of March 31, 2025, total debt obligations were $1.51 billion, a slight decrease from $1.52 billion as of December 31, 2024 [128]. - The company anticipates capital expenditures between $90 million and $100 million for the full year, compared to $94 million in 2024 [84]. - The company expects to maintain regular quarterly dividend payments, subject to board approval [127]. Segment Performance - Merchant Services segment revenue for Q1 2025 was $97,769,000, a 1.3% increase from $96,477,000 in Q1 2024, driven by higher volumes from government clients [113]. - Total revenue for the B2B Payments segment in Q1 2025 was $70,155,000, a 1.1% increase from $69,418,000 in Q1 2024 [115]. - Data Solutions segment revenue increased by 29.3% to $77,227,000 in Q1 2025, up from $59,712,000 in Q1 2024 [117]. - Adjusted EBITDA for the Data Solutions segment rose by 32.4% to $19,693,000 in Q1 2025, compared to $14,869,000 in Q1 2024 [117]. - Print segment revenue decreased by 4.0% to $291,304,000 in Q1 2025, down from $303,334,000 in Q1 2024 [119]. Tax and Interest - The effective income tax rate for Q1 2025 decreased to 27.1%, down from 33.8% in Q1 2024, primarily due to lower tax impacts from foreign operations [98]. - Interest expense for Q1 2025 increased to $31,266,000, a 1.5% rise from Q1 2024, driven by higher interest rates despite a 3.0% decrease in average debt outstanding [97]. Future Outlook - The North Star program aims for a $100 million run-rate improvement in free cash flow and an $80 million run-rate improvement in adjusted EBITDA by 2026 [110]. - The company is focused on growth investments, debt reduction, and returning capital to shareholders through dividends, subject to board approval [84]. Foreign Currency Exposure - The company is exposed to fluctuations in foreign currency exchange rates, primarily Canadian dollars [136]. - Foreign operations constitute a relatively small portion of the overall business, minimizing the impact of exchange rate changes on earnings and cash flows [136]. - The company has not engaged in hedging activities to mitigate foreign currency exchange rate risks [136].

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was just over $536 million, up 1.4% on a comparable adjusted basis year over year [9][18] - Comparable adjusted EBITDA for the quarter was just over $100 million, increasing nearly 3.5% from 2024 [10][19] - Comparable adjusted EPS finished at $0.75, reflecting just over 4% expansion versus the prior year [10][20] - Net debt levels decreased to $1.46 billion, down approximately $80 million from the previous year [28] Business Line Data and Key Metrics Changes - Payments and Data segments grew by a blended rate just above 8.5%, with the Data segment revenue growing 29% year over year [11][24] - Merchant Services revenue grew by 1.3% year over year to $97.8 million, with adjusted EBITDA remaining flat at $21.4 million [20] - B2B segment revenues increased by 1.2% to $70.2 million, with adjusted EBITDA dollars remaining flat at $13.3 million [22] - Print segment revenue declined by 4% year over year to $291.3 million, with legacy check revenues declining by 1.8% [26] Market Data and Key Metrics Changes - The revenue mix shifted towards payments and data offerings, with the ratio of print to payments and data segments changing from 57:43 to 54:46 year over year [11] - The company continues to monitor macroeconomic trends and consumer sentiment for potential impacts on revenue [6][32] Company Strategy and Development Direction - The company is focused on executing its North Star strategy, which emphasizes accelerating free cash flow and profit growth [5][14] - The management is maintaining overall guidance ranges for 2025 despite macroeconomic uncertainties [9][32] - New partnerships, such as with TownBank, are seen as opportunities to expand market reach and improve service delivery [38][66] Management's Comments on Operating Environment and Future Outlook - Management acknowledged extraordinary volatility and macroeconomic uncertainty but emphasized control over internal execution [5][6] - The company expects continued strong performance in the Data segment and is optimistic about future growth despite potential challenges in the Print segment [24][32] Other Important Information - The company reported a free cash flow of $24.3 million for the quarter, improving by $18.1 million from the previous year [29] - The Board approved a regular quarterly dividend of $0.30 per share, payable on June 2, 2025 [31] Q&A Session Summary Question: Insights on the Merchant Business - Management noted that the Merchant business continues to perform well across various market conditions, with strength in government and not-for-profit sectors [34][35] Question: Strategic Changes with New Leadership - Management expressed confidence in the new leadership and highlighted a focus on improving partnership relationships and expanding distribution channels [36][38] Question: Segment Modeling and Performance - Management indicated that the Data segment had a strong quarter but does not expect to maintain a 29% growth rate, projecting upper single digits to low double digits for the full year [44] Question: Impact of Government Check Phasing Out - Management clarified that the federal government is not a customer and does not expect significant impact from the phasing out of physical checks [54][56] Question: Observations on Tariffs and Spending - Management noted minimal evidence of consumer pull forward in spending related to tariffs, emphasizing that their revenue is transaction-based [58][59] Question: Potential Catalysts for Partnerships - Management highlighted the company's strong brand and relationships in the banking sector as key advantages for driving new partnerships [66][70]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was just over $536 million, up 1.4% on a comparable adjusted basis year over year [9][19] - Comparable adjusted EBITDA for the quarter was just over $100 million, increasing nearly 3.5% from 2024 [10][20] - Comparable adjusted EPS finished at $0.75, reflecting just over 4% expansion versus the prior year [10][21] - Net debt levels decreased to $1.46 billion, down approximately $80 million from the previous year [28] Business Line Data and Key Metrics Changes - Payments and Data segments grew by a blended rate just above 8.5%, with Data segment revenue growing 29% year over year [11][24] - Merchant Services revenue grew by 1.3% year over year to $97.8 million, with adjusted EBITDA remaining flat at $21.4 million [21] - B2B segment revenues finished at $70.2 million, increasing 1.2% versus 2024, with adjusted EBITDA dollars remaining flat at $13.3 million [22][23] - Print segment revenue declined 4% year over year, with legacy check revenues declining 1.8% [26] Market Data and Key Metrics Changes - The revenue mix shifted towards payments and data offerings, with the ratio moving from 57:43 to 54:46 in favor of payments and data segments [11] - The Data Solutions segment achieved record levels for the quarter, with revenues of $77.2 million, reflecting a growth of 29.3% [24] Company Strategy and Development Direction - The company is focused on executing its North Star strategy, which emphasizes free cash flow and profit growth [5][14] - The management is maintaining overall guidance ranges for 2025 despite macroeconomic uncertainties [31][32] - The company aims to optimize its balance sheet and reduce net debt levels, with a long-term target of three times leverage or better by the end of 2026 [28][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged extraordinary volatility and macroeconomic uncertainty but emphasized control over internal execution [5][6] - The company continues to monitor consumer sentiment and discretionary spending for potential impacts on its outlook [6] - Despite anticipated challenges, management remains confident in achieving its 2025 revenue and EBITDA goals [14][31] Other Important Information - The company received an S&P ratings upgrade, improving its rating from B- to single B, with a positive outlook [28] - Free cash flow for the quarter was $24.3 million, improving by $18.1 million from the previous year [29][30] - A regular quarterly dividend of $0.30 per share was approved, payable on June 2, 2025 [30] Q&A Session Summary Question: Can you provide more detail on the merchant business and its performance? - The merchant business continues to perform well across various market conditions, with strong retention and ongoing volume from diversified customer categories [33][34] Question: What strategic changes might occur with the new leadership in the merchant business? - The new leadership aims to improve partnership relationships and expand distribution channels, with recent partnerships indicating a move upmarket [35][36] Question: How should we model the segment performance, especially with potential declines? - The data segment is expected to continue strong growth, while print may see a larger decline due to promotional pressures [40][43] Question: What is the secret to the data segment's recent success? - The data business leverages a large consumer and small business database combined with advanced AI tools to effectively target marketing campaigns [46][48] Question: What is the potential impact of the Trump administration's commentary on physical checks? - The company has no direct exposure to government checks and does not anticipate significant collateral impacts from the announcement [52][55] Question: Have there been signs of spending pull forward due to tariffs? - There was a small amount of pull forward in promotional products, but no significant evidence of stocking in the business [56] Question: What are the potential catalysts for driving additional partnerships? - The company has strong brand recognition and relationships in the banking sector, which positions it well for future partnerships [61][62]

Q1 2025 Financial Performance - Total revenue reached $536.5 million, a 0.3% increase compared to Q1 2024[25] - Comparable adjusted revenue increased by 1.4% compared to Q1 2024[25] - Adjusted EBITDA increased by 3.4% to $100.2 million compared to Q1 2024[25] - Adjusted EBITDA margin increased by 40 basis points to 18.7% compared to Q1 2024[25] - Adjusted diluted EPS increased by 4.2% to $0.75 compared to Q1 2024[25] - Net income attributable to Deluxe was $14.0 million, or $0.31 per share, up from $10.8 million in Q1 2024[25,60] Segment Performance - Data Solutions revenue increased significantly by 29.3%[33] - Data Solutions adjusted EBITDA margin increased by 50 basis points to 25.5%[34] - Print segment revenue decreased by 4.0%[39] - Print segment adjusted EBITDA margin expanded by 120 basis points to 31.2%[41] Balance Sheet and Cash Flow - Net debt to adjusted EBITDA ratio remained at 3.6x[43] - Free cash flow increased significantly to $24.3 million, compared to $6.2 million in Q1 2024[43] 2025 Guidance - Revenue is projected to be between $2.090 billion and $2.155 billion, representing a comparable adjusted growth of -1% to +2%[46] - Adjusted EBITDA is expected to be between $415 million and $435 million, a growth of +2% to +7%[46] - Adjusted EPS is projected to be between $3.25 and $3.55, representing a growth of 0% to +9%[46] - Free cash flow is expected to be between $120 million and $140 million, a growth of +20% to +40%[46]

Financial Performance - Reported revenue for Q1 2025 increased by 0.3% to $536.5 million, while comparable adjusted revenue rose by 1.4% to $536.5 million[4]. - Net income improved to $14.0 million, a 29.6% increase from $10.8 million in Q1 2024, driven by cost management and lower restructuring expenses[4]. - Comparable adjusted EBITDA increased by 3.4% to $100.2 million, with a comparable adjusted EBITDA margin of 18.7%, up 40 basis points year-over-year[4][9]. - GAAP diluted EPS rose to $0.31, a 29.2% increase from $0.24 in the previous year, while comparable adjusted diluted EPS improved by 4.2% to $0.75[4][9]. - Adjusted EBITDA for Q1 2025 was $100.2 million, slightly down from $100.5 million in Q1 2024, with an adjusted EBITDA margin of 18.7% compared to 18.8% in the previous year[24][28]. - Adjusted diluted EPS for Q1 2025 was $0.75, slightly down from $0.76 in Q1 2024, indicating stable earnings performance despite fluctuations in expenses[26]. Cash Flow and Debt Management - Free cash flow for Q1 2025 increased significantly by $18.1 million to $24.3 million, compared to $6.2 million in Q1 2024[4][18]. - The company reported a total operating cash flow of $50.3 million for Q1 2025, compared to $26.6 million in Q1 2024[18]. - The company’s net debt decreased to $1,462.3 million from $1,468.7 million, reflecting ongoing debt reduction commitments[16]. - Total debt as of March 31, 2025, was $1,492.6 million, a decrease from $1,503.1 million as of December 31, 2024[31]. - Net debt as of March 31, 2025, was $1,462.3 million, down from $1,468.7 million at the end of 2024, reflecting a slight improvement in financial leverage[31]. - The company continues to focus on free cash flow as a critical metric for funding strategic investments and servicing debt obligations[33]. Revenue Growth and Segments - Revenue growth was observed across all operating segments, with Data Solutions revenue increasing to $77.2 million from $59.7 million in Q1 2024[20]. - Comparable adjusted revenue for Q1 2025 was $536.5 million, up from $529.0 million in Q1 2024, showing a year-over-year growth of 1.3%[28]. Operational Efficiency - Restructuring and integration expenses for Q1 2025 were $8.4 million, down from $14.8 million in Q1 2024, suggesting improved operational efficiency[24][26]. - Management emphasizes that adjusted EBITDA and adjusted EBITDA margin are key indicators of the company's value and operational performance[23]. Outlook and Dividends - The company maintained its full-year 2025 outlook ranges, which include revenue guidance of $2.090 to $2.155 billion and adjusted EBITDA of $415 to $435 million[6][9]. - The Board of Directors approved a quarterly dividend of $0.30 per share, payable on June 2, 2025[7].