Financial Data and Key Metrics Changes - The company reported a 10% increase in net sales for Q1 2025, driven by strong performance in debit and credit cards as well as prepaid solutions [14][15] - Adjusted EBITDA declined by 8% to $21.2 million, with adjusted EBITDA margins decreasing from 20.5% to 17.2% due to lower gross margins and increased production costs [18][24] - Net income decreased by 12% primarily due to lower gross profit and higher interest expenses [18] Business Line Data and Key Metrics Changes - Both debit and credit segments experienced a 10% increase in sales, with growth led by contactless cards and eco-focused cards [7][15] - The prepaid segment also saw a 10% increase, driven by demand for higher-priced fraud prevention packaging solutions in healthcare [15][16] - Income from operations for the debit and credit segment decreased by 5%, while prepaid segment income from operations decreased by 9% due to lower gross margins [18][19] Market Data and Key Metrics Changes - The U.S. cards in circulation increased at a 9% CAGR over the past three years, indicating a healthy demand in the market despite economic uncertainties [21][22] - Current demand from customers remains strong, although there are concerns regarding potential recessionary conditions affecting issuances and customer purchases [22] Company Strategy and Development Direction - The acquisition of AeroEye Solutions is aimed at diversifying the business and enhancing market share by offering innovative payment technology solutions [6][10] - The company aims to support its vision of being a trusted partner for payment technology by focusing on innovation and diversification [10][12] - The integration of AeroEye is expected to generate revenue and cost synergies over time, with a focus on improving margins [12][13] Management's Comments on Operating Environment and Future Outlook - Management affirmed a 2025 organic outlook for mid- to high single-digit growth for net sales and adjusted EBITDA, despite market uncertainties [8][24] - The company is focused on balancing long-term investments with managing spending to improve margins as the year progresses [8][24] - Management acknowledged the impact of tariffs and operational inefficiencies but remains optimistic about future growth [23][52] Other Important Information - The company generated $5.6 million in cash from operating activities in Q1 2025, with free cash flow slightly positive at $300,000 [19][20] - The purchase price for AeroEye was $45.55 million, funded through cash and borrowings from a revolving credit facility [25][41] Q&A Session Summary Question: Can you provide more details on AeroEye's market position and customer overlap? - AeroEye services a segment of the market focused on nimble card programs, primarily catering to fintechs and smaller issuers, with minimal customer overlap with CPI [32][34] Question: What is the expected timeline for AeroEye's EBITDA margins to align with CPI's? - Current adjusted EBITDA margins for AeroEye are in the low double digits, with expectations to improve over time as integration progresses [36][37] Question: How was the acquisition financed and what is the current cash position? - The acquisition was financed with approximately $35 million drawn from the revolver and over $30 million in cash on hand [41] Question: What is the current pricing environment and its impact on gross margins? - The pricing environment is competitive, with some mix issues impacting gross margins, but overall, there is a trend towards a more rational pricing environment [46][49] Question: Can you clarify the startup costs for the new Indiana facility? - The transition involves overlapping costs as both facilities are operated simultaneously, with expectations for these costs to taper off in the future [56][59]

CPI Card Group Inc. (PMTS) came out with quarterly earnings of $0.40 per share, missing the Zacks Consensus Estimate of $0.56 per share. This compares to earnings of $0.46 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -28.57%. A quarter ago, it was expected that this company would post earnings of $0.55 per share when it actually produced earnings of $0.57, delivering a surprise of 3.64%.Over the last four quarters, the comp ...

Non-GAAP Financial Measures In addition to financial results reported in accordance with U.S. generally accepted accounting principles ("GAAP"), we have provided the following non-GAAP financial measures in this release, all reported on a continuing operations basis: EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow, LTM Adjusted EBITDA and Net Leverage Ratio. These non-GAAP financial measures are utilized by management in comparing our operating performance on a consistent basis between fisca ...

Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market's attention and deliver solid returns. But finding a great growth stock is not easy at all.By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss.However, the task of finding cutting-edge growth stocks is made easy with the help of the Zacks ...

Shares of CPI Card Group Inc. (PMTS) have gained 1.3% over the past four weeks to close the last trading session at $29.03, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $37 indicates a potential upside of 27.5%.The mean estimate comprises four short-term price targets with a standard deviation of $2.94. While the lowest estimate of $33 indicates a 13.7% increase from the curr ...

Financial Data and Key Metrics Changes - Net sales increased by 22% in Q4 2024, driven by strong performance in the prepaid segment and growth in debit and credit card volumes [24][25] - Adjusted EBITDA increased by 10%, while net income more than doubled [24] - Full-year net sales increased by 8%, with a 4% increase from debit and credit segments [28][32] - Gross profit for the full year increased by 10%, with gross margin rising from 35.0% to 35.6% [29] Business Line Data and Key Metrics Changes - Prepaid business grew by 26% for the year, exceeding $100 million in net sales, driven by demand for fraud prevention solutions and healthcare payment solutions [12][24] - Debit and credit business increased by 4% for the year, with strong growth in the second half, particularly in eco-focused contactless cards [12][28] - Income from operations for the prepaid segment increased by 106% in Q4, while the debit and credit segment's income decreased by 7% [33] Market Data and Key Metrics Changes - The prepaid segment saw a 59% increase in Q4, driven by strong demand for higher-priced fraud-focused packaging solutions [25] - Contactless cards represented approximately 90% of chip card volume in 2024, up from just over 80% in the prior year [28] - The total number of credit and debit cards in the US increased by 9% in 2024, indicating healthy growth in the card business [37][38] Company Strategy and Development Direction - The company aims to be the most trusted partner for innovative payment technology solutions, focusing on customer service, quality, innovation, and diversification [18][20] - Plans to expand into adjacent markets and enhance digital solutions, including healthcare payment solutions and closed-loop prepaid markets [20][21] - Investments in the Indiana factory and other initiatives to support long-term growth while balancing profitability [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving mid to high single-digit net sales growth in 2025, led by the debit and credit business [16][39] - The channel inventory situation is improving, and the market is expected to normalize during the year [39] - Anticipated adjusted EBITDA growth of mid to high single digits in 2025, with strong free cash flow generation [17][41] Other Important Information - The company generated over $34 million in free cash flow for the full year while increasing capital spending [14][34] - Completed several capital structure actions, including purchasing $9 million of stock and refinancing $285 million of senior notes [15][36] - The net leverage ratio improved to 3.0 times, down from 3.1 times at the end of 2023 [36] Q&A Session Summary Question: Can you provide details on the strong prepaid results and gross margins? - Management highlighted strong demand for higher-value packaging due to fraud protection and significant growth in the healthcare vertical [50][51] - Gross margins increased by 60 basis points, with operating leverage contributing to strong performance in the prepaid segment [52] Question: What is the outlook for inventory clearance and its impact? - Management indicated that inventory levels might increase slightly throughout 2025 but expect to bring the balance down by year-end [55] Question: Can you discuss the closed-loop market and its potential size? - The closed-loop market is believed to be four to five times larger than the open-loop market, presenting a significant opportunity for the company [62] Question: Update on the Indiana facility? - The Indiana facility is on track to be operational in the second half of 2025, with new equipment and automation being implemented [66][67] Question: What is the expected free cash flow for 2025? - Free cash flow is expected to be slightly below 2024 levels due to increased cash interest expense and higher capital spending [73]

Fourth Quarter 2024 Investor Presentation March 4, 2025 Cautionary Statements These risks and uncertainties include, but are not limited to: (i) risks relating to our business and industry, such as a deterioration in general economic conditions, including due to inflationary conditions, resulting in reduced consumer confidence and business spending, and a decline in consumer credit worthiness impacting demand for our products; the unpredictability of our operating results, including an inability to anticipa ...

CPI Card Group Inc. (PMTS) came out with quarterly earnings of $0.57 per share, beating the Zacks Consensus Estimate of $0.55 per share. This compares to earnings of $0.23 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 3.64%. A quarter ago, it was expected that this company would post earnings of $0.50 per share when it actually produced earnings of $0.66, delivering a surprise of 32%.Over the last four quarters, the company ...

Market Position and Growth - CPI Card Group is a leader in the U.S. payment card solutions market, focusing on debit and credit card production, personalization, and SaaS-based instant issuance services[18]. - The company has increased installations of its Card@Once instant issuance solution from approximately 11,000 customer locations in 2019 to more than 16,000 in 2024, indicating significant growth in this segment[37]. - In 2024, one customer accounted for approximately 18% of total net sales, with nearly two-thirds of net sales coming from the top 10 customers, who have been served for an average of over 10 years[48]. - CPI aims to expand its addressable market by diversifying product offerings and entering non-traditional industry verticals, such as healthcare and the gig economy[25]. - The U.S. payment card solutions market has experienced growth driven by new account openings and stable recurring revenue from card reissuance due to expiration and replacement activities[20]. Product and Technology Development - CPI's eco-focused card solutions, including Second Wave and Earthwise cards, incorporate upcycled materials and address increasing demand for environmentally friendly products[29]. - The company has developed technology integrations with financial institution platform providers and card processors to enhance its digital solutions offerings, including digital push provisioning services[45]. - CPI's comprehensive end-to-end card solutions are integral to many customers' card programs, providing a full suite of products and services while maintaining security requirements[44]. - CPI's proprietary and patented solutions, such as the Card@Once system, provide a competitive advantage by enabling faster card issuance and personalization[45]. - The company aims to diversify its product offerings, including digital solutions, to remain competitive and capitalize on cross-selling opportunities[103]. Supply Chain and Operational Challenges - Approximately 95% of the company's purchased microchips and antennas come from three main suppliers, with 78% sourced from a single supplier[63]. - The company has committed approximately $190 million to a capacity reservation agreement with a chip supplier, with $62 million remaining as of December 31, 2024[64]. - The company has experienced extended production lead times due to labor shortages and supply chain constraints, affecting its ability to meet customer delivery expectations[95]. - Disruptions in the supply chain, including reliance on specific suppliers for critical components, could negatively impact production and customer fulfillment[112]. - The company experienced delays and increased costs during the COVID-19 pandemic, highlighting vulnerabilities in its supply chain[113]. Financial and Regulatory Risks - CPI's substantial indebtedness and covenants may limit its ability to capitalize on business opportunities and impact cash flow management[84]. - The company is subject to various federal and state regulations, including those related to privacy and data security, impacting its operations[68]. - The company may face significant costs related to compliance with evolving data privacy and security laws, which could adversely affect operations and financial results[165]. - The company is subject to PCI Security Standards, and failure to comply could result in loss of eligibility to provide products and services, impacting revenue and profitability[166][168]. - The company may need to raise additional funds in the future, and unfavorable market conditions could limit access to capital, delaying innovation[158]. Environmental, Social, and Governance (ESG) Considerations - The company emphasizes environmental sustainability practices in its operations, aligning with its business model and customer needs[56]. - Stakeholder expectations regarding environmental, social, and governance (ESG) matters may impose additional costs and risks, potentially affecting demand for the company's products[143]. - The company may face challenges in meeting evolving consumer concerns regarding the environmental impact of its products, which could require significant research and development costs[144]. - Future ESG reporting requirements may lead to increased costs for monitoring and compliance, impacting the company's financial condition and operations[146]. - Environmental regulations related to climate change may impose additional costs and liabilities on the company, potentially affecting its financial position and operations[182]. Cybersecurity and Risk Management - The cybersecurity program is based on frameworks established by the National Institute of Standards and Technology (NIST) and focuses on risk management and incident response[205]. - The Security Committee conducts annual cybersecurity risk assessments to prioritize initiatives for enhancing security controls[207]. - The company has implemented third-party risk management controls to mitigate cybersecurity threats associated with service providers[210]. - Regular independent cyber audits are conducted to assess the effectiveness of cybersecurity controls and alignment with industry standards[214]. - The board of directors oversees cybersecurity risk management and receives regular updates on material security risks[215]. Corporate Governance and Ownership - The concentration of ownership by significant stockholders, such as the Tricor Funds, may influence corporate decisions and affect the market price of the company's securities[183]. - The Tricor Funds have the right to designate nominees for the board of directors as long as they own 5% or more of the total shares outstanding[194]. - The company has opted out of Section 203 of the Delaware General Corporation Law, which generally restricts business combinations with stockholders owning 15% or more of voting stock for three years[195]. - The board of directors has the ability to issue preferred stock without stockholder approval, which may hinder changes in control[197]. - Stockholder activism and securities litigation could divert management's attention and resources, potentially hindering the execution of business strategies[191].

Exhibit 99.1 CPI Card Group Inc. Reports Fourth Quarter and Full Year 2024 Results Date: March 4, 2025 Fourth Quarter Net Sales Increased 22% to $125 Million; Net Income Increased 148% to $7 Million; Adjusted EBITDA Increased 10% to $22 Million Full Year Net Sales Increased 8% to $481 Million; Prepaid Debit Net Sales Increased 26% and Exceeded $100 Million Outlook for 2025 Projects Mid-to-high Single-digit Net Sales and Adjusted EBITDA Growth Littleton, CO. March 4, 2025 -- CPI Card Group Inc. (Nasdaq: PMTS ...