CPI Card Group (PMTS) Q2 2025 Earnings Call August 08, 2025 09:00 AM ET Speaker0Welcome to CPI Cards Group Second Quarter twenty twenty five Earnings Call. My name is Bailey, and I will be your operator today. Now I would like to turn the call over to Mike Salip, CPI's Head of Investor Relations.Speaker1Thanks, operator. Welcome to the CPI Card Group's second quarter twenty twenty five earnings webcast and conference call. Today's date is 08/08/2025, and on the call today from CPI Card Group are John Lowe, ...

CPI Card Group Inc. (PMTS) came out with quarterly earnings of $0.04 per share, missing the Zacks Consensus Estimate of $0.56 per share. This compares to earnings of $0.51 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -92.86%. A quarter ago, it was expected that this company would post earnings of $0.56 per share when it actually produced earnings of $0.4, delivering a surprise of -28.57%.Over the last four quarters, the com ...

Financial Performance - Q2 2025 - Net sales increased by 9% to $129.8 million[29] - Excluding the impact of an accounting change, sales increased by 15%[29] - Adjusted EBITDA increased by 3% to $22.5 million, with a margin of 17.3%[29] - Net income decreased significantly by 91% to $0.5 million, resulting in a net income margin of 0.4%[29] Financial Performance - First Half 2025 - Net sales increased by 9% to $252.5 million[37] - Excluding the impact of an accounting change, sales increased by 14% to $259.9 million[31] - Adjusted EBITDA decreased by 3% to $43.7 million, with a margin of 17.3%[37] - Net income decreased by 55% to $5.2 million, resulting in a net income margin of 2.0%[37] Balance Sheet and Cash Flow - Cash on hand was $17.1 million as of June 30, 2025[50] - Total debt was $343.2 million as of June 30, 2025[50] - Net Leverage Ratio was 3.6x as of June 30, 2025[50] - Free Cash Flow was $0.8 million for the first half of 2025[50] Outlook - The company updated its full-year 2025 net sales outlook to a low double-digit to mid-teens increase[60] - The Adjusted EBITDA outlook for 2025 remains unchanged at a mid-to-high single-digit increase[60]

Table of Contents | UNITED STATES SECURITIES AND EXCHANGE COMMISSION | | --- | | Washington, D.C. 20549 | | Form 10-Q | | (Mark One) | | ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 | | For the Quarterly Period Ended June 30, 2025 | | or | | ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | | For the Transition Period from to | | Commission File Number: 001-37584 | | CPI Card Group Inc. | | (Exact name of the registr ...

Exhibit 99.1 CPI Card Group Inc. Reports Second Quarter 2025 Results Date: August 8, 2025 Net Sales Increased 9%, or 15% Excluding a One-time, Non-cash Impact from Accounting Change, Driven by Strong Arroweye Performance and Debit and Credit Growth Net Income Decreased, Impacted by Acquisition Costs and Restructuring Charges; Adjusted EBITDA Increased 2025 Net Sales Outlook Increased; Adjusted EBITDA Outlook Unchanged Littleton, CO. August 8, 2025 -- CPI Card Group Inc. (Nasdaq: PMTS) ("CPI" or the "Company ...

The market expects CPI Card Group Inc. (PMTS) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report might help the stock move higher if these key numbers are better than expectations. On the other hand, if ...

Financial Data and Key Metrics Changes - The company reported a 10% increase in net sales for the first quarter, driven by strong performance in debit and credit cards as well as prepaid solutions [14][16] - Adjusted EBITDA declined by 8% compared to the previous year, primarily due to negative sales mix and increased production costs [8][18] - Gross profit margin decreased from 37.1% in the prior year quarter to 33.2% due to operational inefficiencies and increased production costs [17] 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][16] - Prepaid segment growth was driven by demand for higher-priced fraud prevention packaging solutions in healthcare payment solutions [17] - 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] 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 [21] - Despite economic uncertainties, large bank issuers reported strong account growth, aligning with the company's observed customer demand [22] Company Strategy and Development Direction - The acquisition of AeroEye Solutions aims to diversify the business and enhance market share by providing innovative payment card solutions [6][10] - The company focuses on innovation and diversification to expand addressable markets and enhance customer service [10] - The strategy includes balancing long-term investments with managing spending to improve margins throughout 2025 [9] 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 [9][22] - The company is making changes in sourcing to mitigate tariff impacts, projecting incremental costs of approximately $2 million [23] - Management remains optimistic about customer demand and the potential for revenue and cost synergies from the AeroEye acquisition [12][13] Other Important Information - The company generated $5.6 million in cash from operating activities in the first quarter, with free cash flow slightly positive at $300,000 [19] - The purchase price for AeroEye was $45.55 million, funded through cash and borrowings from the revolving credit facility [26] Q&A Session Summary Question: Can you provide more details on AeroEye's market position and customer overlap? - AeroEye services a smaller, more nimble card program market, catering to fintechs and unique solutions that CPI does not currently offer [34] Question: What is the expected timeline for AeroEye's EBITDA margins to align with CPI's? - Margins may be impacted in 2025 due to integration costs, but there is a belief that they can be brought closer to CPI's margins over time [36][37] Question: How was the acquisition financed and what is the balance sheet impact? - 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 a mix of products affecting gross margins, which are expected to improve in the second half of the year [46][50] Question: What are the startup costs associated with the new Indiana facility? - There are overlapping costs as both facilities are operated during the transition, with expectations for these costs to taper off over time [56][58]

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]

Group 1 - CPI Card Group Inc. reported quarterly earnings of $0.40 per share, missing the Zacks Consensus Estimate of $0.56 per share, and down from $0.46 per share a year ago, representing an earnings surprise of -28.57% [1] - The company posted revenues of $122.76 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.62%, compared to year-ago revenues of $111.94 million [2] - CPI Card Group shares have declined approximately 15.2% since the beginning of the year, while the S&P 500 has decreased by 4.7% [3] Group 2 - The current consensus EPS estimate for the coming quarter is $0.66 on revenues of $128.75 million, and for the current fiscal year, it is $2.81 on revenues of $522.3 million [7] - The Zacks Industry Rank indicates that the Technology Services sector is currently in the top 26% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8] Group 3 - The estimate revisions trend for CPI Card Group is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Table of Contents | UNITED STATES SECURITIES AND EXCHANGE COMMISSION | | --- | | Washington, D.C. 20549 | | Form 10-Q | | (Mark One) | | ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 | | For the Quarterly Period Ended March 31, 2025 | | or | | ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | | For the Transition Period from to | | Commission File Number: 001-37584 | | CPI Card Group Inc. | | (Exact name of the regist ...