Cimpress(CMPR) - 2026 Q1 - Quarterly Results

Financial Performance - Q1 FY2026 revenue increased by 7% year over year to $863.3 million, with organic constant-currency growth of 4%[22] - Adjusted EBITDA reached $98.7 million, marking a 12% increase compared to Q1 FY2025 and the highest-ever Q1 adjusted EBITDA[6] - Net income improved to $6.5 million, an increase of $18.9 million year over year, driven by operating income growth and unrealized gains on currency hedges[6] - Operating cash flow rose by $20.7 million to $25.1 million, primarily due to a reduction in net working capital outflows[6] - National Pen's revenue grew by 10% year over year, supported by cross-Cimpress fulfillment and tariff-related pricing increases[10] - The company expects FY2026 net income of at least $72 million and adjusted EBITDA of at least $450 million[17] - By FY2028, the company anticipates achieving $200 million in net income and $600 million in adjusted EBITDA, with a net leverage ratio of approximately 2.5x trailing-twelve-month EBITDA[14] Revenue Growth - Vista segment revenue grew 6% year over year, with a 5% increase on an organic constant-currency basis; promotional products and packaging grew at double-digit rates[3] - PrintBrothers and The Print Group each reported a 15% revenue growth year over year, with organic constant-currency growth of 8%[8] - Reported revenue for Q1 FY2026 was $185 million, reflecting a 15% growth compared to the previous quarter[82] - Organic constant-currency revenue growth for Q1 FY2026 was 10%[82] - National Pen reported revenue of $131 million for Q1 FY2026, with a 12% year-over-year growth[94] - All Other Businesses generated revenue of $62 million in Q1 FY2026, with a reported growth of 10%[107] - Revenue for the three months ended September 30, 2025, was $863,277, an increase of 7.2% compared to $804,969 for the same period in 2024[134] Profitability Metrics - Gross Profit for Q1 FY2024 was $458 million, with a gross margin of 50%[32] - Contribution Profit for Q1 FY2024 was $319 million, representing a contribution margin of 35%[38] - GAAP Net Income for Q1 FY2024 was $118 million, with a margin of 14%[43] - Gross profit for Q1 FY2026 was $53 million, with a gross margin of 39%[82] - Gross profit for National Pen was $71 million, achieving a gross margin of 53%[96] - Contribution margin for the total company was 31% in Q1 FY24, slightly fluctuating but projected to remain around 31% in Q1 FY26[148] Cash Flow and Liquidity - Cash and cash equivalents stood at $200.5 million as of September 30, 2025, with a $250 million revolving credit facility remaining undrawn[6] - Adjusted Free Cash Flow for Q1 FY2024 was $10.928 million, a decrease from $(25.618) million in Q1 FY2025 and $(17.759) million in Q1 FY2026[27] - Cash Flow from Operations for Q1 FY2024 was $175 million, showing a positive trend compared to previous quarters[53] - Net Debt as of Q1 FY2026 was $(1.371) billion, indicating a reduction in debt levels[65] - Adjusted free cash flow for FY2026 is projected to be $140.0 million, with net cash provided by operating activities at $310.0 million[180] Cost Management - Central and corporate costs for Q1 FY2026 totaled $41 million, consistent with the previous quarter[117] - The company incurred $84,886 in technology and development expenses for the three months ended September 30, 2025, compared to $81,861 for the same period in 2024[134] - Share-based compensation expense was $12.5 million in Q1 FY24, increasing to $17.6 million in Q2 FY24, and projected to be $14.8 million by Q1 FY26[156] - Interest expense, net was $29.2 million in Q1 FY24, with a slight increase to $30.6 million in Q2 FY24, and expected to be $28.1 million by Q1 FY26[156] Future Outlook - The company plans to continue focusing on organic growth strategies, excluding the impact of TTM acquisitions and divestitures, to stabilize revenue growth rates[146] - The company expects reported revenue growth of 5% - 6% for FY2026, with organic constant-currency revenue growth projected at 2% - 3%[174] - Adjusted EBITDA outlook for FY2026 is set at $450.0 million, increasing to at least $600.0 million by FY2028[176] - The company plans to continue focusing on market expansion and new product development in the upcoming quarters[162] Risks and Challenges - The company faces various risks including supply chain constraints, inflation fluctuations, and investment performance issues[185] - Key personnel loss and recruitment challenges are identified as potential risks to business performance[185] - Geopolitical events and changes in governmental policies may disrupt business operations and affect market conditions[185] - The company acknowledges competitive pressures and general economic conditions as significant factors impacting performance[185] Miscellaneous - The company revised its internal organizational structure in Q1 FY26 to drive efficiencies, impacting segment reporting[153] - Forward-looking projections are inherently uncertain and based on management's assumptions and judgments, which may lead to material differences in actual results[185] - There is a disclaimer regarding the obligation to update forward-looking statements based on subsequent events[186] - The company’s expectations and beliefs are subject to change, reflecting the dynamic nature of the market[186]