Cimpress(US:CMPR)2025-10-30 21:25Financial Performance - For the three months ended September 30, 2025, consolidated revenue increased by 7% to $863.3 million, driven primarily by growth in the Vista and PrintBrothers segments [130]. - Organic constant-currency revenue growth was reported at 4%, indicating a solid performance excluding the impact of acquisitions and currency fluctuations [130]. - Operating income rose by $9.6 million to $49.0 million, attributed to increased gross profit from revenue growth and operational efficiencies [128]. - Net income increased by $18.9 million to $6.5 million, supported by higher operating income and improved other income from unrealized hedging gains [129]. - Adjusted EBITDA increased by $10.9 million to $98.7 million, reflecting strong operational performance and favorable currency impacts [130]. - Net income for Q3 2025 was $6,520,000, a significant improvement from a net loss of $12,384,000 in Q3 2024, representing a turnaround of approximately 152.7% [207]. - Adjusted EBITDA for Q3 2025 increased to $98,715,000, up 12.5% from $87,771,000 in Q3 2024 [207]. - Net cash provided by operating activities rose to $25,059,000 in Q3 2025, compared to $4,384,000 in Q3 2024, marking an increase of 471.5% [208]. - Adjusted free cash flow improved to $(17,759,000) in Q3 2025 from $(25,618,000) in Q3 2024, reflecting a reduction in negative cash flow by 30.7% [208]. Segment Performance - Revenue growth in the Vista segment was particularly strong in promotional products, apparel, and packaging, contributing significantly to overall revenue increases [127]. - Vista segment reported revenue grew by 6% to $454.909 million, with segment EBITDA increasing by 11% to $89.986 million [162][163]. - PrintBrothers segment revenue increased by 15% to $184.711 million, with segment EBITDA rising by 27% to $25.739 million [165][166]. - The Print Group's revenue grew by 15% to $96.710 million, while segment EBITDA increased by 3% to $18.671 million [169][171]. - National Pen's revenue increased by 10% to $103.209 million, with segment EBITDA improving by $2.2 million despite a negative EBITDA margin [172][174]. - Segment revenue growth for All Other Businesses was 8% for the three months ended September 30, 2025, driven by strong performance in the packaging product category [178]. - Segment EBITDA increased by $2.2 million compared to the prior year, largely due to cross-Cimpress revenue growth and lower variable long-term incentive compensation expenses of $1.9 million [179]. Cash Flow and Capital Expenditures - Cash provided by operating activities increased by $20.7 million to $25.1 million, driven by higher net income and favorable changes in net working capital [132]. - Adjusted free cash flow improved by $7.9 million to $(17.8) million, despite increased capital expenditures for new production equipment and technology enhancements [133]. - Net cash provided by operating activities was $25.1 million for the three months ended September 30, 2025, a significant increase from $4.4 million in the prior year [182]. Expenses and Costs - Cost of revenue for the three months ended September 30, 2025, increased by $37.7 million year over year, primarily due to higher third-party fulfillment costs and internal manufacturing expenses [144]. - Technology and development expenses increased by $3.0 million to $84.886 million for the three months ended September 30, 2025, representing a 4% increase year-over-year [145][147]. - Marketing and selling expenses rose by $6.6 million to $210.398 million, a 3% increase, driven by higher cash compensation costs and increased advertising spend [145][149]. - General and administrative expenses increased by $2.1 million to $53.996 million, primarily due to higher cash compensation costs and a sales tax reserve expense [145][151]. Debt and Financial Obligations - Cash and cash equivalents stood at $200.5 million, while total debt was $1,600.9 million as of September 30, 2025 [184]. - Total contractual obligations amounted to $2,616.4 million, with $318.9 million due within one year [189]. - The company had unrecorded purchase commitments of $429.2 million as of September 30, 2025, primarily for third-party cloud services and fulfillment [193]. - The 2032 Senior Notes bear interest at a rate of 7.375% per annum and have a total principal amount of $525.0 million [195]. Interest and Taxation - Interest expense decreased by $3.3 million, attributed to a lower weighted average interest rate on the senior secured Term Loan B [156]. - Income tax expense increased to $17.838 million with an effective tax rate of 73.2% for the three months ended September 30, 2025 [157]. Risk Management - The U.S. tariff environment remains fluid, with Cimpress managing tariff impacts through supply chain optimization and pricing adjustments [125]. - As of September 30, 2025, the company had $1,070.1 million in variable-rate debt, exposing it to interest rate risk [211]. - A hypothetical 100 basis point increase in interest rates would result in an $8.0 million increase in interest expense over the next 12 months [211]. - The company manages currency exchange rate risk through normal operations and derivative financial instruments, with significant exposures in the Euro and British Pound [213]. - The use of currency derivatives that do not qualify for hedge accounting may lead to volatility in consolidated financial statements due to unrealized gains and losses [214]. - The company executed interest rate swap contracts to mitigate exposure to interest rate changes related to its variable-rate debt [211].