Core Insights - Coveo has been recognized as a Leader for the second consecutive year in the 2025 Gartner Magic Quadrant for Search and Product Discovery, highlighting its strong performance in AI-driven search and product discovery solutions [1][2] - The evaluation by Gartner was based on the company's Completeness of Vision and Ability to Execute, indicating a robust strategic positioning and operational effectiveness [1][2] Company Overview - Coveo specializes in AI-Relevance, providing advanced AI-search and generative experiences that enhance business outcomes across various customer interactions [1][5] - The Coveo AI-Relevance Platform offers a comprehensive suite of AI and GenAI models designed to deliver personalized experiences at scale, improving product discovery and customer engagement [3][7] Product Features - The platform includes predictive AI search, tailored recommendations, generative answers, and unified personalization, enabling businesses to manage customer experiences effectively [3][7] - Coveo's Relevance Generative Answering (CRGA) solution allows users to leverage expert content and product catalogs for enhanced question-answering capabilities [3] Market Position - The Gartner Magic Quadrant serves as a comprehensive analysis of the competitive landscape, allowing stakeholders to assess technology providers' execution and vision [2] - Coveo's recognition as a Leader reflects the significant return on investment (ROI) experienced by its customers and the platform's capability to address the complexities of B2B and B2C enterprises [2]

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 - Total company revenue for the full year 2024 was $1,100 million, an increase of $229 million or 26% compared to 2023, driven by higher client spending and new ATP and NBA deals [25][27] - Adjusted EBITDA for the year was $222 million, up $56 million compared to the previous year, with adjusted EBITDA margins increasing by over 100 basis points to 20% [28][32] - In Q4, record revenues reached $307 million, a 22% increase year-on-year, with adjusted EBITDA of $61 million, up 53% year-on-year [30][34] Business Line Data and Key Metrics Changes - Betting technology and solutions revenue was $247 million, delivering 21% growth year-on-year, primarily driven by a 30% increase in betting and gaming content [28][29] - Managed trading services (MTS) turnover reached €35 billion, with a margin of 10.7%, an improvement from 9.8% in 2023 [19] - Sports content technology and services revenue was $60 million, increasing 23% year-on-year, led by a 22% growth in marketing and media services [29] Market Data and Key Metrics Changes - U.S. revenues increased by 58% year-on-year, now accounting for 24% of total revenue, up 500 basis points from the previous year [27] - The rest of the world saw a revenue increase of 19% [25] - MTS has expanded to over 250 sportsbook clients, encompassing more than 500 sportsbook brands [20] Company Strategy and Development Direction - The company is expanding its global content portfolio through the acquisition of IMG Arena, enhancing its footprint in key sports like tennis, soccer, and basketball [7][8] - The focus is on leveraging technology and AI to automate data collection and enhance product offerings, aiming for significant cash flow generation and margin expansion [24][38] - The company anticipates continued robust growth in 2025, with revenue expected to reach at least $1,273 million, representing a year-over-year growth of at least 15% [37][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving multi-year margin expansion and significant cash flow generation, citing a strong competitive position and growth profile [9][23] - The acquisition of IMG Arena is expected to be immediately accretive to business and margins, with a focus on maximizing the value of high-demand content [13][14] - Management highlighted the importance of operational synergies and the ability to leverage existing technology and client relationships to drive future growth [48][67] Other Important Information - The company generated free cash flow of $118 million in 2024, up from $50 million in 2023, with a conversion rate of 53% [34] - The balance sheet remains strong, with $348 million in cash and no debt outstanding [34] - The company has repurchased approximately $20 million worth of stock under its share repurchase program [35] Q&A Session Summary Question: Can you provide details on the IMG deal and its impact? - Management emphasized the strategic and commercial benefits of the IMG deal, highlighting its accretive nature to revenue, margin, and cash flow [41][45] - The acquisition includes both assets and liabilities, with a focus on operational synergies to reduce costs [48][49] Question: What is driving the success of MTS in Brazil? - A strong local team and effective marketing strategies are key drivers, with a focus on iGaming as a significant growth opportunity [50][54] Question: Can you elaborate on the impact of the Taiwan Lottery hardware sales on organic growth? - The impact was significant, with the MBS segment growth in Q4 expected to be in the high 20% range without the one-time fees from the Taiwan Lottery [58][60] Question: How does the acquisition of IMG affect revenue and EBITDA projections? - The acquisition is expected to enhance revenue growth significantly, with estimates suggesting a potential high 20% growth rate if IMG had been part of the portfolio from the start of the year [66][67] Question: What is the valuation approach for the IMG acquisition? - The company evaluates ROI for each rights acquisition, focusing on potential revenue generation and margin accretion [86][88]