Financial Data and Key Metrics Changes - Reported net sales increased by 9% in Q2 2025 to $129.8 million, or 15% excluding the impact of a one-time noncash accounting change [18][20] - Adjusted EBITDA increased by 3% to $22.5 million, despite lower gross margins [25] - Net income decreased by 91% in the quarter, impacted by acquisition costs and accounting changes [25] Business Line Data and Key Metrics Changes - SecureCard business delivered volume and sales growth greater than 15% in the first half [7] - CardOnce instant issuance solution grew more than 20% in the first half, expanding to over 17,000 locations [7] - Open loop prepaid business sales increased by 17%, driven by packaging solutions and diversification into healthcare payment offerings [8] Market Data and Key Metrics Changes - The debit and credit segment saw a 16% increase in sales, while the prepaid segment experienced a 19% decrease [21] - Excluding the accounting change, prepaid net sales increased by 4% while debit and credit sales increased by 18% [22] Company Strategy and Development Direction - The company aims to be the most trusted partner for innovative payment technology solutions, focusing on customer service, quality, efficiency, innovation, and diversification [9] - The AeroEye acquisition is expected to create synergies and expand market access, particularly in the prepaid debit payment card market [10][11] - Investments are being made in automation and new facilities to enhance production efficiency and capacity [15] Management's Comments on Operating Environment and Future Outlook - The company anticipates challenges from unexpected tariffs, estimating a $5 million impact for 2025 [16][23] - Despite these challenges, the company has increased its sales outlook for the year, including contributions from AeroEye [17] - The management remains confident in the strategy and growth opportunities, expecting improvements as new facilities become operational [24][32] Other Important Information - The company generated $9.9 million in cash from operating activities in the first half, an increase from $4.1 million in the prior year [28] - The net leverage ratio at quarter end was 3.6 times, up from 3.1 times due to the acquisition funding [30] Q&A Session Summary Question: Insights on ROI acquisition performance and larger orders - The ROI acquisition has exceeded expectations with nearly $10 million in revenue in less than two months, but immediate large orders are not yet evident [38][41] Question: Synergies from chip procurement with ROI - The company plans to leverage its stronger purchasing power for chips, which could free up cash flows in the future [42][43] Question: Impact of accounting changes on ROI contribution - The ROI contribution is still small relative to overall revenue, but its profitability has been beneficial [48][49] Question: Opportunities in government programs with CardOnce - The company is expanding into government disbursement programs, which are expected to provide recurring revenue opportunities [50][52] Question: Metal card market growth - The company is positioned to meet the demand for metal cards, which is a growing but still small segment of the overall market [55][56] Question: Mitigation strategies for potential chip tariffs - The company has ample chip inventory and is prepared to manage through potential tariff impacts [59][62]

Financial Performance - Non-GAAP Net Sales reached $119.6 million, a 10% increase compared to Q2 2024, driven by domestic demand growth[14] - Pro Forma Adjusted EBITDA increased by 26% to $46.3 million compared to Q2 2024, attributed to organic revenue growth and operational efficiencies[15] - The company is raising full year guidance for Non-GAAP Net Sales to approximately $455 million and Pro Forma Adjusted EBITDA to approximately $158 million[16] - Holdings Domestic Net Sales increased by 22% reaching $104.3 million in Q2 2025[66] - Holdings International Net Sales decreased by 35% reaching $15.3 million in Q2 2025[66] - Holdings Gross Margin increased by 588 bps reaching 57.5% in Q2 2025[66] Market and Strategic Positioning - Metal payment cards represent less than 1% of total payment card shipments per year, indicating a growth opportunity[10,40] - The company is focused on increasing its share of metal card issuance as overall payment card volumes expand[38] - The company is making strategic investments in personnel and manufacturing to support long-term growth[30] Product and Customer Wins - The company secured high-profile card program wins and upgrades, including Chase Sapphire Reserve, Crypto.com, Gemini, XP, and MGM[15,33] - The Coinbase One Card, powered by Arculus, launched as the first crypto card on the American Express network[15]

Ms. Corbin Loree stated: "I'm excited to be part of CompoSecure's Board as the company enters its next phase of growth. Drawing on my experience in capital markets and investor relations, I aim to support the team in driving long-term value and strengthening the company's market presence." "Rebecca and Kevin bring exceptional strategic and financial insight that will be instrumental as we continue to scale," said Jon Wilk, President and CEO of CompoSecure. "Their global experience and operational expertise ...

Core Insights - The total card spending for Visa, Mastercard, American Express, and Discover in the US reached $6.136 trillion in 2024, marking a 5.3% increase from 2023 [1] - JP Morgan Chase maintained its position as the top issuer with over $1.344 trillion in purchase volume, followed by American Express and Citi [2] - The top five issuers accounted for 69.1% of all credit card spending, while the top ten issuers represented over 82.5% [2] Spending and Debt Trends - Outstanding credit card receivables reached $1.346 trillion at the end of 2024, reflecting a 7.9% increase [2] - The growth rate of outstanding debt on cards is outpacing spending, suggesting that some consumers may be struggling to meet their obligations [3] - The number of credit cards in circulation was 942 million, with 34 million locations available for purchases [3]