Financial Data and Key Metrics Changes - Total revenue for 2025 was $2.133 billion, a 0.5% increase compared to 2024, and a 1.1% increase on a comparable adjusted basis [18] - GAAP net income improved to $85.3 million, or $1.87 per share, up from $52.9 million, or $1.18 per share in 2024 [18] - Comparable adjusted EBITDA was $431.5 million, a 6.2% increase from the previous year, with adjusted EBITDA margins expanding by 90 basis points to 20.2% [18][19] - Comparable adjusted EPS grew by 12.6% to $3.67 from $3.26 in 2024 [19] Business Line Data and Key Metrics Changes - Merchant Services revenue reached $398.6 million, growing by 3.8% year-over-year, with adjusted EBITDA at $85.9 million, a 9.4% increase [19][20] - B2B Payment segment revenue was $290.5 million, reflecting a 0.9% growth, with adjusted EBITDA at $64.4 million, a 12.8% increase [22][24] - Data segment revenue finished at $307.3 million, a 31.3% increase year-over-year, with adjusted EBITDA at $86.4 million, reflecting a 42.8% growth [25] - Print business revenue was $1.14 billion, a decline of 5.7% compared to the previous year, with adjusted EBITDA at $366.9 million [28][29] Market Data and Key Metrics Changes - Payments and Data now account for 47% of total revenue, up from 43% a year ago, with expectations to achieve revenue parity with Print businesses later this year [5][7] - The Data segment's revenue growth was driven by strong demand for marketing capabilities, with a significant increase in campaign performance [8][25] Company Strategy and Development Direction - The company is focused on shifting revenue mix towards Payments and Data, driving operational efficiencies, and increasing cash flow to lower net debt and improve leverage ratios [6][14] - The strategic goal is to transform Deluxe into a payments and data company, leveraging its history in paper-based payments to build a leading position in digital payments [7][8] - The company aims to achieve a leverage ratio of 3x or lower, with a year-end leverage ratio of 3.2x achieved ahead of schedule [15][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about consumer health and traditional patterns of consumer behavior stabilizing, which is expected to benefit overall business performance [47][48] - The Data segment is anticipated to maintain double-digit growth in the first half of 2026, despite facing tough comparisons in the second half [50] Other Important Information - Free cash flow for 2025 was $175 million, exceeding the 2026 goal a year early, with net debt reduced by $76 million [5][32] - The company has a strong sales pipeline and is optimistic about growth opportunities in the ISV space [10][22] Q&A Session Summary Question: How is Deluxe positioned to respond to trends in AI and agentic commerce? - Management highlighted that Deluxe has applied AI technology across multiple business areas, improving performance and campaign outcomes [44][45] Question: What are the primary objectives for the business in 2026? - The main objectives include shifting the revenue mix towards Payments and Data, driving operational efficiency, and generating cash flow to reduce debt [55][56] Question: What does the pipeline look like for 2026 in terms of distribution growth? - Management indicated a robust pipeline for the ISV distribution channel, with ongoing investments to enhance API offerings and reporting tools [58][59] Question: What are the opportunities for build versus buy decisions in investments? - Management emphasized a balanced approach, making responsible acquisitions while also focusing on internal capability development [66][67] Question: Are there specific areas where AI is seeing greater client receptivity? - Management noted that AI is applied across various business segments to solve specific customer problems, leading to strong receptivity [75]