Third Quarter 2025 Earnings November 5, 2025 Today's Presenters Barry McCarthy President and Chief Executive Officer Chip Zint Senior Vice President and Chief Financial Officer Brian Anderson © 2025 Deluxe Corporation Brian Anderson Vice President, Strategy & Investor Relations 2 Vice President, Strategy & Investor Relations 3 Cautionary Statement Statements made in this presentation regarding Deluxe, the company's,or management's intentions, expectations, outlook, or predictions about future results or eve ...

Core Insights - Postal Center International (PCI) has made significant donations from its PCI Powerhouse Fund to two nonprofit organizations, Abby's House and SA Hope Center, to support women, children, and families in need [1][2][7] - The PCI Powerhouse Fund was launched in December 2022 and aims to uplift communities by providing resources to organizations that address social issues [7] Group 1: Donations and Impact - PCI donated to Abby's House in Worcester, Massachusetts, and SA Hope Center in San Antonio, Texas, with the handover taking place on September 4, 2025 [1] - Abby's House has been providing safe and affordable housing for nearly five decades, focusing on women and children experiencing homelessness [3] - SA Hope Center addresses generational poverty and provides services such as workforce development, childcare, and mental health support [4][6] Group 2: Leadership and Commitment - Ismael Diaz, PCI President & CEO, emphasized the company's commitment to social responsibility, stating that success is measured by the lives transformed through their initiatives [2] - Julie Orozco, Executive Director of Abby's House, expressed gratitude for PCI's support, highlighting its role in maintaining affordable housing and quality care for residents [2] - Megan Legacy, CEO of SA Hope Center, noted that PCI's investment reflects their corporate mission and values, helping families achieve stability and better-paying jobs [4] Group 3: Fund's Mission and Achievements - The PCI Powerhouse Fund has donated to numerous organizations nationwide since its inception, including 4KIDS, Franklin Food Pantry, and others [7] - The founders of PCI, Arturo and Susan Echarte, stated that the Fund aims to extend PCI's legacy into communities where the need is greatest, supporting resilience and hope [7] - PCI is recognized as a leading provider of mail, print, and marketing solutions, employing over 600 associates across various regions [9]

Investment Rating - The report assigns a rating of "1" (Buy) to Western Digital Corporation (WDC), Seagate Technology Holdings (STX), and Amphenol Corporation (APH), while CDW Corporation (CDW), HP Inc. (HPQ), and NetApp, Inc. (NTAP) receive a rating of "2" (Neutral) [8]. Core Insights - The hardware and storage industry is experiencing robust demand driven by AI tailwinds, limited production capacity, and stable pricing, with demand consistently exceeding supply [2][4]. - Companies are focusing on enhancing their product offerings and operational efficiencies to capitalize on the growing demand for high-speed connectivity and data storage solutions [3][19][42]. Company Summaries Western Digital Corporation (WDC) - WDC anticipates a 23% CAGR in enterprise business (EB) demand, driven by AI, with a baseline growth of 15% [27]. - The company is focused on delivering scalable and reliable growth, with significant purchase orders from top customers providing visibility into 2027 [27][28]. - WDC is investing in ePMR and HAMR technologies to enhance storage capacity and reliability [27][32]. Seagate Technology Holdings (STX) - STX expects mid-20s% growth in nearline EB, with demand outpacing supply [37]. - The company is qualifying major cloud customers for its HAMR technology, aiming to meet increasing demand for higher density storage solutions [34][37]. - STX maintains a focus on cost efficiency and capital allocation, with a capex of 4-6% of revenues [41]. Amphenol Corporation (APH) - APH is optimistic about demand in the IT datacom segment, driven by data center interconnect needs [51]. - The company is achieving sustainable incremental margins of over 30% through disciplined execution and a diverse product portfolio [51][55]. - APH's recent acquisitions are expected to enhance its capabilities and market position [53][55]. CDW Corporation (CDW) - CDW's performance reflects resilience due to a diverse portfolio and disciplined execution, with expectations for continued growth despite macroeconomic caution [5][13]. - The company is capitalizing on cloud transitions and the complexity of technology to drive demand for its services [13][18]. - CDW is focused on integrating AI into its offerings to enhance operational efficiencies and customer experiences [18]. HP Inc. (HPQ) - HPQ projects unit growth in PCs at a mid-single-digit rate through 2025, driven by a refresh cycle and the transition to AI PCs [22]. - The company is optimizing its supply chain and expects revenue growth to outpace unit growth in premium categories [22]. - HPQ anticipates a slight decline in print revenues due to enterprise prioritization of other investments, though this is expected to be temporary [22][23]. NetApp, Inc. (NTAP) - NTAP is gaining market share with its refreshed portfolio, focusing on data modernization and AI implementation [42]. - The company expects cautious enterprise IT spending but sees potential upsides in a more favorable macro environment [42]. - NTAP is positioned to benefit from the shift towards AI workloads, which are expected to drive significant data growth [47].

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $521 million, down 2.5% year-over-year, attributed mainly to the low-margin promotional portion of Print [4][17] - Comparable adjusted EBITDA increased by 4.5% year-over-year to $106 million, with EBITDA margin expanding by 140 basis points to just above 20% [4][5] - Comparable adjusted EPS rose by 3.5% to $0.88, and year-to-date free cash flow expanded by over 200% to more than $34 million compared to 2024 [5][17] - The leverage ratio improved to 3.5 times, with a target to be below 3 times next year [5][28] Business Segment Data and Key Metrics Changes - Data Solutions segment revenue grew by over 18% in Q2, continuing to be a standout performer [5][22] - Merchant Services revenue increased by 2.9% year-over-year to $101.4 million, with adjusted EBITDA improving by 13% to $21.7 million [18][19] - B2B payments segment revenues were $71 million, up 1.1% year-over-year, with adjusted EBITDA expanding by 11.4% [20] - Print segment revenue declined by 9% year-over-year to $281.1 million, with adjusted EBITDA declining by 3.7% but maintaining a margin of 32.2% [23][26] Market Data and Key Metrics Changes - The overall revenue ratio remains modestly weighted toward Print at 54% to 46% for the year [10] - Payments and Data segments combined have expanded year-over-year by a blended rate of just under 7.5% [10] Company Strategy and Development Direction - The company is focused on transforming from a paper payments company to a digital payments and data company, with ongoing investments in technology and partnerships [15][11] - The acquisition of CheckMatch is expected to enhance the Deluxe Payment Network, creating revenue and cost synergy opportunities [11][12] - The company aims to maintain strong margins in Print while avoiding low-margin promotional deals [8][27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing macroeconomic uncertainty but expressed confidence in affirming revenue and earnings guidance while increasing free cash flow expectations [30][33] - The company expects to see continued growth in the Data Solutions segment and a solid exit growth rate for B2B payments as it enters 2026 [21][30] Other Important Information - The company ended Q2 with a net debt level of $1.44 billion, a reduction from previous levels, and aims for a leverage ratio of three times or better by 2026 [28][29] - A quarterly dividend of $0.30 per share was approved, payable on September 2, 2025 [30] Q&A Session Summary Question: What has driven the efficiency in the merchant business? - Management highlighted a focus on operating efficiency, pricing strategies, and new market expansions as key drivers for margin improvement [35][36] Question: Has Brian Mahoney implemented any ideas in the merchant business? - Management confirmed that Mahoney has made significant progress and is already seeing positive results from his initiatives [37][39] Question: What are the key drivers for the increase in free cash flow? - The increase is attributed to improved profitability, reduced restructuring spend, and better working capital efficiency [40][42] Question: What continues to drive growth in the Data Solutions segment? - Growth is driven by helping financial institutions target low-cost deposits and expanding into non-FI verticals [46][48] Question: What does the CheckMatch acquisition bring to the company? - CheckMatch enhances the existing Deluxe Payment Network by adding more lockboxes, allowing for digital payment processing and improved cash flow [49][51] Question: What is the outlook for future acquisition opportunities? - The company remains disciplined in capital allocation and will consider opportunities that align with its strategy for growth [60][62] Question: How is the company managing macroeconomic challenges? - Management noted a continuation of consumer hesitancy but emphasized good forecast accuracy and performance across the business [55][57]

Q2 2025 Financial Performance - Total revenue was $521.3 million, a decrease of 3.1% compared to Q2 2024[28] - Net income was $22.4 million, or $0.50 per share on a diluted basis, up from $20.5 million, or $0.46 per share in Q2 2024[28] - Adjusted EBITDA increased 4.6% to $106.5 million, with an adjusted EBITDA margin of 20.4%, up 140 basis points versus Q2 2024[28] - Adjusted diluted EPS was $0.88, up 3.5% compared to Q2 2024[28] Segment Performance - Merchant Services revenue increased 2.9% to $101.4 million, with an adjusted EBITDA margin of 21.4%, up 190 basis points year-over-year[29, 31] - B2B Payments revenue increased 1.1% to $71.0 million, with an adjusted EBITDA margin of 22.0%, up 210 basis points year-over-year[32, 34] - Data Solutions revenue increased 18.1% to $67.8 million, with an adjusted EBITDA margin of 30.1%, up 260 basis points year-over-year[35, 37] - Print revenue decreased 9.0%, with an adjusted EBITDA margin of 32.2%, expanding 180 basis points year-over-year[45, 47] Balance Sheet and Cash Flow - Net debt was $1,444.6 million as of June 30, 2025, with a net debt to adjusted EBITDA ratio of 3.5x[49] - Free cash flow for the six months ended June 30, 2025, was $52.1 million, compared to $17.6 million for the same period in 2024[49] 2025 Guidance - Revenue is projected to be between $2.090 billion and $2.155 billion, representing a decline of 1% to an increase of 2%[52] - Adjusted EBITDA is expected to be between $415 million and $435 million, an increase of 2% to 7%[52] - Adjusted EPS is projected to be between $3.25 and $3.55, flat to an increase of 9%[52] - Free cash flow is expected to be between $130 million and $150 million, an increase of 30% to 50%[52]

Q1 2025 Financial Performance - Total revenue reached $536.5 million, a 0.3% increase compared to Q1 2024[25] - Comparable adjusted revenue increased by 1.4% compared to Q1 2024[25] - Adjusted EBITDA increased by 3.4% to $100.2 million compared to Q1 2024[25] - Adjusted EBITDA margin increased by 40 basis points to 18.7% compared to Q1 2024[25] - Adjusted diluted EPS increased by 4.2% to $0.75 compared to Q1 2024[25] - Net income attributable to Deluxe was $14.0 million, or $0.31 per share, up from $10.8 million in Q1 2024[25,60] Segment Performance - Data Solutions revenue increased significantly by 29.3%[33] - Data Solutions adjusted EBITDA margin increased by 50 basis points to 25.5%[34] - Print segment revenue decreased by 4.0%[39] - Print segment adjusted EBITDA margin expanded by 120 basis points to 31.2%[41] Balance Sheet and Cash Flow - Net debt to adjusted EBITDA ratio remained at 3.6x[43] - Free cash flow increased significantly to $24.3 million, compared to $6.2 million in Q1 2024[43] 2025 Guidance - Revenue is projected to be between $2.090 billion and $2.155 billion, representing a comparable adjusted growth of -1% to +2%[46] - Adjusted EBITDA is expected to be between $415 million and $435 million, a growth of +2% to +7%[46] - Adjusted EPS is projected to be between $3.25 and $3.55, representing a growth of 0% to +9%[46] - Free cash flow is expected to be between $120 million and $140 million, a growth of +20% to +40%[46]