Cimpress(US:CMPR)2025-10-30 13:00Financial Data and Key Metrics Changes - The consolidated Q1 revenue grew 7% on a reported basis and 4% on an organic constant currency basis, with adjusted EBITDA increasing by $10.9 million year over year, marking the highest ever EBITDA for a Q1 period [14][16][17] - Gross profit dollars grew 5% on a consolidated basis, while gross margins contracted by 80 basis points due to a product mix shift [17][18] - Adjusted free cash flow showed an outflow of $17.8 million, driven by seasonal net working capital and planned higher capital expenditures [20] Business Line Data and Key Metrics Changes - Vista experienced strong growth in elevated products, particularly in promotional products, apparel, gifts, packaging, and labels, with double-digit growth rates year over year [5][15] - The Upload and Print segment reported a 15% increase in revenue, with constant currency growth of 8% [16] - National Pen and BuildASign also contributed to revenue growth, driven by their role as key fulfillment partners for Vista [16] Market Data and Key Metrics Changes - Elevated products are gaining traction in the web-to-print and mass customization market, indicating a long runway for future market share gains [5][6] - The impact of tariffs on gross profit was minimal, with the company able to offset almost all impacts through pricing adjustments [19][33] Company Strategy and Development Direction - The company is focusing on elevated products to improve customer lifetime value and is investing significantly in production operations to reduce costs and increase product introduction velocity [7][12] - Cross Cimpress Fulfillment is being leveraged to drive revenue and profits across different segments, enhancing synergies within the company [9][25] - The company aims for a path to FY2028 EBITDA of at least $600 million, with significant deleveraging on the balance sheet [11][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting or exceeding fiscal 2026 financial objectives, citing a strong start to the fiscal year [14][21] - The company is optimistic about the upcoming holiday season, having addressed previous headwinds and improved organic search performance [36][38] - Management acknowledged the importance of risk mitigation regarding tariffs and emphasized a strong liquidity position with cash and cash equivalents over $200 million [20][33] Other Important Information - The company reiterated its fiscal year guidance, expecting revenue growth of 5 to 6% and adjusted EBITDA of at least $450 million [21][22] - The introduction of a new metric, variable gross profit per customer, aims to provide better insights into customer value growth [18] Q&A Session Summary Question: How was consolidated revenue "only" up 4% on an organic constant currency basis? - The discrepancy is due to Cross Cimpress Fulfillment, where inter-segment revenues are eliminated in consolidated results, impacting the overall revenue figures [25][26] Question: What is the current status of dealings with Spruce House? - The company has met with Spruce House and appreciates their feedback, focusing on executing plans to reflect intrinsic value [28][29] Question: Can you unpack how Q1 results position you for the remainder of the year? - Q1 results were ahead of the pace needed to meet full-year guidance, indicating a strong start for the fiscal year [30][31] Question: What was the impact of tariffs during the quarter? - The impact of tariffs was minimal, with less than $1 million net impact, and the company continues to focus on risk mitigation [33][34] Question: How is the company preparing for the holiday season? - The company has improved its position compared to last year, addressing previous headwinds and planning strategically for the holiday season [36][38] Question: Why was tax expense so high at $17.8 million? - The increase in tax expense is attributed to higher profitability year over year, with cash taxes expected to be higher due to the absence of prior year refunds [39][40]