Cimpress plc
Cimpress plc
10/30/2025 | Press release | Distributed by Public on 10/30/2025 15:25
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
This Report contains forward-looking statements that involve risks and uncertainties. The statements contained in this Report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including but not limited to our statements about the anticipated growth and development of our businesses and financial results, the impact of interest rate and currency fluctuations, the impact of U.S. tariffs (including potential changes in related trade policies and potential mitigation actions and related estimates, cost impacts, pricing changes and changes in customer demand), sources of liquidity to fund future operations, future payment terms with suppliers, the timing of adoption of certain accounting standards, legal proceedings, our ability to prevail in our appeal of an adverse land duty tax assessment, indefinitely reinvested earnings, unrecognized tax benefits, our effective tax rate, and sufficiency of our tax reserves. Without limiting the foregoing, the words "may," "should," "could," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "assume," "designed," "potential," "possible," "continue," "target," "seek," "likely," "will" and similar expressions are intended to identify forward-looking statements. All forward-looking statements included in this Report are based on information available to us up to, and including the date of this document, and we disclaim any obligation to update any such forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various important factors, including but not limited to flaws in the assumptions and judgments upon which our forecasts and estimates are based; the development, duration, and severity of supply chain constraints and fluctuating inflation; our inability to make investments in our businesses and allocate our capital as planned or the failure of those investments and allocations to achieve the results we expect; costs and disruptions caused by acquisitions and minority investments; the failure of businesses we acquire or invest in to perform as expected; loss of key personnel or our inability to recruit talented personnel; our failure to develop and deploy our mass customization platform or the failure of the mass customization platform to drive the performance, efficiencies, and competitive advantage we expect; unanticipated changes in our markets, customers, or businesses; disruptions caused by geopolitical events or political instability and war in Ukraine, Israel, the Middle East, or elsewhere; changes in governmental policies, laws, and regulations that affect our businesses, or in their enforcement or interpretation, including related to import tariffs; our failure to manage the growth and complexity of our business; our failure to maintain compliance with the covenants in our debt documents or to pay our debts when due; competitive pressures; general economic conditions; and other factors described in Item 1A (Risk Factors) of our Annual Report on Form 10-K for the 2025 fiscal year, this Quarterly Report on Form 10-Q and subsequent documents we periodically file with the SEC.
Executive Overview
Cimpress is a strategically focused collection of businesses that specialize in print mass customization, through which we deliver large volumes of individually small-sized customized orders of printed materials and promotional products. Our products and services include a broad range of marketing materials, business cards, signage, promotional products, logo apparel, packaging, books and magazines, wall decor, photo merchandise, invitations and announcements, design and digital marketing services, and other categories. Mass customization is a core element of the business model of each Cimpress business and is a competitive strategy which seeks to produce goods and services to meet individual customer needs with near mass production efficiency.
As of September 30, 2025, we have numerous operating segments under our management reporting structure that are reported in the following five reportable segments: Vista, PrintBrothers, The Print Group, National Pen, and All Other Businesses. For purposes of measuring and reporting our segment financial performance, we made updates to our previously implemented methodology for inter-segment transactions during the first quarter of fiscal 2026. These transactions occur when one Cimpress business buys from or sells to another Cimpress business. Under the updated methodology, a merchant business (the buyer) is cross charged the variable cost of fulfillment that includes labor, materials and shipping costs, which excludes the previously included overhead allocation. We also updated our internal organizational structure, which included the transfer of two teams from our Vista reportable segment into our central functions. We have recast the prior periods presented for segment revenue and segment EBITDA for both changes to ensure comparability with the current fiscal year. These changes have no impact on our consolidated financial results. Refer to Note 11 in our accompanying consolidated financial statements for additional information relating to our reportable segments and our segment financial measures.
U.S. Tariffs
The U.S. tariff environment remains fluid. Cimpress businesses operate in the U.S., and we have fulfillment operations for U.S. customers in multiple locations in the U.S., Canada and Mexico. Cimpress has multiple exemptions and exclusions from paying tariffs on many of the products we fulfill for U.S. customers in Canada and
Mexico. The primary impact of tariffs on Cimpress continues to be for promotional products that we source from China and several other countries. After the elimination of the de minimis exemption for shipments under $800 per day to individual U.S. customers in May 2025 for Chinese-sourced goods and August 2025 for goods from other countries, we increased our pricing on impacted products. To date, we have been able to minimize the impact of the new tariffs through supply chain optimization and pricing changes.
We are monitoring the status of tariffs, and we will remain nimble in our sourcing and pricing responses. Most of the computed value of the products we produce in Canada and Mexico for U.S. customers remains covered by exemptions due to their compliance with the US-Mexico-Canada (USMCA) trade agreement and the International Emergency Economic Powers Act (IEEPA) carve out for informational materials. Furthermore, we continue to believe that our scale-based advantages and the assets of our manufacturing, supply chain and procurement, and flexible technology infrastructure have become even clearer through this turbulence. We remain confident that we can manage this effectively, even as facts and circumstances continue to change.
Financial Summary
The primary financial metric by which we set quarterly and annual budgets both for individual businesses and Cimpress wide is our adjusted free cash flow before net cash interest payments; however, in evaluating the financial condition and operating performance of our business, management considers a number of metrics including revenue growth, constant-currency revenue growth, organic constant-currency revenue growth (which excludes the impact of acquisitions/divestitures), operating income, net income (loss), adjusted EBITDA, cash flow from operations, and adjusted free cash flow. Reconciliations of our non-GAAP financial measures are included within the "Consolidated Results of Operations" and "Additional Non-GAAP Financial Measures" sections of Management's Discussion and Analysis. A summary of these key financial metrics for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 follows:
•Revenue increased by 7% to $863.3 million.
•Organic constant-currency revenue growth (a non-GAAP financial measure) was 4%.
•Operating income increased by $9.6 million to $49.0 million.
•Net income increased by $18.9 million to $6.5 million.
•Adjusted EBITDA (a non-GAAP financial measure) increased by $10.9 million to $98.7 million.
•Diluted net income per share attributable to Cimpress plc increased by $0.80 to $0.30.
•Cash provided by operating activities increased by $20.7 million to $25.1 million.
•Adjusted free cash flow (a non-GAAP financial measure) increased by $7.9 million to $(17.8) million.
For the three months ended September 30, 2025, the increase in reported consolidated revenue was primarily driven by revenue growth across most of our reportable segments. The largest contributors of the revenue growth came from our Vista and PrintBrothers reportable segments. Revenue growth in Vista was led by strong performance in promotional products, apparel and gifts (PPAG) and packaging and labels, which delivered growth across all major markets. Our PrintBrothers reportable segment delivered revenue growth across all of their businesses, driven by the combination of increases in new customers and order volume growth.
The increase to operating income of $9.6 million during the three months ended September 30, 2025 was primarily driven by incremental gross profit due to revenue growth discussed above. Across many of our businesses we continue to drive year-over-year advertising and operating expense efficiencies. These efficiencies, including from reductions in the second half of the prior fiscal year, helped offset the overall increase in operating expenses as compared to the prior year period, in part due to higher cash compensation costs driven by the timing of our annual merit cycle.
For the three months ended September 30, 2025, net income increased by $18.9 million to $6.5 million due to the operating income increase described above as well as an increase in other income (expense) of $14.9 million primarily due to unrealized hedging gains of $3.5 million as compared to losses of $20.6 million in the prior-year period. This was partially offset by $8.8 million of higher income tax expense due primarily to increased income (loss) before income taxes.
Adjusted EBITDA increased during the three months ended September 30, 2025, for similar reasons described above as well as $2.9 million in year-over-year currency benefits, net of realized losses on certain currency hedge contracts.
During the three months ended September 30, 2025, cash from operations increased$20.7 million year over year, primarily driven by the higher net income as described above, as well as favorable changes in net working capital year over year of $16.3 million partially offset by higher cash taxes.
Adjusted free cash flow increased by $7.9 million for the three months ended September 30, 2025, due to the operating cash flow increase described above, partially offset by a $9.4 million increase in capitalized expenditures due to planned investments in new production equipment and facility expansion and a $2.7 million increase in capitalized software and website development costs, primarily driven by investments in our mass customization platform and related technology enhancements.
Consolidated Results of Operations
Consolidated Revenue
Our businesses generate revenue primarily from the sale and shipment of customized products. We also generate revenue, to a much lesser extent (and primarily in our Vista business), from digital services, graphic design services, website design and hosting, and social media marketing services, as well as a small percentage of revenue from order referral fees and other third-party offerings. For additional discussion relating to segment revenue results, refer to the "Reportable Segment Results" section included below.
Total revenue and revenue growth by reportable segment for the three months ended September 30, 2025 and 2024 are shown in the following tables. The revenue by reportable segment includes inter-segment transactions, which is when one Cimpress business chooses to buy from or sell to another Cimpress business that is part of a different reportable segment. These transactions are then eliminated in the inter-segment elimination line in the table below.
| In thousands | Three Months Ended September 30, |
Currency Impact: |
Constant- Currency |
Impact of Acquisitions/Divestitures: | Constant- Currency Revenue Growth | ||||||||||||||||||||||||||||||||||||
| 2025 | 2024 (1) |
% Change |
(Favorable)/Unfavorable |
Revenue Growth (2)
|
(Favorable)/Unfavorable |
Excluding Acquisitions/Divestitures (3)
|
|||||||||||||||||||||||||||||||||||
|
Vista
|
$ | 454,909 | $ | 429,576 | 6% | (1)% | 5% | -% | 5% | ||||||||||||||||||||||||||||||||
|
PrintBrothers
|
184,711 | 160,424 | 15% | (7)% | 8% | -% | 8% | ||||||||||||||||||||||||||||||||||
|
The Print Group
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96,710 | 84,202 | 15% | (7)% | 8% | -% | 8% | ||||||||||||||||||||||||||||||||||
|
National Pen
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103,209 | 93,590 | 10% | (2)% | 8% | -% | 8% | ||||||||||||||||||||||||||||||||||
|
All Other Businesses
|
61,742 | 57,240 | 8% | 0% | 8% | -% | 8% | ||||||||||||||||||||||||||||||||||
|
Inter-segment eliminations
|
(38,004) | (20,063) | |||||||||||||||||||||||||||||||||||||||
| Total revenue | $ | 863,277 | $ | 804,969 | 7% | (3)% | 4% | -% | 4% | ||||||||||||||||||||||||||||||||
(1) The prior-period segment results have been adjusted to ensure comparability with the updated methodology used for inter-segment transactions. Refer to Note 11 of the accompanying consolidated financial statements for additional details.
(2) Constant-currency revenue growth, a non-GAAP financial measure, represents the change in total revenue between current and prior-year periods at constant-currency exchange rates by translating all non-U.S. dollar denominated revenue generated in the current period using the prior year period's average exchange rate for each currency to the U.S. dollar. Our reportable segments-related growth is inclusive of inter-segment revenues, which are eliminated in our consolidated results.
(3) Constant-currency revenue growth excluding acquisitions/divestitures, a non-GAAP financial measure, excludes revenue results for businesses in the period in which there is no comparable year-over-year revenue. Our reportable segments-related growth is inclusive of inter-segment revenues, which are eliminated in our consolidated results.
We have provided these non-GAAP financial measures because we believe they provide meaningful information regarding our results on a consistent and comparable basis for the periods presented. Management uses these non-GAAP financial measures, in addition to GAAP financial measures, to evaluate our operating results. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP.
For the three months ended September 30, 2025, the reported revenue growth of $58.3 million was primarily driven by revenue growth in our Vista and PrintBrothers reportable segments and $23.2 million of positive effects from currency exchange rate fluctuations as compared to the prior year. Excluding the effect of changes in currency exchange rates and inter-segment revenue, the largest increase in revenue was from our Vista business with an increase of $19.7 million for the three months ended September 30, 2025. Vista revenue was higher year over year across all major markets, with the most significant growth in the PPAG and packaging and label product categories. Our PrintBrothers reportable segment also contributed $11.1 million of increased revenue for the three months ended September 30, 2025, excluding the effect of changes in currency exchange rates and inter-segment revenue, primarily driven by new customer and order volume growth, partially offset by customers purchasing lower quantities in certain product categories.
For additional discussion relating to segment revenue results, refer to the "Reportable Segment Results" section included below.
Consolidated Cost of Revenue
Cost of revenue includes materials used by our businesses to manufacture their products, payroll and related expenses for production and design services personnel, depreciation of assets used in the production process and in support of digital marketing service offerings, shipping, handling and processing costs, third-party production and design costs, costs of free products, and other related costs of products our businesses sell.
|
In thousands
|
Three Months Ended September 30, | ||||||||||
| 2025 | 2024 | ||||||||||
| Cost of revenue | $ | 460,476 | $ | 422,736 | |||||||
| % of revenue | 53.3 | % | 52.5 | % | |||||||
For the three months ended September 30, 2025, cost of revenue increased by $37.7 million year over year, driven by increases in third-party fulfillment costs of $14.2 million, due in part to product mix shifts toward faster-growing product categories that leverage our third-party fulfillment network. In addition, internal variable manufacturing and shipping costs increased by $12.0 million and $5.0 million, respectively, primarily driven by volume-related increases. For both third-party and internal fulfillment costs, a smaller portion of the increase is also impacted by tariff-related cost increases in the U.S., which have largely been offset by price increases. Currency exchange rate fluctuations also increased the cost of revenue by $14.0 million, as compared to the prior year period.
Consolidated Operating Expenses
The following table summarizes our comparative operating expenses for the following periods
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In thousands
|
Three Months Ended September 30, | ||||||||||||||||
| 2025 | 2024 | 2025 vs. 2024 | |||||||||||||||
| Technology and development expense | $ | 84,886 | $ | 81,861 | 4% | ||||||||||||
| % of revenue | 9.8 | % | 10.2 | % | |||||||||||||
| Marketing and selling expense | $ | 210,398 | $ | 203,847 | 3% | ||||||||||||
| % of revenue | 24.4 | % | 25.3 | % | |||||||||||||
| General and administrative expense | $ | 53,996 | $ | 51,932 | 4% | ||||||||||||
| % of revenue | 6.3 | % | 6.5 | % | |||||||||||||
|
Amortization of acquired intangible assets
|
$ | 4,252 | $ | 5,155 | (18)% | ||||||||||||
| % of revenue | 0.5 | % | 0.6 | % | |||||||||||||
| Restructuring expense | $ | 298 | $ | 99 | 201% | ||||||||||||
| % of revenue | 0.0 | % | 0.0 | % | |||||||||||||
Technology and development expense
Technology and development expense consists primarily of payroll and related expenses for employees engaged in software and manufacturing engineering, information technology operations, and content development, as well as amortization of capitalized software and website development costs, including hosting of our websites, asset depreciation, patent amortization, and other technology infrastructure-related costs. Depreciation expense for information technology equipment that directly supports the delivery of our digital marketing services products is included in cost of revenue.
Technology and development expense increased by $3.0 million for the three months ended September 30, 2025, as compared to the prior year period. This increase was primarily driven by a $3.1 million increase in third-party technology costs, most of which related to further adoption of certain products offered through our mass customization platform, as well as increased business volume, which has collectively increased consumption of those services and related infrastructure costs.
Marketing and selling expense
Marketing and selling expense consists primarily of advertising and promotional costs; payroll and related expenses for our employees engaged in marketing, sales, customer support, and public relations activities; direct-mail advertising costs; and third-party payment processing fees. Our Vista, National Pen, and BuildASign businesses have higher marketing and selling costs as a percentage of revenue as compared to our PrintBrothers and The Print Group businesses due to differences in the customers that they serve.
For the three months ended September 30, 2025, marketing and selling expenses increased by $6.6 million, partly due to higher cash compensation costs of $3.9 million, driven by our annual merit cycle, as well as hiring in our Vista business. In addition, advertising spend increased by $1.8 million, as compared to the prior year period, largely due to volume-driven increases to advertising spend, as well as targeted advertising investments in certain businesses.
General and administrative expense
General and administrative expense consists primarily of transaction costs, including third-party professional fees, insurance, and payroll and related expenses of employees involved in executive management, finance, legal, strategy, human resources, and procurement.
General and administrative expenses increased by $2.1 million during the three months ended September 30, 2025 as compared to the prior year period, driven by an increase in cash compensation costs of $2.7 million, primarily influenced by the timing of our annual merit cycle, as well as expense recognized during the first quarter of fiscal year 2026 for a sales tax reserve of $1.9 million. These increases were partially offset by lower long-term incentive cash compensation costs of $1.3 million due to changes in the estimated payout for certain businesses and lower share-based compensation costs of $1.6 million, driven by fluctuations in the attainment associated with the performance conditions of prior-year performance share units.
Other Consolidated Results
Other income (expense), net
Other income (expense), net generally consists of gains and losses from currency exchange rate fluctuations on transactions or balances denominated in currencies other than the functional currency of our subsidiaries, as well as the realized and unrealized gains and losses on some of our derivative instruments. In evaluating our currency hedging programs and ability to qualify for hedge accounting in light of our legal entity cash flows, we considered the benefits of hedge accounting relative to the additional economic cost of trade execution and administrative burden. Based on this analysis, we execute certain currency derivative contracts that do not qualify for hedge accounting.
The following table summarizes the components of other income (expense), net:
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In thousands
|
Three Months Ended September 30, | ||||||||||
| 2025 | 2024 | ||||||||||
|
Gains (losses) on derivatives not designated as hedging instruments
|
$ | 3,451 | $ | (20,569) | |||||||
| Currency-related (losses) gains, net | (181) | 8,667 | |||||||||
| Other gains | 183 | 410 | |||||||||
| Total other income (expense), net | $ | 3,453 | $ | (11,492) | |||||||
The changes in other income (expense), net was primarily due to the currency exchange rate volatility impacting our derivatives that are not designated as hedging instruments, of which our Euro and British Pound contracts are the most significant exposures that we economically hedge. We expect volatility to continue in future periods, as we do not apply hedge accounting for most of our derivative currency contracts.
We experience currency-related net gains and losses due to currency exchange rate volatility on our non-functional currency intercompany relationships, which we may alter from time to time.
Interest expense, net
Interest expense, net primarily consists of interest on outstanding debt balances, amortization of debt issuance costs, debt discounts, interest related to finance lease obligations, accretion adjustments related to our mandatorily redeemable noncontrolling interests, and realized gains (losses) on effective interest rate swap contracts and certain cross-currency swap contracts.
Interest expense, net decreased $3.3 million during the three months ended September 30, 2025, primarily due to a year-over-year decrease to our weighted average interest rate (net of interest rate swaps) on our senior secured Term Loan B in part arising from our repricing action in December 2024 that reduced the credit spread on our outstanding debt.
Income tax expense
| In thousands | Three Months Ended September 30, | ||||||||||
| 2025 | 2024 | ||||||||||
| Income tax expense | $ | 17,838 | $ | 8,995 | |||||||
| Effective tax rate | 73.2 | % | (265.4) | % | |||||||
Income tax expense for the three months ended September 30, 2025 increased versus the prior year primarily due to increased income (loss) before income taxes and various immaterial discrete items in both periods.
We believe that our income tax reserves are adequately maintained by taking into consideration both the technical merits of our tax return positions and ongoing developments in our income tax audits. However, the final determination of our tax return positions, if audited, is uncertain, and therefore there is a possibility that final resolution of these matters could have a material impact on our results of operations or cash flows. Refer to Note 9 in our accompanying consolidated financial statements for additional details.
Reportable Segment Results
Our segment financial performance is measured based on segment EBITDA, which is defined as operating income plus depreciation and amortization; plus proceeds from insurance not already included in operating income; plus share-based compensation expense related to investment consideration; plus earn-out related charges; plus certain impairments and other adjustments; plus restructuring related charges; less gain or loss on the purchase or sale of subsidiaries as well as the disposal of assets. The effects of currency exchange rate fluctuations impact segment EBITDA and we do not allocate to segment EBITDA any gains or losses that are realized by our currency hedging program.
For purposes of measuring and reporting our segment financial performance, we implemented changes to the previously implemented methodology used for inter-segment transactions during the first quarter of fiscal 2026. These transactions are when one Cimpress business chooses to buy from or sell to another Cimpress business. We also updated our internal organizational structure which included the transfer of two teams from our Vista reportable segment into our central functions. We have recast the prior periods presented for segment revenue and segment EBITDA for both changes to ensure comparability with the current fiscal year. These changes in methodology have no impact on our consolidated financial results. Refer to Note 11 in our accompanying consolidated financial statements for additional details.
Vista
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In thousands
|
Three Months Ended September 30, | ||||||||||||||||
| 2025 | 2024 (1) | 2025 vs. 2024 | |||||||||||||||
|
Reported Revenue
|
$ | 454,909 | $ | 429,576 | 6% | ||||||||||||
|
Segment EBITDA
|
89,986 | 81,142 | 11% | ||||||||||||||
| % of revenue | 20 | % | 19 | % | |||||||||||||
(1) The prior year segment results have been adjusted to ensure comparability with the updated methodology used for inter-segment transactions and organizational changes that transferred two teams to our central functions. Refer to Note 11 of the accompanying consolidated financial statements for additional details.
Segment Revenue
Vista's reported revenue growth for the three months ended September 30, 2025 was 6% and was positively affected by currency exchange rate fluctuations of 1%, resulting in constant-currency revenue growth of 5%. Revenue growth for the three months ended September 30, 2025 was stronger for product categories such as PPAG as well as packaging and labels and was supported by bookings growth for both new and repeat customers. Partially offsetting growth in these product categories was a decline in business card and stationery products, although the rate of decline was improved versus the prior year quarter.
Segment Profitability
For the three months ended September 30, 2025, segment EBITDA increased by $8.8 million, primarily due to gross profit growth of $15.5 million, which was driven by the revenue growth described above. Partially offsetting the increase in gross profit was a $1.4 million increase in advertising spend that was primarily related to increases in performance advertising spend that supported the revenue growth described above and, as a percentage of segment revenue, was lower year over year. In addition, operating expenses increased by $5.1 million, driven by compensation increases from our annual merit cycle and improved customer self-service features to improve customer care efficiency.
PrintBrothers
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In thousands
|
Three Months Ended September 30, | ||||||||||||||||
| 2025 | 2024 (1) | 2025 vs. 2024 | |||||||||||||||
|
Reported Revenue
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$ | 184,711 | $ | 160,424 | 15% | ||||||||||||
|
Segment EBITDA
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25,739 | 20,194 | 27% | ||||||||||||||
| % of revenue | 14 | % | 13 | % | |||||||||||||
(1) The prior year segment results have been adjusted to ensure comparability with the updated methodology used for inter-segment transactions. Refer to Note 11 of the accompanying consolidated financial statements for additional details.
Segment Revenue
PrintBrothers' reported revenue growth for the three months ended September 30, 2025 was positively affected by currency exchange rate fluctions of 7%, resulting in organic constant currency revenue growth of 8%. Organic constant-currency revenue growth was driven primarily by customer and order volume growth across the businesses.
Segment Profitability
PrintBrothers' segment EBITDA for the three months ended September 30, 2025 increased $5.5 million, primarily due to the revenue growth described above, as well as positive year-over-year impacts from currency exchange fluctuations of $1.6 million. This was partially offset by increases in advertising spend of $0.6 million, which as a percentage of external revenue is flat year over year, as well as an increases in operating expenses of $2.0 million, which is mostly driven by technology investments.
The Print Group
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In thousands
|
Three Months Ended September 30, | ||||||||||||||||
| 2025 | 2024 (1) | 2025 vs. 2024 | |||||||||||||||
|
Reported Revenue
|
$ | 96,710 | $ | 84,202 | 15% | ||||||||||||
|
Segment EBITDA
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18,671 | 18,062 | 3% | ||||||||||||||
| % of revenue | 19 | % | 21 | % | |||||||||||||
(1) The prior year segment results have been adjusted to ensure comparability with the updated methodology used for inter-segment transactions. Refer to Note 11 of the accompanying consolidated financial statements for additional details.
Segment Revenue
The Print Group's reported revenue growth was positively affected by currency exchange rate fluctuations of 7%, resulting in constant-currency revenue growth for the three months ended September 30, 2025 of 8%, and was primarily driven by increased fulfillment for other Cimpress businesses. External revenue growth was relatively flat year over year, as we continue to experience a shift to lower overall order values in certain product categories.
Segment Profitability
The Print Group's segment EBITDA increased $0.6 million during the three months ended September 30, 2025 as compared to the prior year, due in part to positive year-over-year impacts from currency exchange fluctuations of $1.1 million. Excluding the effect of currency, segment EBITDA declined by $0.4 million, due to a $2.2 million increase in variable long-term incentive compensation expense, driven by changes year over year in their estimated payouts. This cost increase was offset in part by an increase in gross profit, driven by the revenue growth described above.
National Pen
| In thousands | Three Months Ended September 30, | ||||||||||||||||
| 2025 | 2024 (1) | 2025 vs. 2024 | |||||||||||||||
|
Reported Revenue
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$ | 103,209 | $ | 93,590 | 10% | ||||||||||||
|
Segment EBITDA
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(2,392) | (4,572) | 48% | ||||||||||||||
| % of revenue | (2) | % | (5) | % | |||||||||||||
(1) The prior year segment results have been adjusted to ensure comparability with the updated methodology used for inter-segment transactions. Refer to Note 11 of the accompanying consolidated financial statements for additional details.
Segment Revenue
For the three months ended September 30, 2025, National Pen's revenue growth was positively impacted 2% by currency exchange rate fluctuations, resulting in constant-currency revenue growth of 8% as compared to the prior year. National Pen revenue growth was driven by increases in fulfillment for other Cimpress businesses as well as growth in external revenue, mostly from tariff-related pricing increases. These increases were offset by revenue declines in mail order where National Pen continued to reduce and optimize their direct mail advertising spend.
Segment Profitability
National Pen's segment EBITDA increased $2.2 million for the three months ended September 30, 2025, driven by a reduction in advertising spend of $1.1 million, most of which relates to the lower direct mail advertising as described above, as well as a $1.4 million decrease in variable long-term incentive compensation expense, driven by changes year over year in their estimated payouts.
All Other Businesses
This segment includes BuildASign and Printi, a smaller business that is an online printing leader in Brazil.
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In thousands
|
Three Months Ended September 30, | ||||||||||||||||
| 2025 | 2024 (1) | 2025 vs. 2024 | |||||||||||||||
|
Reported Revenue
|
$ | 61,742 | $ | 57,240 | 8% | ||||||||||||
|
Segment EBITDA
|
9,080 | 6,862 | 32% | ||||||||||||||
| % of revenue | 15 | % | 12 | % | |||||||||||||
(1) The prior year segment results have been adjusted to ensure comparability with the updated methodology used for inter-segment transactions. Refer to Note 11 of the accompanying consolidated financial statements for additional details.
Segment Revenue
All Other Businesses' reported and constant-currency revenue growth was 8% for the three months ended September 30, 2025. BuildASign, the largest business in this segment, delivered strong growth from fulfillment for other Cimpress businesses as well as growth in the packaging product category, which was partially offset by lower revenue for signage products. Our smaller Printi business delivered constant-currency revenue growth versus the prior year.
Segment Profitability
For the three months ended September 30, 2025, segment EBITDA increased $2.2 million versus the prior year, largely driven by the cross-Cimpress revenue growth described above as well as lower variable long-term incentive compensation expense of $1.9 million, driven by changes year over year in estimated payouts.
Central and Corporate Costs
Central and corporate costs consist primarily of the team of software engineers that is building our mass customization platform; shared service organizations such as global procurement; technology services such as security; administrative costs of our Cimpress India offices where numerous Cimpress businesses have dedicated business-specific team members; and corporate functions including our tax, treasury, internal audit, legal, sustainability, real estate, corporate communications, consolidated reporting and compliance, investor relations, and the functions of our CEO and CFO. These costs also include certain unallocated share-based compensation costs.
During the three months ended September 30, 2025, central and corporate costs decreased by $0.2 million as compared to the prior year, due primarily to a reduction in unallocated share-based compensation expense year over year of $1.6 million, driven by fluctuations in the attainment associated with the performance conditions of prior-year performance share units. This decrease was partially offset by higher third-party technology costs as a result of continued adoption and usage of mass customization platform products that are developed by our central technology teams.
Liquidity and Capital Resources
Consolidated Statements of Cash Flows Data
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In thousands
|
Three Months Ended September 30, | ||||||||||
| 2025 | 2024 | ||||||||||
| Net cash provided by operating activities | $ | 25,059 | $ | 4,384 | |||||||
| Net cash used in investing activities | (42,818) | (25,502) | |||||||||
| Net cash used in financing activities | (14,656) | (35,416) | |||||||||
The cash flows during the three months ended September 30, 2025 related primarily to the following items:
Cash inflows:
•Net income of $6.5 million
•Adjustments for non-cash items of $48.6 million primarily related to adjustments for depreciation and amortization of $36.6 million, share-based compensation costs of $14.8 million and deferred taxes of $2.8 million, offset in part by unrealized currency-related gains of $7.7 million
•Proceeds from the sale of assets of $0.8 million
•Proceeds from the exercise of options of $0.5 million
Cash outflows:
•Net working capital outflows of $30.1 million, primarily due to typical fluctuations from seasonal trends that resulted in increases in accounts receivables and inventory levels
•Capital expenditures of $26.4 million, of which the majority is related to the purchase of manufacturing and automation equipment for our production facilities
•Internal and external costs of $17.3 million for software and website development that we have capitalized
•Payment of withholding taxes in connection with share awards of $6.7 million, primarily driven by the vesting of restricted and performance share unit grants
•Net repayments of debt of $3.7 million, primarily including our Term Loan B amortization payment
•Purchases of our ordinary shares for $2.7 million
•Payments for finance lease arrangements of $2.0 million
Additional Liquidity and Capital Resources Information. At September 30, 2025, we had $200.5 million of cash and cash equivalents and $1,600.9 million of debt, excluding debt issuance costs and debt premiums and discounts. During the three months ended September 30, 2025, we financed our operations and strategic investments through internally generated cash flows from operations and cash on hand. We expect to finance our future operations through our cash, operating cash flow, and borrowings under our debt arrangements.
We have historically used excess cash and cash equivalents for organic investments, share repurchases, acquisitions and equity investments, and debt reduction. During the three months ended September 30, 2025, we purchased and retired 45,000 of our ordinary shares for $2.7 million. We evaluate share repurchases, as any other use of capital, relative to our view of the impact on our intrinsic value per share compared against other opportunities.
Supply Chain Financing Program. As part of our ongoing efforts to manage our liquidity, we work with our suppliers to optimize our terms and conditions, which includes the extension of payment terms. We facilitate a voluntary supply chain finance program through a financial intermediary to allow our suppliers to receive funds earlier than our contractual payment date. We do not believe there is a substantial risk that our payment terms will be shortened in the near future. Refer to Note 12 of the accompanying consolidated financial statements for additional information.
Indefinitely Reinvested Earnings. As of September 30, 2025, a portion of our cash and cash equivalents were held by our subsidiaries, and undistributed earnings of our subsidiaries that are considered to be indefinitely reinvested were $97.0 million. We do not intend to repatriate these funds as the cash and cash equivalent balances are generally used and available, without legal restrictions, to fund ordinary business operations and investments of the respective subsidiaries. If there is a change in the future, the repatriation of undistributed earnings from certain subsidiaries, in the form of dividends or otherwise, could have tax consequences that could result in material cash outflows.
Contractual Obligations
Contractual obligations at September 30, 2025 are as follows:
| In thousands | Payments Due by Period | ||||||||||||||||||||||||||||
| Total |
Less than 1 year |
1-3 years |
3-5 years |
More than 5 years |
|||||||||||||||||||||||||
| Operating leases, net of subleases (1) | $ | 107,948 | $ | 20,069 | $ | 39,926 | $ | 23,499 | $ | 24,454 | |||||||||||||||||||
| Purchase commitments | 429,237 | 173,362 | 138,215 | 111,421 | 6,239 | ||||||||||||||||||||||||
| Senior secured credit facility and interest payments (2) | 1,242,763 | 76,863 | 1,164,613 | 1,287 | - | ||||||||||||||||||||||||
| 2032 Notes and interest payments | 796,033 | 38,719 | 77,438 | 77,438 | 602,438 | ||||||||||||||||||||||||
| Other debt | 5,754 | 3,068 | 2,686 | - | - | ||||||||||||||||||||||||
| Finance leases, net of subleases (1) | 34,646 | 6,898 | 11,136 | 6,056 | 10,556 | ||||||||||||||||||||||||
| Total (3) | $ | 2,616,381 | $ | 318,979 | $ | 1,434,014 | $ | 219,701 | $ | 643,687 | |||||||||||||||||||
___________________
(1) Operating and finance lease payments above include only amounts which are fixed under lease agreements. Our leases may also incur variable expenses which are not reflected in the contractual obligations above.
(2) Interest payments are based on the interest rate as of September 30, 2025 and assume all Term SOFR-based revolving loan amounts outstanding will not be paid until maturity but that the term loan amortization payments will be made according to our defined schedule. Senior secured credit facility and interest payments include the effects of interest rate swaps, whether they are expected to be payments or receipts of cash.
(3) We may be required to make cash outlays related to our uncertain tax positions. However, due to the uncertainty of the timing of future cash flows associated with our uncertain tax positions, we are unable to make reasonably reliable estimates of the period of cash settlement, if any, with the respective taxing authorities. Accordingly, uncertain tax positions of $0.4 million as of September 30, 2025 have been excluded from the contractual obligations table above. See Note 9 in our accompanying consolidated financial statements for additional information on uncertain tax positions.
Operating Leases. We rent manufacturing facilities and office space under operating leases expiring on various dates through 2037. The terms of certain lease agreements require security deposits in the form of bank guarantees and letters of credit, with $4.5 million in the aggregate outstanding as of September 30, 2025.
Purchase Commitments.At September 30, 2025, we had unrecorded commitments under contract of $429.2 million. Purchase commitments consisted of third-party cloud services of $253.2 million; third-party fulfillment and digital services of $87.7 million; software of $40.1 million; insurance costs of $18.4 million; production-related temporary labor of $11.9 million; professional and consulting fees of $7.6 million; production and computer equipment purchases of $4.0 million; advertising of $3.7 million; and other commitments of $2.6 million.
Senior Secured Credit Facility and Interest Payments.On September 26, 2024, we entered into an amendment to our Restated Credit Agreement to extend the maturity date of our senior secured revolving credit facility to September 26, 2029 and reduced the minimum credit spread on borrowing and the minimum commitment fee on unused balances, depending on our First Lien Leverage Ratio. Our $250.0 million senior secured revolving credit facility has $232.0 million unused as of September 30, 2025. There are no drawn amounts on the Revolving Credit Facility, but our outstanding letters of credit reduce our unused balance. Our unused balance can be drawn at any time so long as we are in compliance with our debt covenants, and if any loans made under the Revolving Credit Facility are outstanding on the last day of any fiscal quarter, then we are subject to a financial maintenance covenant that the First Lien Leverage Ratio (as defined in the Restated Credit Agreement) calculated as of the last day of such quarter shall not exceed 3.25 to 1.00. Any amounts drawn under the Revolving Credit Facility will be due on September 26, 2029. Interest payable included in the above table is based on the interest rate as of September 30, 2025 and assumes all Term SOFR-based revolving loan amounts outstanding will not be paid until maturity but that the term loan amortization payments will be made according to our defined schedule. As of September 30, 2025, we have borrowings under our Restated Credit Agreement of $1,070.1 million, consisting of the Term Loan B, which amortizes over the loan period, with a final maturity date of May 17, 2028.
2032 Senior Notes and Interest Payments. On September 26, 2024, we completed a private placement of $525.0 million in aggregate principal amount of senior unsecured notes due 2032 (the "2032 Notes"). We used the net proceeds from the 2032 Notes, together with cash on hand, to redeem all of the outstanding 2026 Notes, and pay associated accrued interest and all related financing fees. Our $525.0 million 2032 Notes bear interest at a rate of 7.375% per annum and mature on September 15, 2032. Interest on the 2032 Notes is payable semi-annually on
March 15 and September 15 of each year. Refer to Note 8 in the accompanying consolidated financial statements for additional information.
Debt Covenants.The Restated Credit Agreement and the indenture that governs our 2032 Notes contain covenants that restrict or limit certain activities and transactions by Cimpress and our subsidiaries. As of September 30, 2025, we were in compliance with all covenants under our Restated Credit Agreement and the indenture governing our 2032 Notes. Refer to Note 8 in the accompanying consolidated financial statements for additional information.
Other Debt.In addition, we have other debt which consists primarily of term loans acquired through our various acquisitions or used to fund certain capital investments. As of September 30, 2025, we had $5.8 million outstanding for those obligations that have repayments due on various dates through September 2028.
Finance Leases.We lease certain facilities, machinery, and plant equipment under finance lease agreements that expire at various dates through 2037. The aggregate carrying value of the leased assets under finance leases included in property, plant and equipment, net in our consolidated balance sheet at September 30, 2025 is $29.5 million, net of accumulated depreciation of $35.9 million. The present value of lease installments not yet due included in other current liabilities and other liabilities in our consolidated balance sheet at September 30, 2025 amounts to $33.7 million.
Additional Non-GAAP Financial Measures
Constant-currency revenue growth and constant-currency revenue growth excluding acquisitions/divestitures (which we refer to above as organic constant-currency revenue growth), in each case as defined and presented in the consolidated results of operations section above (with reconciliations to GAAP revenue growth), as well as adjusted EBITDA and adjusted free cash flow presented below, are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. We do not, nor do we suggest, that investors should consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
Adjusted EBITDA is defined as net income (loss) plus income tax expense plus (gain) loss on early extinguishment of debt plus interest expense, net plus other expense (income), net plus depreciation and amortization plus share-based compensation expense plus earn-out related charges plus certain impairments plus restructuring related charges less the gain or loss on purchase or sale of subsidiaries as well as the disposal of assets. In addition, adjusted EBITDA includes the impact of certain items that are recognized in other income, net which includes realized gains or losses on currency derivatives that are intended to hedge our adjusted EBITDA exposure to foreign currencies for which we do not apply hedge accounting, as well as proceeds from insurance recoveries.
Adjusted EBITDA is the primary profitability metric by which we measure our consolidated financial performance and is provided to enhance investors' understanding of our current operating results from the underlying and ongoing business for the same reasons it is used by management. For example, for acquisitions, we believe excluding the costs related to the purchase of a business (such as amortization of acquired intangible assets, contingent consideration, or impairment of goodwill) provides further insight into the performance of the underlying acquired business in addition to that provided by our GAAP net income.
Adjusted free cash flow is the primary financial metric by which we set quarterly and annual budgets both for individual businesses and Cimpress-wide. Adjusted free cash flow is defined as net cash provided by (used in) operating activities less purchases of property, plant and equipment, purchases of intangible assets not related to acquisitions, and capitalization of software and website development costs that are included in net cash used in investing activities; plus the proceeds from sale of assets, payment of contingent consideration in excess of acquisition-date fair value, and gains on proceeds from insurance that are not included in net cash provided by operating activities, if any. We use this cash flow metric because we believe that this methodology can provide useful supplemental information to help investors better understand our ability to generate cash flow after considering certain investments required to maintain or grow our business, as well as eliminate the impact of certain cash flow items presented as operating cash flows that we do not believe reflect the cash flow generated by the underlying business.
Our adjusted free cash flow measure has limitations as it may omit certain components of the overall cash
flow statement and does not represent the residual cash flow available for discretionary expenditures. For example, adjusted free cash flow does not incorporate our cash payments to reduce the principal portion of our debt or cash payments for business acquisitions. Additionally, the mix of property, plant and equipment purchases that we choose to finance may change over time. We believe it is important to view our adjusted free cash flow measure only as a complement to our entire consolidated statement of cash flows.
The table below sets forth net income (loss) and adjusted EBITDA for the three months ended September 30, 2025 and 2024:
| In thousands | Three Months Ended September 30, | ||||||||||
| 2025 | 2024 | ||||||||||
| Net income (loss) | $ | 6,520 | $ | (12,384) | |||||||
|
Exclude expense (benefit) impact of:
|
|||||||||||
|
Income tax expense
|
17,838 | 8,995 | |||||||||
| Gain on early extinguishment of debt | - | (179) | |||||||||
|
Interest expense, net
|
28,066 | 31,415 | |||||||||
|
Other (income) expense, net
|
(3,453) | 11,492 | |||||||||
| Depreciation and amortization | 36,618 | 35,546 | |||||||||
| Share-based compensation expense | 14,793 | 15,633 | |||||||||
| Certain impairments and other adjustments | 727 | (614) | |||||||||
| Restructuring-related charges | 298 | 99 | |||||||||
|
Include certain items that are a part of other income (expense), net:
|
|||||||||||
|
Realized losses on currency derivatives (1)
|
(2,692) | (2,232) | |||||||||
| Adjusted EBITDA | $ | 98,715 | $ | 87,771 | |||||||
_________________
(1) These realized losses include only the impacts of certain currency derivative contracts that are intended to hedge our adjusted EBITDA exposure to foreign currencies for which we do not apply hedge accounting. Refer to Note 4 in our accompanying consolidated financial statements for further information.
The table below sets forth net cash provided by operating activities and adjusted free cash flow for the three months ended September 30, 2025 and 2024:
| In thousands | Three Months Ended September 30, | ||||||||||
| 2025 | 2024 | ||||||||||
| Net cash provided by operating activities | $ | 25,059 | $ | 4,384 | |||||||
| Purchases of property, plant and equipment | (26,353) | (17,001) | |||||||||
| Capitalization of software and website development costs | (17,286) | (14,571) | |||||||||
|
Proceeds from the sale of assets
|
821 | 1,570 | |||||||||
|
Adjusted free cash flow
|
$ | (17,759) | $ | (25,618) | |||||||
Cimpress plc published this content on October 30, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 30, 2025 at 21:26 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]