DELUXE CORP

Previous wording

A detailed discussion of our strategy can be found in Part I, Item 1 of the 2024 Form 10-K. Having substantially completed our infrastructure modernization efforts and the divestiture of non-strategic businesses, we have redirected our focus toward growth investments. This shift is aimed at driving scale and accelerating profit growth at a pace that surpasses revenue growth. Our operations continue to benefit from our disciplined pricing actions and comprehensive cost management practices. In 2023, we launched our North Star program with the objective of enhancing shareholder value by (1) accelerating our adjusted EBITDA growth, (2) increasing cash flow, (3) reducing debt, and (4) improving our leverage ratio. We have started to realize the benefits of our North Star initiatives. If not for the impact of business exits, both adjusted EBITDA and adjusted EBITDA margin would have shown an increase in the first quarter of 2025 compared to the first quarter of 2024. A key driver of this improvement was a 3.8% reduction in selling, general and administrative (SG&A) expense for the first quarter of 2025 compared to the first quarter of 2024. Additionally, free cash flow increased $18 million for the same period, and we reduced net debt by $7 million from the previous year end.

Current wording

A detailed discussion of our strategy can be found in Part I, Item 1 of the 2024 Form 10-K. With the completion of our infrastructure modernization and the divestiture of non-strategic businesses, our current focus is on growth investments aimed at driving scale and accelerating profit growth at a rate that exceeds revenue growth. Our operations continue to benefit from our disciplined pricing actions and comprehensive cost management practices. In 2023, we launched our North Star program with the objective of enhancing shareholder value by (1) accelerating our adjusted EBITDA growth, (2) increasing cash flow, (3) reducing debt, and (4) improving our leverage ratio.

Previous wording

Highlights of our financial results for the first quarter of 2025 compared to the first quarter of 2024 include:

Current wording

Highlights of our financial results for the first half of 2025 compared to the first half of 2024 include:

Previous wording

•Consolidated revenue – Increased by $2 million to $536 million, including a decrease of $6 million resulting from business exits. The increase was primarily driven by our pricing actions, as well as growth in our data-driven marketing business. These positive impacts were partially offset by the continuing secular decline in order volumes for checks, business forms, and various business accessories, as well as soft demand for certain of our promotional products.

Current wording

•Consolidated revenue – Decreased by $15 million to $1.06 billion, including a decrease of $9 million resulting from business exits. The remaining decrease was primarily driven by soft demand for certain of our promotional products, as well as the continuing secular decline in order volumes for checks, business forms, and various business accessories. These impacts were partially offset by growth in our data-driven marketing and merchant services business.

Previous wording

•Net income– Increased by $3 million to $14 million, reflecting the impact of our pricing and cost management actions, reduced restructuring and integration expense, and growth in our data-driven marketing business. These positive factors were partially offset by the continuing secular revenue declines in the Print segment, inflationary pressures affecting hourly wages, materials, and delivery, as well as the loss of earnings from exited businesses. Additionally, we recognized a $9 million gain from the sale of businesses and long-lived assets in the first quarter of 2024, which did not recur in 2025.

Current wording

•Net income– Increased by $5 million to $36 million, reflecting the impact of our pricing and cost management actions. Additionally, there was a reduction in amortization expense, stemming from accelerated amortization related to business exits and a trade name intangible asset in 2024, as well as lower acquisition-related amortization in 2025. Also, restructuring and integration expense decreased, and our data-driven marketing business grew year-over-year. These positive factors were partially offset by the soft demand for certain promotional products and the continuing secular declines within the Print segment, inflationary pressures affecting materials and delivery, as well as the loss of earnings from exited businesses. Additionally, we recognized a $24 million gain from the sale of businesses and long-lived assets in the first half of 2024, which did not recur in 2025.

Previous wording

•Adjusted EBITDA– Remained nearly unchanged at $100 million for each period, despite the impact of business exits, which drove a $4 million decrease year-over-year. Excluding this impact from business exits, adjusted EBITDA would have increased, driven by the benefits of our pricing and cost management actions, as well as growth in data-driven marketing. These positive impacts were partially offset by the continuing secular declines in the Print segment and inflationary pressures on our cost structure.

Current wording

•Adjusted EBITDA– Increased $3 million to $207 million, despite the impact of business exits, which drove a $5 million decrease year-over-year. The increase was primarily driven by the benefits of our pricing and cost management actions, as well as growth in data-driven marketing. These positive impacts were partially offset by soft demand for certain promotional products and the continuing secular declines within the Print segment, as well as inflationary pressures on our cost structure.

Previous wording

Adjusted EBITDA margin was 18.7% for the first quarter of 2025, virtually the same as the 18.8% reported for the first quarter of 2024. This includes the impact of business exits, which drove a 0.5 point year-over-year decrease. Excluding the impact of business exits, adjusted EBITDA margin would have increased due to our pricing and cost management actions and the favorable impact of new data-driven marketing business. These factors were partially offset by the impact of inflationary pressures. A reconciliation of net income to adjusted EBITDA can be found in the Consolidated Results of Operations section.

Current wording

Adjusted EBITDA margin increased to 19.5% for the first half of 2025, compared to 19.0% for the first half of 2024, despite the impact of business exits, which drove a 0.3 point year-over-year decrease. The increase in adjusted EBITDA margin was primarily driven by our pricing and cost management actions and the favorable impact of growth in the data-driven marketing business. These factors were partially offset by the impact of inflationary pressures. A reconciliation of net income to adjusted EBITDA can be found in the Consolidated Results of Operations section.

Previous wording

Net cash provided by operating activities increased $24 million for the first quarter of 2025 compared to the first quarter of 2024, reflecting the positive impacts of our pricing and cost management actions, a $15 million reduction in performance-based employee cash bonuses, reduced restructuring and integration spend, and the growth in our data-driven marketing business. These impacts were partially offset by the continuing secular declines in the Print segment, higher income tax payments due to the timing of federal payments, inflationary pressures on our cost structure, and the impact of business exits.

Current wording

•Net cash provided by operating activities– Increased by $35 million to $101 million, reflecting several positive factors. Key contributors included the positive impacts of our pricing and cost management actions, a reduction in performance-based employee cash bonuses, and a reduction in restructuring and integration spend. Additionally, growth in data-driven marketing and positive working capital changes, particularly in prepaid expenses and other current assets, also contributed to the increase in net cash from operating activities. Also, interest payments decreased, as the timing of these payments changed in 2025 due to the refinancing of our debt in December 2024, which altered the schedule and structure of our financial obligations. These positive impacts were partially offset by softer demand for certain promotional products and the continuing secular declines within the Print segment, higher income tax payments related to the timing of federal tax payments, inflationary pressures on our cost structure, and the impact of business exits.

Previous wording

•Free cash flow– Increased by $18 million to $24 million, defined as net cash provided by operating activities less purchases of capital assets. We continue to reinvest the free cash flow generated by our Print business into our growth businesses. A reconciliation of free cash flow to its comparable GAAP financial measure can be found in the Consolidated Results of Operations section.

Current wording

•Free cash flow– Increased by $35 million to $52 million, driven by the same factors impacting net cash provided by operating activities. We continue to reinvest the free cash flow generated by our Print business into our other businesses. Free cash flow is defined as net cash provided by operating activities less purchases of capital assets. A reconciliation of free cash flow to its comparable GAAP financial measure can be found in the Consolidated Results of Operations section.

Previous wording

We continually monitor the interest rate environment and its effect on our outstanding debt. As of March 31, 2025, 61% of our debt carried a weighted-average fixed interest rate of 8.1%, providing us with some protection against potential future interest rate increases.

Current wording

We continually monitor the interest rate environment and its effect on our outstanding debt. As of June 30, 2025, 62% of our debt carried a weighted-average fixed interest rate of 8.1%, providing us with some protection against potential future interest rate increases.

Previous wording

We also closely monitor the impact of inflation on our labor, delivery, and material costs. In response to inflationary pressures, we have implemented targeted price increases, particularly within our Print and Merchant Services segments. Despite these price adjustments, our revenue volumes remain robust, underscoring the strength of our business and the sustained demand for our products and services. We have occasionally faced supply chain disruptions, particularly in the supply of certain printed products within our Print segment. Additionally, ongoing global unrest and uncertainties related to trade policies, treaties, and tariffs could further disrupt the global supply chain and lead to increased costs. To mitigate these risks, we actively monitor our supply chain to prevent delays or disruptions. We have also previously encountered labor supply challenges in certain areas of our business. The severity and duration of inflation, as well as supply chain and labor issues, remains difficult to predict and could continue to impact our business, financial position, and results of operations.

Current wording

In addition to interest rate considerations, we closely monitor the impact of inflation on our cost structure, including labor, delivery, and material costs. In response to inflationary pressures, we have implemented targeted price increases, particularly within our Print and Merchant Services segments. Additionally, ongoing global unrest and uncertainties related to trade policies, treaties, and tariffs could disrupt the global supply chain and lead to increased costs. To mitigate these risks, we actively monitor our supply chain to prevent delays or disruptions and to effectively leverage our purchasing power. The severity and duration of inflation remains difficult to predict and could continue to impact our business, financial position, and results of operations.

Previous wording

We also monitor trends in small business sentiment and consumer discretionary spending. We analyze various data sources, including information from credit card brands, the Federal Reserve, other economic forecast providers, and our proprietary data. These trends significantly influence multiple areas of our portfolio, particularly our Merchant Services and Print segments. The data suggests some erosion of consumer confidence, which raises some concern about overall general economic conditions. Notably, during the first quarter of 2025, we observed a continuation of the softer demand we experienced toward the end of last year, especially in more discretionary categories such as our promotional merchandise. We also monitor various factors that could affect our customers' purchasing power, including potential global trade disruptions due to tariffs and other changes to trade policy in the U.S. and other countries. Additionally, geopolitical events, such as war or other hostilities, could lead to a downturn in the global economy, which may negatively impact our performance.

Current wording

We also monitor trends in small business sentiment and consumer discretionary spending. We analyze various data sources, including information from credit card brands, the Federal Reserve, other economic forecast providers, and our proprietary data. These trends significantly influence multiple areas of our portfolio, particularly our Merchant Services and Print segments. Recent data suggests some erosion in consumer confidence, raising concerns about the broader economic landscape. During the first half of 2025, we observed a continuation of the softer demand we experienced toward the end of last year, especially in more discretionary categories such as our promotional merchandise. We also monitor various factors that could affect our customers' purchasing power, such as potential global trade disruptions and geopolitical events. These factors could lead to a downturn in the global economy, which may negatively impact our financial performance.

Previous wording

As of March 31, 2025, we held cash and cash equivalents of $30 million, along with an additional $368 million available for borrowing under our revolving credit facility. We anticipate that capital expenditures will be between $90 and $100 million for the full year, compared to $94 million for 2024, as we continue to build scale across our product categories and invest in innovation. Our capital allocation priorities remain focused on responsible growth investments, debt reduction, and returning capital to shareholders through dividends. We expect to maintain our regular quarterly dividend payments. However, dividends are subject to approval by our board of directors each quarter and, therefore, may change.

Current wording

As of June 30, 2025, we held cash and cash equivalents of $26 million, along with an additional $390 million available for borrowing under our revolving credit facility. We anticipate that capital expenditures will be between $90 and $100 million for the full year, compared to $94 million in 2024, as we continue to build scale across our product categories and invest in innovation. Our capital allocation priorities remain focused on responsible growth investments, debt reduction, and returning capital to shareholders through dividends. We expect to maintain our regular quarterly dividend payments. However, dividends are subject to approval by our board of directors each quarter and, therefore, may change.

Previous wording

Total revenue for the first quarter of 2025 increased compared to the first quarter of 2024, despite the impact of business exits, which drove a $6 million decrease. Revenue benefited from several factors, including price increases in response to inflation, primarily in our Print and Merchant Services segments. Additionally, there was strong demand for our data-driven marketing services, particularly among financial institutions, which contributed an $18 million increase in revenue.

Current wording

These decreases in revenue were partially offset by strategic price increases implemented in response to inflation, particularly within our Print and Merchant Services segments. Additionally, there was strong demand for our data-driven marketing services, especially among financial institutions, which contributed a $10 million increase in revenue for the second quarter and $28 million for the first half of the year.

Previous wording

Cost of revenue primarily consists of raw materials used to manufacture our products, shipping and handling costs, third-party costs for outsourced products and services, payroll and related expenses, information technology costs, depreciation and amortization of assets used in the production process and in support of digital service offerings, and related overhead.

Current wording

Cost of revenue primarily consists of raw materials for product manufacturing, shipping and handling costs, third-party costs for outsourced products and services, payroll and related expenses, information technology costs, depreciation and amortization of assets used in production and in support of digital service offerings, residuals paid to independent sales organizations (ISOs), and related overhead.

Previous wording

Total cost of revenue for the first quarter of 2025 increased compared to the first quarter of 2024, driven by several factors, including revenue growth in data-driven marketing and inflationary pressures on hourly wages, materials, and delivery. These increases in total cost of revenue were partially offset by a reduction in revenue volume due to the continuing secular decline in checks, business forms, and various business accessories, as well as softer demand for certain promotional products. Additionally, total cost of revenue benefited from our various cost management actions and the impact of business exits reduced our costs by approximately $6 million, including the impact of accelerated amortization expense in the first quarter of 2024.

Current wording

In the second quarter and first half of 2025, total cost of revenue decreased compared to the same periods in 2024. This reduction was driven by a decline in revenue volume, attributed to soft demand for certain promotional products and the ongoing secular decline in checks, business forms, and various business accessories within our Print segment. Additionally, our cost management initiatives contributed to the decrease, and the impact of business exits reduced costs by approximately $2 million in the second quarter and $9 million in the first half of the year, including the impact of accelerated amortization expense in 2024. These reductions in total cost of revenue were partially offset by an increase in costs related to the revenue growth in data-driven marketing, as well as inflationary pressures affecting materials and delivery costs.

Previous wording

Total cost of revenue as a percentage of total revenue increased for the first quarter of 2025 compared to the first quarter of 2024. The benefits of our pricing and cost management actions and the accelerated amortization expense in 2024 were more than offset by the inflationary impacts and the shift in revenue to lower margin business.

Current wording

Despite the decreases, total cost of revenue as a percentage of total revenue increased for the second quarter and first half of 2025 compared to the same periods in 2024. This was due to the inflationary impacts and a shift in revenue towards our lower-margin growth businesses, which outweighed the benefits of our pricing and cost management actions and the accelerated amortization expense in the previous year.

Previous wording

Consolidated Selling, General and Administrative (SG&A) Expense

Current wording

Selling, General and Administrative (SG&A) Expense

Previous wording

SG&A expense for the first quarter of 2025 decreased compared to the first quarter of 2024, primarily due to various cost management actions, including workforce adjustments and the optimization of our marketing and sourcing strategies. Additionally, external commissions decreased due to lower Print revenue volumes. These reductions in SG&A expense were partially offset by an increase in medical costs within our Corporate operations. This increase is indicative of higher-cost claims that are expected to arise from time to time as part of our self-insurance program.

Current wording

In the second quarter and first half of 2025, SG&A expense decreased compared to the same periods in 2024. This decrease was largely driven by various cost management actions, including workforce adjustments across functional areas and the optimization of our marketing and sourcing strategies. Additionally, there was a reduction in amortization expense, stemming from accelerated amortization in 2024 related to a trade name intangible asset, as well as lower acquisition-related amortization expense in 2025. Bad debt expense decreased $4 million in the second quarter and $6 million in the first half of the year, primarily within our Print segment, and external commissions declined due to reduced Print revenue volumes. These reductions in SG&A expense were partially offset by an increase in medical costs within our Corporate operations, which is attributed to higher-cost claims that are expected to occur periodically as part of our self-insurance program.

Previous wording

Total SG&A expense as a percentage of total revenue decreased for the first quarter of 2025 compared to the first quarter of 2024, as the combined effects of price increases and our cost management actions more than offset the increase in medical costs.

Current wording

SG&A expense as a percentage of total revenue decreased for the second quarter and first half of 2025 compared to the same periods in 2024. The combined effects of price increases, effective cost management actions, and the reductions in amortization and bad debt expense more than compensated for the rise in medical costs.

Previous wording

We are actively pursuing several initiatives aimed at aligning our business with our growth strategy and enhancing operational efficiency. As we implement these initiatives, the amount of restructuring and integration expense is expected to fluctuate from period to period. Further information regarding these costs can be found in the Restructuring and Integration Expense section.

Current wording

We are actively pursuing initiatives aimed at aligning our business with our growth strategy and enhancing operational efficiency. As we implement these initiatives, the amount of restructuring and integration expense is expected to fluctuate from period to period. Further information regarding these costs can be found in the Restructuring and Integration Expense section.

Previous wording

Income recognized in the first quarter of 2024 related to the exit from our payroll and human resources services business that we substantially completed during 2024. Further information can be found under the caption "Note 6: Divestitures" in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part 1, Item 1 of this report.

Current wording

In 2024, the income recognized was primarily associated with our strategic exit from the payroll and human resources services business, a process that we substantially completed during 2024. Further information can be found under the caption "Note 6: Acquisition and Divestitures" in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part 1, Item 1 of this report.

Previous wording

Interest expense for the first quarter of 2025 increased compared to the first quarter of 2024, as the impact of higher interest rates exceeded the decrease in our average debt outstanding. Based on the amount of variable-rate debt outstanding as of March 31, 2025, a one percentage point change in the weighted-average interest rate would result in a $4 million change in interest expense for the remainder of 2025.

Current wording

In the second quarter and first half of 2025, interest expense increased compared to the same periods in 2024. This increase was primarily due to the impact of higher interest rates, which outweighed the benefit of a reduction in our average debt outstanding. Based on the amount of variable-rate debt outstanding as of June 30, 2025, a one percentage point change in the weighted-average interest rate would result in a $3 million impact on interest expense for the remainder of 2025.

Previous wording

The effective income tax rate for the first quarter of 2025 decreased compared to the first quarter of 2024. This reduction was primarily due to lower tax rate impacts in 2025 from our foreign operations, share-based compensation, and non-deductible executive compensation. These decreases in our effective income tax rate were partially offset by an increase in our effective state income tax rate.

Current wording

In the second quarter and first half of 2025, our effective income tax rate decreased compared to the same periods in 2024. The 2025 rate benefited from lower tax impacts for our foreign operations, non-deductible compensation, and share-based compensation. These benefits were partially offset by an increase in our effective state income tax rate. Further information regarding our income tax provision can be found under the caption "Note 9: Income Tax Provision" in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part I, Item 1 of this report.

Previous wording

Net income and diluted EPS for the first quarter of 2025 increased compared to the first quarter of 2024, reflecting the changes noted above. Adjusted diluted EPS decreased $0.01 per share year-over-year, driven by the impact of business exits, which drove a $0.04 per share decrease. Excluding the impact of business exits, adjusted diluted EPS would have increased due to the benefits of our pricing and cost management actions, as well as growth in our data-driven marketing business. These positive impacts were partially offset by the secular declines in the Print segment and inflationary pressures on our cost structure. A reconciliation of net income to adjusted net income, as used in the calculation of adjusted diluted EPS, can be found in the following section.

Current wording

In the second quarter and first half of 2025, net income and diluted EPS increased compared to the same periods in 2024, reflecting the factors noted above. Adjusted diluted EPS in the second quarter of 2025 increased $0.02 per share year-over-year, primarily due to the benefits of our pricing and cost management actions, growth in our data-driven marketing business, and a reduction in bad debt expense. These positive impacts were partially offset by the soft demand for certain promotional products and the ongoing secular declines within the Print segment, inflationary pressures on our cost structure, and increased medical costs.

Previous wording

(2) The total of weighted-average shares and potential common shares outstanding used in the calculation of adjusted diluted EPS differs from the GAAP calculation due to differences in the amount of dilutive securities in each calculation.

Current wording

(2) The total of weighted-average shares and potential common shares outstanding used in the calculation of adjusted diluted EPS may differ from the GAAP calculation due to differences in the amount of dilutive securities in each calculation.

Previous wording

We are currently pursuing several initiatives designed to support our growth strategy and to increase our efficiency, including several initiatives that we collectively refer to as our North Star program. The goal of this program is to enhance shareholder value by (1) accelerating our adjusted EBITDA growth, (2) increasing cash flow, (3) reducing debt, and (4) improving our leverage ratio. North Star is a comprehensive, multi-year plan that balances cost reduction and growth opportunities. On the cost reduction front, we focused on refining our organizational structure and transforming our infrastructure and operations. We have successfully completed the material elements of our organizational redesign, which included consolidating similar roles, reducing hierarchical layers, and expanding spans of control. We are also leveraging technology and process automation to digitize and streamline our operations. Additionally, we are scaling our operations by consolidating back-office functions and tapping into the global labor market. On the revenue growth side, our priorities include developing an integrated software channel in Merchant Services, expanding our Data Solutions business to cater to more industry verticals, and enhancing our marketing and sales capabilities. We have made significant progress on all of the remaining North Star initiatives and anticipate continued positive impacts on our results of operations. For example, SG&A expense decreased 3.8% for the first quarter of 2025 compared to the first quarter of 2024, and free cash flow increased $18 million for the same period. Further information regarding restructuring and integration expense can be found under the caption "Note 8: Restructuring and Integration Expense" in the condensed Notes to Unaudited Consolidated Financial Statements located in Part I, Item 1 of this report.

Current wording

We are currently pursuing initiatives designed to support our growth strategy and to increase our efficiency, including several initiatives that we collectively refer to as our North Star program. The goal of this program is to enhance shareholder value by (1) accelerating our adjusted EBITDA growth, (2) increasing cash flow, (3) reducing debt, and (4) improving our leverage ratio. North Star is a comprehensive, multi-year plan that balances cost reduction and growth opportunities. On the cost reduction front, we focused on refining our organizational structure and transforming our infrastructure and operations. We have successfully completed the material elements of our organizational redesign, which included consolidating similar roles, reducing hierarchical layers, and expanding spans of control. We are also leveraging technology and process automation to digitize and streamline our operations. Additionally, we are scaling our operations by consolidating back-office functions and tapping into the global labor market. On the revenue growth side, our priorities include developing an integrated software channel in Merchant Services, expanding our Data Solutions business to cater to more industry verticals, and enhancing our marketing and sales capabilities. The positive impact of the North Star initiatives is evident in our results of operations. For example, SG&A expense decreased 6.0% for the first half of 2025 compared to the first half of 2024, and free cash flow increased $35 million for the same period. Further information regarding restructuring and integration expense can be found under the caption "Note 8: Restructuring and Integration Expense" in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part I, Item 1 of this report.

Previous wording

All investments under the North Star program are required to meet our internal hurdle rate and provide a higher return compared to other uses of capital, such as debt repayment. The North Star program aims to achieve a $100 million run-rate improvement in free cash flow and an $80 million run-rate improvement in adjusted EBITDA by 2026. Through March 31, 2025, we incurred related restructuring and integration expense of approximately $103 million, and we expect to incur approximately $7 million in additional North Star restructuring and integration expense in 2025. These charges include professional services fees, employee severance, and other restructuring-related costs.

Current wording

All investments under the North Star program are required to meet our internal hurdle rate and provide a higher return compared to other uses of capital, such as debt repayment. The North Star program aims to achieve a $100 million run-rate improvement in free cash flow and an $80 million run-rate improvement in adjusted EBITDA by 2026. Through June 30, 2025, we incurred related restructuring and integration expense of approximately $108 million, and we expect to incur approximately $5 million in additional North Star restructuring and integration expense in 2025. These charges include professional services fees, employee severance, and other restructuring-related costs.

Previous wording

The majority of the employee reductions included in our restructuring and integration accruals as of March 31, 2025, along with the related severance payments, are expected to be completed by the end of 2025. As a result of these employee reductions, including those related to our North Star program, we expect to realize annual cost savings of approximately $5 million in cost of sales and $13 million in SG&A expense in 2025, in comparison to our 2024 results of operations. Note that these savings do not reflect all of our cost saving actions and they may be offset by increased labor and other costs, including inflationary impacts and investments in the business.

Current wording

The majority of the employee reductions included in our restructuring and integration accruals as of June 30, 2025, along with the related severance payments, are expected to be completed by early 2026. As a result of these employee reductions, we expect to realize annual cost savings of approximately $5 million in cost of sales and $14 million in SG&A expense in 2025, in comparison to our 2024 results of operations. Note that these savings do not reflect all of our cost saving actions and they may be offset by increased labor and other costs, including inflationary impacts and investments in the business.

Previous wording

Total revenue for the first quarter of 2025 increased compared to the first quarter of 2024, due to higher volumes from government clients, which were driven by increased property tax remittances. Additionally, there was growth in the banking channel, along with the positive impact of modest pricing actions implemented in response to inflation. These gains were partially offset by pressure on processing volumes within certain discretionary categories.

Current wording

Total revenue for the second quarter and first half of 2025 increased compared to the same periods in 2024, due to the positive impact of modest pricing actions implemented in response to inflation. Additionally, there was volume growth for government clients, as well as higher volumes in the banking channel. These gains were partially offset by pressure on processing volumes.

Previous wording

Adjusted EBITDA and adjusted EBITDA margin for the first quarter of 2025 were virtually flat compared to the first quarter of 2024, as the modest price increase offset the impact of normal channel mix dynamics. While our portfolio remains well-positioned, encompassing a diversified range of both traditional discretionary and less discretionary spending categories, we continue to monitor consumer spending trends, as these trends may impact our volumes going forward.

Current wording

Adjusted EBITDA and adjusted EBITDA margin for the second quarter and first half of 2025 increased compared to the same periods in 2024, as the price increases more than offset the impact of normal channel mix dynamics. While our portfolio remains well-positioned, encompassing a diversified range of both traditional discretionary and less discretionary spending categories, we continue to monitor consumer spending trends, as these trends may impact our volumes going forward.

Previous wording

Total revenue for the first quarter of 2025 increased compared to the first quarter of 2024, primarily driven by the onboarding of new clients and a modest price increase to counteract inflation. These increases in revenue were partially offset by declining trends in lockbox processing volumes.

Current wording

Total revenue for the second quarter and first half of 2025 increased compared to the same periods in 2024, primarily driven by the onboarding of new clients and a modest price increase to counteract inflation. These increases in revenue were partially offset by declining trends in lockbox processing volumes.

Previous wording

Total revenue for the first quarter of 2025 increased compared to the first quarter of 2024, driven by strong demand for customer acquisition marketing activities, particularly from our financial institution partners. Additionally, we added new clients in various other verticals, contributing to the revenue growth. It is important to note that the timing of campaigns within this business can lead to quarter-to-quarter volatility, making specific quarterly growth rates more challenging to predict.

Current wording

Total revenue for the second quarter and first half of 2025 increased compared to the same periods in 2024, driven by strong demand for customer acquisition marketing activities, particularly from our financial institution partners. Additionally, we added new clients in various other verticals, contributing to the revenue growth. It is important to note that the timing of campaigns within this business can lead to quarter-to-quarter volatility, making specific quarterly growth rates more challenging to predict.

Previous wording

Adjusted EBITDA for the first quarter of 2025 increased compared to the first quarter of 2024, primarily driven by the increase in data-driven marketing volume. Adjusted EBITDA margin increased for the first quarter of 2025 compared to the first quarter of 2024, primarily due to a favorable mix of clients and campaigns compared to 2024.

Current wording

Adjusted EBITDA for the second quarter and first half of 2025 increased compared to the same periods in 2024, primarily driven by the increase in data-driven marketing volume and continued realization of operating expense efficiencies, which included favorability from vendor rebates. Adjusted EBITDA margin increased for the second quarter and first half of 2025 compared to the same periods in 2024, primarily due to a favorable mix of clients and campaigns compared to 2024, as well as operating expense efficiencies.

Previous wording

Total revenue for the first quarter of 2025 decreased compared to the first quarter of 2024, primarily driven by the ongoing secular decline in order volumes for checks, business forms, and various business accessories. Additionally, we continued to experience softer demand in more discretionary categories such as our promotional merchandise. These revenue declines were partially offset by pricing actions implemented in response to inflation.

Current wording

Total revenue for the second quarter and first half of 2025 decreased compared to the same periods in 2024, mainly due to a decline in revenue from promotional products, reflecting softer demand. Additionally, the ongoing secular decline in order volumes for checks, business forms, and various business accessories contributed to the decrease. These revenue declines were partially offset by pricing actions implemented in response to inflation.

Previous wording

Adjusted EBITDA for the first quarter of 2025 was virtually flat compared to the first quarter of 2024, despite the decline in revenue and inflationary pressures on materials and delivery costs. Our cost management actions offset these challenges, as we continued to emphasize operating expense discipline and overall efficiency within this segment. Adjusted EBITDA margin for the first quarter of 2025 increased compared to the first quarter of 2024, as the benefits from our pricing and cost management actions and a shift toward check revenues during the quarter contributed positively. These factors more than offset the inflationary cost pressures.

Current wording

Adjusted EBITDA for the second quarter and first half of 2025 decreased compared to the same periods in 2024, driven by the decline in revenue and inflationary pressures on materials and delivery costs. Our cost management actions partially offset these challenges, as we continued to emphasize operating expense discipline and overall efficiency within this segment. Additionally, bad debt expense declined year-over-year.

Previous wording

As of March 31, 2025, we held cash and cash equivalents of $30 million. Additionally, we had restricted cash and restricted cash equivalents, which were included in settlement processing assets and other non-current assets on the consolidated balance sheet, totaling $37 million. The following table should be read in conjunction with the consolidated statements of cash flows located in Part I, Item 1 of this report.

Current wording

As of June 30, 2025, we held cash and cash equivalents of $26 million. Additionally, we had restricted cash and restricted cash equivalents, which were included in settlement processing assets and other non-current assets on the consolidated balance sheet, totaling $15 million. The following table should be read in conjunction with the consolidated statements of cash flows located in Part I, Item 1 of this report.

Previous wording

Net cash used by financing activities for the first quarter of 2025 decreased by $58 million compared to the first quarter of 2024. This decrease was primarily driven by changes in settlement processing obligations during each period, including the impact of our exit from the payroll and human resources services business during 2024. Additionally, lower payments on long-term debt in 2025 contributed to the decrease.

Current wording

Net cash used by investing activities for the first half of 2025 was virtually the same as in the first half of 2024. Net cash used by financing activities for the same periods decreased by $72 million, driven by changes in settlement processing obligations during each period, including the impact of our exit from the payroll and human resources services business during 2024. Additionally, lower net payments on long-term debt in 2025 contributed to the decrease.

Previous wording

When evaluating our cash needs, we must consider our debt service requirements, lease obligations, other contractual commitments, and contingent liabilities. Detailed Information regarding the maturities of our long-term debt and our contingent liabilities can be found under the captions “Note 11: Debt” and "Note 12: Other Commitments and Contingencies," both of which appear in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part I, Item 1 of this report. Information regarding our lease obligations can be found under the caption "Note 14: Leases" in the Notes to Consolidated Financial Statements appearing in the 2024 Form 10-K, and information regarding our contractual obligations can be found in the MD&A section of the 2024 Form 10-K, under the section entitled Cash Flows and Liquidity. In the first quarter of 2025, we amended and extended an agreement for information technology services. This modification increased our contractual commitments by approximately $25 million, with the majority of those payments scheduled to be made during the years ending December 31, 2028 and 2029.

Current wording

When evaluating our cash needs, we must consider our debt service requirements, lease obligations, other contractual commitments, and contingent liabilities. Detailed Information regarding the maturities of our long-term debt and our contingent liabilities can be found under the captions “Note 11: Debt” and "Note 12: Other Commitments and Contingencies," both of which appear in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part I, Item 1 of this report. Information regarding our lease obligations can be found under the caption "Note 14: Leases" in the Notes to Consolidated Financial Statements appearing in the 2024 Form 10-K, and information regarding our contractual obligations can be found in the MD&A section of the 2024 Form 10-K, under the section entitled Cash Flows and Liquidity. In the first quarter of 2025, we amended and extended an agreement for information technology services. This modification increased our contractual commitments by approximately $25 million, with the majority of the payments scheduled to be made during the years ending December 31, 2028 and 2029.

Previous wording

As of March 31, 2025, we held cash and cash equivalents of $30 million, with an additional $368 million available for borrowing under our revolving credit facility. We believe that net cash generated from our operations, combined with cash and cash equivalents on hand and the availability under our credit facility, will be sufficient to support our operations over the next 12 months. This includes meeting our contractual obligations, debt service requirements, and addressing our long-term capital needs. We expect to maintain our regular quarterly dividend payments. However, dividends are subject to approval by our board of directors each quarter and, therefore, may change.

Current wording

As of June 30, 2025, we held cash and cash equivalents of $26 million, with an additional $390 million available for borrowing under our revolving credit facility. We believe that net cash generated from our operations, combined with cash and cash equivalents on hand and the availability under our credit facility, will be sufficient to support our operations over the next 12 months. This includes meeting our contractual obligations, debt service requirements, and addressing our long-term capital needs. We expect to maintain our regular quarterly dividend payments. However, dividends are subject to approval by our board of directors each quarter and, therefore, may change.

Previous wording

As of March 31, 2025, the principal amount of our debt obligations was $1.51 billion, compared to $1.52 billion as of December 31, 2024. Our capital structure for each period was as follows:

Current wording

As of June 30, 2025, the principal amount of our debt obligations was $1.49 billion, compared to $1.52 billion as of December 31, 2024. Our capital structure for each period was as follows: