DELUXE CORP
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
DLX$26.56-4.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0000027996-26-000112
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0000027996-26-000135
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 128 previous paragraphs and 137 current paragraphs.
62 unchanged; 56 reworded; 18 added; 9 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 21 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
Enhancing operational efficiency – During the first nine months of 2026, we continued to focus on cost management and operational efficiency through workforce adjustments across multiple functions and optimization of our marketing strategies. We also continued to realize the benefits of prior-year initiatives, including operational efficiencies within our lockbox processing operations.
Current report
On a consolidated basis, net income decreased $2.2 million year-over-year in the first nine months of 2026, primarily reflecting costs associated with the Celero acquisition and continued secular declines in our Print segment. However, our cost management and operational efficiency initiatives, together with targeted pricing actions and growth in our payments and data businesses, contributed to improvements in consolidated adjusted EBITDA and adjusted EBITDA margin compared to the first nine months of 2025.
Current report
•Net income– Decreased by $2.2 million to $68.0 million, primarily reflecting transaction costs of $15.4 million associated with the Celero acquisition and $10.9 million of incremental amortization expense attributable to the acquired intangibles, as well as continued revenue pressures in the Print segment, and higher material and delivery costs due to inflation. These factors were partially offset by the benefits of our cost management and pricing initiatives and growth in our payments and data businesses.
Current report
These unfavorable factors were partially offset by strong demand for our data-driven marketing services, which contributed $49.0 million of additional revenue compared to the prior-year period. Revenue also benefited from growth in our Merchant Services segment, including $33.5 million of revenue from the Celero acquisition, as well as strategic price increases, particularly within our Merchant Services and Print segments. Growth in our B2B segment, driven by new lockbox and remittance processing clients and a software license agreement within our broader suite of treasury management offerings, also contributed to revenue.
Current report
Total cost of revenue increased in the third quarter and first nine months of 2026 compared to the same periods in 2025. The increases were primarily driven by higher costs associated with growth in our payments and data businesses, including the impact of the Celero acquisition, lower vendor rebates in our data-driven marketing business compared to the prior year, and inflationary pressures on materials and delivery costs.
Current report
SG&A expense increased in the third quarter of 2026 compared to the third quarter of 2025, primarily driven by costs associated with the Celero acquisition, including transaction costs of $9.8 million, amortization expense of $10.9 million, and the ongoing operating expenses of the acquired business. Partially offsetting these increases was the first quarter business exit discussed in the Executive Overview section, which reduced SG&A expense by approximately $16.8 million in the third quarter of 2026. SG&A expense also benefited from our ongoing cost management initiatives, including workforce adjustments across multiple functions, and lower commission expense driven by lower Print revenue volumes.
Current report
SG&A expense decreased in the first nine months of 2026 compared to the first nine months of 2025, primarily driven by the first quarter business exit discussed in the Executive Overview section, which reduced SG&A expense by approximately $39.7 million. SG&A expense also benefited from our ongoing cost management initiatives, including workforce adjustments across multiple functions and the optimization of our marketing strategies, as well as lower commission expense driven by lower Print revenue volumes. These decreases were partially offset by costs associated with the Celero acquisition, including transaction costs of $15.4 million, amortization expense of $10.9 million, and the ongoing operating expenses of the acquired business.
Current report
Restructuring and integration expense increased in the third quarter of 2026 compared to the third quarter of 2025, primarily due to integration activities associated with the Celero acquisition. For the first nine months of 2026, restructuring and integration expense decreased compared to the first nine months of 2025, as lower costs from our ongoing restructuring initiatives more than offset integration costs related to the Celero acquisition.
Current report
Interest expense increased in the third quarter of 2026 compared to the third quarter of 2025, primarily due to higher average debt outstanding as a result of the financing of the Celero acquisition. This increase was partially offset by a lower weighted-average interest rate.
Current report
Interest expense decreased in the first nine months of 2026 compared to the first nine months of 2025, primarily due to a lower weighted-average interest rate. This decrease was partially offset by higher average debt outstanding as a result of the financing of the Celero acquisition.
Current report
For the third quarter of 2026, our effective income tax rate increased compared to the third quarter of 2025, primarily due to higher non-deductible executive compensation expense. This increase was partially offset by a $1.4 million reduction in the valuation allowance associated with a deferred tax asset for a capital loss carryforward.
Current report
During the first nine months of 2026, we continued to focus on cost management and operational efficiency through workforce adjustments across multiple functions and optimization of our marketing strategies. We also benefited from prior-year initiatives, including operational improvements within our lockbox processing operations.
Current report
On a consolidated basis, net income decreased $2.2 million year-over-year in the first nine months of 2026, primarily reflecting costs associated with the Celero acquisition and continued secular declines in our Print segment. However, our cost management and operational efficiency initiatives, together with targeted pricing actions and growth in our payments and data businesses, contributed to improvements in consolidated adjusted EBITDA and adjusted EBITDA margin compared to the first nine months of 2025. In addition, net cash provided by operating activities increased by $47.4 million in the first nine months of
Current report
2026 compared to the prior-year period, reflecting improved operating performance and favorable working capital changes, among other factors.
Current report
Total revenue increased in the third quarter of 2026 compared to the third quarter of 2025, driven by revenue from a software license agreement within our broader suite of treasury management offerings, higher remittance processing volumes, and targeted price increases to mitigate the impact of inflation. These increases were partially offset by pressure on remittance processing volumes in certain customer relationships.
Current report
Adjusted EBITDA decreased in the third quarter and first nine months of 2026 compared to the same periods in 2025, primarily driven by higher vendor rebates in the prior-year periods, partially offset by increased data-driven marketing volume.
Current report
Adjusted EBITDA margin also decreased in both periods compared to the prior year, reflecting the impact of higher vendor rebates in the prior-year periods and changes in the mix of marketing campaigns.
Current report
Business combinations – We account for business combinations using the acquisition method of accounting, which requires us to estimate the fair values of assets acquired and liabilities assumed as of the acquisition date. These estimates involve significant judgment, particularly in valuing acquired intangible assets. The valuation of intangible assets generally involves assumptions regarding forecasted revenue, customer attrition, EBITDA margins, discount rates, and other factors. These assumptions are based on management's expectations of future operating performance and market conditions and are inherently uncertain. Changes in key assumptions could materially affect the estimated fair values of acquired intangible assets and the amount of goodwill recognized. The fair values assigned to acquired intangible assets, along with their estimated useful lives and amortization methods, determine the amount and timing of future amortization expense. In addition, if actual operating results fall below expectations, the resulting decline in the estimated fair value of the business could increase the risk of future goodwill impairment charges. In connection with our acquisition of Celero on July 31, 2026, we applied these valuation techniques to determine the preliminary fair values of assets acquired and liabilities assumed, as discussed under the caption "Note 6: Acquisitions and Divestitures" in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part I, Item 1 of this report.
Removed paragraphs (9)
Previous report
Enhancing operational efficiency – In the first half of 2026, we reduced selling, general and administrative (SG&A) expense by 6.4% year-over-year, reflecting the benefits of our ongoing cost management efforts. Additionally, despite revenue pressures in the Print segment, operational improvements resulted in adjusted EBITDA margin improvement for this segment. These results contributed to year-over-year increases in net income, consolidated adjusted EBITDA, and consolidated adjusted EBITDA margin in the first half of 2026.
Previous report
•Net income– Increased by $18.5 million to $55.0 million, primarily reflecting the impact of our cost management and pricing initiatives, as well as lower restructuring and integration expense. Growth in our payments and data businesses further contributed to the improvement. Additionally, interest expense decreased $6.6 million year-over-year and we recognized a $5.1 million gain from the sale of the Safeguard small business distributor channel within the Print segment. These favorable factors were partially offset by the continuing demand softness and secular declines in the Print segment, inflationary pressures impacting material and delivery costs, and transaction costs related to the Celero acquisition of $5.6 million in the first half of 2026.
Previous report
These unfavorable drivers were partially offset by strong demand for our data-driven marketing services, which contributed a $35.1 million year-over-year increase for the first half of 2026. Revenue growth was further supported by strategic price increases implemented in response to inflationary pressures, particularly within our Merchant Services and Print segments, and by higher Merchant Services and B2B Payments volume reflecting new customer implementations.
Previous report
Total cost of revenue decreased in the second quarter of 2026 compared to the second quarter of 2025. The decrease was primarily due to lower costs associated with the soft demand for promotional products and the continued secular declines in the Print segment, as well as the impact of our cost management initiatives. In addition, the first quarter business exit discussed in the Executive Overview section reduced cost of revenue by approximately $16.3 million in the second quarter of 2026. These decreases were partially offset by the revenue growth and higher favorability in the prior year from vendor rebates in our data-driven marketing business, as well as inflationary pressures on materials and delivery costs.
Previous report
SG&A expense decreased in the second quarter of 2026 compared to the second quarter of 2025, primarily as a result of our ongoing cost management initiatives, including actions such as workforce adjustments across multiple functions. In addition, commission expense declined due to lower Print revenue volumes. The first quarter business exit discussed in the Executive Overview section further reduced SG&A expense by approximately $17.2 million in the second quarter of 2026. Partially offsetting these decreases in SG&A expense were transaction costs of $5.6 million related to the Celero acquisition discussed in the Executive Overview section.
Previous report
SG&A expense decreased in the first half of 2026 compared to the first half of 2025, primarily as a result of our ongoing cost management initiatives, including actions such as workforce adjustments across multiple functions and the optimization of our marketing strategies. In addition, commission expense declined due to lower Print revenue volumes, and medical costs decreased. The first quarter business exit discussed in the Executive Overview section further reduced SG&A expense by approximately $23.0 million in the first half of 2026. Partially offsetting these decreases in SG&A expense were transaction costs of $5.6 million related to the Celero acquisition discussed in the Executive Overview section.
Previous report
Both adjusted EBITDA and adjusted EBITDA margin increased year-over-year during the first half of 2026. These improvements were supported by a 6.4% reduction in SG&A expense. Within our Print segment, adjusted EBITDA margin also improved as a result of our optimization actions, even as revenue pressures continue in the business. In addition, net cash provided by operating activities increased by $32.5 million year-over-year, and we reduced total debt by $77.2 million compared to the prior year-end. These results reflect the ongoing benefits of initiatives completed in prior periods, as well as incremental improvements from current‑period actions.
Previous report
Adjusted EBITDA decreased in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by higher favorability from vendor rebates in the prior year, partially offset by the higher data-driven marketing volume. Adjusted EBITDA increased in the first half of 2026 compared to the first half of 2025, primarily driven by the higher data-driven marketing volume, partially offset by higher favorability from vendor rebates in the prior year.
Previous report
Adjusted EBITDA margin decreased year-over-year in both periods, driven by the prior-year vendor rebate favorability and changes in the mix and nature of campaign activity compared with the prior year.
Reworded paragraphs (56)
Previous wording
•Consolidated Results of Operations; Restructuringand Integration Expense; and Segment Results that includes a more detailed discussion of our revenue and expenses;
Current wording
•Consolidated Results of Operations, Restructuringand Integration Expense, and Segment Results that include a more detailed discussion of our revenue and expenses;
Previous wording
•Cash Flows and Liquidity and Capital Resources that discusses key aspects of our cash flows, financial commitments, capital structure, and financial position; and
Current wording
•Cash Flows and Liquidity and Capital Resources that discuss key aspects of our cash flows, financial commitments, capital structure, and financial position; and
Previous wording
A comprehensive discussion of our strategy is provided in Part I, Item 1 of the 2025 Form 10-K. During the first half of 2026, we continued to execute on our strategic priorities of accelerating profitable growth, enhancing operational efficiency, and disciplined capital allocation.
Current wording
A comprehensive discussion of our strategy is provided in Part I, Item 1 of the 2025 Form 10-K. During the first nine months of 2026, we continued to execute on our strategic priorities of accelerating profitable growth, enhancing operational efficiency, and disciplined capital allocation.
Previous wording
Accelerating profitable growth – We continued to execute on our strategy of growing our payments and data businesses while optimizing our overall portfolio, delivering stronger revenue mix and profitability. In March 2026, we completed the divestiture of the Safeguard small business distributor channel within our Print segment, a strategic action enabling greater focus on our growth businesses and ongoing portfolio optimization objectives. The divestiture reduced first-half 2026 Print segment revenue by approximately $47.1 million and Print adjusted EBITDA by approximately $4.9 million compared to the first half of 2025. At the same time, our payments and data businesses demonstrated strong momentum, collectively delivering 11.1% year-over-year revenue growth and a 14.6% increase in adjusted EBITDA in the first half of 2026.
Current wording
Accelerating profitable growth – We continued to execute on our strategy of growing our payments and data businesses while optimizing our overall portfolio, delivering stronger revenue mix and profitability. In March 2026, we completed the divestiture of the Safeguard small business distributor channel within our Print segment, a strategic action enabling greater focus on our growth businesses and ongoing portfolio optimization objectives. The divestiture reduced Print segment revenue by approximately $79.3 million and Print adjusted EBITDA by approximately $7.8 million in the first nine months of 2026 compared to the first nine months of 2025.
Previous wording
In June 2026, we entered into an equity purchase agreement and plan of merger to acquire Celero Commerce (“Celero”), a financial technology company that provides payment solutions to small and mid-sized businesses through a diversified distribution network. The transaction closed on July 31, 2026, with aggregate cash consideration of $625.0 million, plus payment of certain seller transaction expenses and other adjustments. The acquisition was financed through our amended credit agreement, via a combination of additional term loan financing and revolving credit facility borrowings. Further information regarding the amended credit facility agreement can be found in the Capital Resources section.
Current wording
On the growth side of our portfolio, our payments and data businesses demonstrated strong momentum, collectively delivering 14.6% year-over-year revenue growth and an 18.0% increase in adjusted EBITDA in the first nine months of 2026. Approximately $33.5 million of the revenue increase was driven by the acquisition of Celero Commerce ("Celero") on July 31, 2026. Celero is a financial technology company that provides payment solutions to small and mid-sized businesses through a diversified distribution network. Cash consideration paid for the acquisition was $625.0 million plus certain seller transaction expenses and other adjustments. Further information regarding the acquisition can be found under the caption "Note 6: Acquisitions and Divestitures" in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part I, Item 1 of this report. The transaction was financed through our amended credit agreement, via a combination of additional term loan financing and revolving credit facility borrowings. Further information regarding the amended credit agreement can be found in the Capital Resources section.
Previous wording
Celero's platform is complementary to our existing payments offerings and is expected to accelerate the modernization of our payments technology, expand our distribution capabilities through Celero's diversified, partner-led model, and strengthen our competitive position by increasing scale, expanding channel reach, and deepening the value we deliver to a broader set of customers.
Current wording
Celero's platform complements our existing payments offerings and is expected to accelerate the modernization of our payments technology, expand our distribution capabilities, and strengthen our competitive position through increased scale and broader customer reach.
Previous wording
Disciplined capital allocation – We continued to apply our capital allocation framework, working to ensure investments are aligned with our growth objectives and deliver optimal returns. In the first half of 2026, net cash provided by operating activities increased by $32.5 million year-over-year, and we reduced total debt by $77.2 million compared to year-end 2025. The Celero acquisition reflects our commitment to accelerating growth, and we remain focused on disciplined deleveraging. The strong cash generation of our business, combined with available capacity under our credit arrangements, positions us well to service our obligations, reduce leverage over time, and continue delivering value for shareholders.
Current wording
Disciplined capital allocation – We continued to apply our capital allocation framework, focusing on investments that support our strategic growth objectives while maintaining financial flexibility. During the first nine months of 2026, net cash provided by operating activities increased by $47.4 million year-over-year, reflecting our continued focus on working capital management and operational improvements. While the Celero acquisition represents a significant investment in our growth strategy, we remain focused on reducing leverage over time. Our operating cash flow generation and available capacity under our credit arrangements position us well to service our obligations, reduce debt, and deliver long-term value to shareholders.
Previous wording
Highlights of our financial results for the first half of 2026 compared to the first half of 2025 include:
Current wording
Highlights of our financial results for the first nine months of 2026 compared to the first nine months of 2025 include:
Previous wording
•Consolidated revenue – Decreased by $20.3 million to $1,037.4 million, primarily driven by the first quarter business exit, which reduced revenue by approximately $47.1 million. Additionally, the ongoing secular decline in order volumes for checks, business forms, and various business accessories in our Print segment contributed to the decrease. These unfavorable drivers were partially offset by growth in all three of our payments and data businesses.
Current wording
•Consolidated revenue – Decreased by $6.8 million to $1,591.2 million, primarily driven by the first quarter business exit, which reduced revenue by approximately $79.3 million. Additionally, soft demand for promotional products and the ongoing secular decline in order volumes for checks, business forms, and various business accessories in our Print segment contributed to the decrease. These unfavorable drivers were partially offset by growth in all three of our payments and data businesses, including $33.5 million of revenue contributed by the Celero acquisition, which closed on July 31, 2026.
Previous wording
•Adjusted EBITDA– Increased $20.1 million to $226.7 million, driven by the benefits of our cost management and pricing initiatives and growth in our payments and data businesses. These favorable impacts were partially offset by demand softness and the ongoing secular declines in the Print segment and inflationary cost pressures. In addition, our first quarter business exit resulted in a decrease in adjusted EBITDA of approximately $4.9 million.
Current wording
•Adjusted EBITDA– Increased $28.3 million to $353.8 million, driven by the benefits of our cost management and pricing initiatives and growth in our payments and data businesses. These favorable impacts were partially offset by the continued revenue pressures in the Print segment and inflationary cost pressures. In addition, our first quarter business exit resulted in a decrease in adjusted EBITDA of approximately $7.8 million.
Previous wording
Adjusted EBITDA margin increased to 21.9% for the first half of 2026, compared to 19.5% for the first half of 2025. The margin improvement was primarily driven by our cost management and pricing initiatives, partially offset by inflationary pressures and the shift in mix toward our growth businesses. 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 22.2% for the first nine months of 2026, compared to 20.4% for the first nine months of 2025. The margin improvement was primarily driven by our cost management and pricing initiatives, partially offset by inflationary pressures and the shift in mix toward our growth businesses. 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 by $32.5 million to $133.9 million. The increase was primarily driven by the benefits of our cost management and pricing actions, lower income tax payments due to the impact of federal tax law changes enacted in July 2025, favorable changes in working capital, and lower cash expenditures for restructuring and integration activities.
Current wording
•Net cash provided by operating activities– Increased by $47.4 million to $215.9 million. The increase was primarily driven by the benefits of our cost management and pricing actions, lower income tax payments due to the impact of federal tax law changes enacted in July 2025, favorable changes in working capital, and growth in our payments and data businesses, including the Celero acquisition.
Previous wording
These benefits were partially offset by higher payouts for performance-based employee cash bonuses related to our 2025 performance, demand softness and continuing secular declines in the Print segment, and inflationary cost pressures.
Current wording
These benefits were partially offset by transaction costs associated with the Celero acquisition, higher performance-based employee bonuses related to our 2025 results, continued revenue pressures in the Print segment, inflationary cost pressures, and the impact of the Safeguard divestiture.
Previous wording
•Free cash flow– Increased by $33.8 million to $85.9 million, reflecting the same factors that drove the increase in 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 most directly related GAAP financial measure can be found in the Consolidated Results of Operations section.
Current wording
•Free cash flow– Increased by $39.0 million to $134.9 million, primarily reflecting the same factors that drove the increase in 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 most directly related GAAP financial measure can be found in the Consolidated Results of Operations section.
Previous wording
We continually monitor macroeconomic conditions and other external factors that may affect our business, including interest rates, inflation, small business sentiment, consumer spending trends, and global economic conditions. As of June 30, 2026, 68% of our debt had a weighted-average fixed interest rate of 8.1%, which provides partial insulation from changes in market interest rates. This capital structure helps moderate our exposure to interest rate volatility in a higher‑rate environment, although future changes in rates could still affect our borrowing costs due to our variable-rate debt.
Current wording
We continually monitor macroeconomic conditions and other external factors that may affect our business, including interest rates, inflation, small business sentiment, consumer spending trends, and global economic conditions. As of September 30, 2026, 75% of our debt had a weighted-average fixed interest rate of 7.3%, which provides partial insulation from changes in market interest rates. However, future changes in interest rates could continue to affect our borrowing costs on the variable-rate portion of our debt.
Previous wording
Macroeconomic conditions, including inflation, energy price volatility, and fluctuations in logistics and certain raw material costs, continue to influence our cost structure, pricing dynamics, and customer demand. In response, we implemented targeted price adjustments, particularly within our Merchant Services and Print segments, to help offset increased costs while remaining mindful of customer price sensitivity. We continue to monitor these trends closely, including the potential for further cost volatility resulting from changes in energy markets, supply chain conditions, and raw material pricing.
Current wording
Macroeconomic conditions, including inflation, energy price volatility, and fluctuations in logistics and certain raw material costs, continue to influence our cost structure and customer demand. In response, we implemented targeted price adjustments, particularly within our Merchant Services and Print segments, to help offset increased costs while remaining mindful of customer price sensitivity. We continue to monitor the potential for further cost volatility resulting from changes in energy markets, supply chain conditions, and raw material pricing.
Previous wording
Global economic conditions remain uncertain, reflecting ongoing geopolitical unrest and evolving trade policies, treaties, and tariffs. These developments may disrupt supply chains, increase operating costs, and affect the availability, timing, and pricing of certain goods and services. In addition, heightened geopolitical tensions and an increasingly complex threat environment have elevated cybersecurity and technology‑related risks, reinforcing the importance of continued investments in information security, data protection, and technology resilience.
Current wording
Global economic conditions remain uncertain, reflecting ongoing geopolitical unrest and evolving trade policies, treaties, and tariffs. These developments may disrupt supply chains, increase operating costs, and affect the availability, timing, and pricing of certain goods and services.
Previous wording
We also closely track trends in small business sentiment and consumer discretionary spending, as these factors influence demand across our portfolio. Our analysis incorporates data from credit card networks, the Federal Reserve, leading economic forecasters, and our proprietary analytics. Recent economic indicators suggest continued caution among consumers and small businesses amid ongoing economic uncertainty and cost pressures. While employment conditions and other underlying economic indicators have generally remained stable, shifts in consumer and business spending patterns could influence transaction volumes in our Merchant Services segment and demand for certain discretionary products within our Print segment. Inflation, labor market conditions, trade policies, tariffs, and other macroeconomic factors may continue to influence customer purchasing behavior. A sustained period of economic uncertainty or a broader slowdown in economic activity could adversely affect our financial position, results of operations, and future growth prospects.
Current wording
We also closely monitor trends in small business sentiment and consumer discretionary spending, as these factors influence demand across our portfolio. Our analysis incorporates data from credit card networks, the Federal Reserve, leading economic forecasters, and our proprietary analytics. Recent economic indicators suggest that while consumer sentiment remains weak, consumer spending has remained relatively resilient, although consumers continue to demonstrate price sensitivity. Small business optimism has softened modestly, with recent indicators reflecting elevated uncertainty and more cautious expansion plans. Negative shifts in consumer and business spending patterns could influence transaction volumes in our Merchant Services segment and demand for certain discretionary products within our Print segment. A sustained period of economic uncertainty or a broader slowdown in economic activity could adversely affect our financial position, results of operations, and future growth prospects.
Previous wording
As of June 30, 2026, we held cash and cash equivalents of $34.9 million, along with an additional $384.3 million available for borrowing under our revolving credit facility. We anticipate that capital expenditures will be between $100.0 million and $110.0 million for the full year, compared to $95.3 million in 2025, 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, which are subject to quarterly approval by our board of directors.
Current wording
As of September 30, 2026, we held cash and cash equivalents of $74.9 million, along with an additional $189.8 million available for borrowing under our revolving credit facility. We anticipate that capital expenditures will be approximately $110.0 million for the full year, compared to $95.3 million in 2025, 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, which are subject to quarterly approval by our board of directors.
Previous wording
We believe that net cash generated by operations, together with our cash and cash equivalents on hand and available credit, will be sufficient to meet our operational needs, contractual obligations, and debt service requirements over the next 12 months. This assessment takes into account our working capital position and anticipated cash flows, including those associated with the additional debt incurred in connection with the acquisition of Celero. We regularly monitor our liquidity position in light of potential risks, including market volatility, interest rate fluctuations, and macroeconomic uncertainty, and we are prepared to adjust our capital allocation strategy as needed. As of June 30, 2026, we were in compliance with our debt covenants. Additional information regarding our long-term capital requirements and debt maturities can be found in the Cash Flows and Liquidity and Capital Resources sections.
Current wording
We believe that net cash generated by operations, together with our cash and cash equivalents on hand and borrowing availability, will be sufficient to meet our operational needs, contractual obligations, and debt service requirements over the next 12 months. This assessment takes into account our working capital position and anticipated cash flows, including those associated with the additional debt incurred in connection with the acquisition of Celero. We regularly monitor our liquidity position in light of potential risks, including market volatility, interest rate fluctuations, and macroeconomic uncertainty, and we are prepared to adjust our capital allocation strategy as needed. As of September 30, 2026, we were in compliance with our debt covenants. Additional information regarding our long-term capital requirements and debt maturities can be found in the Cash Flows and Liquidity and Capital Resources sections.
Previous wording
These unfavorable drivers were partially offset by strong demand for our data-driven marketing services, which contributed a $14.7 million year-over-year increase in the second quarter of 2026. Revenue growth was further supported by strategic price increases implemented in response to inflationary pressures, particularly within our Merchant Services and Print segments.
Current wording
Total revenue increased in the third quarter of 2026 compared to the third quarter of 2025, primarily driven by growth in our Merchant Services segment, including the impact of the Celero acquisition on July 31, 2026, which contributed revenue of $33.5 million. Strong demand for our data-driven marketing services also contributed to the increase, resulting in $13.9 million of additional revenue compared to the prior-year quarter. Revenue growth was further supported by strategic price increases implemented in response to inflationary pressures, particularly within our Merchant Services and Print segments.
Previous wording
Total revenue decreased in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by the first quarter business exit discussed in the Executive Overview section, which reduced revenue by approximately $34.5 million. Additionally, soft demand for promotional products and the continued secular decline in order volumes for checks, business forms, and business accessories within our Print segment contributed to the decrease.
Current wording
These favorable factors were partially offset by the first quarter business exit discussed in the Executive Overview section, which reduced revenue by approximately $32.3 million. Soft demand for promotional products and the continued secular decline in order volumes for checks, business forms, and business accessories within our Print segment also negatively impacted revenue.
Previous wording
Total revenue decreased in the first half of 2026 compared to the first half of 2025, primarily due to the first quarter business exit discussed in the Executive Overview section, which reduced revenue by approximately $47.1 million for the first half of the year. Additionally, soft demand for promotional products and the continued secular decline in order volumes for checks, business forms, and business accessories within our Print segment contributed to the decrease.
Current wording
Total revenue decreased in the first nine months of 2026 compared to the first nine months of 2025, primarily due to the first quarter business exit discussed in the Executive Overview section, which reduced revenue by approximately $79.3 million. Soft demand for promotional products and the continued secular decline in order volumes for checks, business forms, and business accessories within our Print segment also contributed to the decrease.
Previous wording
Total cost of revenue increased in the first half of 2026 compared to the first half of 2025. The increase was primarily due to the revenue growth and higher favorability in the prior year from vendor rebates in our data-driven marketing business, as well as inflationary pressures on materials and delivery costs. These increases were partially offset by lower costs associated with the soft demand for promotional products and the continued secular declines in the Print segment, as well as the impact of our cost management initiatives. In addition, the first quarter business exit discussed in the Executive Overview section reduced cost of revenue by approximately $22.3 million in the first half of 2026.
Current wording
These increases were partially offset by lower costs associated with soft demand for promotional products and the continued secular declines in the Print segment, as well as the impact of our cost management initiatives. In addition, the first quarter business exit discussed in the Executive Overview section reduced cost of revenue by approximately $14.8 million in the third quarter of 2026 and $37.1 million in the first nine months of 2026.
Previous wording
As a percentage of total revenue, total cost of revenue increased in the second quarter and first half of 2026 compared to the same periods in 2025, driven by inflationary pressures and a shift in revenue mix toward our growth businesses. These increases were partially offset by the benefits of targeted pricing actions to address inflation and cost management initiatives.
Current wording
As a percentage of total revenue, total cost of revenue increased in the third quarter and first nine months of 2026 compared to the same periods in 2025, driven by inflationary pressures and a shift in revenue mix toward our growth businesses. These increases were partially offset by the benefits of targeted pricing actions and cost management initiatives.
Previous wording
As a percentage of total revenue, SG&A expense decreased in the second quarter of 2026 compared to the second quarter of 2025, as our cost management actions and the impact of the first quarter business exit more than offset the impact of the acquisition transaction costs incurred during the quarter.
Current wording
As a percentage of total revenue, SG&A expense increased in the third quarter of 2026 compared to the third quarter of 2025, as the impact of transaction costs and amortization expense associated with the Celero acquisition more than offset our cost management actions and the impact of the first quarter business exit.
Previous wording
As a percentage of total revenue, SG&A expense decreased in the first half of 2026 compared to the first half of 2025, as our cost management actions, the impact of the first quarter business exit, and reduced medical costs more than offset the impact of the acquisition transaction costs incurred during the first half of the year.
Current wording
As a percentage of total revenue, SG&A expense decreased in the first nine months of 2026 compared to the first nine months of 2025, as our cost management actions and the impact of the first quarter business exit more than offset the impact of transaction costs and amortization expense associated with the Celero acquisition.
Previous wording
We are actively pursuing initiatives aimed at improving operating efficiency and supporting earnings and cash flow growth. 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 improving operating efficiency and supporting earnings and cash flow growth. As we implement these initiatives, the amount of restructuring and integration expense is expected to fluctuate from period to period.
Previous wording
In the first quarter of 2026, we recognized a gain on the sale of the Safeguard small business distributor channel within our Print segment. 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.
Current wording
In the first quarter of 2026, we recognized a gain on the sale of the Safeguard small business distributor channel within our Print segment. Further information can be found under the caption "Note 6: Acquisitions and Divestitures" in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part 1, Item 1 of this report.
Previous wording
Interest expense decreased in the second quarter and first half of 2026 compared to the same periods in 2025 primarily due to a reduction in average debt outstanding, as well as a lower weighted-average interest rate. As of June 30, 2026, $440.0 million of our debt was subject to variable rates, which exposes us to fluctuations in market interest rates. Based on the amount of variable-rate debt outstanding as of June 30, 2026, a one percentage point change in the weighted-average interest rate would result in a $2.0 million impact on interest expense for the remainder of 2026.
Current wording
As of September 30, 2026, $500.5 million of our debt was subject to variable rates, after giving effect to our interest rate swaps. Changes in market interest rates on this debt could affect our interest expense. Based on the amount of variable-rate debt outstanding as of September 30, 2026, a one percentage point change in the weighted-average interest rate would result in a $1.3 million impact on interest expense for the remainder of 2026.
Previous wording
Our effective income tax rate of 28.3% for the six months ended June 30, 2026 was unchanged compared to the same period in 2025. The 2026 rate benefited from a higher tax benefit related to employee share-based compensation and lower foreign income taxes. These favorable impacts were offset by several factors, including a $2.3 million increase in the valuation allowance related to a capital loss carryforward generated during the period that we do not expect to fully utilize, as well as the tax impact related to the surrender of COLI policies, higher non-deductible executive compensation expense, and state income taxes. Further information regarding our income tax provision can be found under the caption "Note 9: Income Taxes" in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part I, Item 1 of this report.
Current wording
For the nine months ended September 30, 2026, our effective income tax rate increased compared to the same period in 2025. The increase was primarily due to higher non-deductible executive compensation expense, the tax impact of the surrender of company-owned life insurance (COLI) policies, a higher state income tax rate, and a $0.9 million increase in the valuation allowance related to a capital loss carryforward generated during the period that we do not expect to fully utilize. These unfavorable impacts were partially offset by a higher tax benefit related to employee share-based compensation. Further information regarding our income tax provision can be found under the caption "Note 10: Income Taxes" 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 decreased in the second quarter of 2026 as compared to the second quarter of 2025, driven by the factors discussed above regarding our results for the second quarter. Adjusted diluted EPS also decreased year-over-year, primarily reflecting the soft demand for promotional products, the ongoing secular declines in the Print segment, inflationary cost pressures, and higher amortization expense driven by our technology investments. In addition, the first quarter business exit discussed in the Executive Overview section reduced adjusted diluted EPS on a year-over-year basis by $0.06 per share in the second quarter of 2026. These decreases were partially offset by the benefits of our cost management and pricing initiatives, as well as growth in our payments and data businesses and a reduction in interest expense.
Current wording
Net income and diluted EPS decreased in the third quarter of 2026 compared to the third quarter of 2025, driven by the factors discussed above. Adjusted diluted EPS also decreased year-over-year, primarily due to the ongoing secular declines and soft demand for promotional products in the Print segment, inflationary cost pressures, increased interest expense, and higher amortization expense driven by our technology investments. The first quarter business exit discussed in the Executive Overview section also reduced adjusted diluted EPS by $0.05 per share compared to the prior-year quarter. These unfavorable factors were partially offset by the benefits of our pricing and cost management actions, as well as growth in our payments and data businesses, including the impact of the Celero acquisition.
Previous wording
Net income and diluted EPS increased in the first half of 2026 as compared to the first half of 2025, driven by the factors discussed above regarding our results for the first half of the year. Adjusted diluted EPS also increased year-over-year, primarily reflecting the benefits of our cost management and pricing initiatives, as well as growth in our payments and data businesses and a reduction in interest expense. These favorable impacts were partially offset by the soft demand for promotional products, the ongoing secular declines in the Print segment, inflationary cost pressures, and higher amortization expense driven by our technology investments. In addition, the first quarter business exit discussed in the Executive Overview section reduced adjusted diluted EPS on a year-over-year basis by $0.08 per share for the first half of 2026.
Current wording
Net income and diluted EPS decreased in the first nine months of 2026 as compared to the first nine months of 2025, driven by the factors discussed above, with diluted EPS also impacted by a higher weighted-average number of shares outstanding in 2026. Adjusted diluted EPS increased year-over-year, primarily reflecting the benefits of our pricing and cost management actions, as well as growth in our payments and data businesses, including the impact of the Celero acquisition, and lower interest expense. These favorable factors were partially offset by the ongoing secular declines and soft demand for promotional products in the Print segment, inflationary cost pressures, higher amortization expense driven by our technology investments, and the higher weighted-average number of shares outstanding in 2026. The first quarter business exit discussed in the Executive Overview section also reduced adjusted diluted EPS by $0.13 per share compared to the prior-year period.
Previous wording
Adjusted EBITDA and adjusted EBITDA margin– We believe that adjusted EBITDA and adjusted EBITDA margin are metrics that provide meaningful insight into our operating performance. These measures exclude the impact of interest expense, income taxes, depreciation and amortization, and certain other items that may vary for reasons unrelated to current period operating performance. Management uses these measures to evaluate our results of operations, facilitate period-to-period and peer comparisons, and inform strategic decision-making aimed at enhancing performance. We believe that growth in adjusted EBITDA and adjusted EBITDA margin reflects improvement in our operating efficiency and may be indicative of increased enterprise value.
Current wording
Adjusted EBITDA and adjusted EBITDA margin– We believe that adjusted EBITDA and adjusted EBITDA margin are metrics that provide meaningful insight into our operating performance. These measures exclude the impact of interest expense, income tax expense, depreciation and amortization expense, and certain other items that may vary for reasons unrelated to current period operating performance. Management uses these measures to evaluate our results of operations, facilitate period-to-period and peer comparisons, and inform strategic decision-making aimed at enhancing performance. We believe that growth in adjusted EBITDA and adjusted EBITDA margin reflects improvement in our operating efficiency and may be indicative of increased enterprise value.
Previous wording
By the end of 2025, we had completed the material components of our North Star program, a comprehensive, multi-year initiative designed to enhance shareholder value by accelerating adjusted EBITDA growth, increasing cash flow, reducing debt, and improving our leverage ratio. Related restructuring and integration expense incurred during the first half of 2026 was not material. However, we continue to realize the benefits of actions taken under the program, which contributed to improved operating results in 2026.
Current wording
By the end of 2025, we had completed the material components of our North Star program, a comprehensive, multi-year initiative designed to enhance shareholder value by accelerating adjusted EBITDA growth, increasing cash flow, reducing debt, and improving our leverage ratio. Related restructuring and integration expense incurred during the first nine months of 2026 was not material. However, we continue to realize the benefits of actions taken under the program, which contributed to improved operating results in 2026.
Previous wording
The restructuring and integration expense recognized in the first half of 2026 relates to various employee reductions and other efficiency initiatives. The majority of the employee reductions included in our restructuring and integration accruals as of June 30, 2026, along with the related severance payments, are expected to be completed by the end of 2026.
Current wording
The restructuring and integration expense recognized in the first nine months of 2026 relates to various employee reductions, other efficiency initiatives, and integration activities related to the Celero acquisition. We do not expect the remaining expense associated with Celero integration activities to be material. The majority of the employee reductions included in our restructuring and integration accruals as of September 30, 2026, along with the related severance payments, are expected to be completed by early 2027.
Previous wording
The 2025 and 2026 workforce reductions are expected to generate annual cost savings of approximately $2.0 million in cost of sales and $15.0 million in SG&A expense in 2026 compared to our 2025 results. These projected savings are attributable solely to the workforce reductions and are not intended to represent the aggregate impact of all cost reduction measures. Actual outcomes may vary due to factors such as inflationary pressures and continued strategic investments in the business.
Current wording
Workforce reductions implemented in 2025 and 2026 are expected to generate cost savings of approximately $2.0 million in cost of revenue and $17.0 million in SG&A expense in 2026 compared to our 2025 results. These projected savings reflect only the impact of workforce reductions and do not represent the total benefits of our cost reduction initiatives. Actual savings may differ from these estimates due to factors such as inflationary pressures and continued strategic investments in the business.
Previous wording
Total revenue increased in the second quarter and first half of 2026 compared to the same periods in 2025, driven by a combination of factors, including new customer implementations, higher transaction volumes from existing partners across several channels, and targeted pricing actions. These positive drivers were partially offset by pressure on consumer and business spending in certain customer channels.
Current wording
Total revenue increased in the third quarter and first nine months of 2026 compared to the same periods in 2025, driven by revenue from the Celero acquisition, new customer implementations, higher transaction volumes from existing partners across several channels, and targeted pricing actions. The Celero acquisition, which closed on July 31, 2026, contributed $33.5 million of revenue in both periods. These increases were partially offset by pressure on consumer and business spending in certain customer channels.
Previous wording
Adjusted EBITDA and adjusted EBITDA margin also improved in the second quarter and first half of 2026 compared to the same periods in 2025, reflecting targeted price increases, cost management initiatives, including the year-end 2025 purchase of residual commission rights from an ISO partner, and contributions from new client implementations.
Current wording
Adjusted EBITDA and adjusted EBITDA margin also improved in the third quarter and first nine months of 2026 compared to the same periods in 2025, reflecting contributions from the Celero acquisition and new customer implementations, targeted pricing actions, and cost management initiatives. These initiatives included the purchase of residual commission rights from an ISO partner in late 2025, which reduced ongoing commission expense.
Previous wording
Total revenue increased in the second quarter and first half of 2026 compared to the same periods in 2025, driven by the onboarding of new lockbox and remittance processing clients, increased remittance processing volume, and the implementation of modest price increases to counteract inflationary pressure. These impacts were partially offset by pressure on remittance processing volumes in certain customer relationships.
Current wording
Total revenue increased in the first nine months of 2026 compared to the first nine months of 2025, driven by the onboarding of new lockbox and remittance processing clients, higher remittance processing volumes, revenue from a software license agreement, and targeted price increases to mitigate the impact of inflation. These increases were partially offset by pressure on remittance processing volumes in certain customer relationships.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Further information regarding these costs can be found in the Restructuring and Integration Expense section.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The increase in our effective income tax rate in the second quarter of 2026 compared to the second quarter of 2025 was primarily driven by the tax impact of the surrender of company-owned life insurance (COLI) policies during the second quarter of 2026 and higher non-deductible executive compensation expense.