PITNEY BOWES INC /DE/

Previous wording

Our segments include SendTech Solutions and Presort Services. Management measures segment profitability and performance using adjusted segment earnings before interest and taxes (EBIT). Adjusted segment EBIT is calculated as segment revenues less the related costs and expenses attributable to the segment. Segment results exclude interest, including finance interest expense, taxes, corporate expenses, restructuring charges and other items not allocated to the segments.

Current wording

Our segments include SendTech Solutions and Presort Services. Management measures segment profitability and performance using adjusted segment earnings before interest and taxes (EBIT). Adjusted segment EBIT is calculated as segment revenues less the related costs and expenses attributable to the segment. Segment results exclude interest, including finance interest, taxes, corporate expenses, restructuring charges and other items not allocated to the segments. Effective January 1, 2026, we are also excluding expense related to U.S. and Canada pension plans that we have taken steps to terminate. Prior periods were not recast.

Previous wording

SendTech Solutions revenue decreased $3 million in the second quarter of 2026 compared to the prior year period. Products revenue declined $3 million primarily due to a decline in our international portfolio. Financing and other revenue declined $1 million compared to the prior year period. Services revenue increased $2 million compared to the prior year period primarily driven by higher volumes in a cross-border services contract, which was partially offset by a declining meter population.

Current wording

SendTech Solutions revenue decreased $6 million in the third quarter of 2026 compared to the prior year period. Services revenue decreased $3 million compared to the prior year period primarily due to a declining meter population, which was partially offset by higher revenue from a cross-border services contract. Financing and other revenue declined $3 million compared to the prior year period primarily due to a decline in our leasing portfolio. Products revenue increased $1 million primarily due to a significant deal in the current quarter, partially offset by a large international deal in the prior year period.

Previous wording

Gross margin increased $8 million and gross margin percentage increased to 69.2% from 66.1% compared to the prior year period primarily driven by favorable product mix and a $5 million tariff refund in 2026.

Current wording

Gross margin increased $1 million and gross margin percentage increased to 67.6% from 66.1% compared to the prior year period primarily driven by favorable product mix.

Previous wording

Selling, general and administrative ("SG&A") expense declined $15 million compared to the prior period primarily driven by lower employee-related expenses of $6 million, lower professional and outsourcing fees of $2 million, lower marketing expenses of $2 million, lower depreciation and amortization expense of $2 million and lower equipment maintenance expense of $1 million.

Current wording

Selling, general and administrative ("SG&A") expense declined $15 million compared to the prior period primarily driven by lower employee-related expenses of $8 million, lower marketing expenses of $2 million, lower depreciation and amortization expense of $2 million and lower equipment maintenance expense of $1 million.

Previous wording

Adjusted segment EBIT was $123 million in the second quarter of 2026 compared to $101 million for the prior year period.

Current wording

Adjusted segment EBIT was $115 million in the third quarter of 2026 compared to $101 million for the prior year period.

Previous wording

SendTech Solutions revenue decreased $4 million in the first half of 2026 compared to the prior year period. Revenue in the first quarter of 2025 includes an unfavorable adjustment of $4 million related to prior periods. Products revenue declined $8 million primarily due to customers opting to extend leases of their existing advanced-technology equipment rather than purchase new equipment as well as a declining meter population. Financing and other revenue declined $1 million compared to the prior year period. Services revenue increased $4 million compared to the prior year period driven by higher volumes in a cross-border services contract and higher subscription revenue which was partially offset by a declining meter population.

Current wording

SendTech Solutions revenue decreased $10 million in the first nine months of 2026 compared to the prior year period. Revenue in 2025 includes an unfavorable adjustment of $4 million related to prior periods. Products revenue declined $7 million primarily due to customers opting to extend leases of their existing advanced-technology equipment rather than purchase new equipment as well as a declining meter population. Financing and other revenue declined $3 million compared to the prior year period primarily due to a decline in our lease portfolio. Services revenue was flat compared to the prior year period driven by higher revenue in a cross-border services contract and higher subscription revenue which was offset by a declining meter population.

Previous wording

Gross margin increased $10 million and gross margin percentage increased to 68.4% from 66.3% compared to the prior year period primarily driven by a $5 million tariff refund in 2026, the unfavorable revenue adjustment of $4 million in the first quarter of 2025 and favorable product mix.

Current wording

Gross margin increased $11 million and gross margin percentage increased to 68.1% from 66.2% compared to the prior year period primarily driven by a $5 million tariff refund in 2026, the unfavorable revenue adjustment of $4 million in 2025 and favorable product mix.

Previous wording

SG&A expense declined $30 million compared to the prior year period primarily driven by lower employee-related expenses of $11 million, lower professional and outsourcing fees of $6 million, lower marketing expenses of $4 million, lower equipment maintenance expense of $3 million and lower depreciation expense of $3 million.

Current wording

SG&A expense declined $45 million compared to the prior year period primarily driven by lower employee-related expenses of $19 million, lower professional and outsourcing fees of $6 million, lower marketing expenses of $6 million, lower depreciation and amortization expense of $5 million and lower equipment maintenance expense of $4 million.

Previous wording

Adjusted segment EBIT was $236 million in the first half of 2026 compared to $198 million for the prior year period.

Current wording

Adjusted segment EBIT was $351 million in the first nine months of 2026 compared to $299 million for the prior year period.

Previous wording

Revenue decreased $8 million in the second quarter of 2026 compared to the prior year period primarily due to a 3% decline in total mail volumes driven by a broader market decline, client losses from the first half of 2025 and pricing actions. The processing of First Class Flats, First Class Mail and Marketing Mail contributed revenue decreases of $3 million, $3 million and $2 million, respectively.

Current wording

Revenue increased $2 million in the third quarter of 2026 compared to the prior year period primarily due to a 4% increase in total mail volumes partially offset by pricing actions. The processing of First Class Flats, First Class Mail and Marketing Mail Flats/Bound Printed Matter contributed revenue increases of $3 million, $1 million and $1 million, respectively, partially offset by a revenue decrease in Marketing Mail of $3 million.

Previous wording

Gross margin decreased $32 million and gross margin percentage decreased to 31.0% from 38.8% in the prior period primarily due to lower revenue, increased transportation and fuel costs of $9 million and higher employee-related benefits of $4 million.

Current wording

Gross margin decreased $1 million and gross margin percentage decreased to 32.8% from 33.9% in the prior period primarily due to increased transportation and fuel costs of $6 million, which was offset by lower employee-related benefits.

Previous wording

Revenue decreased $22 million in the first half of 2026 compared to the prior year period primarily due to a 4% decline in total mail volumes driven by a broader market decline, client losses from the first half of 2025 and pricing actions. The processing of First Class Mail, First Class Flats and Marketing Mail contributed revenue decreases of $13 million, $7 million and $2 million, respectively.

Current wording

Revenue decreased $20 million in the first nine months of 2026 compared to the prior year period primarily due to a 2% decline in total mail volumes driven by a broader market decline, client losses from the first half of 2025 and pricing actions. The processing of First Class Mail, Marketing Mail and First Class Flats contributed revenue decreases of $12 million, $6 million and $4 million, respectively, partially offset by a revenue increase in Marketing Mail Flats/Bound Printed Matter of $2 million.

Previous wording

Gross margin decreased $17 million and gross margin percentage decreased to 26.3% from 36.0% in the prior period primarily due to lower revenue, increased transportation and fuel costs of $7 million and higher employee-related benefits of $3 million.

Current wording

Gross margin decreased $33 million and gross margin percentage decreased to 31.6% from 37.2% in the prior period primarily due to lower revenue and increased transportation and fuel costs of $15 million.

Previous wording

Corporate expenses for the second quarter of 2026 decreased $8 million compared to the prior year period primarily due to lower depreciation expense of $3 million, lower insurance expense of $2 million, lower outsourcing and professional fees of $2 million and lower excise tax of $1 million.

Current wording

Corporate expenses for the third quarter of 2026 increased $7 million compared to the prior year period primarily due to higher employee-related expenses of $12 million, partially offset by lower depreciation expense of $2 million, lower insurance expense of $1 million and lower excise tax of $1 million.

Previous wording

Corporate expenses for the first half of 2026 decreased $18 million compared to the prior year period primarily due to lower employee-related expenses of $14 million driven by actions taken under our restructuring plans and lower insurance expense of $4 million.

Current wording

Corporate expenses for the first nine months of 2026 decreased $11 million compared to the prior year period primarily due to lower insurance expense of $6 million and lower depreciation expense of $6 million.

Previous wording

SG&A expense decreased $42 million in the second quarter of 2026 compared to the prior year period. In addition to the changes in SG&A expense previously discussed, SG&A also declined $18 million due to lower non-cash foreign currency revaluation gains/losses on intercompany loans.

Current wording

SG&A expense decreased $5 million in the third quarter of 2026 compared to the prior year period. In addition to the changes in SG&A expense previously discussed, SG&A also increased $2 million due to higher non-cash foreign currency revaluation gains/losses on intercompany loans.

Previous wording

SG&A expense decreased $74 million in the first half of 2026 compared to the prior year period. In addition to the changes in SG&A expense previously discussed, SG&A also declined $30 million due to lower non-cash foreign currency revaluation gains/losses on intercompany loans partially offset by higher transaction and strategic review costs of $5 million.

Current wording

SG&A expense decreased $79 million in the first nine months of 2026 compared to the prior year period. In addition to the changes in SG&A expense previously discussed, SG&A also declined $28 million due to lower non-cash foreign currency revaluation gains/losses on intercompany loans partially offset by higher transaction and strategic review costs of $5 million.

Previous wording

Restructuring charges decreased $10 million in the second quarter of 2026 and $7 million in the first half of 2026 compared to the prior year periods primarily due to a reduction in the number of actions taken during the current year compared to the prior year.

Current wording

Restructuring charges decreased slightly in the third quarter of 2026 and $7 million in the first nine months of 2026 compared to the prior year periods primarily due to a reduction in the number of actions taken during the current year compared to the prior year.

Previous wording

Total interest expense was flat in the second quarter of 2026 compared to the prior year period and declined $2 million in the first half of 2026 compared to the prior year period primarily due to lower effective interest rates partially offset by higher outstanding debt. The decline in interest expense allocated to finance interest was driven primarily by a decline in finance receivables.

Current wording

Total interest expense declined $3 million in the third quarter of 2026 and $5 million in the first nine months of 2026 compared to the prior year periods primarily due to a reduction in total debt and lower effective interest rates. The decline in allocated finance interest expense was driven primarily by a decline in finance receivables.

Previous wording

Other components of net pension and postretirement cost increased $10 million in the second quarter of 2026 and $19 million in the first half of 2026 compared to the prior year periods primarily due to the lower expected return on pension plan assets year over year driven by the U.S. and Canada buy-in contracts. The amount of other components of net pension and postretirement cost recognized each year will vary based on actuarial assumptions and actual results of our pension plans. See Note 11 to the Condensed Consolidated Financial Statements for further information.

Current wording

Other components of net pension and postretirement cost increased $9 million in the third quarter of 2026 and $28 million in the first nine months of 2026 compared to the prior year periods primarily due to the lower expected return on pension plan assets year over year driven by the U.S. and Canada buy-in contracts. The amount of other components of net pension and postretirement cost recognized each year will vary based on actuarial assumptions and actual results of our pension plans. See Note 11 to the Condensed Consolidated Financial Statements for further information.

Previous wording

For full year 2026, we continue to expect low to mid-single digit decline in revenue driven by the continued secular decline in mailing. We expect Adjusted EBIT to be a low-single digit decline to low-single digit growth, primarily driven by higher transportation costs and competitive pricing pressures, partially offset by lower worldwide operating costs from previous and continued cost-cutting actions and stronger than expected results for the first half of 2026.

Current wording

For full year 2026, we expect low to mid-single digit decline in revenue driven by the continued secular decline in mailing. We expect low-single digit decline to low-single digit growth in Adjusted EBIT, primarily driven by higher transportation costs and competitive pricing pressures, partially offset by lower worldwide operating costs from previous and continued cost-cutting actions and stronger than expected year-to-date results.

Previous wording

The transportation market is experiencing significant volatility due to higher third-party carrier spot rates, driver shortages and increases in oil and diesel fuel prices associated with shipping disruptions through the Strait of Hormuz because of the Iran conflict. These factors have impacted our financial results and are expected to continue to adversely impact our financial results in the second half of the year.

Current wording

The transportation market continues to experience significant volatility due to higher third-party carrier spot rates, driver shortages and increases in oil and diesel fuel prices caused by the Iran conflict. These factors have impacted our financial results and are expected to continue to adversely impact our financial results in the fourth quarter.

Previous wording

Our principal source of liquidity is cash generated from operations and access to credit markets, including borrowing capacity under our revolving credit facility. At June 30, 2026, we had cash and cash equivalents of $267 million, which includes $58 million held at our foreign subsidiaries used to support their liquidity needs. At this time, we believe that existing cash and cash equivalents, cash generated from operations and borrowing capacity under our revolving credit facility will be sufficient to fund our cash needs and meet our obligations for the next 12 months.

Current wording

Our principal source of liquidity is cash generated from operations and access to credit markets, including borrowing capacity under our revolving credit facility. At September 30, 2026, we had cash and cash equivalents of $269 million, which includes $64 million held at our foreign subsidiaries used to support their liquidity needs. We believe that existing cash and cash equivalents, cash generated from operations and borrowing capacity under our revolving credit facility will be sufficient to fund our cash needs and meet our obligations for the next 12 months.

Previous wording

Cash flows from operating activities for the first half of 2026 improved $102 million compared to the prior year period primarily due to higher net income and changes in working capital, primarily driven by lower accrued liability payments and inventory spending and higher receivable collections.

Current wording

Cash flows from operating activities for the first nine months of 2026 improved $187 million compared to the prior year period primarily due to higher net income and changes in working capital, primarily driven by lower accounts payable and accrued liability payments and inventory spending.

Previous wording

Cash flows from investing activities for the first half of 2026 improved $47 million compared to the prior year period primarily due to lower investments in loan receivables of $65 million partially offset by an $8 million reimbursement in the prior year for the DIP Facility, lower cash from investment activities of $7 million and lower capital expenditures of $4 million.

Current wording

Cash flows from investing activities for the first nine months of 2026 improved $82 million compared to the prior year period primarily due to lower investments in loan receivables of $77 million and higher cash from investment activities of $12 million, partially offset by a $9 million DIP Facility reimbursement in the prior year.

Previous wording

Cash flows from financing activities for the first half of 2026 improved $21 million compared to the prior year period. Net cash from debt activities increased $70 million as we received net proceeds of $41 million in 2026 compared to net repayments of $29 million in 2025. Cash flows from financing activities also benefited from higher proceeds from stock option exercises of $29 million and lower fees paid to redeem/refinance debt of $15 million. These improvements were partially offset by higher common stock repurchases of $98 million.

Current wording

Cash flows from financing activities for the first nine months of 2026 declined $133 million compared to the prior year period. Net cash from debt activities decreased $265 million as net cash of $110 million was used to redeem/refinance debt in 2026 whereas we received net cash of $155 million in 2025. This decrease was partially offset by higher cash from changes in customer account deposits at PB Bank of $50 million, lower common stock repurchases of $46 million, a capped call payment of $25 million in 2025 associated with a convertible notes issuance and higher proceeds from stock option exercises of $15 million.

Previous wording

We paid dividends of $27 million in the first half of 2026. Each quarter, our Board of Directors considers whether to approve the payment of a dividend. We currently expect to continue paying a quarterly dividend; however, no assurances can be given.

Current wording

We paid dividends of $41 million in the first nine months of 2026. Each quarter, our Board of Directors considers whether to approve the payment of a dividend. We currently expect to continue paying a quarterly dividend; however, no assurances can be given.

Previous wording

In the first quarter of 2026, we issued an additional aggregate $150 million of the Notes due March 2029 with identical terms to the prior notes outstanding. In the second quarter of 2026, we borrowed an additional $150 million under the Term Loan due March 2028 and extended the maturity date to March 2031. The proceeds of the additional term loan borrowing were used to repay the Notes due March 2027.

Current wording

In the first quarter of 2026, we issued an additional aggregate $150 million of the Notes due March 2029 with identical terms to the prior notes outstanding. In the second quarter of 2026, we borrowed an additional $150 million under the Term Loan due March 2028 and extended the maturity date to May 2031. The proceeds of the additional term loan borrowing were used to repay the Notes due March 2027. In the third quarter of 2026, we completed a tender offer and redeemed an aggregate $46 million of the Notes due January 2037 and Notes due March 2043 and recorded a gain of $5 million in other (income) expense. Also, in the third quarter of 2026, we amended the Term loan due March 2032 to reduce the spread by 0.75%.

Previous wording

We have access to a $450 million revolving credit facility (increased from $400 million in the first quarter of 2026). In the second quarter of 2026, we further amended the revolving credit facility to extend the maturity date to March 2031 and updated certain covenants. This credit facility requires that we maintain (with maintenance tested quarterly) (i) a Consolidated Interest Coverage Ratio (as defined in the credit facility agreement) of not less than 2.00 to 1.00, (ii) a Consolidated Secured Net Leverage Ratio (as defined in the credit facility agreement) of no greater than 3.00 to 1.00 and (iii) a Consolidated Total Net Leverage Ratio (as defined in the credit facility agreement) of no greater than (a) 4.75 to 1.00 for the fiscal quarters ending June 30, 2026, September 30, 2026 and December 31, 2026, (b) 4.50 to 1.00 for the fiscal quarters ending March 31, 2027, June 30, 2027, September 30, 2027 and December 31, 2027, (c) 4.25 to 1.00 for the fiscal quarters ending March 31, 2028, June 30, 2028, September 30, 2028 and December 31, 2028 and (d) 4.00 to 1.00 for each fiscal quarter ending on or after March 31, 2029. At June 30, 2026, we were in compliance with these financial covenants. During the quarter, we borrowed $97 million under this credit facility, which was outstanding at June 30, 2026. At July 30, 2026, this amount has been fully repaid. At June 30, 2026, we have remaining borrowing capacity of $330 million. Borrowings under this credit facility are secured by assets of the Company.

Current wording

We maintain a $450 million revolving credit facility (increased from $400 million in the first quarter of 2026) that matures in May 2031. This credit facility requires that we maintain (with maintenance tested quarterly) (i) a Consolidated Interest Coverage Ratio (as defined in the credit facility agreement) of not less than 2.00 to 1.00, (ii) a Consolidated Secured Net Leverage Ratio (as defined in the credit facility agreement) of no greater than 3.00 to 1.00 and (iii) a Consolidated Total Net Leverage Ratio (as defined in the credit facility agreement) of no greater than (a) 4.75 to 1.00 for each of the fiscal quarters in 2026, (b) 4.50 to 1.00 for each of the fiscal quarters in 2027, (c) 4.25 to 1.00 for each of the fiscal quarters in 2028 and (d) 4.00 to 1.00 for each fiscal quarter thereafter. At September 30, 2026, we were in compliance with these financial covenants. During 2026, we borrowed an aggregate $177 million under this credit facility, $80 million of which was borrowed in the third quarter, and was fully repaid by September 30, 2026. At September 30, 2026, we have remaining borrowing capacity of $427 million. Borrowings under this credit facility are secured by assets of the Company.

Previous wording

The credit facility also contains provisions whereby if, on any day prior to December 14, 2028, the Notes due March 2029 have not been redeemed in full and liquidity is less than an amount equal to the amount to redeem the Notes due March 2029 plus $100 million, the Term loan due March 2031 and any borrowings under the revolving credit facility would become due on such date. Further, if on any day prior to May 16, 2030, the Convertible Notes due August 2030 have not been redeemed in full and liquidity is less than an amount equal to the amount to redeem the Convertible Notes due August 2030 plus $100 million, the Term loan due March 2031 and any borrowings under the revolving credit facility would become due on such date.

Current wording

The credit facility also contains provisions whereby if, on any day prior to December 14, 2028, the Notes due March 2029 have not been redeemed in full and liquidity is less than an amount equal to the amount to redeem the Notes due March 2029 plus $100 million, the Term loan due May 2031 and any borrowings under the revolving credit facility would become due on such date. Further, if on any day prior to May 16, 2030, the Convertible Notes due August 2030 (the "Convertible Notes") have not been redeemed in full and liquidity is less than an amount equal to the amount to redeem the Convertible Notes plus $100 million, the Term loan due May 2031 and any borrowings under the revolving credit facility would become due on such date.

Previous wording

We have outstanding an aggregate $230 million convertible senior notes (the "Convertible Notes"). The Convertible Notes are senior unsecured obligations of the Company and are guaranteed jointly and severally, on a senior unsecured basis, by each of the Company’s existing and future wholly owned U.S. subsidiaries that guarantee the Company’s existing credit agreement, existing senior notes or any other series of capital market debt with an aggregate principal amount outstanding in excess of $150 million.

Current wording

The Convertible Notes are senior unsecured obligations of the Company and are guaranteed jointly and severally, on a senior unsecured basis, by each of the Company’s existing and future wholly owned U.S. subsidiaries that guarantee the Company’s existing credit agreement, existing senior notes or any other series of capital market debt with an aggregate principal amount outstanding in excess of $150 million.

Previous wording

The conversion rate is 70.3835 shares of common stock per $1,000 principal amount, or $14.21 per share, subject to adjustment. Conversions of the Convertible Notes will be settled by paying cash up to the aggregate principal amount of the Convertible Notes being converted and by delivering shares of our common stock in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted.

Current wording

The conversion rate is 70.4648 shares of common stock per $1,000 principal amount, or $14.19 per share, subject to adjustment. Conversions of the Convertible Notes will be settled by paying cash up to the aggregate principal amount of the Convertible Notes being converted and by delivering shares of our common stock in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted.