Core Insights - Deluxe (DLX) reported quarterly earnings of $1.09 per share, exceeding the Zacks Consensus Estimate of $0.92 per share, and showing an increase from $0.84 per share a year ago, resulting in an earnings surprise of +18.48% [1] - The company achieved revenues of $540.2 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.36% and up from $528.4 million year-over-year [2] - Deluxe has consistently surpassed consensus EPS estimates over the last four quarters, achieving this four times [2] Financial Performance - The earnings surprise for the previous quarter was +23.94%, with actual earnings of $0.88 per share compared to an expected $0.71 per share [1] - The current consensus EPS estimate for the upcoming quarter is $0.94, with projected revenues of $513.1 million, while the estimate for the current fiscal year is $3.49 on $2.11 billion in revenues [7] Market Position - Deluxe shares have underperformed the market, losing about 19.3% since the beginning of the year, while the S&P 500 has gained 15.1% [3] - The Zacks Industry Rank places the Business - Office Products sector in the top 14% of over 250 Zacks industries, indicating a favorable industry outlook [8] Future Outlook - The sustainability of Deluxe's stock price movement will depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current Zacks Rank for Deluxe is 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6]

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Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was reported at $540.2 million, reflecting a 2.2% increase year-over-year and a 2.5% increase on a comparable adjusted basis [13] - GAAP net income improved to $33.7 million, or $0.74 per share, compared to $8.9 million, or $0.20 per share in Q3 2024 [14] - Comparable adjusted EBITDA reached $118.9 million, up 13.8% year-over-year, with margins improving to 22% of revenue, an increase of 220 basis points [14] - Adjusted EPS grew nearly 30% year-over-year to $1.09 per share [5][14] Business Line Data and Key Metrics Changes - The data segment saw revenue growth of 46% year-over-year, reaching $89.2 million, driven by strong demand for marketing campaigns [17] - Merchant services revenue grew by 4.8% year-over-year, totaling $98 million, with adjusted EBITDA improving by 14.6% to $20.4 million [15] - B2B payments segment revenues were $73.1 million, a decline of 2.7% year-over-year, but adjusted EBITDA expanded by 9.8% [16] - Print segment revenue declined by 5.9% year-over-year to $279.9 million, with branded promotional products seeing a 14.7% decline [20] Market Data and Key Metrics Changes - Payments and data now account for 47% of total company revenue, up nearly 400 basis points from the previous year [7] - The company reported a year-to-date free cash flow expansion of over 49%, growing by more than $31 million compared to the prior year [6] Company Strategy and Development Direction - The company is focused on shifting its revenue mix towards payments and data, driving operating efficiencies, and increasing EBITDA and cash flow to lower net debt [6][12] - The strategic priorities include enhancing the payments and data segments while leveraging cash flows from the print segment [6][12] - The company aims to achieve a debt-to-EBITDA target ratio below three times by the end of 2026 [5][23] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of free cash flow improvements and the overall health of core fundamentals [29][27] - The company anticipates continued strong growth in the data segment, although some moderation is expected in Q4 due to seasonal factors [19][35] - Management remains committed to maintaining a balanced capital allocation strategy focused on debt reduction and internal investments for growth [40][41] Other Important Information - The company achieved a net debt reduction of over $20 million during the quarter, resulting in a leverage ratio of 3.3 times, ahead of schedule [6][23] - A quarterly dividend of $0.30 per share was approved, payable on December 1, 2025 [24] Q&A Session Summary Question: Discussion on free cash flow and its sustainability - Management highlighted the focus on improving free cash flow through enhanced profitability, lower restructuring spend, and strong working capital efficiency [29] Question: Insights on the distribution partners and pipeline - Management discussed the successful partnership with People's Bank and the healthy pipeline of opportunities in financial institutions and ISVs [31] Question: Key drivers behind the data segment's growth - Management attributed the data segment's growth to investments in infrastructure and proprietary AI tools that enhance marketing effectiveness [34] Question: Clarification on print segment margins - Management explained that improved margins in the print segment were driven by a focus on profitable volume and operational efficiencies [36][39] Question: Capital allocation strategy post-leverage target achievement - Management reiterated the commitment to debt reduction while also investing in high-return growth opportunities in payments and data [40][41]

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Financial Performance Highlights - Q3 2025 revenue increased to $540.2 million, a 2.2% increase compared to Q3 2024[16] - Comparable adjusted revenue increased by 2.5% compared to Q3 2024[16] - Net income for Q3 2025 was $33.7 million, up from $8.9 million in Q3 2024[16] - Adjusted EBITDA for Q3 2025 reached $118.9 million, a 13.8% increase compared to Q3 2024, with a margin of 22.0%[16] - Comparable adjusted EPS was $1.09, a 29.8% increase compared to Q3 2024[17] Segment Performance - Data Solutions revenue increased by 46.0% compared to Q3 2024[17] - Merchant Services revenue increased by 4.8% compared to Q3 2024[17] - B2B Payments revenue decreased by 2.7% compared to Q3 2024[17] - Print revenue decreased by 5.9%, with Check revenue down by 2.1% compared to Q3 2024[17] Balance Sheet and Cash Flow - Net debt decreased by $44.7 million compared to year-end 2024[17] - Leverage ratio reached 3.3x in Q3 2025[17] - Cash flow from operations year-to-date was $168.5 million, a 25.7% increase compared to YTD Q3 2024[17] 2025 Guidance - Revenue is projected to be between $2.11 billion and $2.13 billion, flat to a 1% increase compared to 2024[46] - Adjusted EBITDA is expected to be between $425 million and $435 million, a 5% to 7% increase compared to 2024[46] - Adjusted EPS is projected to be between $3.45 and $3.60, a 6% to 10% increase compared to 2024[46] - Free cash flow is expected to be between $140 million and $150 million, a 40% to 50% increase compared to 2024[46]

Financial Performance - Reported revenue for Q3 2025 increased by 2.2% to $540.2 million, while comparable adjusted revenue rose by 2.5%[4] - Net income for Q3 2025 was $33.7 million, significantly up from $8.9 million in Q3 2024[4] - Comparable adjusted EBITDA increased by 13.8% to $118.9 million, with a margin of 22.0%, up 220 basis points year-over-year[4][9] - Adjusted diluted EPS improved by 29.8% to $1.09, compared to $0.84 in the same quarter last year[4][9] - Total revenue for Q3 2025 was $540.2 million, a slight increase of 2.4% compared to $528.4 million in Q3 2024[21] - Adjusted EBITDA for Q3 2025 reached $118.9 million, representing a 13.5% increase from $104.9 million in Q3 2024[25] - The adjusted EBITDA margin improved to 22.0% in Q3 2025, up from 19.9% in Q3 2024[29] - Comparable adjusted revenue for the nine months ended September 30, 2025, was $1,598.0 million, a slight increase from $1,590.9 million in the same period of 2024[29] Cash Flow and Debt - Free cash flow for the first nine months of 2025 increased by $31.6 million to $95.9 million[4] - Cash from operating activities for the first nine months of 2025 was $168.5 million, up from $134.1 million in 2024[19] - Free cash flow for Q3 2025 was $43.8 million, slightly down from $46.7 million in Q3 2024[35] - Total debt as of September 30, 2025, was $1,449.8 million, down from $1,503.1 million at the end of 2024[32] - Net debt as of September 30, 2025, was $1,424.0 million, down from $1,468.7 million at the end of 2024[17] - Net debt decreased to $1,424.0 million as of September 30, 2025, compared to $1,468.7 million at the end of 2024[32] Guidance and Dividends - The company raised its full-year 2025 guidance for adjusted diluted EPS, with revenue expected between $2.11 billion and $2.13 billion[9] - Adjusted EBITDA guidance for 2025 is set between $425 million and $435 million[9] - The Board of Directors approved a quarterly dividend of $0.30 per share, payable on December 1, 2025[7] Revenue Breakdown - Merchant Services revenue increased to $98.0 million, up 4.8% from $93.5 million year-over-year[21] - Data Solutions revenue surged to $89.2 million, a significant increase of 46.1% compared to $61.1 million in the same quarter last year[21]

Core Insights - Deluxe (NYSE: DLX) announced its third quarter 2025 financial results, which are available on the company's Investor Relations website [1] - The earnings release will be submitted to the Securities and Exchange Commission (SEC) on a Form 8-K [1] - An open-access conference call to discuss the financial results is scheduled for today at 5:00 p.m. ET [1]

Company Overview - Deluxe is a Trusted Payments and Data company that has been supporting businesses for over 100 years, helping them pay, get paid, and grow [2][3] - The company processes more than $2 trillion in annual payment volume, serving millions of small businesses and thousands of financial institutions [2] Financial Reporting - Deluxe will report its third quarter 2025 financial results on November 5, 2025, after market close [1] - An open-access conference call will be held on the same day at 5:00 p.m. ET, allowing interested parties to listen in [1] Recent Developments - Deluxe has expanded its partnership with Peoples Bank, a $9.5 billion financial institution, to deliver integrated Merchant Services [5] - Michelle T. Collins has been elected to Deluxe's Board of Directors, bringing over four decades of experience in business transformations and risk management [6] - Deluxe Merchant Services has won the 2025 Association of TeleServices International Call Center Award of Distinction for the 13th consecutive year, highlighting the exceptional performance of its customer care team [7]

Core Insights - Deluxe has announced an expanded partnership with Peoples Bank, a financial institution with assets of $9.5 billion, headquartered in Marietta, Ohio [1] - The new engagement will focus on delivering integrated Merchant Services, enhancing the existing relationship based on shared values of innovation, service, and community impact [1] - Over the past year, Peoples Bank has been strengthening its relationship with Deluxe by choosing to place a portion of its services with them [1]

Group 1 - Deluxe Corporation (NYSE:DLX) is recognized as one of the 13 Best Diversified Stocks to Buy According to Hedge Funds, indicating significant upside potential [1] - CFO William Zint purchased 175 shares of Deluxe Corporation at $19.13 per share, totaling $3,347, reflecting confidence in the company's operations and strategic initiatives [2][3] - Deluxe Corporation provides technology-enabled solutions across various segments including Merchant Services, B2B Payments, Data Solutions, and Print, primarily serving small- and medium-sized businesses and financial institutions [3] Group 2 - While Deluxe Corporation shows potential as an investment, certain AI stocks are noted to offer greater upside potential and less downside risk [4]