Deluxe(DLX)2025-04-30 21:00Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was just over 100 million, increasing nearly 3.5% from 2024 [10][20] - Comparable adjusted EPS finished at 1.46 billion, down approximately 97.8 million, with adjusted EBITDA remaining flat at 70.2 million, increasing 1.2% versus 2024, with adjusted EBITDA dollars remaining flat at 77.2 million, reflecting a growth of 29.3% [24] Company Strategy and Development Direction - The company is focused on executing its North Star strategy, which emphasizes free cash flow and profit growth [5][14] - The management is maintaining overall guidance ranges for 2025 despite macroeconomic uncertainties [31][32] - The company aims to optimize its balance sheet and reduce net debt levels, with a long-term target of three times leverage or better by the end of 2026 [28][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged extraordinary volatility and macroeconomic uncertainty but emphasized control over internal execution [5][6] - The company continues to monitor consumer sentiment and discretionary spending for potential impacts on its outlook [6] - Despite anticipated challenges, management remains confident in achieving its 2025 revenue and EBITDA goals [14][31] Other Important Information - The company received an S&P ratings upgrade, improving its rating from B- to single B, with a positive outlook [28] - Free cash flow for the quarter was 18.1 million from the previous year [29][30] - A regular quarterly dividend of $0.30 per share was approved, payable on June 2, 2025 [30] Q&A Session Summary Question: Can you provide more detail on the merchant business and its performance? - The merchant business continues to perform well across various market conditions, with strong retention and ongoing volume from diversified customer categories [33][34] Question: What strategic changes might occur with the new leadership in the merchant business? - The new leadership aims to improve partnership relationships and expand distribution channels, with recent partnerships indicating a move upmarket [35][36] Question: How should we model the segment performance, especially with potential declines? - The data segment is expected to continue strong growth, while print may see a larger decline due to promotional pressures [40][43] Question: What is the secret to the data segment's recent success? - The data business leverages a large consumer and small business database combined with advanced AI tools to effectively target marketing campaigns [46][48] Question: What is the potential impact of the Trump administration's commentary on physical checks? - The company has no direct exposure to government checks and does not anticipate significant collateral impacts from the announcement [52][55] Question: Have there been signs of spending pull forward due to tariffs? - There was a small amount of pull forward in promotional products, but no significant evidence of stocking in the business [56] Question: What are the potential catalysts for driving additional partnerships? - The company has strong brand recognition and relationships in the banking sector, which positions it well for future partnerships [61][62]