Deluxe Q2 Earnings Call Highlights

Deluxe delivered improved underlying performance in Q2: Comparable adjusted revenue rose 2.6%, adjusted EBITDA increased 5.3% to $108.8 million, and adjusted EPS climbed to $0.87. Payments and data businesses led growth, while Data Solutions revenue surged 21.4%. The Celero acquisition expands Deluxe’s merchant-services platform to more than $70 billion in annual processing volume across over 210,000 merchants. Management expects near-term cost synergies, although Celero is expected to be neutral to adjusted EPS in 2026 before becoming accretive thereafter. Deluxe strengthened its financial outlook and balance sheet: Year-to-date free cash flow rose 65% to $85.9 million, net debt declined, and the company raised its 2026 guidance to $2.095–$2.12 billion in revenue, $455–$475 million in adjusted EBITDA, and approximately $200 million in free cash flow. Deluxe NYSE: DLX reported second-quarter results that showed comparable adjusted revenue growth, higher margins and increased free cash flow, while outlining plans to integrate merchant-services provider Celero following the transaction’s July 31 closing. Total second-quarter revenue was $499.3 million, down 4.2% from the prior-year reported figure but up 2.6% on a comparable adjusted basis. GAAP net income was $19.2 million, or $0.41 per share, compared with $22.4 million, or $0.50 per share, a year earlier. Chief Financial Officer Chip Zint said the decline in GAAP earnings reflected $5.6 million of one-time transaction-related expenses and a somewhat higher tax provision, partly offset by lower restructuring, selling and general administrative expenses, and interest expense. Comparable adjusted EBITDA increased 5.3% to $108.8 million, while adjusted EBITDA margin rose 60 basis points to 21.8%. Adjusted diluted earnings per share were $0.87, compared with $0.82 on a comparable adjusted basis in the prior-year quarter. Payments and Data Businesses Drive Growth President and Chief Executive Officer Barry McCarthy said Deluxe continued to shift its business mix toward payments and data. The company’s payments and data businesses represented 52% of year-to-date revenue and grew 11% through the first half. In the second quarter, the two categories combined grew more than 9.5%. The Data Solutions segment posted the fastest growth, with revenue increasing 21.4% year over year to $82.3 million. Segment adjusted EBITDA was $18.1 million, producing a 22% margin. McCarthy attributed the performance to demand for data-driven marketing campaigns, particularly from financial institutions and adjacent verticals. “We’ve now grown data segment revenues by more than 15% for seven consecutive quarters,” McCarthy said, citing the company’s AI-supported data-driven marketing model. Zint said the company remains positive on the data business but expects its growth rate to moderate in the second half as it faces stronger comparisons from the prior year. Deluxe maintained its expectation for high-single-digit full-year revenue growth in Data Solutions. Deluxe Merchant Services revenue rose 6.1% to $107.6 million, supported by new partner onboarding, stable processing volumes and a resilient spending environment. Segment adjusted EBITDA increased 15.7% to $25.1 million, and its margin expanded 190 basis points to 23.3%. B2B Payments revenue rose 3.5% to $73.5 million. Adjusted EBITDA grew 17.3% to $18.3 million, resulting in a 24.9% margin. Zint said margin improvement reflected operating efficiencies in the company’s physical lockbox operations and expense structure. Print segment revenue declined 4.3% on a comparable adjusted basis.