Q1 2024 Deluxe Corp Earnings Call Transcript
Key Points
- Deluxe Corp reported a strong start to 2024 with growth across key metrics including revenue, adjusted EBITDA, EPS, and margin.
- The payments and data segments combined delivered a revenue of $226 million, growing by 8.1% with margins of 22%, demonstrating significant growth and profitability.
- Deluxe Corp's adjusted EBITDA expanded at a faster rate than revenue, showcasing effective operating leverage within the company.
- The company has successfully transitioned towards a payments and data company, achieving its fourth consecutive year of delivering organic revenue growth.
- Deluxe Corp raised its 2024 cash flow guidance due to strong performance and affirmed other full-year operating metrics, reflecting confidence in continued financial health.
- Despite overall growth, the B2B payments segment experienced a year-over-year decline of 7.7%, aligning with internal expectations but still reflecting challenges in transitioning to a SaaS model.
- The print segment continued to experience revenue decline, down by just over 3% to $303 million, consistent with expected secular declines in this area.
- While Deluxe Corp is managing the decline in print effectively, the segment still faces inherent challenges due to the digital shift in the industry.
- The transition to SaaS in the B2B segment has led to short-term revenue impacts, although it is expected to improve margins and profitability in the long term.
- The company noted that macroeconomic factors such as inflation pressure and consumer spending dynamics could pose risks to future performance.
Before we begin, and as seen on the current slide, I'd like to remind everyone that comments made today regarding management's intentions, projections, financial estimates, and expectations of the company's future strategy or performance are forward-looking in nature as defined in the Private Securities Litigation Reform Act of 1995. Additional information about factors that may cause our actual results to differ from projections is set forth in the press release. We furnished this afternoon in our Form 10-K for the year ended December 31, 2023, and in other company SEC filings.
On the call today, we will discuss non-GAAP financial measures, including comparable adjusted revenue, adjusted and comparable adjusted EBITDA and EBITDA margin, adjusted and comparable adjusted EPS, and free cash flow. In our press release, today's presentation, and our filings with the SEC, you'll find additional disclosures regarding the non-GAAP measures, including reconciliation of these measures to the most comparable measures under US
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