Q3 2024 Cimpress PLC Earnings Call

May 2, 2024

Operator: Welcome to Cimpress's third quarter fiscal year 2024 earnings call. I will introduce Meredith Burns, Vice President of Investor Relations and Sustainability. Thank you, Ember.

Welcome to spend Christmas third quarter fiscal year, 'twenty 'twenty full earnings call.

I want to dance Meredith Byrnes, Vice President of Investor Relations and sustainability.

Meredith Burns: And thank you everyone for joining us. With us today on the call are Robert Keane, Founder, Chairman, and Chief Executive Officer, and Sean Quinn, EVP and Chief Financial Officer. We appreciate the time that you've dedicated to understanding our results, commentary, and outlook. This live Q&A session will last about 45 minutes and will answer both pre-submitted and live questions. You can submit questions live via the questions and answers box at the bottom left of the screen.

Meredith Burns: Thank you Emma and thank you everyone for joining us are with US today on the call are Robert Keane, founder, Chairman and Chief Executive Officer, and Sean Quinn, EVP and Chief Financial Officer, we.

Meredith Burns: We appreciate the time that you've dedicated to understand our results commentary and outlook is live Q&A session. In the last about 45 minutes and will answer both pre submitted and live questions. You can submit questions lives. The other questions and answers box at the bottom left of the screen.

Meredith Burns: Before we start, I'll note that in this session, we will make statements about the future. Our actual results may differ materially from these statements due to risk factors that are outlined in detail in our SEC filings and the documents we published yesterday on our website. We also have published non-GAAP reconciliations for our financial results and outlook on our IR website, along with historical financial results. We invite you to read them.

Meredith Burns: Before we start I'll note that in this session. We will make statements about the future. Our actual results may differ materially from these statements due to risk factors that are outlined in detail in our SEC filings and the documents we published yesterday on our website. We also have published non-GAAP reconciliations for our financial results and outlook on our IR website, along with hyster.

Meredith Burns: <unk> financial results, we'd like you to read them and now I'll turn things over to Shaun.

Meredith Burns: And now I'll turn things over to Sean. Great. Thanks a lot, Meredith.

Sean Edward Quinn: And thanks to everyone who's joined us today. We're on a recording. Before we take any questions that you have, I'm just going to highlight a few key points from our earnings document that we published yesterday. Cimpress delivered strong results in the third quarter. Consolidated revenue grew 5% on a reported basis and 4% on an organic basis. The timing of the Easter holiday, which was at the end of Q3 this year versus Q4 last year, had about $6 million of impact, or 80 basis points of negative impact, on consolidated organic revenue growth for the quarter.

Shaun: Great. Thanks, a lot Meredith and thanks to everyone, who has joined us today or on a recording before we take any questions that you have I'm just going to highlight a few key points from our earnings document that we published yesterday.

Shaun: So perhaps delivered strong results in the third quarter.

Shaun: Consolidated revenue grew 5% on a reported basis and 4% on an organic constant currency basis the.

Shaun: The timing of the Easter holiday, which was at the end of Q3. This year versus Q4 last year had about $6 million of impact or 80 basis points of negative impact on consolidated organic revenue growth for the quarter. So the underlying consolidated revenue growth trends were consistent with what we've seen year to date.

Sean Edward Quinn: So the underlying consolidated revenue growth trends were consistent with what we've seen year-to-year. Adjusted EBITDA grew $25 million year over year in Q3, to $94 million. And our adjusted EBITDA margins were up nearly 300 basis points to just over 12% this year, driven by continued gross margin expansion but also operating expenses. From a segment perspective, we saw an improved trend for our upload and print businesses and also for National Pen, both despite a tough Q3 comp for those businesses, and growth in all their businesses remains flat, where there are puts and takes beneath the surface consistent with the last few quarters. We had a pre-submitted question on that. A little bit of detail here.

Shaun: Adjusted EBITDA grew $25 million year over year in Q3 to $94 million and our adjusted EBITDA margins were up nearly 300 basis points to just over 12%. This year driven by continued gross margin expansion, but also operating expense efficiency.

Shaun: From a segment perspective, we saw an improved trend for our upload and print businesses and also for national pen.

Despite a tough Q3 comp for those businesses.

Shaun: And growth in our other businesses remained flat, where there are puts and takes beneath the surface consistent with the last few quarters. We had a pre submitted question on that so we'll get into a little bit of detail there.

Sean Edward Quinn: In VISTA, if you take the Easter timing out of the mix, revenue growth was a continuation of the trends in the first half of the year, so very strong. VISTA continues to grow the value of its customer cohorts through growth in both customer count and per customer value. And we've also had year-over-year growth in the value of the new customer acquisition cohort again this quarter, which is a pattern that's been in place for six quarters. Adjusted free cash flow was an outflow of $16.6 million this quarter.

Speaker Change: Investor If you take the Easter timing out of the mix revenue growth was a continuation of the trends in the first half of the year, So very strong Vista.

Speaker Change: Vista continues to grow the value of its customer cohorts through growth in both customer count, but also per customer value.

Speaker Change: And we've also had year over year growth in the value of the new customer acquisition cohort again, this quarter, which is a pattern thats been in place for six quarters now.

Sean Edward Quinn: We do typically have an outflow in Q3, just due to our seasonal working capital patterns. However, there was a $3.8 million year-over-year increase in that outflow versus last year, despite the improved adjusted EBITDA. And that was a function of the quarterly variability of working capital versus last year. Q2 was very favorable this year, if you recall. And importantly, our year-to-date adjusted free cash flow is up over $155 million. During the third quarter and also in April, together we repurchased a total of 1.3 million shares for $120 million at an average price of $93 per share.

Speaker Change: Adjusted free cash flow was an outflow of $16 $6 million. This quarter. We do typically have an outflow in Q3, just due to our seasonal working capital patterns. There was a $3 8 million year over year increase in net outflow versus last year. Despite the improved adjusted EBITDA and that was a function of the quarter quarterly.

Speaker Change: Variability of working capital versus last year Q2 was very favorable this year, if you recall and importantly, our year to date adjusted free cash flow is up over $155 million versus last year.

Speaker Change: During the third quarter and also in April together, we repurchased a total of one 3 million shares for $120 million at an average price of $93 per share per share. That's a reduction of about 5% of our shares outstanding.

Sean Edward Quinn: That's a reduction of about 5% of our shares outstanding. These repurchases were done within the limitation that we disclosed last quarter that we would still exit FY24 with net leverage at or below approximately 3.0 times trailing 12-month EBITDA, and that still remains our expectation. Our liquidity position remains strong. We ended the quarter with cash and marketable securities of $160.8 million, and full access to our $250 million revolving credit facility.

Speaker Change: These repurchases were done with the within the limitation that we disclosed last quarter that we would still exit FY 'twenty four with net leverage at or below approximately 3.0 times trailing 12 months EBITDA and that still remains our expectation.

Sean Edward Quinn: And during the month of April, we also received net proceeds of $16.8 million for the sale of our building in Jamaica that had previously been classified as held for sale. Our net leverage at the end of Q3 was 3.0 times trailing 12 months EBITDA as defined by our credit agreement, and that compares to net leverage of 4.8 times one year. With these continued strong results and just one quarter left in the fiscal year,

Speaker Change: Our liquidity position remains strong we ended the quarter with cash and marketable securities of $160 8 million full access to our $250 million revolving credit facility and jewelry in the month of April. We also received net proceeds of $16 8 million for the sale of our building in Jamaica that had previously been classified as.

Speaker Change: Held for sale.

Speaker Change: Our net leverage at the end of Q3 was $3 zero times trailing 12 month EBITDA as defined by our credit agreement and that compares to net leverage of four eight times one year ago.

With these continued strong results in just one quarter left in the fiscal year.

Sean Edward Quinn: We're confident in our ability to meet or exceed our prior guidance that we shared in last quarter's earnings. As we also discussed in the earnings document that we published last night, we provided detailed near-term guidance over the past five quarters because we had plans to dramatically improve our profitability and our cash flow. And we felt that it was appropriate and necessary for us to be more specific about those expectations that we had.

Speaker Change: We're confident in our ability to meet or exceed our prior guidance that we shared in last quarter's earnings documents.

Speaker Change: As we also discussed in the earnings document that we published last night.

Speaker Change: We provided detailed near term guidance over the past five quarters, because we had plans to dramatically improve our profitability and our cash flow and we felt that it was appropriate and it was also necessary for us to be more specific about those expectations that we had.

Sean Edward Quinn: With these improvements now reflected in our actual results going forward, we will replace the near-term guidance with multi-year guidance commentary. So let me just walk through that commentary that we provided for FY25 and beyond in last. First, we expect to grow organic constant currency revenue at mid single-digit rates, possibly a little higher. We expect adjusted EBITDA to grow slightly faster than revenue, and we expect the annual conversion rate of adjusted EBITDA to adjusted pre-cash flow to be in the range of 45% to 50% with fluctuations from one year to the next. Finally, we disclosed a new leverage policy in our earnings document yesterday evening. We think it's really important to have this information for investors.

Speaker Change: With these improvements now reflected in our actual results going forward, we will replace the near term guidance with multiyear guidance commentary. So let me just walk through that commentary that we provided for FY 'twenty five and beyond in last night's release.

Speaker Change: First we expect to grow organic constant currency revenue at mid single digit rates, possibly a little higher.

Speaker Change: We expect to grow adjusted EBITDA slightly faster than revenue.

And we expect the annual conversion rate of adjusted EBITDA to adjusted free cash flow to be in the range of 45% to 50% with fluctuations from one year to the next.

Speaker Change: Finally, we disclosed a new leverage policy and our earnings document yesterday evening, we think it's really important to have this information for investors. It's so important for our capital allocation philosophy and decisions and what you can all expect in the coming years and so we think it is.

Sean Edward Quinn: It's so important for our capital allocation philosophy and decisions and what you can all expect in the coming years. And so we think it's a really useful piece of information, but also a useful input for modeling along with the multi-year outlook commentary that we shared last night and I just said, So that new leverage policy is to target net leverage at approximately 2.5 times or below. With the possibility to take net leverage up to as high as approximately 3.0 times from time to time for investments that we think have good returns, but also with a clear path to delivering on the target of approximately 2.5 times or below.

Speaker Change: That's really useful piece of information, but also a useful input for modeling along with the multi year outlook commentary that we shared last night and I just went through.

Speaker Change: So that new leverage policy is to target net leverage at approximately two five times or below with.

Speaker Change: With the possibility to take net leverage up to as high as approximately 3.0 times from time to time for investments that we think have good returns, but also with a clear path to delever to the target of approximately two five times or below.

Sean Edward Quinn: We believe we could reach this 2.5 times net leverage target in FY25. However, if we continue to have attractive opportunities for share repurchases next fiscal year, as we have recently, we expect to exit FY25 with net leverage at or below approximately 2.75. We're still in the process of finalizing our plans for next year.

Speaker Change: We believe we can reach this two five times net leverage target in FY 'twenty. Five however, if we continue to have attractive opportunities for share repurchases next fiscal year. As we have recently, we expect to exit FY 'twenty five with net leverage at or below approximately 275 times.

Speaker Change: We're still in the process of finalizing our plans for next year, but just to set expectations as we look to next year and subject to all the commentary that's already been provided we do expect our opex investments to continue at roughly the current rate.

Sean Edward Quinn: But just to set expectations as we look to next year, and subject to all the commentary that's already been provided, we do expect our OpEx investments to continue at roughly the current rate. We expect higher capex in FY25 just based on opportunities that we see for both new product introductions and efficiency improvements. We continue to not expect material M&A and will consider share and debt repurchases depending on price and subject to the specific debt leverage constraint that I outlined.

Speaker Change: We expect higher Capex in FY 'twenty five just based on opportunities that we see for both new product introduction, but also efficiency improvements.

Speaker Change: We continue to not expect material M&A, and we will consider share and debt repurchases, depending on price and subject to the specific net leverage constraint that I outlined.

Speaker Change: So with that Meredith, let's open it up for questions you bet. Thanks, Sean as a reminder, you can submit questions. During this webcast via the questions and answers box at the bottom left of the screen. We received a number of pre submitted questions.

Meredith Burns: We received a number of pre-submitted questions, and so I will ask those questions now, and we'll pepper the live questions in as they start to come in. So, we're going to kick off with a question about the quarter. So, Sean, EBITDA was up $25 million year-over-year. You grew revenue and gross margins, and you had expected Q3 to benefit from about $25 million of year-over-year cost savings. How come EBITDA didn't grow more than $25 million?

Meredith: And so I will ask those questions now.

Meredith: And we will cover the last question then as they start to come in.

Sean Edward Quinn: Yeah, first on the cost savings piece. Our cost savings were exactly as planned. And so that's been that's been great. I think what we disclosed one year ago, we delivered and maybe a little bit more than that, even, and now those are fully in our run rate by the end of... So those are in the numbers. We did have a currency headwind on EBITDA, which was again, consistent with what we had previously disclosed in our commentary. That was a little over 4 million in the quarter. And just as a reminder, in Q4, there's still another about 4 million headwinds in front of us.

Meredith: So we're going to kick off with a question on on the quarter. So Sean EBITDA was up $25 million year over year, you grew revenue and gross margins and you had expected Q3 to benefit from about $25 million a year over year cost savings how come EBITDA didn't grow more than $25 million.

Sean Edward Quinn: Yes, yes.

Speaker Change: Just first on the cost savings piece or cost savings.

Speaker Change: <unk> exactly as planned and so that's been.

Speaker Change: That's been great I think what we disclosed one year ago, we delivered and maybe a little bit more than that even.

Speaker Change: And now.

Speaker Change: Now those are fully in our run rate by the end of it.

Speaker Change: March year, so those are in the.

Speaker Change: The numbers we.

Speaker Change: We did have.

Speaker Change: Currency headwind on EBITDA, which was again consistent with what we had previously disclosed in our commentary that was a little over $4 million in the quarter and just as a reminder, in Q4, there is still another about $4 million of headwind.

Speaker Change: In front of us.

Sean Edward Quinn: We do have in office, you know, just naturally, in any year you have things like merit increases or other kind of inflationary increases in your office space. And so you have to factor that in. So we had $25 million in year over year cost savings that's in the math. But then you also have some growth in OPEX just from normal inflationary increases that eats into that. And so the way I would think about it for the quarter is that our contribution profit on a consolidated basis grew $24 million, and our EBITDA grew $25 million.

Speaker Change: We do have in Opex, just naturally in any year, you have things like merit increases or other kind of inflationary increases in in your Opex base and so you have to factor that in so we had $25 million of year over year cost savings thats in the map.

Speaker Change: But then you also have some growth in opex.

Speaker Change: Just from normal inflationary increases that eats into that so the way I would think about it for the quarter is that our contribution profit on a consolidated basis.

Speaker Change: Grew $24 million and our EBITDA grew $25 million and so you can see that the contribution profit growth basically drop through to EBITDA and that's because of the opex efficiency and specifically the cost reductions that we implemented last year, allowing that contribution to profit flow through I think the other thing is that.

Sean Edward Quinn: And so you can see that the contribution profit growth basically dropped through to EBITDA. And that's because of the OPEX efficiency and specifically the cost reductions that we implemented last year, allowing that contribution to profit to flow through. I think the other thing is that, as I mentioned in my earlier remarks, there was a little bit of impact from the Easter holiday timing as well. And so you can expect a little bit of flow through from that. That was the timing.

Speaker Change: <unk>.

Speaker Change: I mentioned the semi.

Speaker Change: Earlier remarks that there was a little bit of impact from from the Easter holiday timing as well and so you can expect a little bit of flow through from that that was the timing shift as well.

Meredith Burns: Yeah, and I'll just say that, as I was watching people dialing in a few people after you made that comment, Sean, and you can see this in the transcript, just to reiterate that we did size that at the start of the call. Sean estimated at about 6 million of an impact from the Easter timing in Q3, that would shift into Q4. Just to be clear, that 6 million is the impact on revenue. And that was about Exactly that. Great Thank you. All right, moving on. So Sean, another one for you.

Speaker Change: Yeah, and I'll, just say that as I was watching people dialing in a few people. After you made that comment John and you can see this in the transcript just to reiterate that we did cite that at the start of the kashan sized that at about $6 million of an impact.

Speaker Change: From the Easter timing in Q3.

Speaker Change: That would shift into Q4, just to be clear that $6 million impact on revenue and that was about 80 basis points exactly great. Thank you alright.

Sean Edward Quinn: We rarely talk about end market exposures, but given performance in the past few quarters, it seems that Build-A-Sign is quite exposed to real estate and DIY home decor. Can you give us a ballpark of what percentage of Build-A-Sign's revenue comes from these two end markets? Is it fair to say that until these end markets recover, we will see more of the same as Build-A-Sign? That's a

Speaker Change: Alright moving on.

Speaker Change: Sean.

Sean Edward Quinn: Another one for you.

Sean Edward Quinn: Rarely talk about end market exposures, but given performance in the past few quarters. It reasons that they'll define its quite exposed to real estate in DIY home decor can you give us a ballpark of what percentage of <unk> revenue comes from these two end markets is it fair to say that until these end markets recover we will see more the same.

Fine.

Sean Edward Quinn: And you're right, we rarely talk about end market exposures because we have such little concentration in any one industry or end market. And that's actually a great, great strength of the business. For a bill to sign.

Sean Edward Quinn: Yes.

Speaker Change: Good question and you're right, we rarely talk about end market exposures. Because there is we have such little concentration in any one industry or end market. So.

Speaker Change: That's actually a great a great strength of the business for build assign theres a few things that impacted revenue growth. So I'm just going to walk through that and also respond to the questions along the way.

Sean Edward Quinn: There's a few things that impact revenue growth here. So I'm just going to walk through that and also respond to the question along the way. The first one there are really two impacts here that we've called out one is the slowness in the home decor category and then the impact of real estate. So I'll take those in turn.

Speaker Change: The first one there's really there's two impacts here that we've called out one is.

Speaker Change: The slowness in the home decor category, and then impact of real estate. So I'll take those in turn on home decor side, yes.

Sean Edward Quinn: On the home decor side, you know, it changes quarterly, but on an annual basis, homes, of course, a little less than half. Now we say home decor, but by far the largest product category there is canvas prints, so you. Most of that is for consumer use cases, so that could be in the home, could be for gifts, but you know, they're also businesses.

Speaker Change: It changes quarterly but on an annual basis home decor is a little less than half of the Dol assigned revenue and now we say home decor, but by far the largest product category and Theres canvas prints. So you can think about this.

Speaker Change: Mostly canvas prints.

Speaker Change: Or that is for consumer use cases, so that could be in the home could be for gifts, but there are also a business use cases for Kansas prints as well.

Sean Edward Quinn: I'm not sure, going back to the tie-in to real estate as an end market, I'm not sure I'd connect Home Décor here, or Canvas Prints more specifically, so directly to the real estate market. There may be some impact there, but I wouldn't make that direct connection. For Home Décor or Canvas Prints, this has really been more about channel performance for build-a-sign, and some of the transactional acquisition channels that were very efficient in past years have been less efficient recently. That's going to take a few quarters to work through, and the team is very actively working through that, but we think the end market is still a good one. Again, that's more of a channel.

Speaker Change: Im not sure going back to the tie in to real estate as an end market I'm not sure I'd connected home decor here of canvas prints more specifically so directly to the real estate market. There may be some impact there, but I wouldn't make that that direct connection for home decor or canvas Princess has really been more about channel performance for build a sign that some of the transactional.

Speaker Change: <unk> channels that we're very efficient and passengers have been less efficient recently and so that's going to take a few quarters to work through and the team is very actively working through that.

Speaker Change: But we think the end market is still a good one.

Speaker Change: Again, thats more of a channel performance.

Sean Edward Quinn: Of course, for home decor, we had the spike during the pandemic, which was a pull-forward of demand, and then we've since normalized to lower levels, and then there is some bumpiness because of that shadow. On the real estate side, for real estate, it is about 10% of Build-A-Science revenue, and part of that is their enterprise accounts business, which is some of their largest accounts. Their largest enterprise accounts are national real estate franchises, and so that's had some impact on growth in the near future. But the Build a Sign team is strong.

Speaker Change: Of course for home decor, we had we had the spike during the pandemic, which was a pull forward of demand.

Speaker Change: We've since normalize to lower levels, and then more recently, some lumpiness because of that channel performance on.

Speaker Change: On the real estate side for real estate. It is about 10% of billable signs revenue.

Speaker Change: And part of that is their enterprise accounts business, which some of our largest accounts.

Speaker Change: The largest enterprise accounts, our national real estate franchises. So that's had some impact on growth in the near term, but the bill assign team strong we'd say that regularly they've been working on multiple opportunities and the foundations of those have been multi year efforts, but the benefits are still ahead of us in North America, just to pan out a little bit the sign.

Sean Edward Quinn: We say that regularly. They've been working on multiple opportunities, and the foundations of those have been multi-year efforts, but the benefits are still ahead of them. In North America, just to pan out a little bit, the signage category in both Build-A-Sign and INVISTA has been really strong, and we should also benefit there in the quarters ahead from the political cycle in the United States. Build a Sign is also increasingly an important production partner to Vista with its attractive cost structure for signs for other large format products, but also for supporting new product introductions at Vista as well.

Speaker Change: In this category in both build a sign in and Vista has been really strong and that we should also benefit there in the quarters ahead from the political cycle.

Speaker Change: In the United States the.

Speaker Change: <unk> is also increasingly an important production partner to visit with their attractive cost structure for science for all the large format products, but also for supporting new product introductions at Vista as well and so we expect even more of that as we as we look forward. So.

Sean Edward Quinn: So we expect even more of that as we look forward. It's been a little noisy in recent quarters, but it's a great business, a really strong team, and they have a good ability to adapt and improve over time. We've seen that through the time that they've been part of Cimpress. And so they've done a lot over the last two or three years that should set them up for success in the next few years, including continued expansion as a fulfiller for other Cimpress businesses. [inaudible] Great.

Speaker Change: Noisy in recent quarters, but it's a great business really strong team and they have a good ability to adapt and improve over time, we've seen that through the time that they've been part is impressive so they've done a lot over the last two or three years that should set them up for success in the next few years, including continued expansion as a filler for other <unk> businesses.

Speaker Change: Most notably system.

Speaker Change: Yes.

Meredith Burns: Thank you, Sean. I'm going to have Robert weigh in on this next question. Robert, we have spoken in the past about PP&E or cutback cycles at upload and print and how we were near the end of one. Is this an accurate characterization?

Great: Great. Thank you Shawn.

Great: I'm going to have Robert weigh in on this next question Robert we have spoken in the past about PP&E or capex cycles at upload and print and how we were near the end of one is this an accurate characterization and if so are the new lower spend levels more reflective of where <unk> should be for these days.

Robert S. Keane: And if so, are the new lower spend levels more reflective of where PP&E should be for these businesses moving forward? Okay, well, thanks for the question. And welcome, everyone.

Robert S. Keane: This is moving forward.

Robert S. Keane: We did talk about this in the release; we do expect CapEx overall at Cimpress to be higher next year because we have opportunities for new product introductions and for some important efficiency, improving production equipment. Some of that will be an upload and print. But we're looking at these across the Cimpress level. And with our Cimpress volumes, even if the CapEx will end up in one part of Cimpress, one of our segments, or another, we do look at it as a return on the overall. Cimpress level.

Robert S. Keane: Okay, well thanks for the question and welcome everyone. We.

Robert S. Keane: We did talk about this in the release, we do expect Capex overall at <unk> to be higher next year, because we have opportunities in new product introductions and in some important efficiency.

Robert S. Keane: Proving production equipment.

Robert S. Keane: Some of that will be an upload and print, but we're looking at across the <unk> level.

Robert S. Keane: And with our.

Robert S. Keane: <unk> volumes.

Robert S. Keane: Even if the Capex will end up in one.

Robert S. Keane: Part of <unk>.

Robert S. Keane: One of our segments or another we do look at it as a return on the overall.

Robert S. Keane: So if we talk about CapEx cycles in upload and print specifically, I'd break that into two parts. In our Print Brothers segment, CapEx has been about 1% of revenues for the last five years, and that includes this year's FY24. Because there, we use a lot more third-party fulfillment.

Robert S. Keane: <unk> level. So if we talk about capex cycles in upload and print specifically I'd break that into two parts.

Robert S. Keane: Our print brothers segment.

Robert S. Keane: <unk> has been about 1% of revenues for the last five five years that includes this year FY 'twenty four.

Robert S. Keane: Because there we use a lot more third party fulfillment.

Robert S. Keane: Do expect Capex in print brothers to remain relatively low, but it is likely to increase a bit as we vertically integrate where it makes sense to do so.

Robert S. Keane: We do expect cap backs in Print Brothers to remain relatively low, but it is likely to increase a bit as we vertically integrate where it makes sense to do so. And that comes along with a lower cost of goods sold and better margins when we do that. In that segment, there will continue to be much more third-party fulfillment, but we're starting to shift it a little bit. It's traditionally been a very different model than other parts of Cimpress.

Robert S. Keane: And.

Robert S. Keane: That comes along with lower cost of goods sold and better margins. When we do that can that segment there is.

Robert S. Keane: There will continue to be much more third party fulfillment.

Robert S. Keane: We're starting to shift it a little bit it's traditionally been a very different model than other parts of the same price.

Robert S. Keane: Sticking within Upload and Print, Print Group does produce the vast majority of our revenues internally. So you're correct that over time, that's where we've seen these waves of CapEx intensity tied to both replacement CapEx, but also growth CapEx, or even replacing equipment that is not yet end of life with new equipment, which is just much more economical or higher quality output. Now, as a percentage of revenue, CAPEX intensity is down a bit.

Robert S. Keane: Sticking within upload and print print group does produce the vast majority of our revenues there internally. So youre correct. It over time, that's where we've seen these waves of capex intensity.

Robert S. Keane: I'd to both replacement Capex, but also growth capex.

Robert S. Keane: Or.

Robert S. Keane: Even replacing equipment, which is not yet end of life with new equipment, which is just much more economical or higher quality output.

Robert S. Keane: We do expect it to continue to fluctuate year to year. Over the next year or two, they're not just an upload and print; they're multiple product and efficiency opportunities. I wouldn't set the expectation that that reduction now is a new norm; it's going to continue to fluctuate. And that fluctuation of CapEx is a pretty material factor, although not the only factor behind our statement last night that we expect our conversion from EBITDA to free cash flow at the Cimpress level to fluctuate year to year within that 45 to 50% range. Now, prank groups' gross profits have been really strong, and on top of that, their gross profit and their direct to customer business.

Robert S. Keane: Now as a percentage of revenue capture.

Robert S. Keane: Capex intensity is down a bit we.

Robert S. Keane: We do expect it to continue to fluctuate year to year over the next year or two.

Robert S. Keane: Not just in upload and print their multiple products and efficiency opportunities.

Robert S. Keane: I Wouldnt set the expectation that reduction now as a new norm is going to continue to fluctuate.

Robert S. Keane: That fluctuation of Capex is a pretty material factor, although not the only factor behind our statement last night, we expect our conversion from EBITDA to free cash flow at the simplest level to fluctuate year to year within that 45% to 50% range.

Robert S. Keane: No print groups gross profits has been really strong and.

On top of that.

Robert S. Keane: Gross profit in the direct to customer business on top of that they are growing fulfillment for other businesses for example, vistaprint.

Robert S. Keane: Ben has a cogs reduction impact of the <unk> wide level.

Robert S. Keane: On top of that, they are growing fulfillment for other businesses, for example, Vistaprint, which then has a COGS reduction impact at the Cimpress wide level. And we've been, in other words, we've been able to export some of the great innovation we see in the print group and, to a lesser extent, but a growing extent, print brothers into other parts of Cimpress. And that the CapEx required for that has prevented CapEx in other parts of Cimpress.

Robert S. Keane: And we've been at in other words, we've been able to export some of the great innovation, we see in print group.

Robert S. Keane: Less extent, but a growing extent print brothers into other parts of simplicity and that capex required for that has.

Robert S. Keane: Prevented capex in other parts of some price. So we're very happy with returns we've seen so far.

Robert S. Keane: So we're very happy with the returns we've seen so far. And then, finally, we're confident that all of this CapEx we're talking about, if you look at it as an overall portfolio, is high-return. It's also right behind our growth, and it's improving our competitive advantage. So we're pretty comfortable with what we're doing there. Thank you.

Robert S. Keane: And then finally, we're confident that all of this capex, we're talking about if you look at it as an overall portfolio is high return.

Robert S. Keane: Also behind our growth.

Robert S. Keane: It's improving our competitive advantage, so we're pretty comfortable with what we're doing there.

Meredith Burns: Thank you, Robert. All right, we're going to switch from CapEx to CapSoftware. This one's going to be for Sean.

Speaker Change: Great Great. Thank you. Thank you Robert.

Speaker Change: Switch from Capex to cap software. This one is going to be for Sean.

Meredith Burns: The amount of capitalized software in National Pen and all other businesses seems very high relative to their contribution to Cimpress overall. Why are they so elevated, and how are these investments expected to evolve moving forward? And I'll just say the reason why the person who asked this question knows this is because they're reading our financial and operating metrics spreadsheet, which we post on our website every quarter. So way to go to the person who asked this question, looking at all the documents that we provide. I'm sure whoever asked this appreciates that Meredith.

Sean Edward Quinn: The amount of capitalized software in national Pen and all other businesses. It seems very high relative to their contribution to <unk> overall why are they still elevated and how are these investments expected to evolve moving forward and I'll just say.

Speaker Change: The reason why the person who asked this question knows this is because they are reading, our financial and operating metrics spreadsheet, which we posted on our website every quarter so way to go.

Speaker Change: To the person who asked this question looking at all the documents that we provide.

Sean Edward Quinn: Yeah, so National Pens capitalized software has been pretty consistently 1% of revenue for the last four or five years. Build a sign for that same time period has been about 2%, and that's been consistent as well. Yeah, we don't talk about it as much as we did the Vista tech transformation, but each of these businesses has done a lot in terms of re-architecting their e-commerce front end, but also building additional services on top of that that also leverage. And so, so that's very much been in play for, yeah, the last four or five years.

I am sure whoever asked this I appreciate that merit.

Speaker Change: Yes.

Speaker Change: National Penn capitalized software has been.

Speaker Change: Pretty consistently 1% of revenue for the last four years.

Speaker Change: Four or five years buildup.

Speaker Change: <unk> assigned for the for that same time period has been about 2% and thats been consistent as well we don't we don't talk about it.

Speaker Change: As much as we did the Vista Tech transformation, but each of these businesses has done a lot in terms of re architected in the E Commerce front end.

Speaker Change: But also building additional services on top of that that also leverage MCP.

Speaker Change: And so so that's very much been in play for for the last four or five years and we're through a lot of the heavy lifting on that so we should see leverage out of that as we as we look to the future, but that's that's why.

Sean Edward Quinn: And we're through a lot of the heavy lifting on that, so we should see leverage out of that as we look to the future. But that's why these capitalized software levels are the way they are.

Speaker Change: These capitalized software levels are where they are and I think if you look at national Pen for example.

Meredith Burns: And I think, you know, if you look at, you know, National Pen, for example, it's 1% of revenue, but where their growth is coming from is in the e-commerce segment, pent.com. And that's been very strong growth that is becoming more and more, more and more of the mix. And so, I think that the, you know, if you look at the capitalized software relative to the absolute growth there, and just the size of that channel now, which is, you know, going beyond $100 million and growing, you know, high teens, low 20s percentage. If you look at it from that perspective, I would say the capitalized software investment. Thanks, Sean. All right. I think I'm going to switch gears now.

Speaker Change: 1% of revenue.

Speaker Change: Where their growth is coming from is in the E. Commerce segment, Penn Dot Com and Thats been very strong growth that is becoming more and more more and more of the mix.

Speaker Change: And so so I think that the.

Speaker Change: If you look at the capitalized software relative to the absolute growth there and just the size of that channel now, which is going beyond $100 million and growing high teens low <unk> percentage.

Speaker Change: If you look at it from that perspective, I would say that capitalized software investment has been productive.

Meredith Burns: We're going to talk about cap structure, capital allocation, and fun stuff like that. So, Sean, I'll stick with you for this next question. What is the timeline for refinancing your high-yield notes? Is there still a place for them in your future cap structure, given your new leverage policy with a lower target? We haven't made decisions on either when or how we'll refinance the bonds.

Speaker Change: That's great. Thanks, Sean.

Speaker Change: I think I'm going to switch gears now and we're going to talk about cap structure capital allocation.

Speaker Change: Fund stuff like that so Jon I'll stick with you for this next question.

Jon: What is the timeline for refinancing your high yield notes is there still a place for them in your future cost structure, given your new leverage policy with a lower target.

Jon: We haven't made decisions on either win or how we will refinance the bonds and we have time before we need to make those decisions, we do like having both secured and unsecured debt in our capital structure and so yes, we do think that remains a place for unsecured debt in the future.

Sean Edward Quinn: And, you know, we have time before we need to make those decisions. We do like having both secured and unsecured debt in our capital structure. And so, yes, we do think that remains the place for unsecured debt. And the reasons for that are, there are a few, but diversification of the capital base is a good thing.

Jon: The reasons for that are there are a few but diversification of the capital base a good thing.

Sean Edward Quinn: Keeping secured capacity is a good thing and also, over time, gives us some optionality because we do expect that our base of profitability is going to grow, and therefore, we'll need to access some of these markets. As I said, we don't have a specific timeline. We still have a little more than two years before our high-yield nodes mature.

Jon: Your secured capacity is a good thing and also over time gives us some optionality because we do expect that our base of profitability is going to grow and therefore, we.

Jon: We will need to access some of these markets in the future.

Jon: As I said, we don't have a specific timeline, we still have a little more than two years before our eyes.

Jon: El notes mature.

Sean Edward Quinn: And starting in just a few months from now, we can call the bonds at par. And so we'll keep a close eye on where the market's at. You know, I think for us, we're going to just continue to focus on consistent execution. What we've outlined for our leverage expectations, between that and continued strong results, should position us to have further credit upgrade rating upgrades as well. And all of that should be favorable when we eventually feel like we're in a, Thanks, Sean. Great.

Jon: And starting in just a few months here, we can call the bonds at par and so we'll keep a close eye on on where the market's at.

Jon: I think for US we're going to just continue to focus on consistent execution.

Jon: We've outlined for our leverage expectations between that and continued strong results.

Jon: <unk> us to have further credit rating upgrades as well and all of that should be favorable when we eventually do come to market. So I feel like we're in a good spot there.

Meredith Burns: Okay, I'm going to ask Robert this next question. So Robert, it was great to read that we repurchased 5% of the float at what we believe to be an attractive price for the IVPS gap. What IRR do we typically target with our repurchases so that we can objectively say that repurchasing a dollar of stock is a better or worse use of capital than investing a dollar in automating process exports? Okay, let me just quickly answer your specific question and give some context. I'd say 15%.

Speaker Change: Thanks, Sean.

Okay I'm going to ask Robert This next question.

Speaker Change: So Robert it was great to read that we repurchased 5% of the float at what.

Robert S. Keane: At what we believe to be an attractive price to IEPS gap.

Robert S. Keane: What IRR do we typically target with our repurchases. So that we can objectively say that repurchasing a dollar of stock is better or worse use of capital and investing a dollar and automating processes xyz.

Robert S. Keane: Yeah.

Robert S. Keane: Okay. Let me just quickly answer your specific question and then give some context, I'd say, 15% and our.

Speaker Change: I'll come back to talk about that a little bit more detail.

Robert S. Keane: And I will come back to talk about that in a little bit more detail. So I share, we share your point of view that it was an attractive price relative to our intrinsic value per share. And if you look at it via other metrics, it was roughly eight times trailing 12 month EBITDA. And you can do the multiples of unlimited free cash flow or free cash flow or steady state free cash flow.

Speaker Change: So I chair, we share your point of view that it was an attractive price relative to our intrinsic value per share.

Speaker Change: <unk>.

Speaker Change: If you look at it via other metrics. It was roughly eight times trailing 12 month EBITDA and you can do the multiples of Unlevered free cash flow or free cash flow or steady state free cash flow.

Robert S. Keane: And those are all indications that it was also an attractive price. Now, there are a few ways we look at returns on share repurchases. Again, as you point out in your question, the most important thing is what our estimate of intrinsic value per share is relative to the price we can buy the shares at, which drives that.

Speaker Change: Those are all indications that it was also an attractive price.

Speaker Change: So there's a few ways, we look at returns on share repurchases.

Speaker Change: Again as you pointed out of your question. The most important thing is what our estimate of intrinsic value per share is relative to the price we buy the shares at.

Speaker Change: Which.

Robert S. Keane: But we also look at cash flow yield, how we expect that cash flow to grow over time relative to what we pay per share, and, of course, alternative investments. What can we do to improve customer value to drive our competitive advantage? We believe we should be targeting an IRR on these in excess of 15%, which we believe is happening when we look at the purchases we've made based on the information we have, and so we think that they also will have a very attractive free cash flow per share return over time.

Speaker Change: Drives that but.

Speaker Change: We also look at cash flow yield what we expect that cash flow to grow over time relative to what we pay per share.

Speaker Change: <unk>.

Speaker Change: And the.

Speaker Change: And of course alternative investments what can we do to improve the customer value to drive our competitive advantage.

Speaker Change: We believe we should be targeting an IRR on these in excess of 15%, which we believe.

Speaker Change: It is happening.

Speaker Change: Look at the purchases we've made based on the information we have.

Speaker Change: And.

Speaker Change: So we think that they also will have a very attractive free cash flow per share return over time so.

Robert S. Keane: You know, going back to alternative investments, that is a really important question. We look at other opportunities where, in general, all things being equal, we'd be biased towards organic investments, be that OpEx or CapEx, first. When we are sticking within the leverage guidance we just provided last night and the policy we just described, and where the returns and the profitability justify those investments organically on the individual projects. So, going back to what I answered in the question before about our commentary last night in the earnings document, we're going to be making an increase we expect in CapEx in fiscal year 25, and those have very good IRRs, and we like those projects, but there are limits to how much we can do in any given period of time and also do so while ensuring operational execution.

Speaker Change: You going back to alternative investments that is really important.

Speaker Change: Question.

Speaker Change: Look at other opportunities where in general all things being equal we'd be biased towards organic investments be that opex or capex first.

Speaker Change: When we are sticking within the leverage guidance. We just provided last night in the policy. We just described.

Speaker Change: And where the returns and the profitability.

Speaker Change: Justify those investments organically.

Speaker Change: On the individual projects so.

Speaker Change: Dr <unk>.

Speaker Change: And the question before about our commentary last night in the earnings document, we're going to be making an increase we expect in capex in fiscal year 'twenty five and those have very good irr's and.

Speaker Change: We like those projects, but there's limits to how much we can do in any given period of time.

Speaker Change: So do so while ensuring operational execution.

Speaker Change: So.

Robert S. Keane: If I step back way, we're really doing as we've said for the last 12, 18 months, staying focused on what's most important from an operational and customer improvement perspective. And when the needs for capital in that bucket get filled up, and there's excess cash that we can use to either build liquidity and bring down our debt or earn a yield or buy shares, we'd continue to do that. And once again, we think our new leverage policy and the target of continuing to deliver down towards the 2.5 mark will keep the bar high in terms of what investments we do, whether it's organic or share buyback or anything else. Thanks, Robert.

Speaker Change: If I step way back right now we're really.

Speaker Change: Doing as we've.

Speaker Change: <unk> said for the last 12 to 18 months stay focused on what's most important from an operational and customer improvement perspective.

Speaker Change: And when the need for capital in that bucket get filled up and there's excess cash that we can use to either build liquidity.

Speaker Change: And bring down our debt.

Speaker Change: Or earning yield or buy shares we'd continue to do that and.

Speaker Change: Once again, we think our new leverage policy and the target of continuing to Delever down towards the two five mark will keep the bar high in terms of what investments, we do whether it's organic or share buyback or anything else.

Speaker Change: Thanks Robert.

Meredith Burns: So I've got a related question that I'm going to have Sean answer this time. Could you please remind us of what IRR thresholds we target for each of the capital allocation activities you identified on page 3 of the earnings document, namely operating expense growth investments, CapEx for new products and enhancing productivity, M&A, repurchasing shares, and debt repurchase? Sure, I'll remind everyone what we've said in the past, and then I think there's probably a practical overlay on top of that that might even help.

Speaker Change: So I've got a related question.

Speaker Change: I'm going to have Sean answer this time could you. Please remind us of what IRR thresholds, we target for each of the capital allocation activities you identified on page three of the earnings document, namely operating expense growth investments capex for new products and enhancing productivity and M&A.

Sean Edward Quinn: Purchasing shares and debt repurchases.

Sean Edward Quinn: Sure.

Sean Edward Quinn: I'll remind everyone. What we said in the past and then I think there's probably a practical overlay on top of that that might even be.

Sean Edward Quinn: So the ones that we talked about historically, and these are all risk-dependent as well, were 10% for OpEx or CapEx investments in well-understood areas where we have a long track record of driving returns and things that are very close to how we run the business every day. 15% for M&A, profitable businesses, or for new product introduction areas that are adjacent to the ones that we know well. And then 25% for investment in either new geographies or riskier new products. And so those have been outlined in Robert's past annual letters and other venues.

Sean Edward Quinn: More relevant so the.

The ones that we've talked about historically.

Sean Edward Quinn: These are all risk dependent as well was 10% for opex or capex investments and well understood areas, where we have a long track record of driving returns and.

Sean Edward Quinn: Things that are very close close into how we run the business every day.

Sean Edward Quinn: 50% for M&A profitable businesses or for new product introduction areas that are adjacent to the ones that we know well and then 25% for investment in new geographies or riskier new product introduction.

Sean Edward Quinn: And.

Sean Edward Quinn: So those are those have been outlined in Robert's past annual letters and other other venues a lot has changed since we talked about those publicly the last time, most importantly cost of debt has been higher.

Sean Edward Quinn: A lot has changed since we talked about them publicly the last time. Most importantly, the cost of debt is a bit higher. And, you know, we've also learned some lessons about some of those areas of capital allocation, and in particular, new developing geographies. And so, you know, the bar there is very high.

Sean Edward Quinn: And we've also learned some lessons about some of those areas of capital allocation in particular developing geographies and so the bar there is very high practically speaking.

Sean Edward Quinn: Given the commentary that we gave last night and also the leverage policy that we've outlined, yeah, there's really a strong desire to continue to maintain our focus and operational rigor. And so practically speaking, I think organic investments should right now have a bar that's a bit higher than that. Let's call it, you know, 12% plus, but some of it, like some of the CapEx opportunities that we see for next year, will be much higher than that and have very quick payback. So this should be very, very obvious.

Given the commentary that we gave last night and also the leverage policy that we've outlined.

Sean Edward Quinn: Yes, there is really we have a strong desire to continue to maintain our focus on operational rigor and so practically speaking I think organic.

Sean Edward Quinn: Investments should right now have a bar that's been higher than that let's call it 12% plus.

Sean Edward Quinn: But some of it like some of the Capex opportunities that we see for next year.

Sean Edward Quinn: We will be will be much higher than that in very quick payback very very obvious.

Sean Edward Quinn: From an M&A perspective, as we've said, we're not considering material M&A right now. And so anything that we've done there, which has been relatively small, or even anything that we would expect to consider in the near future, which would also be smaller, would have those very obvious high returns. And that's how I would classify anything that we've done in our, in our very recent past. And that would be, you know, 20% plus, so it should be just extremely obvious and relatively small. For share repurchases, Robert went through that, and so I won't repeat what he went through there.

Sean Edward Quinn: From an M&A perspective.

Speaker Change: <unk> said were not considering material M&A right now and so anything that we've done there which has been relatively small or even anything that we would expect to consider in the near future, which would also be smaller.

Speaker Change: Have that very obvious high returns and that's how I would classify anything that we've done in our and our very recent past.

Speaker Change: And that would be 20% plus so it should be just extremely obvious and relatively small for share repurchases. Robert went through that and so I won't repeat what he went through there and then for debt repurchases that return thresholds bid lower.

Sean Edward Quinn: And then for debt repurchases, that return threshold is a bit lower, and I think the framework there is a bit different. So, you know, if we have sufficient liquidity, which we do, and we have cash on the balance sheet, that is excess cash that's earning a money market return right now, let's say, you know, 5% plus. We can compare that to buying bonds. And if we can do that at a known yield, an excess of 10%, which we've been able to do, that also reduces our gross debt, and there' Yeah, that's a no brainer.

Speaker Change: And I think I think the framework there is a bit different so if we have sufficient liquidity, which we do and we have cash on the balance sheet that.

Speaker Change: As excess cash that's earning money market return right now, let's say, 5% plus.

Speaker Change: We can compare that to buying bonds and if we can do that ended in a known yield in excess of 10%, which is we've been able to do that also reduced our gross debt and theres no execution risk attached to that that's a no brainer and so thats been the framework we've used for those.

Sean Edward Quinn: And so that's been the framework we've used for those. And again, that's more of a function of cash liquidity position and then the relative opportunities to use them. Thank you, Sean. All right.

Speaker Change: And again, that's more of a function of cash liquidity position and then the relative opportunities to use excess cash.

Speaker Change: Thank you Sean.

Meredith Burns: Another question for Robert. Robert, can you please elaborate on why, philosophically, it makes sense to run our business with two and a half times leverage and not one times leverage or four times leverage? So in summary, philosophically, not four times because 2.5 makes us much more robust and resilient, and not one time, because debt does have clear advantages and returns to equity. And we think the new policy strikes the right balance between those. To dive a little bit more behind that, the 2.5x, which is an approximate, or we could go below that, is not the output of a spreadsheet.

Speaker Change: Alright.

Speaker Change: Another question.

Speaker Change: Robert.

Speaker Change: Robert can you. Please elaborate on why philosophically it makes sense to run our business with two five times leverage and not one times leverage our four times leverage.

Robert S. Keane: So in summary, philosophically not four times because.

Robert S. Keane: Two five makes us much more robust and resilient and not one time because that does have clear advantages and returns to equity and we think the new policy.

Robert S. Keane: Like is the right balance between those.

Robert S. Keane: There's a lot of discussion that got it there, but when we did look at it analytically, factoring in the possibilities of shocks to profitability, including future mega shocks like the pandemic we had, you know, four years ago, and also considering the cost of debt, different leverage levels, we pretty quickly got to the 3x leverage. And then the discussion continued from there about what the advantage of de-levering further than that was.

Speaker Change: To dive a little bit more behind that.

Robert S. Keane: $2 five X.

Robert S. Keane: Approximate.

Robert S. Keane: We could go below that.

Robert S. Keane: Is not the output of a spreadsheet theres a lot of discussion that got us there.

Robert S. Keane: When we did look at it analytically alright.

Robert S. Keane: Okay.

Robert S. Keane: Factoring in the possibilities of shocks of profitability.

Robert S. Keane: Including future future Mega shocks like the pandemic, we had four years ago.

Robert S. Keane: And also considering the cost of debt to different leverage levels, we pretty quickly got to the three X leverage and then the discussion continue from there how about let's see advantage of.

Robert S. Keane: Delevering further than that.

Robert S. Keane: I would say it's not for Cimpress a question about optimizing tax benefits and financing costs. Because the way our corporate structure works, we don't get the benefit of all of our interest costs. So there is a cost of capital part of this as a risk management piece from, you know, being more robust. And there's an intangible piece of this, which is, how do we want to sleep at night?

Speaker Change: I'd say its not for Sim, perhaps a question of optimizing tax benefits of financing costs because of the way our corporate structure works, we don't get benefit of.

Speaker Change: All of our interest cost.

Speaker Change: There is a cost of capital part of this as a risk management piece from.

Speaker Change: Being more robust.

Robert S. Keane: And how do we want to operate the business? Stepping way back to the pandemic, we were in the midst of turning around Vista when the pandemic hit, and we chose to continue that turnaround, but it led to uncomfortably high leverage, which we've now come back out of, and we'll go further. Another factor we talked about, and again, there's no overriding factor in this conversation, but just to introduce you to some of the conversations we had in a world of real interest rates, which are materially higher.

Speaker Change: And there is an intangible piece of this which is.

Robert S. Keane: How do we want to sleep at night and.

Robert S. Keane: How do we want to operate the business.

Robert S. Keane: Stepping way back to the pandemic.

Robert S. Keane: In the midst of a turnaround wister when the pandemic hit we.

Robert S. Keane: Chose to continue we've got a turnaround but.

Robert S. Keane: Led to an uncomfortably high leverage.

Robert S. Keane: We've now come back out of it will go further.

Robert S. Keane: Another factor we talked about.

Robert S. Keane: Theres no overriding factor in this conversation, but just to <unk>.

Robert S. Keane: Exposure to some of the conversations we had.

Robert S. Keane: In a world of real interest rates.

Robert S. Keane: Our.

Robert S. Keane: And having seen the shocks that have happened, we think delevering is just healthy and will help us through that volatility. But who knows when and if interest rates will ever get back to where they were before?

Robert S. Keane: Materially higher.

Robert S. Keane: And having seen the shocks.

Robert S. Keane: Has happened.

Robert S. Keane: We think delevering is healthy.

Robert S. Keane: It will help us through that volatility.

Robert S. Keane: Who knows when and if the interest rates will ever get back to where they were before.

Robert S. Keane: Finally, I'd say there's a lot of value in not doing unnatural things that disrupt the business. And again, we've seen that in the pandemic, we, in the very early days, had to really quickly cut costs, and then we had to go back and invest in areas we felt we needed to turn around the business for the longer term. And again, being at a lower level really helps us give us the flexibility in those types of cases, which are out of the middle of the bell curve of future events.

Robert S. Keane: Finally, there is a lot.

Robert S. Keane: Sort of value and not doing unnatural things.

Robert S. Keane: Disruptive business and again, we've seen that in the pandemic.

Robert S. Keane: Very early days, we had a really quickly cut costs. Then we had to go back and invest in areas. We felt we needed to turnaround the business for the longer term and again being at a lower level really helps us give us the flexibility in those types of.

Robert S. Keane: Cases, which are out of the middle of the bell curve of future events.

Robert S. Keane: That's all why to come down, going back to why we can go lower. Again, we do see a lot of opportunity to invest capital at above our cost of capital. And this level still gives us that, and therefore, again, helps, Unknown Attendee, Robert Keane, Sean Quinn, Maarten Wensveen, Paolo Roatta, Marlane Pereiro, Cimpress NV, Great.

Robert S. Keane: That's all a lie to come down going back to why Wouldnt go lower again, we do see a lot of opportunity to invest capital.

Robert S. Keane: At above our cost of capital and.

Robert S. Keane: This level is still gives us that.

Robert S. Keane: Therefore again helps.

Robert S. Keane: US in terms of returns returns on equity.

Robert S. Keane: And again, we don't know where were not going necessarily paid $2 five and stay there. We certainly have no problem with building up dry powder.

Robert S. Keane: With operating cash flow.

Robert S. Keane: We'll cross that bridge, when we get to it.

Speaker Change: Great. Thank you Robert.

Robert S. Keane: Alright, we have exhausted the list of questions from our pre submitted and live perspective, and so I am going to ask Robert to wrap up the call.

Robert S. Keane: Okay, well, thank you Meredith and thank you to all the investors for joining this call and thank you for continuing to entrust your capital with us.

Robert S. Keane: We remain very focused on execution, our teams very motivated and incentivized to continuously improve most importantly, the value we deliver to our customers and we really we've been doing so that will continue to drive the financial results, we delivered to our shareholders.

Robert S. Keane: Strategically and operationally our significant investments over the past five years have really positioned us well for the future.

Robert S. Keane: Financially speaking, our strong profitability and a return to stronger profitability.

Robert S. Keane: As we plan to do does mean that we're going to be operating at much more comfortable levels of leverage as I just spoke about in the last question, even as we will continue to invest in our customer value.

Robert S. Keane: And in doing so our investing and continuing to grow our intrinsic value per share.

Speaker Change: So have a great day, everyone again, we appreciate your interest and trust with us.

Speaker Change: Thank you. This concludes today's conference ladies and gentlemen, thank you for your participation have a great day and you may now disconnect.

Speaker Change: [music].

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Robert S. Keane: Thanks.

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Robert S. Keane: [music].

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Robert S. Keane: Thank you, Robert. All right, we have exhausted the list of questions from a pre-submitted and live perspective, and so I am going to ask Robert to wrap up the call. Okay, well, thank you, Meredith.

Speaker Change: Welcome to <unk> third quarter fiscal year, 'twenty 'twenty four earnings call I.

Speaker Change: I went to James Meredith Byrnes, Vice President of Investor Relations and sustainability.

Robert S. Keane: Most importantly, the value we deliver to our customers, and we really believe in doing so, will continue to drive the financial results we deliver to our shareholders. Strategically and operationally, our significant investments over the past five years have really positioned us well for the future. Financially speaking, our strong profitability and return to higher profitability, as we plan to do, does mean that we're going to be operating at much more comfortable levels of leverage, as I just spoke about in the last question, even as we will continue to invest in our customer value and, in doing so, continue to grow our intrinsic value per share. So have a great day, everyone!

Speaker Change: Thank you Emma and thank you everyone for joining us with US today on the call are Robert Keane, founder, Chairman and Chief Executive Officer, and Sean Quinn, EVP and Chief Financial Officer, we.

Operator: Again, we appreciate your interest and trust in us. Thank you. This concludes today's conference, ladies and gentlemen. Thank you for your participation. Have a great day, and you may now disconnect.

Speaker Change: We appreciate the time that you have dedicated to understand our results commentary and outlook is live Q&A session will last about 45 minutes and we will answer both pre submitted and live questions. You can submit questions lives. The other questions and answers box at the bottom left of the screen.

Speaker Change: Before we start I will note that in this session. We will make statements about the future. Our actual results may differ materially from these statements due to risk factors that are outlined in detail in our SEC filings and the documents published yesterday on our website. We also have published non-GAAP reconciliations for our financial results and outlook on our IR website, along with history.

Speaker Change: <unk> financial results, we invite you to read them and now I'll turn things over to Shaun.

Operator: [inaudible] ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? [inaudible] ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Welcome to Cimpress third quarter fiscal year 2024 earnings call. I will introduce Meredith Burns, Vice President of Investor Relations and Sustainability. Thank you, Ember.

Shaun: <unk> delivered strong results in the third quarter.

Sean Edward Quinn: And thanks to everyone who's joined us today. We're on a recording. Before we take any questions that you have, I'm just going to highlight a few key points from our earnings document that we published yesterday. Cimpress delivered strong results in the third quarter; consolidated revenue grew 5% on a reported basis and 4% on an organic basis. The timing of the Easter holiday, which was at the end of Q3 this year versus Q4 last year, had about $6 million of impact, or 80 basis points of negative impact, So the underlying consolidated revenue growth trends were consistent with what we've seen year-to-year. Adjusted EBITDA grew $25 million year over year in Q3 to $94 million.

Shaun: Consolidated revenue grew 5% on a reported basis and 4% on an organic constant currency basis.

Shaun: The timing of the Easter holiday, which was at the end of Q3. This year versus Q4 of last year had about $6 million of impact or 80 basis points of negative impact on consolidated organic revenue growth for the quarter. So the underlying consolidated revenue growth trends were consistent with what we've seen year to date.

Shaun: Adjusted EBITDA grew $25 million year over year in Q3 to $94 million.

Sean Edward Quinn: And our adjusted EBITDA margins were up nearly 300 basis points to just over 12% this year, driven by continued gross margin expansion but also operating expenses. From a segment perspective, we saw an improved trend for our upload and print businesses and also for National Pen, both despite a tough Q3 comp for those businesses, and growth in all their businesses remains flat, where there are puts and takes beneath the surface consistent with the last few quarters. We had a pre-submitted question on that. A little bit of detail here.

Shaun: Our adjusted EBITDA margins were up nearly 300 basis points to just over 12%. This year driven by continued gross margin expansion, but also operating expense efficiency.

Shaun: From a segment perspective, we saw an improved trend for our upload and print businesses and also for national pen both despite a tough Q3 comp for those businesses.

Speaker Change: Investor If you take the Easter timing out of the mix revenue growth was a continuation of the trends in the first half of the year, So very strong Vista.

Speaker Change: <unk> continues to grow the value of its customer cohorts through growth in both customer count, but also per customer value.

Speaker Change: And we've also had year over year growth in the value of the new customer acquisition cohort again this quarter, which.

Speaker Change: Which is a pattern that's been in place for six quarters now.

Sean Edward Quinn: We do typically have an outflow in Q3, just due to our seasonal working capital patterns. However, there was a $3.8 million year-over-year increase in that outflow versus last year, despite the improved adjusted EBITDA, and that was a function of the quarterly variability of working capital versus last year. Q2 was very favorable this year, if you recall. And importantly, our year-to-date adjusted free cash flow is up over $155 million. During the third quarter and also in April, together, we repurchased a total of 1.3 million shares for $120 million at an average price of $93 per share.

Speaker Change: The ability of working capital versus last year Q2 was very favorable this year, if you recall and importantly, our year to date adjusted free cash flow is up over $155 million versus last year.

Sean Edward Quinn: And during the month of April, we also received net proceeds of $16.8 million for the sale of our building in Jamaica that had previously been classified as held for sale. Our net leverage at the end of Q3 was 3.0 times Trailing 12-month EBITDA as defined by our credit agreement, and that compares to net leverage of 4.8 times one year. With these continued strong results and just one quarter left in the fiscal year,

Speaker Change: Our liquidity position remains strong we ended the quarter with cash and marketable securities of $168 million full access to our $250 million revolving credit facility and jewelry in the month of April. We also received net proceeds of $16 $8 million for the sale of our building in Jamaica that had previously been classified as.

Speaker Change: Held for sale.

Speaker Change: Our net leverage at the end of Q3 was $3 zero times trailing 12 months EBITDA as defined by our credit agreement and that compares to net leverage of four eight times one year ago.

Speaker Change: With these continued strong results in just one quarter left in the fiscal year.

Sean Edward Quinn: We're confident in our ability to meet or exceed our prior guidance that we shared in last quarter's earnings, and as we also discussed in the earnings document that we published last night. We provided detailed near-term guidance over the past five quarters because we had plans to dramatically improve our profitability and our cash flow. And we felt that it was appropriate and necessary for us to be more specific about those expectations that we have.

Speaker Change: We're confident in our ability to meet or exceed our prior guidance that we shared in last quarter's earnings documents.

Speaker Change: As we also discussed in the earnings document that we published last night.

Speaker Change: We provided detailed near term guidance over the past five quarters, because we had plans to dramatically improve our profitability and our cash flow and we felt that it was appropriate but it was also necessary for us to be more specific about those expectations that we had.

Sean Edward Quinn: With these improvements now reflected in our actual results going forward, we will replace the near-term guidance with multi-year guidance commentary. So let me just walk through that commentary that we provided for FY25 and beyond in last. First, we expect to grow organic constant currency revenue at mid-single-digit rates, possibly a little higher. We expect adjusted EBITDA to grow slightly faster than revenue, and we expect the annual conversion rate of adjusted EBITDA to adjusted pre-cash flow to be in the range of 45% to 50% with fluctuations from one year. Finally, we disclosed a new leverage policy in our earnings document yesterday evening. We think it's really important to have this information for investors.

Speaker Change: First we expect to grow organic constant currency revenue at mid single digit rates, possibly a little higher we.

We expect to grow adjusted EBITDA slightly faster than revenue.

Speaker Change: And we expect the annual conversion rate of adjusted EBITDA to adjusted free cash flow to be in the range of 45% to 50% with fluctuations from one year to the next.

Sean Edward Quinn: Finally, we disclosed a new leverage policy and our earnings document yesterday evening, we think it's really important to have this information for investors. It's so important for our capital allocation philosophy and decisions and what you can all expect in the coming years and so we think it is.

Sean Edward Quinn: It's so important for our capital allocation philosophy and decisions and what you can all expect in the coming years. And so we think it's a really useful piece of information, but also a useful input for modeling along with the multi-year outlook commentary that we shared last night and I just went, So that new leverage policy is to target net leverage at approximately 2.5 times or below, with a possibility to take net leverage up to as high as approximately 3.0 times from time to time for investments that we think have good returns, but also with a clear path to deliver to the target of approximately 2.5 times or below.

Sean Edward Quinn: That's really useful piece of information, but also a useful input for modeling along with the multi year outlook commentary that we shared last night and I just went through.

Sean Edward Quinn: So that new leverage policy is to target net leverage at approximately two five times or below.

Sean Edward Quinn: With the possibility to take net leverage up to as high as approximately 3.0 times from time to time for investments that we think have good returns, but also with a clear path to delever to the target of approximately two five times or below.

Sean Edward Quinn: We believe we can reach this two five times net leverage target in FY 'twenty. Five however, if we continue to have attractive opportunities for share repurchases next fiscal year. As we have recently, we expect to exit FY 'twenty five with net leverage at or below approximately 275 times.

Sean Edward Quinn: We're still in the process of finalizing our plans for next year, but just to set expectations as we look to next year and subject to all the commentary that's already been provided we do expect our opex investments to continue at roughly the current rate.

Sean Edward Quinn: But just to set expectations as we look to next year, and subject to all the commentary that's already been provided, we do expect our OPEX investments to continue at roughly the current rate. We expect higher CapEx in FY25 just based on opportunities that we see for both new product introductions but also efficiency improvements. We continue to not expect material M&A and will consider share and debt repurchases depending on price and subject to the specific net leverage constraint that I outlined.

Sean Edward Quinn: We expect higher Capex in FY 'twenty five just based on opportunities that we see for both new product introduction, but also efficiency improvements.

Sean Edward Quinn: We continue to not expect material M&A, and we will consider share and debt repurchases, depending on price and subject to the specific net leverage constraint that I outlined.

Sean Edward Quinn: So with that, Meredith, let's open it up for questions. You bet. Thanks, Sean. As a reminder, you can submit questions during this webcast via the questions and answers box at the bottom left of the screen. We received a number of pre-submitted questions, and so I will ask those questions now, and we'll pepper the live questions in as they start to come in.

Sean Edward Quinn: So with that Meredith, let's open it up for questions you bet. Thanks, Sean as a reminder, you can submit questions. During this webcast via the questions and answers box at the bottom left of the screen. We received a number of pre submitted questions.

Meredith Burns: And so I will ask those questions now.

Meredith Burns: And we will cover the last question then as they start to come in.

Meredith Burns: So, we're going to kick off with a question on the quarter. Sean, EBITDA was up $25 million year-over-year. You grew revenue and gross margins, and you had expected Q3 to benefit from about $25 million of year-over-year cost savings. How come EBITDA didn't grow more than $25 million?

Meredith Burns: So we're going to kickoff.

Meredith Burns: With a question on on the quarter. So Sean EBITDA was up $25 million year over year, you grew revenue and gross margins and you had expected Q3 to benefit from about $25 million a year over year cost savings how come EBITDA didn't grow more than $25 million.

Sean Edward Quinn: Yeah, first on the cost savings piece. Our cost savings were exactly as planned. And so that's been that's been great. I think what we disclosed one year ago, we delivered and maybe a little bit more than that, even. And now those are fully in our run rate by the end of the year. So those are in the numbers. We did have a currency headwind on EBITDA, which was, again, consistent with what we had previously disclosed in our commentary. That was a little over 4 million in the quarter. And there's, just as a reminder, in Q4, there's still another about 4 million headwinds in front of us.

Sean: Yes, we just first on the cost savings piece or cost savings.

Meredith Burns: Were exactly as planned and so that's been.

Sean Edward Quinn: That's been great I think what we disclosed one year ago, we delivered and maybe a little bit more than that even.

Sean Edward Quinn: And now.

Sean Edward Quinn: Now those are fully in our run rate by the end of <unk>.

Sean Edward Quinn: March here so those are in the numbers.

Sean Edward Quinn: We did have.

Sean Edward Quinn: Currency headwind on EBITDA, which was again consistent with what we had previously disclosed in our commentary that was a little over $4 million in the quarter and just as a reminder, in Q4, there is still another about $4 million of headwind.

Sean Edward Quinn: We do have in office, you know, just naturally, in any year, you have things like merit increases or other kind of inflationary increases in your office space. And so you have to factor that in. So we had $25 million in year over year cost savings that's in the math. But then you also have some growth in OPEX just from normal inflationary increases that eats into that. And so the way I would think about it for the quarter is that our contribution profit on a consolidated basis grew $24 million, and our EBITDA grew $25 million.

Sean Edward Quinn: In front of us.

Sean Edward Quinn: We do have in Opex, just naturally in any year, you have things like merit increases or other kind of inflationary increases in in your Opex base and so you have to factor that in so we had $25 million of year over year cost savings thats in the map.

Sean Edward Quinn: But then you also have some growth in opex.

Sean Edward Quinn: Just from normal inflationary increases that eats into that so the way I would think about it for the quarter is that our contribution profit on a consolidated basis.

Sean Edward Quinn: Grew $24 million and our EBITDA grew $25 million and so you can see that the contribution profit growth basically dropped through to EBITDA and that's because of the opex efficiency and specifically the cost reductions that we implemented last year, allowing that contribution to profit flow through I think the other thing is that.

Sean Edward Quinn: <unk>.

Sean Edward Quinn: I mentioned the semi.

Sean Edward Quinn: Earlier remarks that there was a little bit of impact from the Easter holiday timing as well and so you can expect a little bit of flow through from that that was the timing shift as well.

Meredith Burns: Yeah, and I'll just say that, as I was watching people dialing in a few people after you made that comment, Sean, and you can see this in the transcript, just to reiterate that we did size that at the start of the call. Sean sized that at about $6 million of an impact from the Easter timing in Q3 that would shift into Q4. Just to be clear, that $6 million is the impact on revenue. And that was about Exactly that. Great Thank you. All right, moving on. So Sean, another one for you.

Meredith Burns: From the Easter timing in Q3.

Meredith Burns: That would shift into Q4, just to be clear that $6 million impact on revenue and that was about 80 basis points exactly great. Thank you alright.

Meredith Burns: We rarely talk about end market exposures, but given performance in the past few quarters, it seems that Build-A-Sign is quite exposed to real estate and DIY home decor. Can you give us a ballpark of what percentage of Build-A-Sign's revenue comes from these two end markets? Is it fair to say that until these end markets recover, we will see more of the same as Build-A-Sign? That's a

Meredith Burns: Alright moving on.

Meredith Burns: Sean another one for you we rarely talk about end market exposures, but given performance in the past few quarters. It reasons that they'll define is quite exposed to real estate in DIY home decor can you give us a ballpark of what percentage of <unk> revenue comes from these two end markets is it fair to say that until these end.

Meredith Burns: Markets recover we will see more at the same at this time.

Speaker Change: Next question.

Meredith Burns: We rarely talk about end market exposures, because there is we have such a little concentration in any one industry or end market and so.

Sean Edward Quinn: That's actually a great a great strength of the business for a builder side Theres, a few things that impacting revenue growth here. So I'm just going to walk through that and also respond to the question along the way.

Sean Edward Quinn: The first one there's really there's two impacts here that we've called out one is the slowness in the home decor category and then the impact of real estate. So I'll take those in turn on home decor side, yes.

Sean Edward Quinn: On the home decor side, yeah, it changes quarterly. But on an annual basis, homes, of course, a little less than half. Now we say home decor, but by far the largest product category there is canvas prints. So, most of that is for consumer use cases, so that could be in the home, could be for gifts, but they're also businesses.

Sean Edward Quinn: Yes, it changes quarterly but on an annual basis home decor is a little less than half of the bill assigned revenue and now we say home decor, but by far the largest product category in there as canvas prints. So you can think about this.

Sean Edward Quinn: Mostly canvas prints.

Sean Edward Quinn: Or that is for consumer use cases, so that could be in the home could be for gifts, but they're also business use cases for campus prints as well.

Sean Edward Quinn: I'm not sure, going back to the tie-in to real estate as an end market, I'm not sure I'd connect Home Décor here, or Canvas Prints more specifically, so directly to the real estate market. There may be some impact there, but I wouldn't make that direct connection. For Home Décor or Canvas Prints, this has really been more about channel performance for bill design, and some of the transactional acquisition channels that were very efficient in past years have been less efficient recently.

Sean Edward Quinn: Im not sure, but going back to the tie in to real estate as an end market Im not sure I'd connect home decor here of canvas prints more specifically so directly to the real estate market. There may be some impact there, but I wouldn't make that that direct connection for home decor or canvas Princess has really been more about channel performance for build a sign that some of the transactional.

Sean Edward Quinn: <unk> channels that we're very efficient and passengers have been less efficient recently and so that's going to take a few quarters to work through and the team is very actively working through that.

Sean Edward Quinn: And so that's going to take a few quarters to work through, and the team is very actively working through that. But we think the end market is still a good one, and again, that's more of a channel, of course, for home decor. We had the spike during the pandemic, which was a pull-forward of demand. And then we've since normalized to lower levels, and then there's some bumpiness because of that shadow.

Sean Edward Quinn: But we think the end market is still a good one.

Sean Edward Quinn: Again, thats more of a channel performance.

Sean Edward Quinn: Of course for home decor, we had we had the spike during the pandemic, which was a pull forward of demand.

Sean Edward Quinn: We've since normalize to lower levels, and then more recently, some lumpiness because of that channel performance on.

Sean Edward Quinn: On the real estate side, for real estate, it is about 10% of Build a Sign's revenue, and part of that is their enterprise accounts business, which is some of their largest accounts. Their largest enterprise accounts are national real estate franchises. So that's had some impact on growth in the near future, But the Build a Sign team is strong. You know, we say that regularly.

Sean Edward Quinn: On the real estate side for real estate. It is about 10% of billable signs revenue.

Sean Edward Quinn: And part of that is their enterprise accounts business, which some of our largest accounts.

Sean Edward Quinn: Our largest enterprise accounts, our national real estate franchises. So that's had some impact on growth in the near term, but the bill assign team strong we'd say that regularly they've been working on multiple opportunities and the foundations of those have been multi year efforts, but the benefits are still ahead of us in North America, just a pan out a little bit the sign.

Sean Edward Quinn: They've been working on multiple opportunities, and the foundations of those have been multi-year efforts, but the benefits are still ahead of them. In North America, just to pan out a little bit, the signage category in both Build-A-Sign and INVISTA has been really strong, and we should also benefit there in the quarters ahead because of the political cycle in the United States. Build a Sign is also increasingly an important production partner to Vista with their attractive cost structure for signs for other large format products, but also for supporting new product introductions at Vista as well.

Sean Edward Quinn: This category in both build a sign in and Vista has been really strong and that we should also benefit there in the quarters ahead from the political cycle.

Sean Edward Quinn: In the United States.

Sean Edward Quinn: <unk> also increasingly an important production partner to visit with their attractive cost structure for signs for other large format products, but also for supporting new product introductions at Vista as well and so we expect even more of that as we as we look forward. So.

Sean Edward Quinn: And so we expect even more of that as we look forward. So it's been a little noisy in recent quarters, but it's a great business, a really strong team, and they have a good ability to adapt and improve over time. We've seen that through the time that they've been part of Cimpress, and so they've done a lot over the last two or three years. That should set them up for success in the next few years, including continued expansion as a fulfillment center for other Cimpress businesses. Mercedero.

Sean Edward Quinn: So noisy in recent quarters, but it's a great business really strong team and they have a good ability to adapt and improve over time, we've seen that through the time that they've been part of impress and so they've done a lot over the last two or three years that should set them up for success in the next few years, including continued expansion as a filler for other <unk> businesses.

Sean Edward Quinn: Most notably system.

Meredith Burns: Great. Thank you, Sean. I'm going to have Robert weigh in on this next question. Robert, we have spoken in the past about PP&E or cutback cycles at upload and print and how we were near the end of one. Is this an accurate characterization?

Sean Edward Quinn: Yes.

Mercedero: Great. Thank you Shawn.

Sean Edward Quinn: Im going to have Robert weigh in on this next question Robert we have spoken in the past about PP&E or capex cycles at upload and print and how we were near the end of one is this an accurate characterization and if so are the new lower spend levels more reflective of where PPA in Asia for these <unk>.

Robert S. Keane: And if so, are the new lower spend levels more reflective of where PP&E should be for these businesses moving forward? Okay, well, thanks for the question. And welcome, everyone.

Robert: <unk> is moving forward.

Robert S. Keane: We did talk about this in the release; we do expect CapEx overall at Cimpress to be higher next year because we have opportunities for new product introductions and for some important efficiency, improving production equipment. Some of that will be an upgrade in print. But we're looking at these across the Cimpress level. And with our Cimpress volumes, even if the CapEx will end up in one part of Cimpress, one of our segments, or another, we do look at it as a return on the overall. Cimpress level.

Robert: Okay, well, thanks for the question and welcome everyone.

Robert: We did talk about this in the release, we do expect Capex overall at some price to be higher next year, because we have opportunities in new product introductions and in some important efficiency.

Robert S. Keane: Improving production equipment.

Robert S. Keane: Some of that will be an upload and print, but we're looking at across the same price level.

Robert S. Keane: And with our <unk>.

Robert S. Keane: <unk> volumes.

Robert S. Keane: Even if the Capex will end up in one.

Robert S. Keane: Part of.

Robert S. Keane: One of our segments or another we do look at it as a return on the overall.

Robert S. Keane: <unk> level. So if we talk about capex cycles, and upload and print specifically I'd break that into two parts.

Robert S. Keane: In our print brother segment Capex has been about 1% of revenues for the last five five years that includes this year FY 'twenty four.

Robert S. Keane: Because there we use a lot more third-party fulfillment. We do expect cap backs in Print Brothers to remain relatively low, but it is likely to increase a bit as we vertically integrate where it makes sense to do so. And that comes along with a lower cost of goods sold and better margins when we do that. In that segment, there will continue to be much more third-party fulfillment, but we're starting to shift it a little bit. It's traditionally been a very different model than other parts of Cimpress.

Robert S. Keane: Because there we use a lot more third party fulfillment.

Robert S. Keane: We do expect Capex.

Robert S. Keane: In print brothers to remain relatively low, but it is likely to increase a bit as we vertically integrate where it makes sense to do so.

Robert S. Keane: And.

Robert S. Keane: That comes along with lower cost of goods sold and better margins when we do that in that segment.

Robert S. Keane: There will continue to be much more third party fulfillment.

Robert S. Keane: We're starting to shift it a little bit it's traditionally been a very different model than other parts of <unk>.

Robert S. Keane: Sticking within Upload and Print, Print Group does produce the vast majority of our revenues internally. So you're corrected over time. That's where we've seen these waves of CapEx intensity tied to both replacement CapEx but also growth CapEx or even replacing equipment which is not yet end of life with new equipment, which is just much more economical or higher quality output. Now, as a percentage of revenue, CAPEX intensity is down a bit.

Robert S. Keane: Sticking within upload and print print group does produce the vast majority of our revenues there internally. So youre correct that over time, that's where we've seen these waves of capex intensity tied.

Robert S. Keane: Tied to both replacement Capex, but also growth capex or.

Robert S. Keane: Even replacing equipment, which is not yet end of life with new equipment, which is just much more economical or higher quality output.

Robert S. Keane: We do expect it to continue to fluctuate year to year. Over the next year or two, there is not just an upload and print; there are multiple product and efficiency opportunities. I wouldn't set the expectation that that reduction now is a new norm; it's going to continue to fluctuate. And that fluctuation of CapEx is a pretty material factor, although not the only factor behind our statement last night that we expect our conversion from EBITDA to free cash flow at the Cimpress level to fluctuate year to year within that 45 to 50% range. Now, prank groups' gross profits have been really strong, and on top of that, their gross profit and their direct to customer business.

Robert S. Keane: Now as a percentage of revenue Capex.

Robert S. Keane: Capex intensity is down a bit.

Robert S. Keane: We do expect it to continue to fluctuate year to year over the next year or two.

Robert S. Keane: Not just in upload and print their multiple products and efficiency.

Robert S. Keane: Efficiency opportunities.

Robert S. Keane: I Wouldnt set the expectation that reduction now as a new norm is going to continue to fluctuate.

Robert S. Keane: On.

Robert S. Keane: That fluctuation of Capex is a pretty material factor, although not the only factor behind our statement last night that we.

Robert S. Keane: We expect our conversion from EBITDA to free cash flow at the simplest level to fluctuate year to year, we didn't have 45% to 50% range.

Robert S. Keane: Now print group's gross profit has been really strong.

Robert S. Keane: Yes.

Robert S. Keane: On top of that.

Robert S. Keane: Gross profit in the direct to customer business on top of that they are growing fulfillment for other businesses for example, vistaprint.

Robert S. Keane: On top of that, they are growing fulfillment for other businesses, for example, Vistaprint, which then has a COGS reduction impact at the Cimpress wide level. And we've been, in other words, we've been able to export some of the great innovation we see in a print group and, to a lesser extent, but a growing extent, print for others, into other parts of Cimpress. And that the CapEx required for that has prevented CapEx in other parts of Cimpress.

Robert S. Keane: Japan has a cogs reduction impact of the <unk> wide level.

Robert S. Keane: And we've been at in other words being able to export some of the great innovation, we see in print group and to a lesser extent, but a growing extent print brothers into other parts of simplicity and that capex required for that has.

Robert S. Keane: Prevented capex in other parts of <unk>. So we're very happy with returns we've seen so far.

Robert S. Keane: And then finally, we're confident that all of this capex, we're talking about if you look at it as an overall portfolio is high return, it's also behind our growth and improving our competitive advantage. So we're pretty comfortable with what we're doing there.

Meredith Burns: Thank you, Robert. All right, we're going to switch from CapEx to CapSoftware. This one's going to be for Sean.

Speaker Change: Great Great. Thank you. Thank you Robert we're going to switch from Capex to cap software. This one is going to be for Sean.

Speaker Change: The amount of capitalized software in national Pen and all other businesses. It seems very high relative to their contribution to <unk> overall why are they still elevated and how are these investments expected to evolve moving forward and I'll just say.

Meredith Burns: The reason why the person who asked this question knows this is because they are reading, our financial and operating metrics spreadsheet, which we posted on our website every quarter so way to go.

Meredith Burns: To the person who asked this question looking at all of the documents that we provide.

Sean Edward Quinn: Yeah, so National Pens capitalized software has been pretty consistently 1% of revenue for the last, for five years. Build a sign for the last for that same time period has been about 2%, and that's as well. You know, we don't, we don't talk about it as much as we did the Vista tech transformation, but each of these businesses has done a lot in terms of re-architecting their e-commerce front end, but also building additional services on top of that that also leverage And so, so that's very much been in play for, yeah, for the last, you know, four or five years, and we're through a But that's why these capitalized software levels are where they are.

Meredith Burns: I am sure whoever assets appreciates that merit.

Meredith Burns: Yes.

Meredith Burns: National Penn capitalized software has been.

Sean Edward Quinn: Pretty consistently 1% of revenue for the last I think three or.

Sean Edward Quinn: Four or five years buildup.

Sean Edward Quinn: <unk> assigned for the for that same time period has been about 2% and thats been consistent as well.

Sean Edward Quinn: We don't we don't talk about it.

Sean Edward Quinn: As much as we did the Vista Tech transformation, but each of these businesses has done a lot in terms of re architect their ecommerce front end.

Sean Edward Quinn: But also building additional services on top of that that also leverage MCP.

Sean Edward Quinn: And I think, you know, if you look at, you know, National Pen, for example, it's 1% of revenue, but where their growth is coming from is in the e-commerce segment, pent.com. And that's been very strong growth that is becoming more and more, more and more of the mix. And so, I think that the, you know, if you look at the capitalized software relative to the absolute growth there, and just the size of that channel now, which is going beyond $100 million and growing, you know, high teens, low 20s percentage. If you look at it from that perspective, I would say the capitalized software investment. Thanks, Sean. All right. I think I'm going to switch gears now.

Sean Edward Quinn: And so so that's very much been in play for <unk> for the last four or five years and we're through a lot of the heavy lifting on that so we should see leverage out of that as we as we look to the future, but that's that's why these capitalized software levels are where they are and I think if you look at.

Sean Edward Quinn: National Pen for example.

Sean Edward Quinn: 1% of revenue.

Sean Edward Quinn: Where their growth is coming from is in the E. Commerce segment, Penn Dot Com and Thats been very strong growth that is becoming more and more more and more of the mix.

Sean Edward Quinn: And so I think that the if you look at the capitalized software relative to the absolute growth there and just the size of that channel now, which is going beyond $100 million and growing high teens low twenties percentage.

Sean Edward Quinn: If you look at it from that perspective, I would say that capitalized software investment has been productive.

Speaker Change: That's great. Thanks, Sean.

Speaker Change: I think I'm going to switch gears now and we're going to talk about cap structure capital allocation.

Meredith Burns: Fund stuff like that so Jon I'll stick with you for this next question.

Meredith Burns: What is the timeline for refinancing your high yield notes is there still a place for them in your future cost structure, given your new leverage policy with a lower target.

Sean Edward Quinn: And, you know, we have time before we need to make those decisions. We do like having both secured and unsecured debt in our capital structure. And so, yes, we do think there remains a place for unsecured debt. And the reasons for that are, there are a few, but diversification of the capital base is a good thing.

Meredith Burns: We haven't made decisions on either win or how we will refinance the bonds and we have time before we need to make those decisions, we do like having both secured and unsecured debt in our capital structure and so yes, we do think that remains a place for unsecured debt in the future.

Sean Edward Quinn: And the reasons for that are there are a few but diversification of the capital base is a good thing.

Sean Edward Quinn: Keep your secured capacity is a good thing and also over time gives us some optionality because we do expect that our base of profitability is going to grow and therefore.

Sean Edward Quinn: We will need to access some of these markets in the future.

Sean Edward Quinn: We don't have a specific timeline, we still have a little more than two years before our high yield notes mature.

Sean Edward Quinn: And starting in just a few months here, we can call the bonds at par and so we'll keep a close eye on on where the market's at.

Sean Edward Quinn: I think for US we're going to just continue to focus on consistent execution and what we've outlined before our leverage expectations between that and continued strong results position us to have further credit rating upgrades as well and all of that should be favorable when we eventually do come to market. So we feel like we're in a good.

Sean Edward Quinn: Spot there.

Meredith Burns: Okay, I'm going to ask Robert this next question. So, Robert, it was great to read that we repurchased 5% of the float at what we believe to be an attractive price for IVPS gaps. What IRR do we typically target with our repurchases so that we can objectively say that repurchasing a dollar of stock is a better or worse use of capital than investing a dollar in the automated process? Okay, let me just quickly answer your specific question and give some context. I'd say 15%.

Speaker Change: Thanks, Sean.

Sean Edward Quinn: Okay I'm going to ask Robert This next question.

Meredith Burns: So Robert it was great to read that we repurchased 5% of the float at what.

Meredith Burns: At what we believe to be an attractive price to IEPS gap.

Meredith Burns: What IRR do we typically target with our repurchases. So that we can objectively say that repurchasing a dollar of stock is better or worse and use of capital and investing a dollar in automating process xyz.

Meredith Burns: Okay. Let me just quickly answer your specific question and then give some context I would say, 15% and I will come back to talk about that a little bit more detail.

Robert S. Keane: And I will come back to talk about that in a little bit more detail. So I share, we share your point of view that it was an attractive price relative to intrinsic value per share. And if you look at it by other metrics, it was roughly eight times trailing 12 month EBITDA. And you can do the multiples of unlimited free cash flow or free cash flow or steady state free cash flow.

Robert: So I share we share your point of view that it was attractive price relative to our intrinsic value per share.

Robert S. Keane: And.

Robert S. Keane: If you look at it via other metrics. It was roughly eight times trailing 12 month EBITDA and you can do the multiples of our levered free cash flow or free cash flow or steady state free cash flow.

Robert S. Keane: Those are all indications that it was also an attractive price.

Robert S. Keane: Now there's a few ways, we look at returns on share repurchases.

Robert S. Keane: Again as you pointed out your question. The most important thing is what our estimate of intrinsic value per share is relative to the price we buy the shares at.

Robert S. Keane: But we also look at cash flow yield, what we expect that cash flow to grow over time relative to what we pay per share. Unknown Speaker, and, of course, alternative investments. What can we do to improve customer value to drive our competitive advantage?

Robert S. Keane: Which.

Robert S. Keane: Drive that but.

Robert S. Keane: We also look at cash flow yield what we expect that cash flow to grow over time relative to what we pay per share.

Robert S. Keane: And the.

Robert S. Keane: And of course in alternative investments what can we do to improve the customer value to drive our competitive advantage.

Robert S. Keane: We believe we should be targeting an IRR on these in excess of 15%, which we believe is happening when we look at the purchases we've made based on the information we have, and so we think that they also will have a very attractive free cash flow per share return over time. You know, going back to alternative investments, that is a really important question. We look at other opportunities where, in general, all things being equal, we'd be biased towards organic investments, be that OpEx or CapEx, first.

Robert S. Keane: We believe we should be targeting an IRR on these in excess of 15%, which we believe.

Robert S. Keane: Is happening when we.

Robert S. Keane: Look at the purchases we've made based on the information we have.

Robert S. Keane: And so.

Robert S. Keane: So we think that.

Robert S. Keane: They also will have a very attractive free cash flow per share return over time so.

Robert S. Keane: You going back to alternative investments that is a really important.

Robert S. Keane: Question, we look at other opportunities where in general all things being equal we'd be biased towards organic investments be that opex or capex first.

Robert S. Keane: When we are sticking within the leverage guidance we just provided last night and the policy we just described, and where the returns and the profitability justify those investments organically on the individual projects. So, going back to what I answered in the question before about our commentary last night in the earnings document, we're going to be making an increase we expect in CapEx in fiscal year 25, and those have very good IRRs, and we like those projects, but there are limits to how much we can do in a given period of time and also do so while ensuring operational execution.

Robert S. Keane: When we are sticking within.

Robert S. Keane: The leverage guidance, we just provided last night in the policy, we just described and where the returns and the profitability.

Robert S. Keane: Justify those investments organically on the individual projects so.

Robert S. Keane: Back to what I answered the question before about our commentary last night in the earnings document, we're going to be making an increase we expect in capex in fiscal year 'twenty five and those have very good irr's and.

Robert S. Keane: We like those projects, but there's limits to how much we can do in any given period of time.

Robert S. Keane: So do so while ensuring operational execution.

Robert S. Keane: If I step back way, we're really doing as we've said for the last 12, 18 months, staying focused on what's most important from an operational and customer improvement perspective. And when the needs for capital in that bucket get filled up, and there's excess cash that we can use to either build liquidity and bring down our debt, earn a yield, or buy shares. We will continue to do that. And once again, we think our new leverage policy and the target of continuing to deliver down towards the 2.5 mark will keep the bar high in terms of what investments we do, whether it's organic or share buyback or anything else. Thanks, Robert.

Robert S. Keane: So.

Robert S. Keane: If I step way back right now we're really.

Robert S. Keane: Doing as we've.

Robert S. Keane: <unk> said for the last 12 to 18 months stay focused on what's most important from an operational and customer improvement perspective.

Robert S. Keane: And when the needs for capital in that bucket get filled up and there is excess cash that we can use to either build liquidity.

Speaker Change: And bring down our debt.

Robert: Or earning yield or buy shares we'd continue to do that Tom and.

Robert S. Keane: Once again, we think our new leverage policy and the target of continuing to Delever down towards the two five mark.

Robert S. Keane: Keep the bar high in terms of what investments, we do whether it's organic or share buyback or anything else.

Speaker Change: Thanks Robert.

Meredith Burns: I've got a related question that I'm going to have Sean answer this time. Could you please remind us of what IRR thresholds we target for each of the capital allocation activities you identified on page three of the earnings document, namely operating expense growth investments, CapEx for new products and enhancing productivity, M&A, repurchasing shares, and debt repurchasing. Sure, I'll remind everyone what we've said in the past, and then I think there's probably a practical overlay on top of that that might even be helpful.

Speaker Change: I've got a related question.

Robert S. Keane: I can have Sean answer this time could you. Please remind us of what IRR thresholds, we target for each of the capital allocation activities you identified on page three of the earnings document, namely operating expense growth investments capex for new products and enhancing productivity and M&A.

Sean: Repurchasing shares and debt repurchases.

Meredith Burns: Sure.

Sean: Remind everyone. What we said in the past and then I think there's probably a practical overlay on top of that that might even be.

Sean Edward Quinn: So the ones that we talked about historically, and these are all risk-dependent as well, were 10% for OPEX or CAPEX investments in well-understood areas where we have a long track record of driving returns and things that are very close to how we run the business every day. 15% for M&A, profitable businesses, or for new product introduction areas that are adjacent to the ones that we know well, and then 25% for investment in either new geographies or riskier new products. And so those have been outlined in Robert's past annual letters and other venues.

Sean: More relevant so.

Sean: The ones that we've talked about historically.

Sean: These are all risk dependent as well was 10% for opex or capex investments and well understood areas, where we have a long track record of driving returns.

Sean Edward Quinn: And things that are very close close into how we run the business every day, 15% for M&A profitable businesses or for new product introduction areas that are adjacent to the ones that we know well and then 25% for investment in new geographies or risk here new product introduction.

Sean Edward Quinn: So.

Sean Edward Quinn: A lot has changed since we talked about them publicly the last time. Most importantly, the cost of debt is a bit higher. And, you know, we've also learned some lessons about some of those areas of capital allocation, in particular, new developing geographies. And so, you know, the bar there is very high.

Sean Edward Quinn: And we've also learned some lessons about some of those areas of capital allocation and in particular do developing geographies and so the bar there is very high practically speaking.

Sean Edward Quinn: Given the commentary that we gave last night and also the leverage policy that we've outlined, yeah, there's really we have a strong desire to continue to maintain our focus and operational rigor. And so practically speaking, I think organic investments should right now have a bar that's a bit higher than that, let's call it, you know, 12% plus, but some of them, like some of the capex opportunities that we see for next year, will be much higher than that and have very quick payback. So this should be very, very obvious.

Sean Edward Quinn: Given the commentary that we gave last night and also the leverage policy that we've outlined.

Sean Edward Quinn: Yes, there is really we have a strong desire to continue to maintain our focus on operational rigor and so practically speaking I think.

Sean Edward Quinn: Organic investments should right now have a bar that's been higher than that let's call it 12% plus.

Sean Edward Quinn: But some of it like some of the Capex opportunities that we see for next year.

Sean Edward Quinn: We will be will be much higher than that in very quick payback, so very very obvious.

Sean Edward Quinn: From an M&A perspective.

Sean Edward Quinn: That said, we're not considering material M&A right now and so anything that we've done there which has been relatively small or even anything that we would expect to consider in the near future, which will also be smaller.

Sean Edward Quinn: Would have that very obvious high returns and that's that's how I would classify anything that we've done in our and our very recent past.

Sean Edward Quinn: And that would be, you know, 20% plus, so it should be just extremely obvious and relatively small. For share repurchases, Robert went through that. And so I won't repeat what he went through there.

Sean Edward Quinn: That would be 20% plus so it should be just extremely obvious and relatively small for share repurchases Robert went through that and so I won't repeat what he went through there and then for debt repurchases that return thresholds bid lower.

Sean Edward Quinn: And I think I think the framework there is a bit different so if we have sufficient liquidity, which we do and we have cash on the balance sheet that.

Sean Edward Quinn: As excess cash that's earning money market return right now is let's say, 5% plus.

Sean Edward Quinn: We can compare that to buying bonds and if we can do that ended in a known yield in excess of 10%, which we've been able to do that also reduced our gross debt and there is no execution risk attached to that yet it's a no brainer and so thats been the framework we've used for those.

Sean Edward Quinn: And again, that's more of a function of cash liquidity position and then the relative opportunities to use excess cash.

Speaker Change: Thank you Sean.

Sean Edward Quinn: Alright.

Speaker Change: Another question.

Speaker Change: For Robert.

Sean Edward Quinn: Robert can you. Please elaborate on why philosophically it makes sense to run our business with two and half times leverage and not one times leverage our four times leverage.

Meredith Burns: So in summary, philosophically not four times because.

Meredith Burns: $2 five makes us much more robust and resilient and not one time, because that does have clear advantages and returns to equity and we.

Meredith Burns: I think the new policy.

Meredith Burns: <unk> the right balance between those.

Robert S. Keane: There's a lot of discussion that got it there, but when we did look at it analytically, and factoring in the possibilities of shocks to profitability, including future mega shocks like the pandemic we had four years ago, And also considering the cost of debt at different leverage levels, we pretty quickly got to the 3x leverage, and then the discussion continued from there about what the advantage of de-levering further than that. I would say it's not for Cimpress a question about optimizing tax benefits and financing costs. Because the way our corporate structure works, we don't get the benefit of all of our interest costs.

Meredith Burns: But to dive a little bit more behind that.

Meredith Burns: $2 five X.

Meredith Burns: As an approximate.

Robert S. Keane: We could go below that.

Robert S. Keane: It is not the output of a spreadsheet theres a lot of discussion that got us there.

Robert S. Keane: When we did look at it analytically.

Robert S. Keane: Okay.

Robert S. Keane: Factoring in the possibilities of shocks to profitability.

Robert S. Keane: Including future future Mega shocks like the pandemic, we had four years ago.

Robert S. Keane: Also considering the cost of debt to different leverage levels, we pretty quickly got to the three <unk> leverage and then the discussion continue from there how about let's see vantage of Delever.

Robert S. Keane: Delevering further than that.

Robert S. Keane: I'd say its not for Sim Presser question about optimizing tax benefits of financing costs because of the way our corporate structure works, we don't get benefit of.

Robert S. Keane: All of our interest cost.

Robert S. Keane: So there is a cost of capital part of this as a risk management piece from being more robust. And there is an intangible piece of this, which is, how do we want to sleep at night? And how do we want to operate the business?

Robert S. Keane: There is a cost of capital part of this as a risk management piece.

Robert S. Keane: Stepping way back to the pandemic, we were in the midst of turning around Vista when the pandemic hit, and we chose to continue that turnaround, but it led to an uncomfortably high leverage, which we've now come back out of, and we'll go further. Another factor we talked about, and again, there's no overriding factor in this conversation, but just to introduce you to some of the conversations we had in a world of real interest rates, which are materially higher.

Robert S. Keane: Being more robust.

Robert S. Keane: And there is an intangible piece of this which is.

Robert S. Keane: How do we want a sleep at night.

Robert S. Keane: How do we want to operate the business.

Robert S. Keane: Stepping way back to the pandemic, we are in the midst of turnaround restore independent market. We chose to continue we've got a turnaround, but it led to an uncomfortably high leverage which we've now come back out of it will go further.

Robert S. Keane: Another factor we talked about.

Robert S. Keane: There is no overriding factor in this conversation, but just to expose you to some of the conversations we had.

Robert S. Keane: In a world of real interest rates, which are.

Robert S. Keane: And having seen the shocks that have happened, we think the levering is just healthy and will help us through that volatility. But who knows when and if interest rates will ever get back to where they were before?

Robert S. Keane: Materially higher and.

Robert S. Keane: Having seen the shocks.

Robert S. Keane: That has happened.

Robert S. Keane: Think delevering is as healthy and will help us through that volatility.

Robert S. Keane: Who knows when and if the interest rates will ever get back to where they were before.

Robert S. Keane: Finally, I'd say that there's a lot of value in not doing unnatural things that disrupt the business. And again, we've seen that in the pandemic, we, in the very early days, had to really quickly cut costs, and then we had to go back and invest in areas we felt we needed to turn around the business for the longer term. And again, being at a lower level really helps us give us the flexibility in those types of cases, which are out of the middle of the bell curve of future events.

Robert S. Keane: Sure.

Robert S. Keane: Finally activity there is a lot of value and not doing unnatural things.

Robert S. Keane: Disrupt the business and again, we've seen that in the pandemic.

Robert S. Keane: Very early days, we had a really quickly cut costs, but then we had to go back and invest in areas. We felt we needed to turnaround the business for the longer term and again being at a lower level really helps us give us the flexibility in those types of.

Robert S. Keane: Cases, which are out of the middle of the bell curve of future events.

Robert S. Keane: That's all why to come down, going back to why we can go lower. Again, we do see a lot of opportunity to invest capital at above our cost of capital. And this level still gives us that, and therefore again, helps Ossie, in terms of returns on equity, returns on equity, and again, we don't know where we are, we're not necessarily going to pay 2.5 and stay there. We certainly have no problem with building up dry powder with operating cash flow. We'll cross that bridge when we get to it.

Robert S. Keane: That's all I had to come down going back to why Wouldnt go lower again, we do see a lot of opportunity to invest capital.

Robert S. Keane: Yes.

Robert S. Keane: Above our cost of capital and this level is still gives us that and therefore again helps.

Robert S. Keane: In terms of returns returns on equity and again, we don't know where were not going necessarily paid $2 five and stay there. We certainly have no problem with building up dry powder with.

Robert S. Keane: With operating cash flow.

Robert S. Keane: We'll cross that bridge, when we get to it.

Meredith Burns: Great. Thank you, Robert. All right, we have exhausted the list of questions from a pre-submitted and live perspective, and so I am going to ask Robert to wrap up the call. Okay, well, thank you, Meredith.

Speaker Change: Great. Thank you Robert.

Robert S. Keane: Alright, we have exhausted the list of questions from our pre submitted and live perspective, and so I am going to ask Robert to wrap up the call.

Robert S. Keane: And thank you to all of the investors for joining this call. And thank you for continuing to entrust your capital with us. We remain very focused on execution, our teams are very motivated and incentivized to continuously improve. Most importantly, the value we deliver to our customers, and we really believe in doing so, will continue to drive the financial results we deliver to our shareholders. Strategically and operationally, our significant investments over the past five years have really positioned us well for the future.

Robert: Okay, well, thank you Meredith and thank you to all of the investors for joining this call and thank you for continuing to entrust your capital with us.

Robert S. Keane: We remain very focused on execution, our team is very motivated and incentivized to continuously improve most importantly, the value we deliver to our customers and we really we've been doing so that will continue to drive the financial results, we delivered to our shareholders.

Robert S. Keane: Strategically and operationally our significant investments over the past five years have really positioned us well for the future financially speaking are strong.

Robert S. Keane: Financially speaking, our strong profitability and return to higher profitability, as we plan to do, does mean that we're going to be operating at much more comfortable levels of leverage, as I just spoke about in the last question, even as we will continue to invest in our customer value and, in doing so, continue to grow our intrinsic value per share.

Robert S. Keane: The ability to return to stronger profitability.

Robert S. Keane: And in doing so our investing and continuing to grow our intrinsic value per share.

Operator: So have a great day, everyone. Again, we appreciate your interest and trust in us. Thank you. This concludes today's conference, ladies and gentlemen. Thank you for your participation. Have a great day, and you may now disconnect.

Speaker Change: So have a great day, everyone again, we appreciate your interest and trust with us.

Speaker Change: Thank you. This concludes today's conference ladies and gentlemen, thank you for your participation.

Operator: Great Day, and you may now disconnect.

Q3 2024 Cimpress PLC Earnings Call

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