Q2 2024 Deluxe Corp Earnings Call

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Deluxe Quarterly Earnings Conference Call. All participants are currently in a listen-only mode, and today's call is being recorded. At this time, I would like to turn the conference over to your host, Vice President of Strategy and Investor Relations, Brian Anderson. Please go ahead.

Operator: Ladies and gentlemen, thank you for standing by and welcome to the Deluxe Quarterly Arne's conference call. All participants are currently in a listen-only mode, and today's call is being recorded.

Ladies and gentlemen, thank you for standing by and welcome to the Deluxe quarterly earnings Conference call. All participants are currently in a listen only mode and today's call is being recorded.

Brian Anderson: At this time, I would like to turn the conference over to your host, Vice President of Strategy and Investor Relations, Brian Anderson. Please go ahead. Thank you, operator, and welcome to the Deluxe Second Quarter 2024 Arne's call. Joining me on today's call are Barry McCarthy, our President and Chief Executive Officer, and Chip Zint, our Chief Financial Officer.

At this time I would like to turn the conference over to your host Vice President of strategy and Investor Relations. Brian Anderson. Please go ahead.

Brian Anderson: Thank you, Operator, and welcome to the Deluxe Second Quarter 2024 earnings call. Joining me on today's call are Barry McCarthy, our President and Chief Executive Officer, and Chip Zint, our Chief Financial Officer. At the end of today's prepared remarks, we will take questions.

Brian Anderson: Thank you operator, and welcome to the Deluxe second quarter 2024 earnings call.

Speaker Change: Joining me on today's call are Barry Mccarthy, our President and Chief Executive Officer, and Chip, then our Chief Financial Officer.

Brian Anderson: At the end of today, for Prairie remarks, we will take questions. Before we begin, and as seen on the current slide, I'd like to remind everyone that comments made today regarding management's intentions, projections, financial estimates, and expectations about the company's future strategy or performance are forward-looking in nature, as defined in the Private Securities Litigation Reform Act of 1995. Additional information about factors that may cause actual results to differ from projections is set forth in the press release we furnished this afternoon in our Form 10-K for the year ended December 31st, 2023, and now their company SEC filings.

Speaker Change: At the end of today's prepared remarks, we will take questions.

Brian Anderson: Before we begin, and as seen on the current slide, I'd like to remind everyone that comments made today regarding management's intentions, projections, financial estimates, and expectations about the company's future strategy or performance are forward-looking in nature, as defined in the Private Securities Litigation Reform Act of 1995. Additional information about factors that may cause actual results to differ from projections is set forth in the press release we issued this afternoon, in our Form 10-K for the year ended December 31, 2023, and in other company SEC filings.

Speaker Change: Before we begin and as seen on the current slide I'd like to remind everyone that comments made today regarding management's intentions projections financial estimates and expectations about the company's future strategy or performance are forward looking in nature as defined in the private Securities Litigation Reform Act of 1995 <unk>.

Speaker Change: Additional information about factors that may cause actual results to differ from projections is set forth in the press release, we furnished this afternoon. Our Form 10-K for the year ended December 31, 2023, and in other company SEC filings.

Brian Anderson: On the call today, we will discuss non-GAAP financial measures, including comparable adjusted revenue, adjusted and comparable adjusted EBITDA and EBITDA margin, adjusted and comparable adjusted EPS, and free cash flow. In our press release, today's presentation, and our filings with the SEC, you will find additional disclosures regarding the non-GAAP measures, including reconciliation of these measures to the most comparable measures under US GAAP. Within the materials, we are also providing reconciliation of GAAP EPS to comparable adjusted EPS, which may assist with your modeling.

Brian Anderson: On the call today, we will discuss non-GAAP financial measures, including comparable adjusted revenue, adjusted and comparable adjusted EBITDA and EBITDA margin, adjusted and comparable adjusted EPS, and free cash flow. In our press release, today's presentation, and our filings with the SEC, you'll find additional disclosures regarding these non-GAAP measures, including reconciliation of these measures to the most comparable measures under U.S. GAAP. Within the materials, we are also providing reconciliations of GAP EPS to comparable adjusted EPS, which may assist with your modeling. And with that, I'll turn it over to Barry.

Speaker Change: On the call today, we will discuss non-GAAP financial measures, including comparable adjusted revenue.

Speaker Change: Adjusted and comparable adjusted EBITDA, and EBITDA margin, adjusted and comparable adjusted EPS and free cash flow in.

Speaker Change: In our press release todays presentation, and our filings with the SEC you will find additional disclosures regarding the non-GAAP measures, including reconciliations of these measures to the most comparable measures under U S. GAAP.

Speaker Change: Within the materials. We are also providing reconciliations of GAAP EPS to comparable adjusted EPS, which may assist with your modeling.

Barry McCarthy: And with that, I'll turn it over to Barry. Thanks, Brian, and good evening everyone. I'm pleased to report our second quarter results reflecting sustained earnings momentum across the enterprise, including continued year-over-year improvement to both comparable adjusted EBITDA dollars and rate, which improved 80 basis points to 19% during the period. We also continue to deliver strong operating cash flows, reflecting expected sequential growth versus our first quarter results at a very robust year-to-date improvement versus the first half of 2023. These results are reflective of our continuing strong execution across core capital allocation priorities and initiatives of our North Star operating plan.

Speaker Change: With that I'll turn it over to Barry.

Barry C. McCarthy: Thanks, Brian, and good evening, everyone. I'm pleased to report our second quarter results reflecting sustained earnings momentum across the enterprise, including continued year over year improvement to both comparable adjusted EBITDA dollars and rate, which improved 80 basis points to 19% during the period. We also continue to deliver strong operating cash flows, reflecting expected sequential growth versus our first quarter results and a very robust year-to-date improvement versus the first half of 2023.

Barry C. McCarthy: Thanks, Brian and good evening, everyone I'm pleased to report our second quarter results, reflecting sustained earnings momentum across the enterprise, including continued year over year improvement to both comparable adjusted EBITDA dollars and rate, which improved 80 basis point.

The 19% during the period.

Barry C. McCarthy: We also continued to deliver strong operating cash flows.

The expected sequential growth versus our first quarter results at a very robust year to date improvement versus the first half of 2023.

Barry C. McCarthy: These results are reflective of our continuing strong execution across core capital allocation priorities and initiatives of our North Star Operating Plan. These efforts are accelerating the growth of these key profitability metrics and further demonstrate our ability to consistently expand earnings faster than revenue. During the quarter, we continue to deliver strong revenue results across both the data solutions and merchant services segments, in particular, reflecting year-to-day growth rates through the first half of 2024 at 13% and 8%, respectively, which I'll cover a bit more in a few moments. Accompanying this growth, we also experienced some ongoing revenue headwinds across the B2B payment segment, as well as expected secular declines within the print portfolio.

Barry C. McCarthy: These results are reflective of our continuing strong execution across core capital allocation priorities and initiatives of our norstar operating plan.

Barry McCarthy: These efforts are accelerating the growth of these key profitability metrics and further demonstrate our ability to consistently expand earnings faster than revenue. During the quarter, we continue to deliver strong revenue results across both the data solutions and merchant services segments, in particular. Reflecting year-to-day growth rates through the first half of 2024 at 13% and 8%, respectively, which I'll cover up a bit more in a few moments. Accompanying this growth, we also experienced some ongoing revenue headwinds across the B2B payment segment, as well as expected secular declines within the print portfolio.

Barry C. McCarthy: The efforts are accelerating the growth of these key profitability metrics and further demonstrate our ability to consistently expand earnings faster than revenue.

Barry C. McCarthy: During the quarter, we continued to deliver strong revenue results across both the data solutions and merchant services segments in particular reflect our year to date growth rates through the first half of 2024 at 13% and 8%, respectively, which I'll cover a bit more in a few moments.

Barry C. McCarthy: Accompanying this growth we also experienced some ongoing revenue headwinds across the BW payment segment as well as expected secular declines with them the <unk> portfolio.

Barry McCarthy: Radio. Based on these trends and our updated outlook, today we're pleased to reaffirm our full-year guidance ranges for earnings and free cash flow. We're modestly adjusting our revenue range, given some lingering macro uncertainty over the balance of the year. Importantly, each of our operating segments has continued to maintain strong year-to-date adjusted EBITDA margins in line with both the operating leverage demonstrated in our total enterprise results and Norstar objectives.

Barry C. McCarthy: Based on these trends and our updated outlook, today we're pleased to reaffirm our full-year guidance ranges for earnings and free cash flow. We're modestly adjusting our revenue range, given some lingering macro uncertainty over the balance of the year. Importantly, each of our operating segments has continued to maintain strong year-to-date adjusted EBITDA margins in line with both the operating leverage demonstrated in our total enterprise results and North Star objectives. Now, prior to reviewing our second quarter enterprise and segment highlights in a bit more detail, I'd like to provide a couple of additional comments on the broader macro environment and our North Star progress.

Barry C. McCarthy: Based on these trends and our updated outlook today, we're pleased to reaffirm our full year guidance ranges for earnings and free cash flow.

Barry C. McCarthy: We are modestly adjusting our revenue range, given some lingering macro uncertainty over the balance of the year.

Barry C. McCarthy: Importantly, each of our operating segments has continued to maintain strong year to date adjusted EBITDA margins in line with both the operating leverage demonstrated in our total enterprise results.

Barry C. McCarthy: And Northstar objectives.

Barry McCarthy: Now, prior to reviewing our second quarter enterprise and segment highlights in a bit more detail, I'd like to provide a couple of additional comments on the broader macro environment and our Norstar progress. As we discussed previously, Deluxe monitors trends are on both small business sentiment and consumer discretionary spending, as well as the interest rate environment. We review many sources of data, including from the card brands, Stunder Reserve, and other economic forecast providers, as well as our own proprietary data. These trends impact multiple areas of our portfolio. While our year-to-date performance reflected a generally stable economic environment, there remained some signs of continued pressure on the average consumer.

Barry C. McCarthy: Prior to reviewing our second quarter enterprise and segment highlights in a bit more detail I'd like to provide a couple of additional comments on the broader macro environment and our Northstar progress.

Barry C. McCarthy: As we've discussed previously, Deluxe monitors trends around both small business sentiment and consumer discretionary spending, as well as the interest rate environment. We review many sources of data, including from the card brands, the Federal Reserve, and other economic forecast providers, as well as our own proprietary data.

Barry C. McCarthy: As we've discussed previously.

Barry C. McCarthy: Lots of monitors trends around both small business sentiment and consumer discretionary spending.

Barry C. McCarthy: As well as the interest rate environment.

Barry C. McCarthy: We reviewed many sources of data, including from the card brands Thunder Reserve and other economic forecast providers as well as our own proprietary data.

Barry C. McCarthy: These trends impact multiple areas of our portfolio. While our year-to-date performance reflected a generally stable economic environment, there remain some signs of continued pressure on the average consumer. In our merchant segments, we have seen some elevated trends toward non-discretionary spend compared with discretionary spend. And in certain market verticals, we have seen flattening of same-store sales. Similarly, demand for some short-cycle discretionary promo products has also softened

Barry C. McCarthy: These trends impact multiple areas of our portfolio.

Barry C. McCarthy: While our year to date performance reflected a generally stable economic environment. There remains some signs of continued pressure on the average consumer.

Barry McCarthy: In our merchant segments, we have seen some elevated trends toward non-discretionary spend compared with discretionary spend, and in certain market verticals, we have seen flattening of same-store sales. Similarly, demand for some short-cycle discretionary promo products has also softened. As a result of these data points and lingering macro uncertainty within the balance of year economic forecasts, we believe our revenue performance made trend to the low end of our original full-year guidance range, leading to our adjustments today. In line with our Norstar execution to date, we remain confident that our profitability outlook remained solidly within our reaffirmed guidance range, inclusive of free cash flow generation.

Barry C. McCarthy: In our merchant segment, we have seen some elevated trends towards non discretionary spend compared with discretionary spend and uncertain market verticals. We have seen flattening of same store sales.

Barry C. McCarthy: Similarly demand from some short cycle discretionary promo products has also softened.

Barry C. McCarthy: As a result of these data points and lingering macro uncertainty within the balance of year economic forecast, we believe our revenue performance may trend to the low end of our original full year guidance range, leading to our adjustments today. However, in line with our North Star execution to date, we remain confident that our profitability outlook remains solidly within our reaffirmed guidance range, inclusive of free cash flow generation. Shifting now to North Star Progress.

Barry C. McCarthy: As a result of these data points and lingering macro uncertainty within the balance of year economic forecasts. We believe our revenue performance may trend to the low end of our original full year guidance range.

Barry C. McCarthy: Leading to our adjustments today.

Barry C. McCarthy: In line with our norstar execution to date, we remain confident that our profitability outlook remained solidly within our reaffirmed guidance range inclusive of free cash flow generation.

Barry McCarthy: Shifting now to Norstar progress, the enterprise continues to execute well against both cost optimization and revenue-enhancing initiatives spanning the holistic Norstar multi-year execution plan. As a reminder, our Norstar goal remains to unlock $80 million of incremental adjusted EBITDA and $100 million of annualized incremental free cash flow, both by 2026. Consistent with my update following the first quarter, we've continued to make meaningful progress across all 12 Norstar workstreams shown here. Initiatives comprising roughly two-thirds of our goal are moving through the execution phase. Benefit realization will be reflected over both the back half of this year and throughout 2025 as execution progresses.

Barry C. McCarthy: Shifting now to Northstar progress.

Barry C. McCarthy: The enterprise continues to execute well against both cost optimization and revenue enhancing initiatives spanning the holistic NorthStar multi-year execution plan. As a reminder, our NorthStar goal remains to unlock $80 million of incremental adjusted EBITDA and $100 million of annualized incremental free cash flow, both by 2026. Consistent with my updates following the first quarter, we've continued to make meaningful progress across all 12 North Star workstreams shown here. Initiatives comprising roughly two-thirds of our goal are moving through the execution phase.

Barry C. McCarthy: The enterprise continues to execute well against both cost optimization and revenue enhancing initiatives spanning the holistic northstar multiyear execution plan.

Barry C. McCarthy: As a reminder, our northstar goal remains to unlock $80 billion of incremental adjusted EBITDA and $100 million of annualized incremental free cash flow both by 2026.

Barry C. McCarthy: Consistent with my update following the first quarter, we've continued to make meaningful progress across all 12 Northstar work streams shown here.

Barry C. McCarthy: Initiatives comprising roughly two thirds of our goal are moving through the execution phase benefit realization will be reflected over both the back half of this year and throughout 2025 as execution progresses.

Barry C. McCarthy: Benefit realization will be reflected over both the back half of this year and throughout 2025 as execution progresses. One of the simplest ways to see our North Star progress is via the continued decline in corporate segment expense as a percent of total company revenue. Since we began the program, we've improved that metric by roughly 100 basis points. We're also pleased to advise that our more complex workstreams, planned to begin later in our process, are now fully in flight, along with each of the work streams shown toward the top of the chart.

Barry McCarthy: One of the simplest ways to see our Norstar progress is that they continue to decline in corporate segment expense as a percent of total company revenue.

Barry C. McCarthy: What are the simplest ways to see our norstar progress you'll see the continued decline in corporate segment expense as a percent of total company revenue.

Barry McCarthy: Nu. Since we began the program, we've improved that metric by roughly 100 basis points. We're also pleased to advise that our more complex work streams plan to begin later in our process are now fully inflite, along with each of the work streams shown toward the top of the trucks. One notable Q2 example of execution within the marketing effectiveness work stream was the consolidation of all six brands acquired as part of First American into one unified brand, Deluxe Merchant Services. This will improve our marketing efficiency and performance. Additionally, this brand consolidation will further leverage and simplify our one Deluxe go-to-market success in driving crossover.

Barry C. McCarthy: Since we began the program we've improved that metric by roughly 100 basis points.

Barry C. McCarthy: We're also pleased to advise that are more complex work streams planned to begin later in our process are now fully in flight along with each of the work streams shown towards the top of the chart.

Barry C. McCarthy: One notable Q2 example of execution within the marketing effectiveness workstream was the consolidation of all six brands acquired as part of First American into one unified brand, Deluxe Merchant Service. This will improve our marketing efficiency and performance. Additionally, this brand consolidation will further leverage and simplify our One Deluxe go-to-market success in driving cross-sell.

Barry C. McCarthy: One notable Q2 example of execution within the marketing effectiveness work stream.

Barry C. McCarthy: The consolidation of all six brands.

Barry C. McCarthy: Wired as part of first American into one unified brand Deluxe merchant services.

Barry C. McCarthy: This will improve our marketing efficiency and performance.

Barry C. McCarthy: Additionally, this branch consolidation will further leverage and simplify our one deluxe go to market success in driving cross sell even before the brand consolidation. The one deluxe model has been helping drive merchant growth as evidenced by the segment's performance which was materially.

Barry C. McCarthy: Even before the brand consolidation, the One Deluxe model has been helping drive merchant growth as evidenced by the segment's performance, which has materially improved since the acquisition in June of 2021. Now, to provide some additional details about our second quarter performers. As a reminder, and consistent with our prior calls, today's comments will be discussing comparable adjusted results for the quarter and year-to-date periods, which we believe best reflect our ongoing business performance. Chip will review both our reported, consolidated, and comparable adjusted results to provide additional perspective.

Barry McCarthy: Even before the brand consolidation, the one Deluxe model has been helping drive merchant growth, as evidenced by the segment's performance, which has materially improved since the acquisition in June of 2021.

Barry C. McCarthy: Improved since the acquisition in June of 2021.

Barry McCarthy: Now to provide some additional details about our second quarter performance. As a reminder and consistent with our prior calls, today my comments will be discussing comparable adjusted results for the quarter and year-to-date periods, which we believe best reflect our ongoing business performance. Chip will review both our reported, consolidated, and comparable adjusted results to provide additional perspectives. For the second quarter, net of business exits, revenue is $535 million, which reflected in the client of 3% year over year. As I noted during my introductory comments, this top line result was just a bit below our overall plan for the first half of the year.

Barry C. McCarthy: Now to provide some additional details about our second quarter performance.

Speaker Change: As a reminder, and consistent with our prior calls today my comments will be discussing comparable adjusted results for the quarter and year to date periods, which we believe best reflect our ongoing business performance.

Speaker Change: Chip will review, both our reported consolidated and comparable adjusted results to provide additional perspective.

Barry C. McCarthy: For the second quarter, net of business exits, revenue was $535 million, which reflected a decline of 3% year over year. As I noted during my introductory comments, this top line result was just a bit below our overall plan for the first half of the year. The specific period included both expected softness in B2B and the promotional portion of print, in addition to some prior year comparable timing impacts in the data cycle.

Chip: For the second quarter net of business exits revenue was $535 million, which reflected a decline of 3% year over year.

Chip: As I noted during my introductory comments. This top line result was just a bit below our overall plan for the first half of the year.

Barry McCarthy: The specific period included both expected softness and B2B and the promotional portion of print in addition to some prior year comparable timing impacts in the data segment. Despite some of these top line challenges, total adjusted EBITDA dollars increased 1.6 percent from the second quarter of 2023 to $102 million, continuing to reflect robust operating leverage at the enterprise level, as I noted in my opening comments. Adjusted EBITDA margins finished the quarter at 19 percent, reflecting continuation of the Q1 year-over-year expansion dynamics and growing by 80 basis points versus the prior year. At a year-to-date basis, comparable adjusted EBITDA margins have expanded by 90 basis points, while free cash flow improved by more than $26 million from the year-to-date 2023 figure.

Chip: The specific periods included both expected softness in B to B and the promotional portion of print. In addition to some prior year comparable timing impacts in the data segment.

Barry C. McCarthy: Despite some of these top line challenges, total adjusted EBITDA dollars increased 1.6% from the second quarter of 2023 to $102 million, continuing to reflect robust operating leverage at the enterprise level, as I noted in my opening comment. Adjusted EBITDA margins finished the quarter at 19%, reflecting continuation of the Q1 year-over-year expansion dynamics and growing by 80 basis points versus the prior year. On a year-to-date basis, Comparable Adjusted EBITDA margins have expanded by 90 basis points, while free cash flow improved by more than $26 million from the year-to-date 2023 figure. We remain particularly pleased with these adjusted EBITDA and cash flow results, further demonstrating our progress against Northstar. Moving on to some segment highlights, beginning with Merchant Service. In the second quarter, merchant segment revenue grew 7.7%.

Chip: Despite some of these top line challenges total adjusted EBITDA dollars increased one 6% from the second quarter of 2000 $23 million to $102 million.

Speaker Change: Kimberly to reflect robust operating leverage at the enterprise level as I noted in my opening comments.

Speaker Change: Adjusted EBITDA margins finished the quarter at 19%.

Speaker Change: Electing continuation of the Q1 year over year expansion dynamics and growing by 80 basis points versus the prior year.

Speaker Change: On a year to date basis comparable adjusted EBITDA margins have expanded by 90 basis points, while free cash flow improved by more than $26 million from the year to date 2023 figure.

Barry McCarthy: We remain particularly pleased with these adjusted EBITDA and cash flow results for the demonstrating our progress against North Star.

Speaker Change: We remain particularly pleased with these adjusted EBITDA and cash flow results further demonstrating our progress against Northstar.

Barry McCarthy: Moving on to some segment highlights, beginning with merchant services. To the second quarter, merchant segment revenue grew 7.7 percent, while the adjusted EBITDA dollars grew 11 percent. and margins continued to approve, expanding by 60 basis points from the second quarter of 2023, accompanying the continued strong revenue trajectory. The merchant business continues to benefit from both core processing volume, as well as new customer wins across our obni-channel solutions, offered both via our direct and independent salary resources and our expanding network of FI and integrated software vendors or ISV partners. Shift into results within the B2B payment segment, we saw a year-over-year decline of 8% for B2B revenue, consistent with the overall first-quarter trajectory.

Chip: Moving on to some segment highlights beginning with merchant services.

Chip: So the second quarter merchant segment revenue grew seven 7%.

Barry C. McCarthy: Well adjusted either way, the dollars grew 11%, and margins continue to improve, expanding by 60 basis points from the second quarter of 2023, accompanying the continued strong revenue trajectory. The merchant business continues to benefit from both core processing volume, as well as new customer wins across our omnichannel solution, offered both via our direct and independent selling resources and our expanding network of FI and integrated software vendors, or ISV. Moving to results within the B2B payment segment. We saw year-over-year declines of 8% for B2B revenue, consistent with the overall first quarter trajectory.

Chip: While adjusted EBITDA dollars grew 11% and margins continued to improve expanding by 60 basis points from the second quarter of 2023 accompanying the continued strong revenue trajectory.

Speaker Change: The merchant business continues to benefit from both core processing volume as well as new customer wins across our omni channel solutions offer both via our direct and independent selling resources and our expanding network of Phi and integrated software vendors, our Isd partners.

Speaker Change: Shifting to results within the BTB payments segment, we saw a year over year declines of 8% for <unk> revenue.

Speaker Change: With the overall first quarter trajectory.

Barry McCarthy: We continue to expect material improvement, and our B2B growth rate over the second half of the year. As we've shared on our previous calls, we're transitioning this business toward a recurring software as a service or SaaS model, thereby reducing our dependency on one-time non-repeating revenue. We also experienced a bit of base volume softness across the lock box space. The year-to-date impact has been less revenue, but a 60 basis point increase in margins. Over the past three quarters, we've also signed four major new lock box clients, all of which will go live over the course of the second half, expected to contribute more than $20 million in annualized recurring revenue, offsetting secular declines.

Barry C. McCarthy: We continue to expect material improvement in our B2B growth rate over the second half of the year. As we've shared on previous calls, we're transitioning this business toward a recurring software as a service or SAS model, thereby reducing our dependency on one-time, non-recurring revenue. We also experienced a bit of bass volume softness across the lockbox space.

Speaker Change: We continue to expect material improvement in our <unk> growth rate over the second half of the year.

Speaker Change: As we've shared on our previous calls we're transitioning this business towards recurring software as a service or SaaS model, thereby reducing our dependency on one time nonrecurring revenue.

Speaker Change: We also experienced a bit of base volume softness across the lock box space.

Barry C. McCarthy: The year-to-date impact has been less revenue, but a 60 basis point increase in market. Over the past three quarters, we've also signed four major new lockbox clients, all of which will go live over the course of the second half, expected to contribute more than $20 million in annualized recurring revenue, offsetting secular decline. The combination of these wins and the growing pipeline for our new products gives us confidence in the expected revenue rebound ahead.

Speaker Change: The year to date impact has been less revenue, but a 60 basis point increase in margins.

Speaker Change: Over the past three quarters. We've also filed for major new lockbox clients all of which will go live over the course of the second half.

Speaker Change: I expect it to contribute more than $20 million in annualized recurring revenue offsetting secular declines the combination of these wins and the growing pipeline for our new products gives us confidence in the expected revenue trajectory rebound ahead.

Barry McCarthy: The combination of these wins and the growing pipeline for our new product gives us confidence in the expected revenue trajectory rebound ahead.

Barry McCarthy: Moving now to data solutions, which continue to deliver strong results during the second quarter. You will recall this business has quarter-quarter lumpiness based on the timing of customer play at a marketing spend. We see the best view of data's growth trajectory remains through a multi-quarter lens. During the second quarter, the core data to have a marketing or a DDM business left a very tough revenue comp from 2023, resulting in a 3.2% decline for the specific period. Year-to-date revenue growth for data was 13% through the first six months of this year, highlighting strong demand for FI and non-FI customers.

Barry C. McCarthy: Moving now to data, which continued to deliver strong results during the second quarter. You will recall this business has quarter to quarter lumpiness based on the timing of customer plans and marketing. Which is the best view of data's growth trajectory remains through a multi-quarter lens? During the second quarter, the Core Data-Driven Marketing, or DDM, business lapped a very tough revenue comp from 2023, resulting in a 3.2% decline for the specific period. Year-to-date revenue growth for data was 13% in the first six months of this year, highlighting strong demand from FI and non-FI customers.

Speaker Change: Moving now to data solutions, which continued to deliver strong results during the second quarter.

Speaker Change: You will recall this business quarter to quarter Lumpiness based on the timing of customer plan to marketing spend.

Speaker Change: We think the best view of Data's growth trajectory remains through a multi quarter lens.

Speaker Change: During the second quarter.

Speaker Change: Core data driven marketing, our DDS business led to a very tough revenue comp from 2023, resulting in a three 2% decline for the specific period.

Speaker Change: Year to date revenue growth for data was 13% through the first six months of this year, highlighting strong demand for EFI and non <unk> customers.

Barry McCarthy: This growth is helping to deliver strong margin expansion, and we remain confident the segment will deliver full year mid- to high-single-digit growth in line with our anticipated longer term expectations.

Barry C. McCarthy: This growth is helping to deliver strong margin expansion, and we remain confident the segment will deliver full-year mid- to high-single-digit growth in line with our anticipated longer-term expectations. Shifting finally to our, this business experienced a revenue decline of 4.8% during the second quarter to $309 million, while adjusted EBITDA margins held at 30% in line with our longer-term outlook for the combined print portfolio. To be very clear, Legacy Check performed well, with most of the softness occurring in the short cycle discretionary promo. On a year-to-date basis, legacy check revenues remain strong at $358 million, reflecting a 2% decline from the prior year six-month period.

Speaker Change: This growth is helping to deliver strong margin expansion and we remain confident the segment will deliver full year mid to high single digit growth in line with our anticipated longer term expectations.

Barry McCarthy: Shifting finally to our print segment. This business experience a revenue decline of 4.8% during the second quarter to $309 million, while the adjusted EBITDA margins held at 30%. In line with our longer-term outlook for the combined print portfolio. To be very clear, Legacy Check performed well, with most of the softness occurring in the short cycle discretionary promo business. On a year-to-date basis, Legacy Check revenues remained strong at $358 million, reflecting a 2% decline from the prior year six-month period. Promo-Revenue softness was a bit more than expected, but roughly in line with our forecasted trajectory as we continue to focus on a higher margin printed offerings, which are more impacted by macro market trends.

Speaker Change: Shifting finally to our print cycle.

Speaker Change: This business experienced a revenue decline of four 8% during the second quarter to $309 million.

Speaker Change: While adjusted EBITDA margins held up 30%.

Speaker Change: Line with our longer term outlook for the combined print portfolio.

Speaker Change: To be very clear legacy check performed well with most of the softness occurring in the short cycle discretionary promo business.

Speaker Change: On a year to date basis legacy check revenues remained strong at $358 million, reflecting a 2% decline from the prior year six month period.

Barry C. McCarthy: Promo revenue softness was a bit more than expected, but roughly in line with our forecasted trajectory as we continue to focus on higher-margin printed offerings, which are more impacted by macro market trends. Overall, we continue to manage the print portfolio to maximize cash flow through operating efficiencies, pricing actions, and responsible investment.

Speaker Change: Promo revenue softness was a bit more than expected, but roughly in line with our forecasted trajectory as we continue to focus on higher margin printed offerings, which are more impacted by macro market trends.

Barry McCarthy: Overall, we continue to manage the print portfolio to maximize cash flow through operating efficiencies, pricing actions, and responsible investments.

Speaker Change: Overall, we continue to manage the print portfolio to maximize cash flow through operating efficiencies pricing actions and responsible investments.

Barry McCarthy: To summarize, our overall second quarter results and particularly our earnings expansion demonstrate our continuing transformation and North Star progress. While much work remains to fully execute against our second half goals and targets, our consistent and sustained pace of progress creates even greater confidence in our bright future as a payments and data company. We remain diligently focused on our multi-year capital allocation priorities, building from our first half progress.

Barry C. McCarthy: To summarize, our overall second quarter results, and particularly our earnings expansion, demonstrate our continuing transformation and North Star progress. While much work remains to fully execute against our second half goals and targets, our consistent and sustained pace of progress creates even greater confidence in our bright future as a payments and data company. We remain diligently focused on our multi-year capital allocation priorities, building from our first half progress. Finally, before passing this to Chip, I want to acknowledge and thank all my fellow deluxers, whose continuing dedication to our customers and to the delivery of our innovative product and service offerings remains the critical enabler toward our realization of the second quarter and year-to-date results. With that, I'll turn it over to Chip. Thank you, Barry, and good evening, everyone.

Speaker Change: To summarize our overall second quarter results and particularly our earnings expansion.

Speaker Change: <unk> straight, our continuing transformation and Northstar progress.

Speaker Change: While much work remains to fully execute against our second half goals and targets, our consistent and sustained pace of progress creates even greater confidence in our bright future as a payments and data company.

Speaker Change: We remain diligently focused on our multiyear capital allocation priorities building from our first half progress.

Barry McCarthy: Finally, before passing this to Chip, I want to acknowledge and thank all my fellow deluxers whose continuing dedication to our customers and to the delivery of our innovative product and service offerings remains the critical enabler toward our realization of the second quarter and year-to-date results.

Mr. Chip: Finally, before passing of Mr. Chip I want to acknowledge and thank all of my fellow deluxe.

Speaker Change: Continuing dedication to our customers and to the delivery of our innovative product and service offerings remains a critical enabler toward our realizations of the second quarter and year to date results.

Chip Zint: With that, I'll try it over to Chip. Thank you, Barry, and good evening, everyone. As Barry noted in his opening, we were pleased with our second quarter progress, particularly our year-to-date free cash flow generation and our continued year-over-year comparable-adjusted EBITDA and EPS growth during the period. As customary, I'll begin today with a bit of additional color around our consolidated highlights for the period. Before moving on to the segment results, our balance sheet and cash flow progress in our four-year 2024 guidance. For the quarter, on a reported basis, we posted total revenue of $538 million, down 5.9% inclusive of the impact of our prior year exits, while declining 3% year-over-year on a comparable-adjusted basis.

Speaker Change: With that I'll turn it over to chip.

Chip: Thank you Barry and good evening everyone.

William Zint: As Barry noted in his opening, we were pleased with our second quarter progress, particularly our year-to-date free cash flow generation and our continued year-over-year comparable adjusted EBITDA and EPS growth during the period. As customary, I'll begin today with a bit of additional color around our consolidated highlights for the period before moving on to the segment results, our balance sheet and cash flow progress, and our full year 2024 guidance. For the quarter, on a reported basis, we posted total revenue of $538 million, down 5.9%, inclusive of the impact of our prior year exit, while declining 3% year-over-year on a comparable adjusted basis.

Chip: As Barry noted in his opening we were pleased with our second quarter progress, particularly our year to date free cash flow generation and our continued year over year comparable adjusted EBITDA and EPS growth during the period.

Chip: As customary I'll begin today with a bit of additional color around our consolidated highlights for the period before moving on to the segment results our balance sheet and cash flow progress in our full year 2020 for guidance.

Speaker Change: For the quarter on a reported basis, we posted total revenue of $538 million down.

Speaker Change: Down five 9% inclusive of the impact of our prior year exits.

Speaker Change: While declining 3% year over year on a comparable adjusted basis.

Chip Zint: We have now fully lapped the divestiture of our North American web hosting business and expect the impacts of exits to be lower in the back half of the year as we finish transitioning the payroll business. We reported gap net income of 20.5 million dollars, or 46 cents per share, for the period, improving from $16.4 million, or 37 cents per share, in the second quarter of 2023. This increase was driven by improved operating results, including both lower SG&A and restructuring-related expense. Comparable-adjusted EBITDA was $101.8 million, up 1.6% versus the second quarter of last year. Comparable-adjusted EBITDA margins were 19%, improving 80 basis points versus the second quarter of 2023, as Barry noted.

William Zint: We have now fully lapped the divestiture of our North American web hosting business and expect the impacts of exits to be lower in the back half of the year as we finish transitioning the payroll business. We reported a net income of $20.5 million or $0.46 per share for the period, improving from $16.4 million or $0.37 per share in the second quarter of 2023.

Speaker Change: We have now fully lapped the divestiture of our North American web hosting business and expect the impacts of exits to be lower in the back half of the year as we finished transitioning the payroll business.

Speaker Change: We reported GAAP net income of $25 million or <unk> 46 per share for the period, improving from $16 4 million or <unk> 37 per share in the second quarter of 2023.

William Zint: This increase was driven by improved operating results, including both lower SG&A and restructuring-related expenses. Comparable Adjusted EBITDA was $101.8 million, up 1.6% versus the second quarter of last year. Comparable adjusted EBITDA margins were 19%, improving 80 basis points versus the second quarter of 2023, as Barry noted. Q2 comparable adjusted diluted EPS came in at $0.85, improving from $0.81 in 2023, primarily driven by the operating income drivers previously noted. Now turning to our operating segment details, beginning with the Merchant Services business.

Speaker Change: This increase was driven by improved operating results, including both lower SG&A and restructuring related expense.

Speaker Change: Comparable adjusted EBITDA was $101 8 million up one 6% versus the second quarter of last year.

Speaker Change: Comparable adjusted EBITDA margins were 19%, improving 80 basis points versus the second quarter of 2023 as Barry noted.

Chip Zint: Q2, comparable-adjusted diluted EPS came in at 85 cents, improving from 81 cents in 2023, primarily driven by the operating income drivers previously noted.

Speaker Change: Q2 comparable adjusted diluted EPS came in at 85.

Speaker Change: Improving from 81 in 2023, primarily driven by the operating income drivers previously noted.

Chip Zint: David. Now, turning to our operating segment details, beginning with the Merchant Services business. The Merchant business grew 2nd quarter revenue by 7.7% year over year to $98.5 million, reflecting strong year-to-date performance. Segment adjusted EBITDA finished at $19.2 million, improving $1.9 million or 11% versus the prior year, with margins expanding 60 basis points to finish at 19.5%. Mainly driven by the continued strong growth of revenue, and resulting operating cost leverage across the expanding platform. The Merchant business continued to benefit from new merchant ads, and their presence spanning a diversified set of category verticals. Merchant remains well positioned to deliver our mid to high single-digit revenue growth and low 20% adjusted EBITDA long-term outlook.

Speaker Change: Now turning to our operating segment details beginning with the merchant services business.

William Zint: The merchant business grew second quarter revenue by 7.7% year over year to $98.5 million, reflecting strong year-to-date performance. Segment adjusted EBITDA finished at $19.2 million, improving 1.9 million or 11% versus the prior year, with margins expanding 60 basis points to finish at 19.5%, mainly driven by the continued strong growth of revenue and resulting operating cost leverage across the expanding platform. The merchant business continued to benefit from new merchant ads and their presence on a diversified set of category verticals.

Speaker Change: The merchant business grew second quarter revenue by seven 7% year over year to $98 $5 million, reflecting strong year to date performance.

Speaker Change: Segment, adjusted EBITDA finished at $19 2 million, improving $1 9 million or 11% versus the prior year with margins expanding 60 basis points to finish at 19, 5%, mainly driven by the continued strong growth of revenue and resulting operating cost leverage across.

Speaker Change: The expanding platform.

Speaker Change: The merchant business continued to benefit from new merchant ads and their presence spanning a diversified set of category verticals.

William Zint: Merchant remains well positioned to deliver our mid to high single-digit revenue growth and low 20% adjusted EBITDA long-term outlook. As we have noted, potential second-half moderation of macro-level spending trends and our Q4 lapping of the large mid-market FI partner conversion previously discussed are likely to result in some back-half easing of growth rates versus the year-to-date levels. Moving to B2B payment.

Speaker Change: <unk> remains well positioned to deliver our mid to high single digit revenue growth and low 20% adjusted EBITDA long term outlook.

Chip Zint: As we've noted, potential 2nd half moderation of macro-level spending trends, and our Q4 lapping of the large mid-market FI partner conversion previously discussed, are likely to result in some back half easing of growth rates versus the year-to-date levels. Moving to B2B payments, for the 2nd quarter, B2B segment revenue finished at $70.2 million, sequentially improving from the first quarter, but down from $76.3 million during 2023. Overall, remittance volumes were slightly lower than expectations, with lockbox revenues declining roughly 4% during the quarter. While the balance of the B2B offerings continued to lapse in prior year and non-recurring sales from 2023, resulting in an overall 8% decline year-over-year.

Speaker Change: As we've noted potential second half moderation of macro level spending trends and our Q4 lapping of the large mid market at Phi partner conversion previously discussed are likely to result in some back half easing of growth rates versus the year to date levels.

Speaker Change: Moving to BTB payments for the second quarter <unk> segment revenue finished at $70 $2 million sequentially, improving from the first quarter, but down from $76 $3 million during 2023.

William Zint: For the second quarter, B2B segment revenues finished at $70.2 million, sequentially improving from the first quarter, but down from $76.3 million during 2023. Overall remittance volumes were slightly below expectations, with lockbox revenues declining roughly 4% during the quarter, while the balance of the B2B offerings continued to lapse in prior year non-recurring sales from 2023, resulting in an overall 8% decline year-over-year. In line with some of the year-over-year revenue headwinds within the segment, Adjusted EBITDA declined 7.9% from 2023 to finish at $14 million, while margins remained flat at 19.9%.

Speaker Change: Overall remittance volumes were slightly below expectations with lockbox revenues declining roughly 4% during the quarter, while the balance of the BTB offerings continue to lap some prior year nonrecurring sales for 2023, resulting in an overall, 8% decline year over year.

Chip Zint: In line, some of the year-rear revenue headwinds within the segment adjusted EBITDA declined 7.9% from 2023 to finish at $14 million, while margins remained flat at 19.9%. As Barry noted, year-to-date adjusted EBITDA margins of 19.5% reflected an overall 60 basis points improvement versus the first half of 2023, as we sustained our focus on operational efficiencies during the transition of this operating segment toward an increasingly SaaS-based set of product offerings. Based on these year-to-date results, we now anticipate a full-year, low single-digit revenue decline rate for this segment, which is included in our updated revenue guidance. We remain confident that adjusted EBITDA margins should improve to the load of mid-20% range over time.

Speaker Change: In line with some of the year over year revenue headwinds within the segment adjusted EBITDA declined seven 9% from 2023 to finish at $14 million, while margins remained flat at 19, 9%.

William Zint: As Barry noted, year-to-date adjusted EBITDA margins of 19.5% reflected an overall 60 basis points improvement versus the first half of 2023, as we sustained our focus on operational efficiencies during the transition of this operating segment toward an increasingly SAS-based set of product offerings. Based on these year-to-date results, we now anticipate a full-year low single-digit revenue decline rate for this segment, which is included in our updated revenue guidance. We remain confident that adjusted even a margin should improve to the low to mid 20% range over time. Moving on to data solutions.

Speaker Change: As Barry noted year to date adjusted EBITDA margins of 19, 5% reflected an overall 60 basis points improvement versus the first half of 2023 as we sustained our focus on operational efficiencies during the transition of this operating segment toward an increasingly SaaS based set of product offerings.

Speaker Change: Based on these year to date results, we now anticipate a full year low single digit revenue decline rate for this segment, which is included in our updated revenue guidance. We remain confident that adjusted EBITDA margin should improve to the low to mid 20% range over time.

William Zint: This segment continued its strong performance inclusive of the very challenging prior-year revenue comp during the second quarter. Data revenues finished at $57.4 million for the quarter, reflecting a modest year-over-year decline of 3.2% versus the same period of 2023, lapping very strong prior-year deposit-seeking campaign activity amongst core FI partners, which we discussed during both the second and third quarters of 2023. Adjusted EBITDA finished at $15.8 million, reflecting a very strong 17.9% growth versus Q2 of the prior year.

Chip Zint: Moving on to data solutions, this segment continued its strong performance, inclusive of the very challenging prior year revenue comp during the second quarter. Data revenues finished at $57.4 million for the quarter, reflecting a modest year-rear decline of 3.2% versus the same period of 2023, lapping very strong prior year deposit-seeking campaign activity amongst core FI partners, which we discussed during both the second and third quarters of 2023. Adjusted EBITDA finished at $15.8 million, reflecting a very strong 17.9% growth versus Q2 of the prior year, while adjusted EBITDA margins expanded 490 basis points to 27.5% on both an improved mix of DDM campaign activity and continued offering expense efficiency across the business.

Speaker Change: Moving on to data solutions. This segment continued its strong performance inclusive of the very challenging prior year revenue comp during the second quarter.

Speaker Change: Data revenues finished at $57 4 million for the quarter, reflecting a modest year over year decline of three 2% versus the same period of 2023 lapping very strong prior year deposit seeking campaign activity amongst core our Fi partners, which we discuss during both the second and third.

Speaker Change: Third quarters of 2023.

Speaker Change: Adjusted EBITDA finished at $15 8 billion, reflecting a very strong 17, 9% growth versus Q2 of the prior year.

William Zint: Well, in just even a margin expanded 490 basis points to 27 and a half percent on both an improved mix of DDM campaign activity and continued operating expense efficiency across the business. The continued strong performance of this segment reinforces our mid to high single-digit longer term growth expectations for the full year 2024. We also maintain strong confidence in the long-term low to mid 20% adjusted EBITDA rate guidance for this segment. Turning now to our print. The Print segment second quarter revenues were $308.8 million, declining 4.8% on a year-over-year basis.

Speaker Change: While adjusted EBITDA margins expanded 490 basis points to 27, 5% on both an improved mix of DBM campaign activity and continued operating expense efficiency across the business.

Chip Zint: of this segment. The continued strong performance of this segment reinforces our mid to high single-digit longer-term growth expectations for the full year 2024 horizon. We also maintain strong confidence in the long-term low to mid 20% adjusted even-orate guidance for this segment.

Speaker Change: The continued strong performance of this segment reinforces our mid to high single digit longer term growth expectations for the full year 2020 for horizon.

Speaker Change: We also maintained strong confidence in the long term low to mid 20% adjusted EBITDA rate guidance for this segment.

Chip Zint: Turning now to our print businesses. Print segment, second quarter revenues, was $308.8 million, declining 4.8% on a year-year basis. This decline was largely in line with our secular decline expectations, especially given the deployment of our ERP upgrade during the first half of last year, and the resulting shift of some revenues from the first to second quarter comparable figure. Legacy check product revenue declined 3.8% during the quarter, with promo revenues driving the balance of the full segment decline rate. Adjusted EBITDA for the quarter finished at $93.9 million, remaining at 30.4% of revenue, in line with our longer-term low 30s target, but 190 basis points below the prior year rate.

Speaker Change: Turning now to our print businesses.

Speaker Change: Print segment second quarter revenues was $308 8 million.

Speaker Change: Declining four 8% on a year over year basis.

William Zint: This decline was largely in line with our secular decline expectations, especially given the deployment of our ERP upgrade during the first half of last year and the resulting shift of some revenues from this first to second quarter comparable figure. Legacy Check product revenue declined 3.8% during the quarter, with promo revenues driving the balance of the full segment decline rate. Adjusted EBITDA for the quarter finished at $93.9 million, remaining at 30.4% of revenue, in line with our longer-term low 30s target but 190 basis points below the prior year rate.

Speaker Change: This decline was largely in line with our secular decline expectations, especially given the deployment of our ERP upgrade during the first half of last year.

Speaker Change: And the resulting shift of some revenues from the first to second quarter comparable figure.

Speaker Change: Legacy check product revenue declined three 8% during the quarter with promo revenues driving the balance of the full segment decline rate.

Speaker Change: Adjusted EBITDA for the quarter finished at $93 $9 million remaining at 34% of revenue in line with our longer term low thirties target by 190 basis points below the prior year rate certain specific accounts receivable reserve adjustments during the quarter impacted margins for the period by.

Chip Zint: Certain specific accounts receivable reserve adjustments during the quarter impacted margins for the period by approximately 140 basis points versus the prior year. Legacy check margins remain consistent with our historical, and previously communicated expectations during the period inclusive of these adjustments, and we would not anticipate this level of reserve adjustments to recur over the balance of 2024. We remain very focused on operating expense discipline and overall efficiency across costs of good sold inputs within the print segment in particular. Consistent with our longer-term outlook, for the balance of 2024, we continue to expect to see low to mid single-digit revenue declines across the print segment, with adjusted EBITDA margins remaining in the low 30s, inclusive of the non-recurring Q2 items previously noted.

William Zint: Certain specific accounts receivable reserve adjustments during the quarter impacted margins for the period by approximately 140 basis points versus the prior year. However, legacy check margins remain consistent with our historical and previously communicated expectations during the period inclusive of these adjustments. We would not anticipate this level of reserve adjustments to recur over the balance of 2024. We remain very focused on operating expense discipline and overall efficiency across cost of goods sold inputs within the print segment, in particular.

Speaker Change: <unk> 140 basis points versus the prior year.

Speaker Change: Legacy check margins remain consistent with our historical and previously communicated expectations. During the period inclusive of these adjustments and we would not anticipate this level of reserve adjustments to recur over the balance of 2024.

Speaker Change: We remain very focused on operating expense discipline and overall efficiency across cost of goods sold inputs within the print segment in particular.

William Zint: Consistent with our longer-term outlook for the balance of 2024, we continue to expect to see low to mid single-digit revenue declines across the print segment, with adjusted EBITDA margins remaining in the low 30s, inclusive of the non-recurring Q2 items previously noted. Turning now to our balance sheet and cash flow. We ended the second quarter with a net debt level of $1.53 billion, remaining nearly flat to our 2023 year-end level of $1.52 billion, while materially improved from the $1.63 billion mark at the end of Q2 of 2023 and consistent with our ongoing commitment to debt reduction as a top capital allocation priority.

Speaker Change: With our longer term outlook for the balance of 2024, we continue to expect to see low to mid single digit revenue declines across the print segment with adjusted EBITDA margins remaining in the low thirties inclusive of the nonrecurring Q2 items previously noted.

Chip Zint: Turning now to our balance sheet and cashware, we ended the second quarter with a net debt level of $1.53 billion, remaining nearly flat to our 2023 year-end level of $1.52 billion, while materially improved from the $1.63 billion mark at the end of Q2 of 2023, and consistent with our ongoing commitment to debt reduction as a top capital allocation priority. Our net debt to adjusted EBITDA ratio remains 3.7 times at the end of the quarter, flat on a sequential basis, while slightly increased from the 3.6 times ratio reported at year end. As we've noted, our long-term strategic target remains approximately three times leverage, and the second half typically reflects sequentially improving cash flow results, which tends to weigh improvements of our reported leverage ratios more heavily towards the balance of the year.

William Zint: Our net debt to adjusted EBITDA ratio remains 3.7 times at the end of the quarter, flat on a sequential basis, while slightly increased from the 3.6 times ratio reported at year end. As we've noted, our long-term strategic target remains approximately three times leverage, and the second half typically reflects sequentially improving cash flow results, which tends to weigh improvements in our reported leverage ratios more heavily toward the balance of the year. Free cash flow, defined as cash provided by operating activities, less capital expenditures, finished at $17.6 million for the year-to-date period, improving by $26.2 million from the negative results reported through the first half of 2023. This was driven by continued improved operating results, lower restructuring spend, and lower capital expenditures versus the prior year.

Speaker Change: Turning now to our balance sheet and cash flow.

Speaker Change: We ended the second quarter with a net debt level of $153 billion remaining nearly flat to our 2023 year end level of 152 billion, while materially improved from the $1 six 3 billion Mark at the end of Q2 of 2023 and consistent with our ongoing commitment to debt reduction.

Speaker Change: <unk> as a top capital allocation priority.

Speaker Change: Our net debt to adjusted EBITDA ratio remained three seven times at the end of the quarter flat on a sequential basis, while slightly increase from the three six times ratio reported at year end.

Speaker Change: As we've noted our long term strategic target remains approximately three times leverage in the second half typically reflects sequentially improving cash flow results, which tends to way improvements of our reported leverage ratios more heavily towards the balance of the year.

Chip Zint: Three cash flow defined as cash provided by operating activities less capital expenditures finished at $17.6 million for the year-to-date period, improving by $26.2 million from the negative results reported through the first half of 2023, driven by continued improved operating results, lower restructuring spend, and the lower capital expenditures versus the prior year. We remain very pleased with our overall operating cash flow generation during recent quarters and in our ability to continue our de-leveraging path consistent with our clear capital allocation priorities. As a brief additional update regarding our overall capital structure, our remind listeners as we share last quarter that we enter into an accounts receivable securitization facility and utilize they draw down against the interest rate advantage capacity towards prepayments of the balance of our 2024 required quarterly amortization.

Speaker Change: Free cash flow defined as cash provided by operating activities less capital expenditures finished at $17 6 million for the year to date period, improving by $26 2 million from the negative results reported through the first half of 2023, driven by continued improved operating results.

Speaker Change: Lower restructuring spend and lower capital expenditures versus the prior year.

William Zint: We remain very pleased with our overall operating cash flow generation during recent quarters and in our ability to continue our deleveraging path, consistent with our clear capital allocation priorities. As a brief additional update regarding our overall capital structure, I'll remind listeners, as we shared last quarter, that we entered into an accounts receivable securitization facility and utilized a drawdown against the interest rate advantage capacity towards prepayments of the balance of the balance of our 2024 required quarterly amortization.

Speaker Change: We remain very pleased with our overall operating cash flow generation during recent quarters and in our ability to continue our deleveraging path consistent with our clear capital allocation priorities.

Speaker Change: As a brief additional update regarding our overall capital structure I'll remind listeners as we shared last quarter that we entered into an accounts receivable securitization facility and utilized a drawdown against the interest rate advantage capacity towards prepayments of the balance of our 2024 required quarterly amortization.

Chip Zint: This 36-month agreement terminates in the first quarter of 2027 and has shifted $80 million of maturities to the extended horizon beyond 2026 shown on the current slide. As Barry mentioned, we continue to actively monitor the broader interest rate environment, both as it relates to potential impacts to our operating trajectory, as well as exploration of options regarding our longer-term debt capital stack. As shown here, our existing revolving credit in term loan facilities are just over three calendar quarters from current status, carrying June of 2026 maturities, while our 8% bonds mature in 2029. We continue to remain comfortable with our available liquidity levels and will certainly provide additional updates on any capital structure or financing developments going forward.

William Zint: This 36-month agreement terminates in the first quarter of 2027 and has shifted $80 million of maturities to the extended horizon beyond 2026 shown on the current slide. As Barry mentioned, we continue to actively monitor the broader interest rate environment, both as it relates to potential impacts on our operating trajectory, as well as exploration of options regarding our longer-term debt capital stack. As shown here, our existing revolving credit and term loan facilities are just over three calendar quarters from their current status, carrying June 2026 maturities, while our 8% bonds mature in 2029.

Speaker Change: This 36 month agreement terminated in the first quarter of 2027, and a shifted $80 million of maturities to the extended horizon beyond 2026 shown on the current slide.

Speaker Change: As Barry mentioned, we continue to actively monitor the broader interest rate environment, both as it relates to potential impacts to our operating trajectory as well as exploration of options regarding our longer term debt capital stack.

Barry C. McCarthy: As shown here, our existing revolving credit and term loan facilities are just over three calendar quarters from current status carry in June of 2026 maturities, while our 8% bonds mature in 2029.

William Zint: We continue to remain comfortable with our available liquidity levels and will certainly provide additional updates on any capital structure or financing developments going forward. Before turning to guidance consistent with prior quarters, our board approved a regular quarterly dividend of $0.30 per share on all outstanding shares. The dividend will be payable on September 3, 2024, to all shareholders of record as of market closing on August 19, 2024.

Barry C. McCarthy: We continue to remain comfortable with our available liquidity levels and we will certainly provide additional updates on any capital structure or financing developments going forward.

Chip Zint: Before turning to guidance, consistent with prior quarters, our board approved a regular quarterly dividend of $0.30 per share on all outstanding shares. The dividend will be payable on September 3rd, 2024, to all shareholders of record as of market closing on August 19th, 2024. As noted previously, we continue to make progress across our key nor-star initiatives. Forecasted realization of the implemented workstream impacts noted in Barry's comments are fully reflected within our 2024 guidance ranges. As signal during his introductory comments, our year-to-date revenue results combine with remaining uncertainty around some of the economic outlook for the second half of the year present line of sight towards the low end of our original guidance, leading to the adjustment we are making to the expected revenue range.

Barry C. McCarthy: Before turning to guidance consistent with prior quarters, our board approved a regular quarterly dividend of <unk> 30 per share on our outstanding shares.

Barry C. McCarthy: The dividend will be payable on September three 2024 to all shareholders of record as of market closing on August 19th 2024.

William Zint: As noted previously, we continue to make progress across our key North Star initiatives. Forecasted realization of the implemented workstream impacts noted in Barry's comments is fully reflected within our 2024 guidance range. As signaled during his introductory comments, our year-to-date revenue results, combined with remaining uncertainty around some of the economic outlook for the second half of the year, present a line of sight towards the low end of our original guidance, leading to the adjustment we are making to the expected revenue range.

Speaker Change: As noted previously we continue to make progress across our key norstar initiatives forecasted realization of the implemented work stream impacts noted in Barry's comments are fully reflected within our 2024 guidance ranges.

Barry C. McCarthy: As signaled during his introductory comments are year to date revenue results combined with remaining uncertainty around some of the economic outlook for the second half of the year.

Barry C. McCarthy: Line of sight towards the low end of our original guidance leading to the adjustment we are making to the expected revenue range.

Chip Zint: With that, our four-year guidance figures are shown on the current slide, keeping in mind all figures are approximate and reflect the impact of the business exits over the past 12 months. Revenue of 2.12 billion to 2.16 billion dollars, reflecting a decline of 1% to positive 1% comparable adjusted growth versus 2023. Adjusted EBITDA of $400 to $420 million, reflecting between 2% and 7% comparable adjusted growth. Adjusted EPS of $3.10 to $3.40, reflecting 3 to 13% comparable adjusted growth, and free cash flow of $80 to $100 million. Finally, to further assist with your modeling, our guidance assumes the following.

William Zint: With that, our full year guidance figures are shown on the current slide, keeping in mind all figures are approximate and reflect the impact of business exits over the past 12 months. Revenue of $2.12 billion to $2.16 billion, reflecting a decline of 1% to positive 1% comparable adjusted growth versus 2023. Adjusted EBITDA of $400 to $420 million, reflecting between 2% and 7% comparable adjusted growth, adjusted EPS of $3.10 to $3.40, reflecting three to 13% comparable adjusted growth, and free cash flow of $80 to $100 million.

Barry C. McCarthy: With that our full year guidance figures are shown on the current slide keeping in mind all figures are approximate and reflect the impact of business exits over the past 12 months.

Barry C. McCarthy: Revenue of $2, one 2 billion to $1 6 billion, reflecting a decline of 1% to positive 1% comparable adjusted growth versus 2023.

Barry C. McCarthy: Adjusted EBITDA of $400 million to $420 million, reflecting between 2% and 7% comparable adjusted growth.

Barry C. McCarthy: Adjusted EPS of $3 10 to $3 40.

Barry C. McCarthy: Reflecting 3% to 13% comparable adjusted growth and free cash flow of $80 million to $100 million.

William Zint: Finally, to further assist with your modeling, our guidance assumes the following: interest expense of $120 to $125 million, and an adjusted tax rate of 26%, depreciation and amortization of $160 million, of which acquisition amortization is approximately $70 million, an average outstanding share count of 45 million shares, and capital expenditures of approximately $100 million.

Barry C. McCarthy: Finally to further assist with your modeling our guidance assumes the following.

Chip Zint: Interest expense of $120 to $125 million and adjusted tax rate of 26%. Depreciation and amortization of $160 million, of which acquisition and amortization is approximately $70 million. and average outstanding share count of 45 million shares and capital expenditures of approximately $100 million. Disguidance remains subject to, among other things, prevailing macroeconomic conditions, as noted previously, including interest rates, labor supply issues, inflation, and the impact of the vestitures. In summary, we remain pleased with our continued execution during the second quarter and our overall first half year-to-date result. Our ability to demonstrate sustaining year-of-year growth of adjusted EBITDA, EPS, and particularly free cash flow, despite areas of anticipated top line pressure during the quarter, is our testament to our continued focus on both North Star execution and our clear long-term capital allocation priorities.

Barry C. McCarthy: Interest expense of $120 million to $125 million in.

Barry C. McCarthy: And adjusted tax rate of 26%.

Barry C. McCarthy: Depreciation and amortization of $160 million of wish acquisition amortization is approximately $70 million.

Barry C. McCarthy: Average outstanding share count of 45 million shares.

Barry C. McCarthy: And capital expenditures of approximately $100 million.

William Zint: This guidance remains subject to, among other things, prevailing macroeconomic conditions, as noted previously, including interest rates, labor supply issues, inflation, and the impact of divestment. In summary, we remain pleased with our continued execution during the second quarter and our overall first half year-to-date results. Our ability to demonstrate sustaining year-over-year growth of adjusted EBITDA, EPS, and particularly free cash flow, despite areas of anticipated top-line pressure during the quarter, is testament to our continued focus on both North Star execution and our clear long-term capital allocation priorities.

Barry C. McCarthy: This guidance remains subject to among other things prevailing macroeconomic conditions as noted previously including interest rates labor supply issues inflation and the impact of divestitures.

Barry C. McCarthy: In summary, we remain pleased with our continued execution during the second quarter and our overall first half year to date results.

Barry C. McCarthy: Our ability to demonstrate sustaining year over year growth of adjusted EBITDA, EPS, and particularly free cash flow. Despite areas of anticipated top line pressure during the quarter are Testament to our continued focus on both Northstar execution and our clear long term capital allocation priorities.

Chip Zint: We remain confident that this diligent focus against core deliverables will continue to be reflected within our ongoing back-haft performance and look forward to providing additional updates as the year progresses.

William Zint: We remain confident that this diligent focus on core deliverables will continue to be reflected within our ongoing back half performance and look forward to providing additional updates as the year progresses. Operator, we are now ready to take questions. Thank you. At this time, if you would like to ask a question, press star followed by the number one on your telephone keypad. If your question has been answered and you would like to remove yourself from the queue, press star one on your telephone.

Barry C. McCarthy: We remain confident that this diligent focus against core deliverables will continue to be reflected within our ongoing back half performance.

Barry C. McCarthy: We look forward to providing additional updates as the year progresses.

Operator: Operator, we are now ready to take questions. Thank you. At this time, if you would like to ask a question, press star followed by the number one on your telephone keypad. If your question has been answered and you would like to remove yourself from the queue, press star one on your telephone. We'll pause for just a moment to compile the Q&A roster.

Speaker Change: Operator, we are now ready to take questions.

Speaker Change: Thank you at this time, if you would like to ask a question press star followed by the number one on your telephone keypad.

Speaker Change: If your question has been answered and you would like to remove yourself from the queue Press star one on your telephone.

Operator: We'll pause for just a moment to compile the Q&A roster. Your first question is from the line of Lance Vitanza with TD Cowan. Lance, your line is open. Lance, please take a phone to make sure you're not self-muted.

Barry C. McCarthy: We'll pause for just a moment to compile the Q&A roster.

Lance Vitanza: Your first question is from a line of length by Tanza with TD Cowan. Lance, please take a phone and make sure you're not self-muted. Hi. Can you hear me, guys? I'm so sorry. Sorry. I had the phone on mute. Thanks for taking the questions, guys. Barry, I had a question regarding the macro pressure for you. Hopefully, there will be time for me to get one more in for Chip regarding guidance.

Barry C. McCarthy: Your first question is from the line of Lance Vitanza with PD Cowen.

Barry C. McCarthy: Your line is open.

Barry C. McCarthy: Lance Please go on to make sure youre not deaf mute it.

Lance William Vitanza: Hi. Hi. Can you hear me, guys? I'm so sorry. Sorry. I had the phone on mute.

Lance William Vitanza: Hi can you hear me guys I'm, so sorry, sorry, I had my phone on mute. Thanks for taking the questions guys. Barry I had a question regarding the macro pressure for you and then hopefully there'll be time for me to get one more in for chip regarding guidance, but Barry I think you mentioned some surveys maybe some government data series that you were looking at.

Barry C. McCarthy: Thanks for taking the questions, guys. Barry, I had a question regarding macro pressure for you, and then hopefully, there'll be time for me to get one more in for Chip regarding guidance. But, Barry, I think you mentioned some surveys, maybe some government data series that you were looking at, but could you talk a little bit more about what exactly it is that you're seeing that's making you build in a little bit more pressure in the back half and which segments are most exposed to that pressure?

Barry McCarthy: But Barry, I think you mentioned some surveys, maybe some government data series that you were looking at. But could you talk a little bit more about what exactly it is that you're seeing that's making you build in a little bit more pressure in the back-haft and which segments are most exposed to that pressure?

Speaker Change: But could you talk a little bit more about what exactly it is that youre seeing.

Speaker Change: Making you bill.

Barry C. McCarthy: Build in a little bit more pressure in the back half and which segments are most exposed to that pressure.

Barry C. McCarthy: Sure, Lance, we've gotten word that this section maybe was a little bit hard to hear. So, just for everyone's benefit, I thought I would reread this section of the prepared comments, and then I'm happy to take the question there and go any deeper as you'd like.

Barry McCarthy: Lance, we've gotten word that there was a little bit hard to hear, so just for everyone's benefit, I thought I would reread this section of the prepared comments, and then I'm happy to take the question there and go any deeper as we'd like. But what I was saying, and perhaps some people could hear and some didn't, I said that, as we've discussed previously, Deluxe monitors trends are on both small business sentiment and consumer discretionary spending, as well as the interest rate environment. We review many sources of data, including from the card brands, Federal Reserve, and other economic forecast providers, as well as our own proprietary data.

Speaker Change: Sure Lance we got we've gotten word that there were this section there was a little bit hard to hear.

Speaker Change: So just for everyone's benefit I thought I would re read the section of the prepared comments and then I'm happy to take the question there and go any deeper as you'd like but what I was saying in perhaps some people could hear on some didn't I said that as we've discussed previously deluxe monitors trends around both small business sentiment and consumer.

Barry C. McCarthy: But what I was saying, and perhaps some people could hear and some didn't, I said that, as we've discussed previously, Deluxe monitors trends around both small business sentiment and consumer discretionary spending, as well as the interest rate environment. We review many sources of data, including from the card brands, the Federal Reserve, and other economic forecast providers, as well as our own proprietary data. These trends impact multiple areas of our portfolio. While our year-to-date performance has reflected a generally stable economic environment, there are some signs of continued pressure on the average consumer.

Speaker Change: Discretionary spending as well as the interest rate environment.

Speaker Change: We view many sources of data, including from the card brands Federal reserve and other economic forecast providers as well as our own proprietary data.

Barry McCarthy: These trends impact multiple areas of our portfolio. While our year-to-date performance reflected a generally stable economic environment, there are some signs of continued pressure on the average consumer. In our merchant segment, we've seen some elevated trends toward non-discretionary spend compared with discretionary spend, and in certain market verticals, we've seen flattening of same-store sales. Similarly, demand for some short cycle discretionary promo products has also softened.

Speaker Change: These trends impact multiple areas of our portfolio.

Speaker Change: While our year to date performance reflected a generally stable economic environment. There are some signs of continued pressure on the average consumer.

Barry C. McCarthy: In our merchant segment, we've seen some elevated trends toward non-discretionary spend compared with discretionary spend. And in certain market verticals, we've seen flattening of same-store sales. Similarly, demand for some short-cycle discretionary promo products has also softened.

Speaker Change: In our merchant segment, we've seen some elevated trends towards non discretionary spend compared with discretionary spend and uncertain market verticals, we've seen flattening of same store sales.

Speaker Change: Similarly demand for some short cycle discretionary promo products has also softened.

Barry McCarthy: As a result of these data points and lingering macro uncertainty with the balance of the economic forecasts, we believe our revenue performance may trend to the low end of our original full-year guidance, leading to our adjustment today. In line with our North Star execution to date, we remain confident that our profitability outlook remains solidly without our reaffirmed guidance range, inclusive of free cash flow generation.

Barry C. McCarthy: As a result of these data points and lingering macro uncertainty with the balance of the economic forecast, we believe our revenue performance may trend to the low end of our original full-year guidance, leading to our adjustment today. However, in line with our North Star execution to date, we remain confident that our profitability outlook remains solidly within our reaffirmed guidance range, inclusive of free cash flow generation. Great, and so yeah, I think I think I did hear that, but just to go a little bit deeper, I'm wondering if the merchant you mentioned in the prepared remarks means to imply that that's where we should expect the bulk of the pressure or is it really going to be more broad-based throughout throughout the enterprise?

Speaker Change: As a result of these data points and lingering macro uncertainty with a balance of the economic forecasts. We believe our revenue performance may trend to the low end of our original full year guidance, leading to our adjustment today.

Speaker Change: In line with our norstar execution to date, we remain confident that our profitability outlook remains solidly within our reaffirmed guidance range inclusive of free cash flow generation.

Barry McCarthy: Great, and so yeah, I think I did hear that, but just to go a little bit deeper, I'm wondering, you called out merchant in the prepared remarks. Does that mean to imply that that's where we should expect the bulk of the pressure, or is it really going to be more broad-based throughout the enterprise? Well, Lance, I think you saw it in our Q2 performance that our short cycle promo products were impacted, and that we do see a little bit of pressure there in merchant. And we think that it is the average consumer seems to be under a bit of stress.

Speaker Change: Okay, great and so yeah, I think I think I did hear that but just to go a little bit deeper I'm wondering you called out a merchant in that in the prepared remarks is that does that mean to imply that that's where we should expect the bulk of the pressure or is it really going to be more broad base.

Speaker Change: <unk> throughout throughout the enterprise.

Barry C. McCarthy: Well, Lance, I think you saw it in our Q2 performance that our short cycle promo products were impacted. And that we do see a little bit of pressure there in merchants. And we think that it is, you know, the average consumer seems to be under a bit of stress, you can see the level of the balance between discretionary versus non-discretionary still is in favor of non-discretionary spending, which in some ways is very good for our merchant portfolio, we have a large amount of our business there that is non-discretionary, people have to pay their taxes, they have to get their cars fixed, they have to pay fees throughout their community.

Speaker Change: Well Lance I think you saw it in our Q2 performance that.

Speaker Change: Our short cycle promo products were impacted.

Speaker Change: And that we do see a little bit of pressure there and merchant.

Speaker Change: And we think that it is.

Speaker Change: The average consumer seems to be under a bit of stress you can see the level of the balance between discretionary versus non discretionary still is in favor of non discretionary spending which in some ways is very good for our merchant portfolio. We have a large amount of our business there that is non discretionary.

Barry McCarthy: You can see the level of the balance between discretionary versus non-discretionary still is in favor of non-discretionary spending, which in some ways is very good for our merchant portfolio. We have a large amount of our business there that is non-discretionary. People have to pay their taxes; they have to get their cars fixed; they have to pay fees throughout their community.

Barry C. McCarthy: So we, you know, that part of our business is strong. But there are other pieces there that we're just signaling, where we're seeing some flattening out of same store sales, which we think may be a bit of a headwind in the back half. But like we said, we feel confident about our profitability, and we think that revenue is going to be at the low end of our original guidance.

Speaker Change: People have to pay their taxes, they have to get their car fixed they have to pay.

Speaker Change: Fees throughout their community. So we have.

Barry McCarthy: So we, that part of our business is strong, but there are other pieces there that we're just signaling. We're seeing some flattening out of same-store sales, which we think may be a bit of a headwind in the back half. But like we said, we feel confident about our profitability, and we think that the revenue is going to be at the low end of our original guidance. But we thought it was just prudent, Lance, just prudent, to make the modest adjustment that we did to be reflecting what that bit of consumer pressure we see.

Speaker Change: That part of our business is strong but there are other pieces. There that were just signaling where we're seeing some flattening out of same store sales, which we think may be a a bit of a headwind in the back half.

Barry C. McCarthy: But we thought it was just prudent, Lance, just prudent to make the modest adjustment that we did to reflect what we think that bit of consumer pressure we're experiencing. Great. And then just maybe on merchant, the strength of merchant revenues up 8%, is it possible to talk about how much of that growth came from cross-selling new merchants versus increased volumes at existing merchants? And then, just as a follow-up to that, if you could remind me sort of what's the lead time you're seeing on cross-selling merchant services? How long does it take from the initial contact to the time that you can actually generate revenues from a new merchant? Thanks.

Speaker Change: But like we said, we feel confident about our profitability and we think that the revenue is going to be at the low end of our original guidance, but we thought it was just prudent lamps was prudent to make a modest adjustments that we did.

Speaker Change: Reflecting.

Speaker Change: That bit of consumer pressure, we see.

Barry McCarthy: Great, and then just maybe on merchant, the strength of merchant revenues up 8%, is it possible to talk about how much of that growth came from cross-selling new merchants versus increased volumes at existing merchants? And then just as a follow-up to that, if you could remind me sort of what the lead time you're seeing on cross-selling merchant services, how long does it take from the initial contact to the time that you can actually generate revenues from a new merchant? Thanks.

Speaker Change: Great and then just maybe on merchant strengthened merchant revenues up 8%.

Speaker Change: Is it possible to talk about how much of that growth came from cross selling new merchants versus increased volumes at existing merchants and and then just as a follow up to that if you could remind me sort of what's the lead time youre seeing on cross selling merchant services, how long does it take from the <unk>.

Speaker Change: Contact to the time that you can actually generate revenues from a from a new a new merchant. Thanks.

Barry McCarthy: There's a couple great questions in there. So let me start with the revenue growth that you're seeing there. We see good performance from our existing portfolio of customers, but to recall that we want a large, large piece of business that went live in the fourth quarter of last year. And that continues today to perform actually above our expectation. So a piece of the growth that you're seeing here is from that significant win. But even we feel solid about the base business and performance on our ability to win merchants in the broad marketplace. Then your question is about if we win an individual merchant, how quickly we can get that merchant boarded and live. Any individual merchant could, you know, could take a couple of days to be longer depending on the complexity of their system.

Barry C. McCarthy: There are a couple of great questions in there, so let me start with the revenue growth that you're seeing there. We see good performance from our existing portfolio of customers, but to recall that we want a large, large piece of business that went live in the fourth quarter of last year. And that continues today to perform actually above our expectations. So a piece of the growth that you're seeing here is from that significant win.

Speaker Change: There's a couple of great questions in there. So let me start with the revenue growth that Youre seeing there we see good performance from our existing portfolio of customers, let's recall that we won a large large piece of business.

Speaker Change: It went live in the fourth quarter of last year and that continues today to performed actually above our expectations. So a piece of the growth that youre seeing here is from that significant win but even we feel solid about the base business and its performance on our ability to win merchants in the broad marketplace.

Barry C. McCarthy: But even we feel solid about the base business that has performance on our ability to win merchants in the broad market. Then your question is about if we win an individual merchant, how quickly we can get that merchant boarded and live. And any individual merchant could take a couple of days to be longer, depending on the complexity of their system.

Speaker Change: So to your question is about if we win an individual merchant how quickly we can get that merchants boarded in lives and any individual merchant.

Speaker Change: Could take a couple of days could be longer depending on the complexity of their system. If you think about a big a deal like the one that went live in.

Barry McCarthy: If you think about a big deal like the one that went live in the fourth quarter of last year, which was a bank referral relationship and reborning their entire portfolio of merchants on our platform. That can be a pretty long cycle, as you would imagine, if you're moving a large amount of volume with a, you know, ultimately excluding a slip of the switch to move that volume to us. The last thing you're making about the question you had about cross-solving, we are really pleased one of the fundamental feces of the acquisition now more than three years ago was that we could help the merchant business grow faster inside our four walls because of our ability to offer leads from across the portfolio, as well as the strength of our brand, our trusted nature with financial institutions, with small businesses, et cetera.

Barry C. McCarthy: If you think about a big deal like the one that went live in the fourth quarter of last year, which was a bank referral relationship and reboarding their entire portfolio of merchants on our platform, that can be a pretty long cycle, as you would imagine, if you're moving a large amount of volume with a, you know, ultimately executing a flip of the switch to move that volume to us. The last thing you say about the question you had about cross selling, we are really pleased.

Speaker Change: In the fourth quarter of last year, which was a bank referral relationship and re boarding their entire portfolio of merchants on our platform.

Speaker Change: That can be a pretty long cycle as you would imagine if youre moving a large amount of volume with a ultimately executing a flip of the switch to move that volume to us.

Speaker Change: The last thing you were making about the question you had about cross selling.

Speaker Change: We're really pleased one of the fundamental theses of the acquisition announced more than three years ago was that we could help the merchant business grow faster inside our four walls because of our ability to offer leads from across the portfolio as well as the strength of our brand our trusted nature with financial institutions.

Barry C. McCarthy: One of the fundamental tenets of the acquisition now more than three years ago was that we could help the merchant business grow faster inside our four walls because of our ability to offer leads from across the portfolio, as well as the strength of our brand, our trusted nature with financial institutions, with small businesses, et cetera. And that's really played out.

Speaker Change: With small businesses et cetera.

Barry McCarthy: And that's really played out. You know, just for perspective, Lance, you know, we can board merchants in cases as fast as two hours if we have gotten, you know, the merchant meets certain criteria. And that's, of course, obviously for certain types of merchants, but we're very pleased with the progress of that business. We think it's obviously a standout on the portfolio and the fundamental feces of what we're doing with First American and for the acquisition, we think it's proving out quite well.

Speaker Change: And that's really played out.

Barry C. McCarthy: You know, just for perspective, Lance, we can board merchants in cases as fast as two hours if we have gotten, you know, if the merchant meets certain criteria. That's, of course, obviously for certain types of merchants. But we're very pleased with the progress of that business. I think it's obviously a standout in the portfolio and the fundamental thesis of what we're doing with First American. And for the acquisition, we think it's proving out quite well. Your next question is from a line of Kartik Mehta with North Coast Research. Good afternoon.

Speaker Change: And just just for perspective Lance.

Lance William Vitanza: We can board merchants and cases as fast as two hours, if we have gotten.

Lance William Vitanza: The merchant meet certain criteria and that's of course, obviously for certain types of merchants.

Lance William Vitanza: But we're very pleased with the progress of that business.

Speaker Change: It's obviously a standout in the portfolio and the fundamental thesis of.

Speaker Change: What we're doing with first American and for the acquisition, we think is.

Speaker Change: Is proving out quite well.

Kartik Mehta: Your next question is from a line of Cartiqunita with North Coast Research. Good afternoon. Very just on the merchant business.

Speaker Change: Your next question is from the line of Kartik Mehta with Northcoast research.

Kartik Mehta: Barry, just on the merchant business, I'm wondering, as you look throughout the quarter, did the slowing start at a certain point in time? I guess when did you start noticing maybe some weakness in the consumer and that impacting the merchants? Uh, part of what we've seen is, um, some just generally unusual patterns where the spending towards non-discretionary categories has been a bigger percentage of the pie versus discretionary. And We've seen that pattern before, but we started seeing it in the second quarter.

Kartik Mehta: Hey, good afternoon.

Kartik Mehta: Just on the merchant business I'm wondering as you move throughout the quarter.

Barry McCarthy: I'm wondering, as you look throughout the quarter, is this flowing started at a certain point in time? I guess when did you start noticing maybe some weakness in the consumer and that impacting the merchant business? You know, part of what we've seen is some just generally unusual patterns, where the spending towards non-discretionary categories has been a bigger percentage of the pie versus discretionary. And we've seen that pattern before, but we started seeing it in the second quarter, and we're not particularly concerned about it. We're just noting that that does represent some stress for the average consumer, and, you know, we're flagging that today just as a cost.

Kartik Mehta: Knowing sort of at a certain point in time I guess when did you start noticing maybe some weakness in.

Speaker Change: The consumer end.

Kartik Mehta: Packaging the merchant business.

Speaker Change: Part of what we've seen is.

Speaker Change: So just generally unusual patterns.

Speaker Change: Where the spending towards non discretionary categories.

Speaker Change: It's been a bigger percentage of the pie versus discretionary.

Speaker Change: And we've seen that pattern before.

Speaker Change: We started seeing it in the second quarter.

Barry C. McCarthy: And we're not particularly concerned about it. We're just noting that that does represent some stress for the average consumer. And we're flagging that today just as a precaution. I'm sorry, Chip. I apologize.

Speaker Change: And.

Speaker Change: We're not particularly concerned about it we're just noting that that does represent some stress for the average consumer.

Speaker Change: And we are flagging that that today, just as a as a caution.

Speaker Change: Hey, Kartik in the check.

Kartik Mehta: Sorry, I apologize.

Barry McCarthy: I mean, even despite those pressures, which is very indicated, we started to see, you know, towards the mid to late part of the quarter and it's been in line with all the things you would have read this week from other consumer-related releases.

William Zint: Even despite those pressures, which are very evident, we started to see, you know, towards the mid to late part of the quarter, and it's been in line with all the things you would have read this week from other consumer-related releases. What I would just continue to point out is we're still guiding kind of mid to high single-digit growth for that business this year. So I still feel good about the year-to-date trends we've been on, the volumes we're seeing there, and, of course, the long-term trajectory of the business.

Speaker Change: Adam.

Adam: Even despite those pressures, which as Barry indicated we started to see.

Speaker Change: Towards the mid to late part of the quarter than it's been in line with all the things you would have read this week from other consumer related.

Barry McCarthy: What I would just continue to point out is we're still guiding kind of mid to high single-digit growth for that business this year, so still feel good about the year-to-date trends we've been on, the volumes we're seeing there, and of course the long-term trajectory of the business.

Speaker Change: Releases, what I would just continue to point out is we're still guiding kind of mid to high single digit growth for that business. This year. So still feel good about the year to date trends we've been on the volumes, we're seeing there and of course, the long term trajectory of the business. However, long. It started however, long it's going to last we view this as a bit of a softening that a lot of people are going.

William Zint: However long it starts, however long it's going to last, we view this as a bit of a softening that a lot of people are going to be dealing with, and we don't view it as a long-lasting pressure against our business that would change our strategy. So we still feel good about the long-term growth trajectory of the merchant business. Bear, just going to print business on checks. You know, you've had some success winning market share.

Barry McCarthy: However long it started, however long it's going to last, we view this as a bit of a softening that a lot of people are going to be dealing with, and we don't view it as a long-lasting pressure against our business that would change our strategy. So we still feel good about the long-term growth trajectory of the market share, and I'm wondering, you know, as you look over the next 12 months, maybe obviously if you can name opportunities every day, but if you can't, maybe what the outlook is for your ability to gain market share in that business.

Speaker Change: Be dealing with and we don't view it as a long a long lasting pressure against our business that would change our strategy. So we still feel good about the long term growth trajectory of the merchant business.

Speaker Change: Fair.

Speaker Change: That business on track.

Speaker Change: Had some success.

Speaker Change: Our market share.

Speaker Change: As you look over the next 12 months.

Speaker Change: Maybe.

Speaker Change: Obviously, you can name opportunities every day, but if you can maybe what the outlook is for your ability to do.

William Zint: And I'm wondering, you know, as you look over the next 12 months, maybe, obviously, if you can name opportunities, okay, but you can't, you know, maybe what the outlook is for your ability to gain market share in that business.

Speaker Change: Gaining market share in that business.

Speaker Change: Okay.

Barry McCarthy: So it's hard to predict market share gains in any narrow window, like the back half of a year, but I can't tell you that we're really pleased that we continue to win far more than we would lose within a competitive bid situation, and we like our chances of continuing to grow market share there. And you'll recall, Cardiac, we've even had periods where we know we're growing revenue in that part of the company space, so we feel like that's still a great cash flowing business and solid prospects to continue.

Speaker Change: So.

Barry C. McCarthy: It's hard to predict market share gains in any narrow window like the back half of a year, but I can't tell you that we're really pleased that we continue to win far more than we would lose in a competitive bid situation. And we like our chances of continuing to grow market share there. And you'll recall, Kartik, we've even had periods where we are now growing revenue in that part of the company space.

Speaker Change: It's hard to predict market share gains in any narrow window like the back half of the year.

Speaker Change: But I can't tell you that we're really pleased that we continue to win far more than we would lose weight in a competitive bid situation.

Speaker Change: And we like our chances of continuing to grow market share there.

Speaker Change: And Youll recall kartik, we've even at periods, where we're now we're growing revenue in that part of the company space.

Speaker Change: So.

Barry C. McCarthy: So, You know, we feel like that's still a great cash flowing business and solid prospects to continue. And I guess I'd just add, Kartik, along those lines, you know, we, of course, can't predict, market share takeaways we're going to get is very eluded, but I think one of the great things about Deluxe is given our reach of the 4,000 FIs and the way we partner across the segment with those FIs, if we don't support them from a check perspective today, we do have some, on average, typical commercial relationship with them, which gives us the ability to talk through these things, have it on our roadmap, and get a chance to play in it when the opportunity comes our way. And just one last question on the promo business.

Speaker Change: We feel like that's still a great cash flowing business and.

Speaker Change: Solid prospects to continue.

Barry McCarthy: And I guess that's just that, Cardiac. Along those lines, you know, we of course can't predict market share takeaways. We're going to get, as very alluded, but I think one of the great things about Delox is given our reach of the 4,000 FIs and the way we partner across the segment with those FIs. If we don't support them from a check perspective today, we do have some on average typical commercial relationship with them, which gives us the ability to talk through these things, having on our roadmap and get a chance to play in it when the opportunity comes our way.

Speaker Change: And I guess I'd just add Carter.

Carter: Along those lines, we of course can't predict.

Barry C. McCarthy: Market share takeaway is we are going to get as Barry alluded, but I think one of the great things about <unk> is given our reach of the 4000 EFI in the way we partner across the segment with those that we don't support them from a check perspective today, we do have some on average typical commercial relationship with them, which gives us the ability to talk through these things happen.

Carter: Our roadmap and get a chance to.

Carter: To play in that when the opportunity comes our way.

Chip Zint: In just one last question, on the promo business, obviously, you know, these are economies having a little bit of an impact on that business. For using any pricing pressure as a result, nor competitors getting a little bit more aggressive because they're seeing the same trends, or has pricing not been an issue up to this point.

Kartik Mehta: Obviously, it seems like the economy is having a little bit of an impact on that business. Are you seeing any pricing pressure as a result? Are competitors getting a little bit more aggressive because they're seeing the same trend? Or has pricing not been an issue up to this point? Hey, it's Chip again.

Speaker Change: And just one last question on the promo business obviously.

Speaker Change: The economy, a little bit of an impact on that business are you seeing any pricing pressure as a result.

Speaker Change: Our competitors getting a little bit more.

Speaker Change: More aggressive because theyre seeing the same trends.

Carter: Sure.

Speaker Change: Pricing not been an issue up to this point.

William Zint: I think it's hard to directly address the pricing question, but I don't believe we've seen a radical change. What I would remind you, though, is as part of our Northstar journey and one of the benefits of going with this combined print entity, we've got focused on margin improvement and margin expansion, specifically to improve cash flow. So we've mentioned it before. We've already gone a bit further to try to think about the deals we do take, the price we're willing to take, and the margins we're willing to play in that promotion space.

Chip Zint: Hey, Chip, again, I think it's hard to directly address the pricing question. I don't believe we've seen a radical change. What I would remind you, though, is as part of our North Star journey and one of the feces of going with this combined print entity, we've gotten focused on margin improvement and margin expansion, specifically to improve the cash flows. So we've mentioned it before. We've already gone a bit foot forward to try to think about the deals we do take, the price we're willing to take, and the margins we're willing to play in that promo space.

Carter: Hey, Chip again, I think it's hard to directly address the pricing question I don't believe we've seen a radical change what I would remind you though is as part of our norstar journey and one of the theses of going with this combined print entity, we've gotten focused on margin improvement and margin expansion specifically to improve the cash flow. So we've.

Carter: We've mentioned it before we have already gone a bit foot forward to try to think about the deals we do take the price we're willing to take and the margin we're willing to play in that promo space. So I think you can think of is yes. There is a softening there with this short cycle promo activity, but there is also us being a little bit more discerning in terms of the type of deal we want to take and so.

William Zint: So I think you can think of it, yes, there's a softening there with the short cycle promo activity, but there's also us being a little bit more discerning in terms of the type of deal we want to take. And so.

Chip Zint: So I think you can think of it, yes, there's a softening there with this short cycle promo activity, but there's also us being a little bit more discerning in terms of the type of deal we want to take. And so, because of that, are we seeing a little bit of pricing change? It's hard to know because we've just fundamentally shifted our focus a little bit there, Carter.

William Zint: Because of that, are we seeing a little bit of a pricing change? It's hard to know because we've just fundamentally shifted our focus a little bit there. Your next question is from a line from Charlie Strauzer with CJS Securities. Hi, good evening, Charlie.

Carter: Because of that or are we seeing a little bit of pricing changes, it's hard to know because we've just fundamentally shifted our focus a little bit there Carter.

Speaker Change: Yes.

Charles Strauzer: Your next question is from a line of Charlie Strouser with C.J.S. Securities. Good evening, Charlie. I just want to say thanks for taking my questions. And if you look at the results in data, clearly formed better than we had expected, especially given the strong Q1, can you provide maybe a little bit more color on how we should think about the back half of the year beyond what Chip has laid up before? Yeah, thanks for acknowledging that, Charlie. You're right. As we indicated on the last call, we recommended averaging three quarters at that time to get the right trend.

Charles Joseph Nabhan: Your next question is from the line of Charlie <unk> with CJS Securities.

Charles S. Strauzer: I just want to say thanks for taking my questions and, can you provide maybe a little bit more color on how... Yeah, thanks. Thanks for acknowledging that, Charlie. You're right.

Speaker Change: Yeah.

Charlie: Hi, Good evening. This is Charlie I, just want to say thanks.

Charlie: For taking my questions.

Speaker Change: Look at the results and data.

Speaker Change: Clearly performed better than we had expected, especially given the strong Q1.

Speaker Change: Can you provide maybe a little bit more color on how we should think about the back half of the year.

Speaker Change: Beyond what <unk> laid out before.

Barry C. McCarthy: As we indicated on the last call, we recommended averaging three quarters at that time to get the right trend, given the lumpiness of the business and the timing of the campaign. You know, I would continue to update that perspective and say, now I think if you average the most recent four quarters, I think it continues to show you the right trend. That will clearly imply, again, another softer data quarter because we're coming up against just another record comp.

Speaker Change: Yeah. Thanks, Thanks for acknowledging that Charlie you're right as we indicated on the last call. We recommended averaging three quarters at that time to get the right trend given the lumpiness of the business and the timing of the campaigns.

Barry McCarthy: The lumpiness of the business and the timing of the campaign, you know, I would continue to update that perspective and say, now I think if you average the most recent four quarters, I think it continues to show you the right trend. That will clearly imply again another softer data quarter because we're coming up against just another record comp. You may recall data had a fantastic Q2 a year ago and then followed up with the new major Q3. But again, if you roll these things forward, it continues to roll on the rolling basis: very solid growth.

Speaker Change: We continue to update that perspective, and say now I think if you average the most recent four quarters I think it continues to show you the right trend that will clearly imply again, another software data quarter, because we're coming up against just another record comp you may recall data had a fantastic Q2, a year ago, and then followed up with a new increase Q3.

William Zint: You may recall Data had a fantastic Q2 a year ago and then followed up with a new and greater Q3. But again, if you roll these things forward, it continues to be on a rolling basis, very solid growth. So even though we don't guide quarters, my direction to you would be to look at the most recent four quarter average from the third quarter of last year through to the second quarter we just reported.

Speaker Change: But again, if you roll these things forward. It continues the more on a rolling basis very solid growth. So even though we don't guide quarters my direction to you would be to look at the most recent four quarter average.

Barry McCarthy: So my, even though we don't guide quarters, my direction to you would be to look at the most recent four-quarter average from the third quarter last year through to the second quarter we just reported.

Speaker Change: From the third quarter of last year through to the second quarter, We just reported and I think thats a good indicator to what to expect for the third.

Barry C. McCarthy: And I think that's a good indicator of what to expect for the third. Looking at lockbox, you know, Barry mentioned that as new customers that you're onboarding there, maybe some more color. Yeah, we continue to win market share here, and it's because of the quality of our service, the footprint we have, and the way we process those payments. I think what we're particularly pleased about is that those wins represent sort of the whole industry, banks all the way up to money center banks, and that they're in the queue to go live across the back half of the year.

Barry McCarthy: And I think that's a good indicator to what to expect for the third. Great, that's helpful. Thank you.

Speaker Change: Great. That's helpful. Thank you.

Barry McCarthy: And then looking at lock box that, you know, Barry mentioned that you had as new customers that you're onboarding there, maybe some more color behind that too. Yeah, we continue to win market share here, and it is because of the quality of our service footprint we have and the way we process those payments. I think what we're particularly pleased about is that those wins represent sort of the across the industry, they are. Banks all the way up to money center banks and that they're in the queue to go live across the back half of the year.

Speaker Change: And then looking at lockbox.

Speaker Change: You mentioned that.

Speaker Change: Or is that you're onboarding there.

Speaker Change: Some more color behind that too.

Speaker Change: Yes, we continue to win market share here.

Speaker Change: And it is because of the quality of our service.

Speaker Change: Footprint, we have in the way we process those payments.

Speaker Change: I think what we're particularly pleased about is that those wins represent sort of the.

Speaker Change: Across the industry they are.

Speaker Change: Banks, all the way up to.

Speaker Change: Money Center banks.

Speaker Change: And that they are in the queue to go live.

Speaker Change: Across the back half of the year and Thats why we just have confidence that that part of the business over the long term, we will continue to get share to help that business.

Barry McCarthy: And that's why we just have confidence that that part of the business over the long term will continue to get share to help that business. Stay robust as we're building and launching and selling and implementing our new products in B2B around receivables and payables digital receivables and digital payables.

Barry C. McCarthy: And it's why we just have confidence that that part of the business, over the long term, will continue to get shared to help that business stay robust, as we're building and launching and selling and implementing our new products in B2B around receivables and payables, digital receivables, and digital payables. And Charlie, just to add, you know, I think lockbox is an area we're not talking enough about. You may recall a few years ago. It coincided with a rapid rise in labor rates for hourly workers.

Speaker Change: Stay robust as were building and launching and selling and implementing our new products and BTB around receivables and payables digital receivables of digital payables.

Barry McCarthy: And Charlie just add, you know, I think lock boxes in area we're not talking enough about. You may recall a few years ago we went through some operational challenges there. It coincided with the rapid raise and labor rates, frowly workers, and we also had just some systemic things we had to work on. And so you may recall the last few years we've been talking about the work we've done to improve the profitability, improve the operations, and that's included a lot of investments in. Our systems there, consolidating sites, getting new modern sites, and I think it's all colliding in this moment in time where we now have very stable modern operations there that are performing very well, and it's met a point in the market where we have an opportunity to take share games, and we're capitalizing on that. It's also super critical for us because that lock box area becomes the gateway to migrate these transactions to our new receivables R360.

William Zint: And we also had just some systemic things we had to work on. And so you may recall, over the last few years, we've been talking about the work we've done to improve profitability, improve operations, and that included a lot of investments in our systems, they're consolidating sites, getting new modern sites. And I think it's all colliding at this moment in time, where we now have very stable, modern operations there that are performing very well.

Speaker Change: And Charlie just to add.

Charles Joseph Nabhan: I think <unk> is an area. We are not talking enough about you may recall, a few years ago, we went through some operational challenges there.

Charles Joseph Nabhan: <unk> sided with the rapid raise in labor rates for hourly workers and we also had just some systemic things we had to work on and so you may recall over the last few years, we've been talking about the work we've done to improve the profitability improve the operations and that's included a lot of investments in <unk>.

Charles Joseph Nabhan: Our systems, they're consolidating sites getting new modern sites and I think it's all colliding in this moment in time, where we now have very stable.

Charles Joseph Nabhan: Modern operations, there that are performing very well and it's met a point in the market, where we have an opportunity to take share gains and we're capitalizing on that and its also super critical for us because that lockbox area becomes the gateway to migrate these transactions to our new receivables are 360, <unk> SaaS based solution. So the <unk>.

William Zint: And it's reached a point in the market where we have an opportunity to take share gains, and we're capitalizing on that. And it's also super critical for us because that lockbox area becomes the gateway to migrate these transactions to our new receivables platform, our 360 SaaS-based solution. So the strategies coming together, the teams performing great, the investments we've made over the last few years have put us in a really great position, and so we're trying to take market share.

Barry McCarthy: SAS based solutions so the strategies coming together that teams performing great. The investments we've made of the last few years have put us in a really great position, and so we're trying to go take market share. And as I said in the check conversation, this is a place where we have great relationships and can really leverage cross sell and all of our bank partners to really take a hold of that area. And we're going to continue to really take makes some really good progress there.

Charles Joseph Nabhan: Strategy is coming together that team is performing great. The investments we've made over the last few years have put us in a really great position and so we're trying to go take market share and as I said in the Czech conversation. This is a place where we have great relationships that can really leverage cross sell and all of our bank partners to really take a hold of that area and we're going to continue to.

Barry C. McCarthy: And as I said in the check conversation, this is a place where we have great relationships and can really leverage CrossSell and all of our bank partners to really take a hold of that area. And we're going to continue to really take, make some really good progress there. I think we do believe that.

Charles Joseph Nabhan: Really take make some really good progress there.

William Zint: And we have made progress there. As Chip has said, we have worked on our distribution footprint of how we receive payments, etc., and operating efficiencies throughout the organization.

Barry McCarthy: There's one thing I like about this second. Do you think I'm more ways to expand margins there purely revenue? New, additional revenue worth of things that you can do that to improve the margins. I think we do believe that, and we have made progress there. As Chip has said, we have worked on our distribution footprint of how we receive payments, the center, and operating efficiencies throughout the organization. So we do believe that that is an area where we have opportunity over time for margin expansion. We'll win market share. And then Chip has already given you the message about how it's strategically important for us as we build the other future businesses around B2B.

Linda: Thanks Linda.

Speaker Change: Staying on <unk> for a second.

Speaker Change: Do you think you can.

Speaker Change: Im more ways to expand margins there.

Speaker Change: Purely revenue.

Speaker Change: Revenue or is it.

Speaker Change: So the things that you can do that to improve.

Speaker Change: Improved.

Speaker Change: Margins.

Barry C. McCarthy: So we do believe that that is an area where we have opportunity over time for margin expansion and will win market share. And then Chip has already given you the message about how it's strategically important for us as we build the other future businesses around B2B. As a reminder, to ask a question, press star 1 on your telephone keypad.

Speaker Change: I think we do believe that and we have made progress there as chip said we have.

Speaker Change: Work on our <unk>.

Speaker Change: Distribution footprint of how we receive payments et cetera.

Speaker Change: And operating efficiencies throughout the organization. So we do believe that that is an area, where we have opportunity over time for margin expansion.

Speaker Change: And market share.

Chip: And then chip has already given you.

Chip: The message about how it is strategically important for us as we build the other future businesses.

Speaker Change: <unk> <unk>.

Operator: As a reminder, to ask a question, press star one on your telephone keypad.

Speaker Change: As a reminder to ask a question press star one on your telephone Keypad. Your next question is from the line of Marc Riddick with Sidoti.

Marc Riddick: Your next question is from a line of Marc Riddick with Sedoti. Thank you, afternoon. I wanted to sort of, we covered quite a bit. So a lot of my questions have already been asked, but I wanted to circle back around to the commentary around the forces that led to the sort of pointing to the low portion of the revenue guide. I was wondering, and I appreciate you putting a finer point on a lot of the things that you guys are looking at. Was there any one or two parts of those considerations that maybe held greater weight, or if not greater weight, maybe were a little more surprising than you thought they would be, or how should we think about maybe it had a bigger impact than others?

Operator: Your next question is from the line of Marc Riddick with Sidoti. Thank you. Good afternoon.

Marc Frye Riddick: Hey, good afternoon.

Marc Frye Riddick: I wanted to sort of, we covered quite a bit, so a lot of my questions have already been answered, but I wanted to circle back around to the commentary around the forces that led to the sort of pointing to the low portion of the revenue guide. I was wondering, and I appreciate you putting a finer point on a lot of the things that you guys are looking at, was there any one or two parts of those considerations that maybe held greater weight, or if not greater weight, maybe were a little more surprising than you thought they would be, or how should we think about maybe had a bigger impact than others?

Speaker Change: Mark.

Marc Frye Riddick: I wanted to sort of we covered quite a bit. So a lot of my questions have already been answered, but I wanted to circle back around to the the commentary around the forces that led.

Speaker Change: It led to the sort of pointing to the low.

Speaker Change: A portion of the revenue guidance I was wondering and I. Appreciate you putting a finer point on a lot of the things that you guys were looking at was there any one or two parts.

Speaker Change: Of those considerations that maybe greater weight or if not greater weight, maybe we're a little more.

Speaker Change: Surprising than you thought they would be or how should we think about maybe.

Speaker Change: The bigger impact than others.

Barry McCarthy: You know, Marc, I think it wasn't any one specific thing. I think what we're communicating is that there's just a bit of softness in the consumer demand for the consumer that's under a little bit of a stress. We are not signaling major stress. We're just signaling there's a bit of softness there. And that will guide us to the lower end of our range. And we're just trying to be prudent in sharing that with you at this point in time.

Marc Frye Riddick: You know, Marc, I think it wasn't any one specific thing. I think what we're communicating is that there's just a bit of softness in consumer demand for the consumer that's under a little bit of stress. We are not signaling major stress.

Speaker Change: Mark I think it wasn't any one specific thing I think what we're communicating is that theres just a bit of <unk>.

Speaker Change: <unk> and <unk> and the consumer demand for the consumer that's under a little bit of a stretch a little stress. We are not signaling major stress. We're just signaling there's a bit of softness there.

Barry C. McCarthy: We're just signaling that there's a bit of softness there, and that will guide us to the lower end of our range. And we're just trying to be prudent and share that with you at this point in time. Okay, that's fair.

Speaker Change: And that will guide us to the lower end of our range and we're just trying to be prudent and sharing that with you at this point in time.

Marc Riddick: Okay, that's fair.

Marc Frye Riddick: And then on a different track, I suppose, I was wondering if we could, I think, in the prepared remarks, there were thoughts around where you were shaking out for interest for the year. Can you just sort of remind us maybe what your thoughts are around the potential for cuts and how that plays into your interest expense thoughts and like? Thank you. Yeah, thanks for the question, Marc. We aren't including any cuts in our forecast.

Speaker Change: Okay, That's fair and then on a different track.

Chip Zint: And then on a different track, I suppose, I was wondering if we could, I think in the prepared remarks, there were thoughts around where you were shaking out for interest for the year. Can you just sort of remind us maybe what your thoughts are around the potential of cuts and how that plays into your interest expense thoughts and like. Thank you. Yeah, we thanks for the question, Marc. We aren't including any cuts in our forecast. And I will remind you that throughout the last two years, we've fixed 75% of our interest rates. So, you know, any cut we'd have, while we'd welcome it, obviously the whole market would welcome it for what that could help with the consumer and the economy.

Speaker Change: Track I suppose I was wondering if we could.

Speaker Change: I think it would be.

Speaker Change: Prepared remarks, there were thoughts around where you were shaking out for interest for the year can.

Speaker Change: Can you just sort of remind us maybe what your thoughts are around the potential of cuts and how that plays into your interest expense thoughts and then like thank you.

William Zint: And I will remind you that throughout the last two years, we've fixed 75% of our interest rates. So, you know, any cut we'd have, while we'd welcome it, obviously, the whole market would welcome it for what it could help with the consumer and the economy, we wouldn't expect any, unless the rates really start to come down by a few points, it's not gonna be material. So a 25 basis point cut next month, as an example, would maybe help us save 300k of interest costs in the back half of the year. It's not material; it's not meaningful.

Speaker Change: Yes.

Speaker Change: Thanks for the question Mark we are including any cuts in our in our forecast and I will remind you that throughout the last two years, we've fixed 75% of our our interest rate. So any cut we'd have while we'd welcome. It obviously the whole market would welcome that for what that could helps with the consumer and the economy.

Chip Zint: We wouldn't expect any, unless the rates really start to come down by a few points. It's not going to be material. So, a 25 basis point cut next month, as an example, would maybe help us save 300K of interest cost the back half of the year. And it's not material. It's not meaningful. And that's because we're 75% fixed at this moment. I think, obviously, where we're hopeful rates will continue to come down. And that'll be a big part of as we think about long-term debt financing structure and what we do in terms of setting the long-term policy around our fixed variable interest rate exposure.

Speaker Change: Wouldn't expect any.

Speaker Change: Rates really start to come down by a few points is not going be material. So a 25 basis point cut.

Speaker Change: Next month as an example, what maybe help us save 300, K a interest cost in the back half of the year and it's not material is not meaningful and that's because we're 75% fixed at this moment I think obviously, we're hopeful rates will continue to come down and that'll be a big part of as we think about long term debt financing structure and what we do in terms of setting the law.

William Zint: And that's because we're 75% fixed. At this moment, I think, obviously, we're hopeful rates will continue to come down. And that'll be a big part of as we think about the long-term debt financing structure and what we do in terms of setting the long-term policy around our fixed variable interest rate exposure.

Speaker Change: Term policy around our fixed variable interest rate exposure.

Marc Riddick: Chair. Okay, great. There's very helpful. Thank you.

Speaker Change: Okay.

Marc Frye Riddick: Okay, great. That's very helpful. Thank you. At this time, there are no further questions. I will now hand today's call over to our presenters for any closing remarks. Thanks, Tameka.

Speaker Change: Okay, Great. That's very helpful. Thank you.

Operator: At this time, there are no further questions.

Speaker Change: At this time there are no further questions.

Unknown Executive: I would now hand say it's called Ozato Prisoners for any closing remarks. Thanks, Tamika.

Speaker Change: I will now hand, todays call all of that to presenters for any closing remarks.

Operator: Before we conclude, I'd like to share that management will be participating virtually at CL King's 22nd Annual Best Ideas Conference on September 16th during the quarter, for which the webcast link will be posted to our Investor Relations website. Thank you again for joining us today, and we look forward to speaking with you all again in November as we share our third quarter results. This concludes today's call. Thank you for joining us. You may now disconnect your line.

Amit: Thanks, Amit.

Unknown Executive: Before we conclude, I'd like to share that management will be participating virtually at FIAL King's 22nd Annual Best Ideas Conference on September 16th during the quarter, for which the webcast link will be posted to our Investor Relations website. Thank you again for joining us today, and we look forward to speaking with you all again in November as we share our third quarter results.

Speaker Change: Before we conclude I would like to share that management will be participating virtually at CL King <unk> second annual best ideas conference on September 16th during the quarter for which the webcast link will be posted to our Investor Relations website.

Speaker Change: Thank you again for joining us today, and we look forward to speaking with you all again in November as we share our third quarter results.

Operator: This concludes today's call. Thank you for joining. You may now disconnect your lines.

Speaker Change: This concludes today's call. Thank you for joining you may now disconnect your lines.

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Operator: Thank you very much for your time, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you very much, thank you 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