Q4 2025 Cimpress PLC Earnings Call

Ari: Good day, and thank you for standing by. Welcome to the CIMPRESS Q4 fiscal year 2025 earnings call. I will now introduce Meredith Burns, Vice President of Investor Relations and Sustainability.

Meredith Burns: Thank you, Ari, and thank you, everyone, for joining us. With us today are Robert Keane, our Founder, Chairman, and Chief Executive Officer, and Sean Quinn, our EVP and Chief Financial Officer. We appreciate the time that you've dedicated to understand our results, commentary, and outlook. This live Q&A session will last about 45 minutes or so, and we will answer both pre-submitted and live questions. You can submit questions live via the questions and answers box at the bottom left of the screen. Before we start, I will note that in this session, we will make statements about the future. Our actual results may differ materially from these statements due to risk factors that are outlined in detail in our SEC filings and the documents we published yesterday on our website.

Good day, and thank you for standing by. Welcome to the Cimpress Q4 Fiscal Year 2025 Earnings Call. I will now introduce Meredith Burns, Vice President of Investor Relations and Sustainability.

Thank you, Ari, and thank you everyone for joining us with us today, are Robert Keane, our founder, chairman and chief executive officer and Sean Quinn R EVP and Chief Financial Officer. We appreciate the time that you've dedicated to understand our results commentary and Outlook this live Q&A session will last about 45 minutes or so, and we'll answer both pre-submitted and live questions.

You can submit questions live via the Questions and Answers box at the bottom left of the screen.

Meredith Burns: We also have published non-GAAP reconciliations for our financial results on our website, and we invite you to read them. Now I will turn things over to Robert.

Published non-gaap reconciliations for our financial results, on our website, and we invite you to read them. So now I will turn things over to Robert.

Robert Keane: Thanks, Meredith Burns. Thank you to all our investors for joining us today. Yesterday, we published two documents, our Q4 and FY25 earnings document, as well as our annual letter to investors. Sean Quinn is going to cover details of the earnings document. I will start with a quick review of that annual letter. To start off, CIMPRESS is a profitable global company that helps millions of businesses build brands, stand out, and grow. Our consistent investment for the long term has led to production capabilities, to technology, and to service capabilities that tower above other firms in the printing or related industries. No competitor has our scale, our global reach, or CIMPRESS's wide array of products. The biggest near-term challenge we face is that we are in a major transition in terms of what product categories drive our success.

Thanks Meredith. Thank you to all our investors for joining us today.

Yesterday, we published 2 documents, our Q4, and our uh, the 24 and FY. 25 erne document.

As well as our annual letter to investors.

Sean is going to cover details of the earnings document. I will start with a quick review of that and the annual letter.

To start off. Cimpress is a profitable global company.

That helps millions of businesses build brands, stand out, and grow. Our consistent investment for the long term has led to production capabilities, technology, and service capabilities that tower above other firms in the printing or related industries. No competitor has our scale or our global reach.

Or cimpress is wide array of products.

Robert Keane: This transition dilutes our near-term growth rate and profit percentage margins, but we believe it will lead to a future of steady growth of gross profit dollars and much higher per customer lifetime value. In summary, we are succeeding in this transition. Since at least 2022 in our annual investor days and in other investor forums, we've discussed key components of this transition. First, the large opportunity for categories like packaging, promotional products, apparel, labels, signage, booklets, catalogs, magazines, and books. These can more offset the maturation of categories like business cards and other legacy products. Second, we've spoken about how we have been consistently investing in manufacturing, in new product introductions, in design enablement, technology, and importantly, in an improved customer experience. All of that investment is designed to capture the opportunity I just described.

The biggest near-term challenge we face is that we are in a major transition in terms of what product categories drive our success.

This transition dilutes our near-term growth rate and profit percentage margins, but we believe it will lead to future of steady growth of gross profit dollars and much higher per customer lifetime value.

In summary, we are succeeding in this transition.

In 2022, during our annual investor days and in other investor forums, we've discussed key components of this transition. First, the large opportunity for categories like packaging and promotional products, apparel, labels, signage, booklets, catalogs, magazines, and books.

These can more offset, the maturation of categories, like, business cards, and other Legacy products.

Second, we’ve spoken about how we have been consistently investing in manufacturing, new product introductions, and design enablement.

Technology and uh, importantly in and improved customer experience.

All of that investment designed to capture the opportunity. I just described

Robert Keane: Third, the value and the profit growth of high-value customers across CIMPRESS has been something we've described, including, for example, speaking about the top several deciles of VistaPrint's customers. That being said, we do recognize that many investors don't fully appreciate either this transition's success to date or its promise for tomorrow, and that we've failed to give specific enough data to model its impact. That's why in this year's letter to investors, we provide quantified examples of the successes we've been delivering in large new elevated product categories. Yesterday's letter also includes a table of revenue share, revenue growth, and variable gross margins by product category for fiscal 2025, which should help you model our business.

third the value and the profit growth of high-value customers across cimpress has been something we've described including for example, speaking about the top several deciles of vista's customers

That being said we do recognize that many investors don't fully appreciate either this transitions success to date or its promise for tomorrow and that we've failed to give specific enough data to model its impact.

That's why in this year's letter to investors, we provide Quantified examples of the successes we've been, uh, delivering in large new elevated. Product categories, yesterday's letter also includes a table of Revenue, share Revenue growth and variable gross margins by product category for fiscal 2025, which should help you model our business.

Robert Keane: The examples and the data in that letter illustrate that CIMPRESS is successfully building on our long-term foundational capabilities, which have traditionally addressed only a small portion of our total addressable market via our legacy products. Thanks to our continuously expanding product range and our investment in an improved customer experience, we are successfully earning customer trust for a much larger share of their print and promo wallet, and they are becoming much higher lifetime value customers for CIMPRESS. This expansion of our capabilities in elevated products and, importantly, the associated rise of lifetime value promises to extend CIMPRESS's multi-decade market disruption.

The examples of the data uh in that letter illustrate. The simplest is successfully building on our long-term foundational capabilities.

Which have traditionally addressed.

Only a small portion of our total addressable market via our Legacy products.

Thanks to our continuously expanding product range and our investment in an improved customer experience. We are successfully earning customer trust for a much larger share of their print and promo wallet and they are becoming much higher lifetime value customers for cimpress.

This expansion of our capabilities in elevated products, and importantly, the associated rise of, uh, lifetime value.

Promises to extend San Francisco's, multi-decade Market disruption.

Robert Keane: That disruption is transforming a fragmented traditional print and promo landscape, which has tens of thousands of small job shops and small distributors towards a future of a limited number of larger firms, of which CIMPRESS is the clear market leader who master mass customization and web to print. As we've conveyed many times before, we estimate that our total addressable market in Europe, North America, and Australia exceeds $100 billion per year, and that more than 60% of that market value is still served by those traditional suppliers. Within this context of market opportunity, this year's annual letter discussed the strategic and financial logic which led us to invest in fiscal 2025 and why we plan to invest in fiscal 2026 at levels of capital expenditures and capitalized software that are well above maintenance levels.

That disruption is transforming a fragmented traditional print in promo landscape.

Which has tens of thousands of small job shops in small, Distributors towards a future of a limited number of larger, firms of which cimpress is the clear market leader.

Who Master Mass customization and web to print.

Value is still served by those traditional suppliers.

Robert Keane: In brief, we believe that these investments will not only accelerate our momentum in elevated products and in higher lifetime value customers, but we also believe that they will allow us to deliver cost reductions worth about $70 to $80 million of incremental annualized adjusted EBITDA improvements by the end of fiscal 2027, above and beyond what we would otherwise do. On top of our well-established traditional legacy products, we see that CIMPRESS's successful expansion to elevated products and higher value customers offers a future of significantly increased cash flow per share, yet our equity valuation does not reflect that perspective.

Within this context of market opportunity, this year's annual letter discussed the strategic and financial logic that led us to invest in fiscal 2025. We also outlined why we plan to invest in fiscal 2026 at levels of capital expenditures and capitalized software that are well above maintenance levels.

In brief, we believe that these investments will not only accelerate our momentum in elevated products and in higher lifetime value customers.

But we also believe that they will allow us to deliver cost reductions worth about 70 to 80 million dollars of incremental, annualized adjusted, evida improvements by the end of fiscal 27 above and beyond what we would otherwise do.

On top of our well-established traditional Legacy products.

We see that Cimpress is successfully expanding to elevated products for higher value customers.

Robert Keane: Now, we certainly seek to close that value gap over time by delivering revenue and profit growth, by being rigorous in our capital allocation, by clearly communicating to investors tangible examples of progress and of return on investment, and of providing disclosure that allows you to track and understand this progress. In the meantime, if our shares continue to trade at these levels, we see this as an opportunity to take advantage of the price-to-value gap through share repurchases like we have just done in the past quarter, even as we maintain a strong balance sheet. Now I will turn things over to Sean Quinn to discuss the financial results and the outlook commentary.

Offers a future of significantly increased cash flow per share. Yet our equity valuation does not reflect that perspective.

Now we certainly seek to close that value Gap over time by delivering revenue and profit growth by being rigorous in our Capital allocation by clearly communicating to investors tangible examples of progress and of return on investment and of providing disclosure. That invest allows you to track and understand this progress.

in the meantime, if our shares continue to trade at these levels,

we see this as an opportunity to take advantage of the price to Value Gap. Through share repurchases like we have just done in the past quarter.

Even as we maintain a strong balance sheet, I’ll turn things over to Sean to discuss the financial results and the outlook commentary.

Sean Quinn: Great. Thanks a lot, Robert. I just want to again thank everyone for joining today. To start with a brief overview of our financial results, our consolidated Q4 revenue grew 4% on a reported basis and 2% on an organic constant currency basis. For the full year, it grew 3% on both a reported and constant currency basis. At VistaPrint, organic constant currency revenue grew 4% for the quarter, and that was fueled by continued strength in promotional products, apparel, and gifts, in signage, in packaging, and labels, all of which grew significantly again in Q4. We go into further detail in Robert's annual letter, but these products are helping to attract and retain higher value customers and to improve per customer profitability, which is a trend that we have seen for several years now, but was definitely notable again in Q4.

Great, thanks a lot Robert and uh, just want to again. Thank everyone for joining today. Just to start with a brief overview of our financial results.

Our Consolidated Q4 Revenue, grew 4% on a reported basis and 2%. On an organic constant currency basis.

And for the full year grew 3% on both a reported and constant currency basis.

At Vista, organic constant, currency Revenue, grew 4% for the quarter and that was fueled by continued strength and promotional products apparel and gifts.

In signage, in packaging and labels all of which grew significantly again in Q4.

Sean Quinn: Organic constant currency revenue growth in European markets remains strong. That was at 7% for Q4, while year-over-year growth in North America improved sequentially to 3%. As noted in Robert's annual letter, legacy products such as business cards, stationery, and holiday cards are experiencing declining market demand, which shows through in our consolidated results. At VistaPrint, business cards declined 6% during Q4. The mix shift from these legacy products to the higher value elevated products does weigh on our gross margins, but we remain optimistic, as Robert talked about, about our ability to drive profitability growth as these higher growth categories continue to scale. One good example of that is VistaPrint's revenue in the promotional products, apparel, and gifts category for the full fiscal year, which grew 18%. That is now on a base of revenue which is over $300 million.

We go into further detail in Robert's annual letter but these products are helping to attract and retain higher value customers and to improve per customer profitability, which is a trend that we have seen for several years now, but was definitely notable again in Q4.

Organic constant currency Revenue, growth in European markets, remain strong, that was at 7% for Q4 while year-over-year growth in North America, improved sequentially to 3%.

As noted in Robert's annual letter, legacy products such as business cards, stationery, and holiday cards are experiencing declining market demand, which is reflected in our consolidated results. At Vista, business cards declined 6% during Q4.

Sean Quinn: Importantly, not only did we grow 18% in that category, but our estimated variable gross profit in that category grew 27%. Turning to profitability, adjusted EBITDA increased by $3.1 million year over year, but declined $35.5 million for the full year. In Q4, our profit trend improved compared to earlier in the year, despite a tariff impact of about $3 million net of pricing offsets. Most of this impact on tariffs happened during the heightened tariff rates in May and was primarily, as we called out in the earnings document last night, at our National Pen business. As tariff rates then came back down in June, we were able to fully offset the impact through pricing mitigation, coupled with all the things that we were doing from a sourcing perspective. Gross margin was impacted by our ongoing product mix shift.

The mix shift from these Legacy products to the higher value elevated products, does weigh on our gross margins but we remain optimistic. As Robert talked about about our ability to drive profitability growth as these higher growth categories. Continue to scale 1, good example of that is vista's revenue in the promotional products of power and Gifts category for the full fiscal year, which grew 18%, and that's now on a base of Revenue, which is over million dollars importantly. And not only did we grow 18%, uh, in that category, but our estimated variable growth profit in that category grew 27%.

Turning to profitability, we adjusted the debit to increase by $3.1 million year-over-year, but it declined by $35.5 million for the full year.

In Q4 our profit Trend improved compared to earlier in the year. Despite a tariff impact of about 3 million dollars. Net of pricing offsets.

Most of this impact on tariffs happened during the heightened tariff rates in May and was primarily, as we called out in the earnings document last night, at our national pain business. As tariff rates then came back down in June, we were able to fully offset the impact through pricing mitigation, coupled with all the things that we were doing from a sourcing perspective.

Sean Quinn: Gross profit dollars grew year over year in Q4, despite the 110 basis points of gross margin compression. That includes, again, the $3 million of tariff impact. As we have described in the past, we expected advertising efficiencies in Q4, and that is what happened. Consolidated advertising as a percentage of revenue declined 120 basis points to 11.3%. Importantly, contribution profit grew 5%, and contribution margin improved slightly. Currency fluctuations had a $3.6 billion benefit to adjusted EBITDA during the quarter as well, given most notably the strengthening of the euro. From a full year perspective, I am not going to recap the full year again, but the year-over-year decline in adjusted EBITDA was primarily driven by the December quarter. There were a number of benefits from fiscal 2024 that did not repeat.

Gross margin was impacted by our ongoing product, mix shift, gross profit dollars, grew year-over-year in Q4, despite the 110 basis points of gross margin compression. And that includes again the $3 million of tariff impact.

Percentage of Revenue declined, 120 basis, points to 11.3%, importantly, contribution profit, grew 5% and contribution. Margin improved slightly.

Sean Quinn: There were a number of one-time negative items in FY25 that combined drove a significant portion of that decline, but the performance in the second half of the year was improved. We importantly feel confident about continuing that improvement in fiscal 2026, as is represented in the outlook that I will go through momentarily. On the tariff front, in the earnings document, we updated our overview of impact. Our exemptions and exclusions there remain the same as what we discussed in our Q3 earnings release. The majority of impact continues to be on our promotional products that have Chinese country of origin. Outside of the period of the heightened tariff rates in May, we are able to offset tariff impacts at VistaPrint and National Pen through pricing actions and also the work that we have done from a sourcing perspective.

Currency currency fluctuations had a 3.6 billion dollar benefit to adjust the debit side during the quarter as well. Given most notably at the strengthening of the Euro. And from a full year perspective, I'm not going to recap the full year again, but the year-over-year decline in adjusted Evita was primarily driven by the December quarter and there were a number of benefits from fiscal 24 that didn't repeat. There were a number of 1-time negative items in fy2 that combined drove a significant portion of that decline. But the performance in the second half of the year was improved. And we importantly feel confident about continuing that Improvement in fiscal 26 as is represented uh in the Outlook that I'll go through a momentarily.

On the Tariff front, uh, in the earnings document, we updated our overview of impact, our exemptions and exclusions there remain the same as what we discussed in our Q3 earnings release.

Sean Quinn: I would say, generally speaking, there has been a lot of work done there, and our mitigation plans here remain on track. Turning to our guidance, we have set our guidance for fiscal 2026 at a level that we believe incorporates continued uncertainty from the trade and macroeconomic environment. In fiscal year 2026, specifically, we expect revenue growth of 5% to 6% or 2% to 3% on an organic constant currency revenue basis. We expect net income of at least $72 million and adjusted EBITDA of at least $450 million when taking into account the impact of additional startups and also our Pixartprinting U.S.

The majority of impact continues to be on our promotional products uh that have Chinese country of Origins outside of the period of the heightened. Tariff rates in May, we're able to offset tariff impacts at Vista and National pens through pricing actions and also the work that we've done from a sourcing perspective. And I would say generally speaking, there's been a lot of work done there, um, and our mitigation plans, here, remain on track.

Sean Quinn: facility and also other manufacturing projects connected with our higher expected CapEx in fiscal 2026 that we believe, as Robert outlined earlier, will drive material financial benefit in fiscal 2027. We will also have about $14 million of annualized savings from cost reduction actions that we implemented in the back half of fiscal 2025, so that will help to reduce operating expense growth next year. We expect operating cash flow of $310 million and adjusted free cash flow of approximately $140 million. We expect the year-over-year impact of currency on EBITDA to be slightly favorable in fiscal 2026, and we expect CapEx to be approximately $100 million and capitalized software to be approximately $70 million, again, as Robert referenced earlier, well above maintenance levels.

Turning to our guidance, we've set our guidance for fiscal 26 at a level that we believe incorporates continued uncertainty from the trade and macroeconomic environment. In fiscal year 2026 specifically, we expect Revenue growth of 5 to 6% or 2 to 3% on an organic constant currency Revenue. Uh, basis, we expect net income of at least 72 million dollars and adjusted Evita of at least 450 million. When taking into account, the impact of additional startup. Also, our Pixar printing, us facility, and also other manufacturing projects connected with our higher expected, Capital expenditures, and fiscal 26, that we believe is Robert outlined earlier. We'll drive material Financial benefits and fiscal 2027.

We'll also have about 14 million dollars of annualized savings from cost reduction actions that we implemented in the back half of fiscal 25 so that will help to reduce operation ratings growth next year.

We expect operating cash flow of 310 million and adjusted free. Cash flow of approximately 140 million dollars.

We expect the year-over-year impact of currency on EB to be slightly favorable in fiscal 26.

Sean Quinn: We expect cash taxes to increase to $55 to $60 million as we received tax refunds in fiscal 2025 that will not repeat. We will also have the impact of profit growth. Lastly, we expect net leverage to decrease slightly by the end of fiscal 2026. We do remain committed to reaching our leverage target of 2.5 times our trailing 12-month EBITDA as defined by our credit agreement. With that, Meredith, why do not we open it up for questions?

And we expect capex to be approximately 100 million dollars and capitalize software to be approximately 70 million again as Robert referenced earlier. You know, well above maintenance levels

We expect cash taxes to increase to $55 million as we receive tax refunds. In fiscal 2025, that won't repeat. We'll also have the impact of profit growth.

And then lastly, we expect net. Net leverage to decrease slightly by the end of fiscal. 26. We do remain committed to reaching our leverage Target of 2 and a half. Times our children 12 months uh as defined by our credit agreement.

Meredith Burns: Thanks, Sean. As a reminder, you can submit questions during this webcast via the questions and answers box at the bottom left of the screen. We have received both pre-submitted questions, and we also have a bunch of live questions coming in now, which is great. We will make sure that we get to as many of your questions as we possibly can. In the places where we have some overlapping topics, we may combine some of the questions just in order to get everybody's thoughts out. I am going to start with Sean first, the first question that was pre-submitted last night. FY26 guidance implies free cash flow conversion of EBITDA at 31%.

With that Meredith. Why don't we open up for questions?

Thanks Sean. Uh, as a reminder you can submit questions during this webcast via the questions and answers box at the bottom left of the screen. Uh, we have received both pre-submitted questions and we also have a bunch of live questions coming in now, which is great. Uh, so we will, uh, make sure that we get to as many of your questions as we possibly can. Uh, and in the places where we have some overlapping topics, uh, we may combine, uh, some of the, the, the questions just in order to, uh, get everybody's, um, thoughts.

Meredith Burns: Historically, you have talked about a conversion rate of 45% to 50% with some fluctuations from year to year, but FY26 will be the second year in a row of free cash flow conversion in the low 30% range. Is the 45% to 50% conversion ratio still in effect on a normalized basis? When should free cash flow conversion return to that 45% to 50% level? I understand that CapEx is going to be a bit higher this year, but I would think that whatever weighed on the conversion in FY25 should start to be bouncing back and help to offset that.

First. Uh the first uh, question that was pre-submitted uh last night so FY 26, guidance, implies free cash flow conversion of Evita at 31%.

Sean Quinn: OK. Yeah, great question. Thank you. Maybe just to start, I just went through the free cash flow guidance for next year. Free cash flow is expected to be slightly lower in fiscal 2026 than it was in fiscal 2025, despite the fact that we do have EBITDA growth implied in the guidance. There are a few factors there. CapEx is expected to be higher, CapEx is higher, and CapEx is higher. If you take this together, that is about $40 million of year-over-year impact back on flow versus fiscal 2025. In terms of the free cash flow conversion, we do have confidence that the 45% to 50% conversion rate is a more normalized level.

Historically, you have talked about a conversion rate of 45% to 50%, with some fluctuations from year to year. However, FY 26 will be the second year in a row with free cash flow conversion in the low 30% range. The 45% to 50% conversion ratio is still in effect on a normalized basis. When should free cash flow conversion return to that 45% to 50% level? I understand that capex is going to be a bit higher this year, but I would think that whatever weighed on the conversion in FY 25 should start to be bouncing back and help to offset that.

Okay yeah, great question. Thank you. Um,

I'll be um, and so this together that's about $40 million of year-over-year uh impact on Flow versus fiscal 25.

Sean Quinn: In our annual letter that we published last night, but also, as Robert Keane remarked earlier, we talked about a few of the factors that we think will drive increased free cash flow, including higher EBITDA through the COGS and operating efficiencies that we can deliver through that CapEx as we exit FY2027. We do not expect that the level of CapEx that I just outlined in the outlook will be sustained on an ongoing basis. So there is slightly elevated, and we will actually get to a question on this, slightly elevated maintenance CapEx both in FY2025 but also in FY2026 as part of those numbers. We are investing from a CapEx perspective that is higher than we would expect on a sustained basis.

In terms of the uh the the free cash flow conversion, we do have confidence that the 45% is the more normalized level.

And in our annual letter um uh that we published last night. But also as Robert remarked earlier, we talked about a few of the factors that we think will drive increased free cash flow, um, including um, you know, higher higher EBA through the the cogs and operating efficiencies that we can deliver through through that capex. Um as exit FY 27, we don't expect that the levels halfbacks that I just outlined in the Outlook.

Sean Quinn: Working capital also is an important factor. That is going to fluctuate from year to year, and I think the last two years are good examples of that. In fiscal 2024, working capital was a very significant inflow. In fiscal 2025, it was a small outflow. On a normalized basis, we expect that to be an inflow and contribute to free cash flow conversion as well. In summary, yes, we believe that that is achievable, the 45% to 50% conversion rate in a normalized environment for the reasons just outlined. That will not be the case in fiscal 2026. But as we get to financial benefits of that higher CapEx coming in in FY2027 and get to more sort of normalized levels of CapEx, we would expect that to be working back into that range.

Uh will be sustained, you know for on a on an ongoing basis. So there's there's slightly elevated and we'll actually cancel question on this slightly elevated maintenance capex, both in FY 25 but also in FY 26 as part of those numbers we're investing in from a capex perspective that's you know higher than we would expect on a sustained basis. Um working capital also is an important factor that's going to fluctuate from year to year and I think the last 2 years are good examples of that in fiscal 24. Working capital was a very significant inflow and fiscal 25. Uh, it was a small outflow on a normalized basis. We expect that to be an inflow and contribute to free cash flow conversion as well. So in summary, yes, we believe that that is achievable to 45 to 50, uh, percent.

Conversion rate in a normal at a, in a normalized environment for the reasons, just outlined that won't be the case in fiscal 26. But as we get the financial benefits of that higher capex coming in in FY 27, um, and get to more sort of normalized levels of capex. Um, we would expect that um, to be working back into that range.

Meredith Burns: Thanks, Sean. Your audio was breaking up just right at the end of the answer to that question, but we understood what you were saying. I am going to move on to a question for Robert next. We appreciated the detail on page 20 of the investor letter around product categories. What is the go-forward revenue growth expectation in percentage terms generally or high level for the legacy products and elevated products? Are there any changes in expected variable gross margin as these categories grow or decline as compared to what was provided for FY25? We obviously recognize it is hard to give specifics, but even high-level guidance by category would be greatly appreciated if possible.

Thanks, Sean. Um, your your audio was breaking up just right at the end of the answer to that question. But um, we understood uh, what you were what you were saying? All right. Um, I'm going to move on to a question for Robert next.

Uh, we appreciated the detail on page 20 of the investor letter around product categories.

What is the go forward? Revenue growth expectation in percentage terms, uh, generally uh, or high level for the Legacy products and elevated products. Are there any changes in expected variable growth margin as these categories grow or decline as compared to what was provided for fy2? We obviously recognize it's hard to give specifics but even high level guidance by category would be greatly appreciated if possible.

Robert Keane: Thanks for the question. As you know, it is hard to give specifics, and we are not going to provide product-specific growth or decay rate projections or variable gross margin targets. But I will try to frame this for you in a way which I think should be helpful. As we noted just above the table you referred to in the letter, each major product category does include examples of legacy products and elevated products. But we broke out some specific details of the larger legacy products to be helpful to investors. That does make it a little bit tough to make high-level comments on growth trends by category. But let me give some context. First of all, the products that we called out in that table as having declined in fiscal 2025, we have planned for a continued decline in those categories.

Well, thanks for the question.

Uh, as you know, it is hard to give specifics, and we aren't going to provide product-specific growth or decay rate projections or variable gross margin targets. But I will try to frame this for you in a way that I think should be helpful.

so,

As we know noted just above the TA table, you refer to in the letter. Each major product category does include uh, examples of Legacy products and elevated products,

But we broke out some specific details of the larger Legacy products to be helpful to investors.

Now that does make it a little bit tough to make high-level comments on growth Trends by category. But

Robert Keane: For business cards, that rate of decline is similar to FY25, and for holiday cards and mugs and home decor, slightly improved as there were some specific drivers in those categories in fiscal 2025. Business cards is the largest impact at 13% of our revenue last year. Most of that is in the VistaPrint business in really one month into the year, but so far, we are on track to plan. Let me just step back a little bit in terms of that business card shift.

let me, uh, give some context. First of all, the products that we called out in that table as having declined in fiscal 25, we have planned for continued, decline in those categories for business cards, that rated the client is similar to fy2, and for a holiday cards, and mugs and Home, Decor slightly improved. As there were some specific drivers, uh, in those categories, in fiscal 25,

Business cards represent the largest impact at 13% of our revenue last year. Most of that is in the Vista business, and we're only one month into the year.

But on, uh, so far, we're on track to plan.

Robert Keane: We definitely see the market being soft overall, but if you go to our site and you look at our communications, we have also really increased the focus on these other products, which is taking some of the shelf space, a significant amount of shelf space away from if you go back 4, 5, 10 years ago, where business cards were really the primary focus of what you would see when you came to the VistaPrint site. That is why we see this type of shift happening. And we think that is a good thing because of all the reasons we spoke about in the letter. In terms of the growing categories, we are expecting additional growth in coming years. Generally, using the table we published as a starting point is helpful, understanding that there are always going to be puts and takes from one year to the next.

Let me just step back a little bit in terms of that business card shift. We definitely see the market being soft overall, but...

If you go to our site and you look at our communications, we've also really...

Increased the focus on these other products, which is taking a significant amount of shelf space away from business cards. If you go back 4, 5, or even 10 years ago, where business cards were really the primary focus, what you would see when you came to this different site. So that's why we see this type of shift happening. We think that's a good thing because of all the reasons we spoke about in the letter.

Now, in terms of the growing categories,

Robert Keane: Some of our fastest growing products are getting more scale, like the VistaPrint promotional products, the apparel. Sean Quinn just gave some details on that earlier, and we expect that type of growth to shine through on our consolidated results. In terms of the part of your question that talked about variable gross margin percentages, in our annual letter, we were clear that we do see the opportunity to improve like-for-like unit costs of the growing product categories. We have done that historically with legacy products.

we are expecting additional growth in coming years. Uh, generally using the table. We published as a starting point, is helpful understanding that there are always going to be puts and takes from 1 year, uh, to the next.

Products are getting more scale, like the Vista promotional products. The apparel Shan Shan just gave some details on earlier, and we expect that type of growth to shine through on our consolidated results.

in terms of your the part of your question, that talks about variable gross margin percentages,

Robert Keane: That should come through a combination of more volume aggregation into focused production hubs, through ongoing production equipment upgrades that become more attractive from an ROI perspective once we get to higher volumes, for example, greater automation, by lower shipping costs, and some production can be shifted to be closer to the end customer where we are delivering to, and on insourcing of products that are currently being fulfilled by third-party fulfillers. Importantly, we have also had a history of introducing product attribute upgrade choices that customers really like, they really value, but which have a cost that is quite low for us. That drives incrementally high gross margin percentages and gross margin dollars. We gave the example of one of our high-volume product categories, business cards and VistaPrint, where in 2005, at the time of our IPO, variable gross margins were about 55%, and today they are about 74%.

in our annual letter, we work clear that we do see the opportunities improve like for like unit costs of the growing product categories and we've done that historically with Legacy products and that should come through a combination of more volume aggregation into

Focused production, hubs.

Through ongoing production equipment upgrades that become more attractive from an ROI perspective, once we get to higher volumes, for example, greater automation.

By lowering shipping costs, as some production can be shifted to be closer to the end customer where we're delivering to, um, and on insourcing of products that are currently being fulfilled by third-party facilities.

Importantly, we've also had a history of introducing product, attribute upgrade choices, that customers really like they really value. But which have um, a cost that is uh quite low for us and that drives incrementally high gross margin percentages and gross margin dollars.

Robert Keane: This is certainly not a promise that we can get 20 points of gross margin out of every product category on that list, but we do see meaningful improvement like this across many products over time, and we are making the investments to drive these types of improvements in these newer categories like we have historically in other categories. In summary, yes, we do think there is an opportunity to improve like-for-like variable gross margin percentages on our elevated products, and very importantly, because elevated products typically have higher per customer lifetime value. In parentheses, let me remind you, we define gross LTV as the gross profit generated in dollar terms, not in percentage terms. Because of that higher LTV, there is also an opportunity to get advertising and OPEX leverage over time as elevated products continue to grow, and that drives higher wallet share from higher value customers.

Now, we gave, uh, the example of 1 of our high volume product categories, business cards, and Vista Print where, uh, in 2005 at the time of our IPO, variable gross margins were about 55%. And today, there are about 74%

And this is certainly not a promise that we can get 20 points of, uh, gross margin out of every product category on that list. But we do see meaningful improvement like this across many products over time. And we're making the investments to drive these types of improvements in these newer categories, like we have historically in other categories.

In summary. Yes, we do think there's an opportunity to improve like for like variable gross margin percentages on our elevated products and

Very importantly because elevated products typically have.

Higher per customer lifetime value.

Robert Keane: So in summary, we are very excited about what this can deliver over the coming years. It is a story of headwinds and tailwinds, but the tailwinds are really starting to gain the upper hand.

And in parentheses, let me remind you, we define gross LTV as the gross profit generated in dollar terms, not in percentage terms. Because of that higher LTV, there's also an opportunity to get advertising and Opex leverage over time as elevated products continue to grow, which drives higher wallet share from higher-value customers. So, in summary, we are very excited about what this can deliver over the coming years.

Uh, it is a story of headwinds and tailwinds, for the tailwinds are really starting to gain the upper hand.

Meredith Burns: Excellent. Thank you, Robert. I am going to stick with you for this next question because it is actually a really nice follow-on. Is the 2% to 3% FX adjusted growth rate expected for FY26 the new steady state growth rate, or do you aspire to get back to at least the mid-single-digit percentage growth or higher over time? If so, how do you get there?

Robert Keane: Definitely the latter. We aspire to get back to at least mid-single-digit % over time. We do think we can grow faster because doing so really is dependent on the execution that we have already been showing with these growth in elevated products and the growth of high-value customers. As I just said, ended the last answer with the tailwinds overcoming some of the headwinds in our legacy products and channels.

Well, and thank you Robert. Um, I'm going to stick with you for this next question because it's actually a really nice follow on. Um, is the 2 to 3% FX adjusted growth rate expected for FY, 26, the new steady state growth rate, or do you aspire to get back, uh, to at least the mid single digit percentage growth or higher over time. And if so, how do you get there?

That's definitely the latter. We aspire to get back to at least uh, mid single digit percentages or over time.

um,

We do think we can grow faster because, um,

Doing so really.

is dependent on the execution that we've already been showing with these growth in elevated products and the growth of high value customers. And, as I just said, I ended the last answer with of the.

Robert Keane: If you make your own assumptions over the next few years of our growth rates by category, and you start with the fiscal 2025 table we published in my letter last night, and if you inform your scenarios by the many examples of strong growth in elevated products, which we provided last night, I think you can see why we should be able to move back to the mid-single-digit growth rates. That is definitively not guidance, but it does give a good frame or framework for thinking about top-line growth. As I just mentioned, and also as discussed in our letter, you can, and I believe you should, layer in assumptions about our gross margin % changes and the impact that that can have on the trajectory of advertising as a % of revenues and therefore the trajectory of contribution profit dollars.

Tailwind. Overcoming some of the headwinds, you know, Legacy products and channels.

Now, if you make your own assumptions about the next few years of our growth rates by category and you start with a fiscal 2025 table we published in my letter last night.

And if you inform your scenarios by the many examples of strong growth and elevated products, which we provided last night.

I think you can see why we should be able to move back to the mid single digit growth rates. That's definitively not guidance, but if it does give a good frame or framework for thinking about Topline growth,

and as I just mentioned, and also as discussed in our letter,

You can, and I believe you should, elaborate on assumptions about our growth margin percentage changes and the impact that can have on the trajectory of advertising as a percentage of revenues, and therefore the trajectory of contribution profit dollars.

Meredith Burns: Great. Thank you, Robert. We did receive a couple of questions from folks regarding a recent Schedule 13D filing by one of our shareholders. I just want to take that one. While we appreciate that this is a topic that is of interest, we are not going to comment on investor filing since CIMPRESS is not the one that filed that document. I will move on to another question. This one is going to be for Sean. Sean, has your maintenance CapEx, including capitalized software expense, increased meaningfully as a result of your recent investments? As I read it, your estimate over organic growth investments indicates that it has, as I am looking at the trend in total CapEx and capitalized software versus the trend in the difference between estimated impact of growth investments on EBITDA and free cash flow.

Great. Thank you, Robert.

Our shareholders. Um, I just want to, uh, take that 1, uh, while we appreciate that. Uh, this is a topic that's of interest. Uh, we're not going to comment on investor filing since, uh, since process is not the 1 that filed that document. Uh, so I will move on to another question. Um, this 1 is going to be for Sean. Uh, Sean has your maintenance capex, including capitalized, software expense, increased meaningfully, as a result of your recent Investments.

As I read it, your estimate over organic growth Investments indicates that it has. As I am looking at the trend in total capex and capitalize, software versus the trend in the difference between estimated impact of growth Investments on Evita and free cash flow.

Sean Quinn: Yeah, you are right to call this out. Our maintenance CapEx did increase this fiscal year and will be more elevated in fiscal 2026 as part of the guidance that we provided as well. That is not as a result of our recent investments. It is more related to two specific factors, most of it being on the CapEx side of things, not on capitalized software, though there is some impact there. On the capitalized software piece, there are always some waves that we go through in terms of the intensity of maintenance capital.

Yeah, uh, yeah, you're right to call this out. Um, our maintenance capex did increase this fiscal year and we'll be more elevated in fiscal 26. This is kind of the guidance that we provided as well.

Sean Quinn: For example, if we happen to be in a year where we are replacing, let us say, an offset press or two offset presses that have a long life, so we are not replacing those on a very regular basis, that would be a year or a reason why there might be a larger outlay in one year versus another. FY2025 was a larger year of maintenance CapEx. When we do that, it is replacing existing equipment. So from that perspective, there is maintenance CapEx, but there are absolutely benefits in terms of increased efficiency, better quality, expanding capacity because throughput increases, uptime being better. There is some sort of aspect to it, but it really is replacement. I think that is really the main difference. It is not that we would necessarily sustain this current level each year.

Um, that's not as a result of our recent Investments. It's more um, related to 2 specific factors, most of it, being on the um, capex side of things, not all capitalized software that there's some impact there. Um, on the capitalized software piece, there's, um, there's always some waves that we go through in terms of the intensity of Maintenance uh maintenance capital. And so you know for example if we happen to be in a year where we're replacing let's say an offset press or 2 offset presses that

You know, have a long life so we don't we're not replacing those on a very regular basis. You know, that that would be a year or a reason why there might be a larger outlay in 1 year versus another. Um, FY. 25 was a larger year of Maintenance capex. Um, and you know, when we do that,

Sean Quinn: We just happened to, in FY2025 and again in FY2026, have slightly elevated levels versus where we were in, let us say, fiscal 2021 through fiscal 2024. So right now, we are at kind of the higher end of that range. On the capitalized software side of things, over time, what we have done, and the question refers to our growth investment disclosures in our annual letter, we have brought down the percentage of our mass customization platform spend that we have considered to be growth investment. The reason that we have done that is that as we get more adoption and that becomes more a part of an ingrained part of how we operate, it becomes more maintenance than growth. That is happening at the same time that the dollars of capitalized software in total have grown.

It is, it is replacing existing equipment. So from that perspective is maintenance capex, but there are absolutely benefits in terms of, um, increased efficiency. You better quality expanding capacity because throughput increases, um, uptime, uh, being better and so, you know, there's there's there's some sort of growth aspect to it but it really is replacement. Um, I think that's really the main difference. It's not um it's not that we would necessarily sustain this current level each year. We just happen to an FYI, 25 and again an FY 26, they have slightly elevated levels. Um, versus where we were in, let's say fiscal 21, through fiscal 24.

So right now, we're at kind of the higher end of that range.

On the capitalized, software side of things, um, over time what we've done and the question refers to our growth investment disclosures in our annual letter. Um, we've brought down the percentage of our Mass customization platform. Spend that we've considered to be growth investment and the reason that we've done that is that you know as we get more adoption and that becomes more, a part of uh integrated part of of how we operate, it becomes more, you know, maintenance and growth. Um and that's happening at the same time that the

Sean Quinn: So the growth investment, if you look at our annual letter, in that area has stayed flat, but our total capitalized software has grown, and therefore, yes, the maintenance portion of that has grown as well. I think at least I always look at this as a percentage of revenue because some of this is in support of the total growth of the business. I think if you look at it on a percentage of revenue in total, again, I would say we are operating at the high end or maybe even higher than what would normally be the high end of our maintenance CapEx and cap software in fiscal 2025. We would expect that after fiscal 2026, we get through some of these bigger cycles of replacement CapEx, but that would then again normalize.

Dollars of capitalized software and total have grown. And so the growth investment, if you look at our annual letter in that area, has stayed flat. But our total capitalized software has grown, and therefore, yes, the maintenance portion of that has grown as well, I think.

I I at least I always look at this as a percentage of Revenue, uh, because some of this is in support of the total growth of the business. And I think if you, if you look at it on a percentage of Revenue, you know, in total again I would say we're we're operating at the high end or maybe even, you know, higher than what would normally be the, the high end of our maintenance capex and cap software in fiscal 25. Um, and we would expect that after fiscal 26, we get through some of these bigger cycles of replacement capex, um, that, that would then, again normalize.

Meredith Burns: Thanks, Sean. I am going to stick with you for the next question as well. The outlook notes that net leverage will decrease slightly over the course of FY26. Should we take this to mean that the company will be repurchasing more shares during FY26? If my math is correct, absent share repurchases or other uses of cash, net leverage would decline to about 2.7 times trailing 12-month EBITDA by the end of FY26.

Thanks, Sean.

Uh, I'm going to stick with you for the next question as well. Um, so the Outlook notes that net leverage will decrease slightly over the course of FY 26,

Should we take this to mean that the company will be repurchasing more shares during FY 26? If my math is correct, absent Sherry purchases or other uses of cash, that leverage would decline to about 2.7 times trailing 12-month debt by the end of FY 26.

Sean Quinn: Yeah, that math is directionally correct. There are some nuances with how exactly EBITDA is calculated based on our credit agreement, but that math gets you almost there. When we are doing our internal planning, but also as we provide guidance, generally speaking, we are not forecasting a certain amount of share repurchases that we are going to do in a year because those are price-dependent. That said, we did say in Robert Keane's letter last night that we would expect to do share repurchases if the price remained at the attractive levels that they have been at recently. So in our outlook, the fact that we have said we expect net leverage to decrease slightly by the end of fiscal 2026, that does allow room for share repurchases and/or small tuck-in M&A. That was our intention with the way that we set that outlook to have that space.

Mhm. Yeah, the, uh, that math is directionally correct. There's some nuances with how exactly does calculated based on a credit agreement but that that math is is, is gets, gets you almost there. Um, we we don't um, when we like when we're doing our internal planning but also um, as we provide, you know, guidance generally speaking, we're not forecasting, you know, certain amount of share repurchases that we're going to do in a year because that those are price dependent. And um, that said we we did say in the uh, in Robert's letter last night that we would expect to do share repurchases if the price remained

Sean Quinn: Again, share repurchase decisions are price-dependent, so we will manage that throughout the year. As you heard in Robert's and also earlier as we got to fiscal 2027, that is what we see our recent investments and also the investments we are making in fiscal 2026, in particular, the increased capital expenditures having a more meaningful positive impact on our profitability, including through the cost reductions outlined that we expect to also positively impact net leverage at that time in fiscal 2027. Just to reiterate again, though, as we said this in the release last night too, we are still committed to the 2.5 times net leverage target as calculated by our credit agreement.

That leverage to decrease slightly by the end of fiscal 26. That does allow room for share repurchases and our small tuck in m&a. And that was our intention with the way that we set that Outlook to have that space. And again, you know, share your purchase decisions are price dependent. So we'll, you know, we'll manage that throughout the year as you heard at the opening and also got the fiscal 27.

That's what we see our recent Investments. And, um, and also the Investments we're making in fiscal 26. And in particular, the increase Capital expenditures, having a more meaningful positive impact on our profitability, including through the cost reductions outlined that we expect to also, positively impact net leverage, you know, at that time, in fiscal, 27. Um, just to reiterate again, though. Um, you as we, and we said this in the release last night, too, we're still committed to the 2 and a half times net leverage Target, um, as calculated by our credit agreement.

Meredith Burns: Thanks, Sean. OK. We had a series of live questions come in around the topic of tariffs, so we will try to take these as they come here. The first one is, what is the risk that the informational product exemption ends?

Thanks, Sean.

Okay, we um, we had a series of live questions come in around the topic of tariffs. So we'll we'll try to take these uh, as as they come here. Um, so the first 1 is, uh, what is the risk that the information, uh, product exemption ends?

Sean Quinn: Yeah, I can take that one. There is some risk there. Maybe just a little bit of background. The informational materials exclusions that exist under IEPA, that exemption is there as a matter of statute. It is not something that has recently been put in. That goes hand in hand with the authorities granted under IEPA by which the tariffs to date have been put in place until some of the more recent trade deals have been done. There is always risk that statutes change, and we do not really have a view on the probability of that risk. Again, that would go hand in hand with the authorities granted under IEPA because it is a matter of statute.

Mhm.

Yeah, I can take that 1. Um, so there is, uh, there is some risk there. Um, maybe just a little bit of background, um, you know, the, the informational materials exclusion that exists under, uh, aipa, you know that that exemption is there. As a matter of Statute. It's not, you know, something that has recently been put in and so that that goes hand in hand with the authorities, granted under aipa by, which to date. You know, have been put in place uh until you know, some of the more recent trade deals um have been done. And so there's always risk that statutes change. Um, and, uh, we don't really have a view on, you know, the uh, the probability of of that risk. Uh, but that again, that would go hand in hand with the um, the authorities, granted, uh, under iipa because it's it's a matter of statute.

Sean Quinn: I think that it is important that, and we talked about this last quarter as well, we have a number of exemptions and exclusions, not just the informational materials exclusion that we benefit from today. If you think about what if that changed and what is our total risk profile, there are other things like the de minimis exemption, which is still in existence other than for China. That is going to go away eventually based on recent legislation. We also have a significant percentage of coverage under USMCA, and that does cover the vast majority of our imports to the United States from Canada and Mexico. I think there is a kind of overlap of all these exclusions and exemptions. In the end, we do not have a crystal ball in terms of how this will all evolve. It has certainly been dynamic.

Um, I think that, you know, it's important that and we we talked about this last quarter as well.

We have a, we have a number of exemptions and exclusions not just the information on materials exclusion that we benefit from today. And so if you think about

You know what, what if that changed and sort of what's our? What's our total risk profile?

Um, you know, there are there are other things like the Dominus exemption um which is still in existence other than for China that's going to go away, you know, eventually based on you know recent legislation but we also have a significant percentage of coverage um under usmca and that does cover the vast majority of our Imports to the United States, from Canada, Mexico.

Sean Quinn: We feel comfortable, and we had to experience this for real in Q4. We feel comfortable with our response and our continued work there to mitigate risk. Coming to the guidance that we provided, and I am scanning through, I think there are a few questions on this, we did incorporate some of that uncertainty that is connected to tariffs into our outlook, and we have done that to the best of our ability.

Um, and so I think, you know, there's a, there's a kind of, overlap of all these exclusions and exemptions in the end, you know, we don't have a crystal ball, uh, in terms of, you know, how this will all evolved. It's certainly been Dynamic. Um, we feel comfortable and we, you know, we, we had to experience this for real, in Q4, uh, we feel comfortable with, um, you know, our response and our continued work there to mitigate risk. And, you know, coming to the coming to the guidance that we provided and I, I'm scanning through. I think there's a few questions on this. Um, you know, we did incorporate some of that uncertainty that, uh, is connected to tariffs into our Outlook and um, you know, we've done that to to the best of our ability.

Meredith Burns: Thanks, Sean. So, another tariff question. Do you think that there was a pull forward in demand during Q4 due to tariffs?

Thanks, Sean. Um so uh, another another tariff question. Do you think that there was a pull forward in demand during Q4 due to tariffs?

Sean Quinn: We really have not seen any indication of that. I mean, I think if you think about the size of the average order across our businesses in the regions that would be impacted, it is really not of a size that I think people would be thinking ahead and pulling forward. So we have not seen any indication of a pull forward in demand.

Meredith Burns: Great. What about the magnitude of the price increases taken during the quarter? Which segment did you take the most price? What was the volume growth in the quarter?

We really have not seen any indication of that. I mean, I think if you you think about the size of the average order across our businesses in, you know, in the regions that would be impacted and it's, it's really not. Um, you know, it's really not of a size that I think people would be, you know, thinking ahead and, and, and pulling forward. So we, we have not seen any indication of a pull forward in demand.

Sean Quinn: Generally speaking, and I will get to the tariff-specific pieces, across all of our businesses, there was nothing notable in terms of large price increases. It was more of a normal mix of increases and decreases and continuous testing, as we always do across our businesses. Price was not a significant driver other than, again, I will get to the tariff piece. For the tariffs, the two main areas of impact were most notably our National Pen business, and we talk about that in the release, and then also the promotional products category, a portion of the promotional products category for Vista. That is where most of the impact was on the cost side, and that is where most of the price happened. We were seeking to offset that, in some cases not fully, but offset most of that.

Great. And then what about the magnitude of the price increases taken during the quarter? Which segments did you take the most price? What was the volume growth in the quarter?

Um,

generally speaking to like and I'll get to the to the Tariff specific pieces.

Cross all of our businesses. There was there was nothing notable in terms of, you know, large price increases.

It was more of a normal mix of increases and decreases in continuous testing. Um, as we always do across our businesses.

So, price was not a, was not a, a, a significant driver other than again, I'll get to the Tariff fees.

Sean Quinn: I would say, and you see this again in our disclosure, we feel good about the results there and also any sort of impact on demand. We really did not see too much impact on the Vista side, on National Pen side to some extent, but that is where in those peak weeks of the really heightened Chinese tariffs, we needed to offset that, and the team did a nice job. I am not going to get into specific percentage increases, but the objective was to offset or mostly offset those cost impacts, and you can see that that was done. I think once we got through May and shifted back down to the lower rates in June, we feel very comfortable that we were fully offsetting. In May, that is where we did have some net costs that came through.

The, um, uh, the promotional products category, a portion of the promotional products category for Vista. That's where most of the, the, uh, the impact was on the cost side. And that's where most of the price. Um, happen. So we, you know, we were seeking to offset that, um, in some cases not fully but, uh, offset most of that. And I would say, um, and you see this again, in our, in our disclosure, um, you know, we did we feel good about, uh, the the results there and also, you know, the, the any, any sort of impact on demand? We really didn't see, you know, too much impact on the business side, on a national pain, to decide, to some extent. But that's where, you know, in those Peak Peak weeks of the, um, the, you know, the really heightened Chinese tariffs. Um, you know, we needed to offset that and and the team did a nice job. Um, I'm not going to get into like specific percentage increases, but the objective was to uh to offset or or uh mostly offset those cost impacts.

And, um, and you can see that that was done. I think the, you know, once we got through May and shift it back down to the lower rates in June, we feel very comfortable that we were fully offsetting, you know, in May. Um, that's where we did have some, um, some net costs that came through

Meredith Burns: Super helpful. Thanks, Sean. I have got a fun accounting question for you now. Can you please explain other income net line item? What derivative contracts led to such a drag on earnings this quarter?

Sean Quinn: Sure. Yeah, I realize that this is kind of annoying noise when you look at our income statement. Basically, we have an active currency hedging program, and that's been effective in reducing volatility and visibility to what our contracts are as we head into the year. By far, our largest currency exposure from an adjusted EBITDA perspective is the euro. Not surprisingly, in terms of notional value of contracts, that's the most gross notional value. For reasons I won't get into because I'll bore you with detail, in order to get hedge accounting, we would have to accept suboptimal economic outcomes that we hedge. We don't use hedge accounting in the way that some companies would for that currency program. So what happens is those derivative contracts get marked to market, as you would expect, every month, and that flows up and down.

Super helpful. Thanks, Sean. Okay, I've got a fun accounting question for you now. Uh so uh can you please explain other income net line item what derivatives contracts led to such a drag on earnings this quarter?

Sure. Um, yeah we have and I I realized that this is, uh, kind of annoying noise of is when you look at our, our income statement. Basically, we, we have, we have an active hedging currency hedging program and

Effective and, you know, reducing volatility and utility to, um, you know, to what our contract. Our, as we as we head into the year, um, by far our largest, um, currency exposure from an, from an adjusted debt perspective is the Euro. And so not surprisingly in terms of notional value of contracts. That's

The most rare notional value.

Um, for reasons I won't get into, um, because I'll bore you with the details in order to get hedge accounting. We would have to um, uh we we would have to accept suboptimal economic

Outcomes that we Edge. And so, we don't use hedge Accounting in the way that some, uh, some companies would for that, uh, for that currency program.

Sean Quinn: As those roll off and match against the operating activities that were the underlying exposure for that period, they match and that all works through the P&L. So it effectively kind of gets you back to hedge accounting if you were to remove the unrealized gains or losses. But you do experience those unrealized gains and losses each quarter, and that's what you're seeing this quarter. You would know that there was a pretty significant movement in many currencies as the dollar weakened in Q4 in the June quarter, but especially for the euro, and that's most of what's driving that. So you see an unrealized loss, but the offset to that is that we will have more favorable euro activity flowing through our P&L. That's really nothing to be alarmed about.

So what happens is, you know, those derivative contracts get marked to Market um as you would expect every month and you know, that floats up and down and then as we um as those roll off and match against the uh the operating activities that were the underlying exposure for that period they match.

and, and that

Works through the p&l. So

effectively kind of gets

Your accounting. If you were to remove the unrealized gains or losses,

But you do experience those unrealized gains and losses, each, um, each quarter, and that's what you're seeing in this quarter. So, you know, you would you would know that, you know, there was a pretty significant movement um, in many currencies as the dollar weakened in Q4 in the June quarter, but especially for the Euro and that's most of what's driving that. So you see an unrealized loss uh, but

Sean Quinn: The way that we think about it is we enter the year with a mix of forwards and options. We know what our contracted, our hedged rate is for the year upcoming. That's what allows us to also give the type of guidance commentary that we provided, which is that as you look forward to FY26, despite the fact that we have some of those unrealized losses in Q4 on those contracts, that currency overall we expect to be slightly favorable on our EBITDA because those unrealized losses, if they are realized, then we'll be offsetting against much higher euro activity that flows through the P&L.

The offset to that is that we will have you know, more favorable um Euro activity flowing through our p&l. And so that that's really nothing to be alarmed about the way that we think about it is like you know we enter the year with a mix of 4S and options. We know what our contracted are hedged rate is for the year upcoming

That's what allows us to also. Give the type of guidance commentary that we provided which is that as you look forward to fy20 26, despite the fact that we have some, you know, those unrealized losses in Q4 on those contracts that currency overall, we expect to be slightly favorable on our Evita because those unrealized losses, if they are realised, then we'll be offsetting against much higher, you know, Euro activity that flows through the p&l.

Meredith Burns: Thanks, Sean. Next question, a quick one. How much of this FY26 EBITDA guide is benefiting from currency?

Thanks Sean. Uh, so next question um, quick 1. Uh how much of the 26 ebiza guide is benefiting from currency

Sean Quinn: That is in the favorable, and you can take that to mean a few million dollars of impact on a positive impact on EBITDA. That is the summary.

Meredith Burns: Thanks, Sean. Another quick one. How has July trended so far?

That we said in the uh with the favorable and yeah you can take that to me in a, you know, a few million of impact on a positive impact on ebita. And um yeah that's the that's the summary.

Thanks Sean. Another quick 1. Uh, how has July trended so far?

Sean Quinn: Yeah, we typically don't comment on kind of interim months. I'd say we've just, as of the time of the last committee into Q4, we didn't have guidance. It was obviously something that we thought long and hard about, put a guidance back in place. When you do that, of course, you have the benefit of quarter-to-date performance. That's baked into the guidance that we provided. I won't get into specifics and certainly not by segment, but I would say that overall we're on track with our plans for the quarter. The other thing that I think is actually quite important is we're through the year in March. The product is consistent with our plans as well. That's important as we think about takeover margin evolution. That's kind of one of the things that I've been on, and that's on track as well.

Right. We it was obviously a um, um, something that we thought long and hard about, you know, putting a guidance back in place. And when you do that, of course, you know, you, you have the benefit of quarter today performance. And so that's baked into

The guidance that we provided um, I won't get into specifics, um, you know, and and certainly not like by by segment, but I would say that overall we're on track with our plans for the further. The other thing that I think is is actually quite important. Um, we're through the

Our product, the product is consistent with our plans as well. So and that's important to think of as margin Evolution. Um, and so, anyway, that's that kind of what 1 of the things that I found and, and that's on track as well.

Meredith Burns: Thanks, Sean. All right. We are going to turn this next question over to Robert. Great to see the rapid growth in promotional products, and thank you for quantifying this to $300 million. In this market, UK listed 4mprint reports $1.3 billion of revenues, and they have grown nicely for a long time. Is it correct that you are well behind 4mprint in this market, and how direct and tough is this competitor?

Thanks, Sean.

All right, we're going to turn this next question over to Robert. It's great to see the rapid growth in promo products, and thank you for quantifying this to $300 million.

Uh, in this market, you can listed for imprint reports 1.3 billion of revenues and they have grown nicely for a long time. Is it correct that you are? Well behind for imprint in this market and how direct and tough is this?

Uh, competitor.

Robert Keane: OK, thanks for the question. First of all, just to clarify, the $300 million is only VistaPrint. National Pen and WIRmachenDRUCK bring our total to over $700 million. That is above 20% of our revenue. WIRmachenDRUCK is a great company. We admire them, and I think they do a lot. They exemplify this general shift towards web to print and the mass customization of this market. We definitely have some differences. They tend to go towards customers that are where we are going now, but we have not in the past for larger size customers with higher revenues per year, whereas especially VistaPrint, but even National Pen, has traditionally focused on much smaller orders. We still, at VistaPrint and National Pen, do very well in those smaller orders, but we are moving up into the higher value customers as well. This is a very, very big market.

Okay, thanks for the question. First of all, uh, just to clarify, there's a 300 million is only this different, a national pain and upload and print bring our total to over 700 million. Um and so that's you know, above 20% of our Revenue.

For imprint is a great company. Uh,

we admire them, uh, and I think they do a lot. They exemplify this, General shift, uh, towards web to print and the mass customization of this market. So, uh,

We definitely have some differences. They tend to go towards uh customers that are where we are going now. Uh but we have not in the past, the larger size customers with higher revenues per year,

Um, whereas especially Vista brand, could even National pain has traditionally focused on much.

Robert Keane: WIRmachenDRUCK in the promotional products space is the online leader in the U.S., and we certainly expect to see the two of us continue to gain share. Again, I will not speak to their growth. I cannot do this, so I do not know them, but other than as a good competitor. We do think we are taking market share, certainly when viewed at the overall market. There was recently a promotional products industry analysis that came out that estimated that I am not sure if it was last year or last quarter, but that the American promotional products industry in that particular study had declined 2% year over year. Obviously, we grew a lot faster than that. So we are very happy with where we are going. Again, I think WIRmachenDRUCK is a great example of that.

Smaller orders. We still at this Sprint. National pens do very well in those smaller orders, but we are moving up into the higher value customers as well. Um, this is a very, very big Market. Uh, foreign print in the promotional products. Space is the online leader in the US. Uh, and, uh, we, uh, certainly expect to see the 2 of us continue to and share. We're growing. I again, I won't speak to their growth. I can't do. So, I don't know them. But, uh, other than there's a, a good competitor. We do think we're taking market share, uh, certainly, when viewed

Robert Keane: I would say if you go back historically, this is a perfect example where we have leveraged the relationships we have with small businesses where traditionally that was predominantly things like business cards, postcards, and very simple promotional products like a small narrow selection of pens or a small narrow selection of photo mugs that you could also put a logo on. We, over the last five to seven years, have done a lot to enter that market in a more effective way. It was an internal startup 10 years ago when we did the re-architecture of our software at VistaPrint. Specifically, we did that in a manner that allowed us to deeply integrate the promotional products offering into the other parts of the VistaPrint offering. We have totally rebuilt over the last several years and finished up a year or two ago the National Pen infrastructure for technology.

The overall Market, uh, there was recently a promotional products industry, uh, analysis that came out that estimated that uh, I'm not sure if it was last year or last quarter, but that the American promotional products industry in that particular study had declined 2% a year over yearly. We grew a lot faster than that. Uh, so we we're very happy with where we're going. And again, uh, I think foreign prints are great example of that. I would say, if you go back, historically, this is a perfect example, where we've leveraged the

Uh, relationships, we have with small businesses, where traditionally that was predominantly things like business cards, postcards. Um, and very simple promotional products, like a small narrow selection of pens or a

Uh, small narrow selection of photo mugs, that you could also put a logo on. And we over the last 5 to 7 years, have done a lot to

enter that market.

In a more effective way. It was an internal startup 10 years ago, when we did the rear architecture of our software at Vista Print, uh, specifically, we, uh, did that in a manner that allowed us to deeply integrate, the promotional products offering into the, the other parts of the Vista Print offering we've totally rebuilt over the last several years and finished up a year or 2 ago. The national

Robert Keane: So we are doing a lot to grow there. Importantly, as I mentioned in the letter, the supply chain we have deep into Southeast Asia, China, and elsewhere with National Pen, as well as our Mexican and Eastern European operations at National Pen, are now rapidly growing as they support Vista through cross and press fulfillment.

Pain, infrastructure for technology. So, we're doing a lot to grow there and importantly, as I mentioned, uh, in the letter

The supply chain we have deep into southeast Asia China and elsewhere uh with national pain, as well as our Mexican and uh Eastern European operations. At National pain. Are now rapidly uh supporting growing as they support Vista through cross and press fulfillment.

Meredith Burns: Thanks, Robert. That is the last live question that we had on the call, so I am going to turn it back over to you to wrap us up.

Robert Keane: Thank you, everyone. I really hope you found today's conversation informative. I hope you found the letter last night as well and our release. Obviously, from a shareholder perspective, our equity value is below what we believe to be its intrinsic value. To change that, we continue to focus on the execution of the plans that we've described for the past several years. As the examples and the many examples in our letter last night illustrate and as discussed again today, these initiatives are building tailwinds that should soon overcome the headwinds which we've been seeing from our legacy products. We're very excited about the progress we're making across CIMPRESS because of that. We're building best-in-class capabilities and competitive advantages with which we can serve our customers better and continue our multi-decade disruption of this huge, very large, $100 billion plus fragmented market for print and print-related products.

Well, thank you, everyone. I really hope you found today's conversation informative. I hope you found the letter A last night as well. And our release obviously from

A shareholder perspective, our Equity value is below what we believe to be its intrinsic value.

To change that, we continue to focus on the execution of the plans that we've described for the past several years.

As the examples of the many examples in our letter last night, illustrate and is discussed. Again today, these initiatives are building Tailwind. That should soon overcome the headwinds which we've been seeing from our Legacy products.

Robert Keane: We're very much focused on helping those customers look professional, and that's a core value we've had for 30 years. Financially speaking, we believe this is going to translate into a continuation of our history of growing cash flow over the long term and especially doing so on a per-share basis. I'll finish up by saying thank you again to all of you who joined the call, and thank you to our investors who've continued to entrust us with your capital. Have a great day.

And we're very excited about the progress we're making across Cimpress. Because of that, we're building best-in-class capabilities and competitive advantages with which we can serve our customers better and continue our multi-deck G disruption of this huge, very large, $100 billion plus fragmented market for print and print-related products.

we're all we're very much focused on uh, helping those customers look professional and that's, that's a core value. We've had for 30 years, financially speaking, uh, we believe this is going to translate into a continuation of our history of

Growing cash flow over the long term and especially doing so on a per share basis. So I'll finish up by saying thank you again, to all of you who joined the call, and thank you to our investors who continued to entrust us with your capital.

Have a great day.

Ari: Thank you for your participation in today's call. This does conclude the program. You may now disconnect.

Thank you for your participation. In today's call, this does conclude the program. You may now disconnect