Q2 2025 Deluxe Corp Earnings Call
At this time I would like to turn the conference over to your host Vice President of strategy and Investor Relations, Brian Anderson.
Go ahead.
Thank you operator, and welcome to the Deluxe second quarter 2025 earnings call.
Joining me on today's call are Barry Mccarthy, our President and Chief Executive Officer, and chips, and our Chief Financial Officer at the end of today's prepared 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 expectation about the companys future strategy or performance are forward looking in nature as defined in the private Securities Litigation Reform Act of 1095.
You are currently holding for the deluxe quarterly earnings conference call.
We are admitting additional participants and plan to be underway shortly. We appreciate your patience and ask that. You please remain on the line.
Additional information about factors that may cause actual results to differ from projections is set forth in the press release, we furnished yesterday and our Form 10-K for the year ended December 31, 2024 and in other SEC company filings.
On the call today, we will discuss non-GAAP financial measures, including comparable adjusted revenue adjusted and comparable adjusted EBITDA and EBITDA margin adjusted and comparable adjusted EPS and free cash flow.
All comparable adjusted metrics reflect the removal of impacts from business exits.
In our press release todays 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 U S. GAAP.
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. In today's call is being recorded
Within the materials. We are also providing reconciliations of GAAP EPS to adjusted EPS, which may assist with your modeling.
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.
And with that I'll hand, it over to Barry.
Thanks, Brian and good evening everyone.
Thank you, operator and welcome to the deluxe second quarter 2025 earnings call.
Our second quarter was highlighted by strong results across each of our core profitability metrics, including a 10th consecutive quarter of year over year comparable adjusted EBITDA growth.
joining me on today's call are barry McCarthy our president and chief executive officer and chips in our Chief Financial Officer at the end of today's prepared remarks, we will take questions
I'll begin my comments Tonight by acknowledging our topline of $521 million was down two 5% from the second quarter of last year softer than our expectations, but fully attributable to the low margin promotional portion of print, which I will detail in a moment.
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.
Importantly, each of our other businesses performed as expected and we generated strong results across all other financial metrics.
Additional information about factors that may cause actual results to differ. From projections is set forth in the press release. We furnished today and our form 10K for the year. Ended December 31st 2024 and in other SEC company filings.
For the quarter.
We grew year over year comparable adjusted EBITDA over four 5% to $106 million.
We expanded margin rate by 140 basis points to just above 20%.
On the call today, we will discuss non-gaap Financial measures including comparable, adjusted Revenue, adjusted and comparable, adjusted, ibida, and ibida margin adjusted in comparable, adjusted EPs, and free, cash flow.
Comparable adjusted EPS increased three 5% to 88.
Exit.
Year to date free cash flow expanded by 200% of more than $34 million versus the first half of 2024.
Adjusted and comparable, adjusted ibida, and ibida margin adjusted incomparable, adjusted, EPs, and free, cash flow.
All comparable adjusted metrics, reflect the removal of impacts from business exits.
We improved our leverage ratio to three five times and remain on path to be below three times next year.
In our press release, today's presentation, and our filings with the SEC, you'll find additional disclosures regarding the non-GAAP measures, including a reconciliation of these measures to the most comparable measures under U.S. GAAP.
And we're affirming our overall full year revenue and earnings guidance and increasing our free cash flow guidance.
within the materials, we are also providing reconciliations of gaap, eps to adjust to DPS, which may assist with your modeling.
And with that, I'll hand it over to Barry.
In our press release, today's presentation, and our filings with the SEC, you'll find additional disclosures regarding the non-gaap measures, including reconciliation of these measures to the most comparable measures under us. Gaap
Thanks Brian and good evening, everyone.
Now moving on to some operating segment highlights.
Within the materials. We are also providing reconciliation of gaap, eps to adjusted EPS, which may assist with your modeling.
The data solutions segment continued to be the standout delivering more than 18% second quarter revenue expansion.
And with that, I'll hand it over to Barry.
Thanks Brian and good evening, everyone.
Observers of the most recent cycle of Bank earnings results May have noted successful demand deposit generation campaigns as an important earnings driver.
Our second quarter was highlighted by strong results. Of each of our core profitability metrics, including a 10th consecutive quarter of year-over-year comparable. Adjusted ebit, doc growth
We're proud that our data segment had a role in many of those successes across our Fi partners.
Our second quarter was highlighted by strong results, across each of our core profitability metrics and including a 10th consecutive quarter of year-over-year comparable, adjusted ebit dot growth.
I'll begin my comments tonight by acknowledging our top line of 521 million was down 2 and 1/2% from the second quarter of last year, softer than our expectations, but fully attributable.
Merchant services growth expanded sequentially to just under 3% despite lingering macroeconomic uncertainty impacting the broader domestic spending environment.
BTB payments delivered expected low single digit growth consistent with our prior guidance.
I'll begin my comments tonight by acknowledging our top line of 521 million was down 2 and 1/2% from the second quarter of last year softer than our expectations, but fully attributable to the low margin, promotional portion of print which I will detail in a moment.
We're pleased with our margin expansion of more than 200 basis points and have a number of customer wins and implementation across the business.
Importantly, each of our other businesses performed as expected, and we generated strong results across all other financial metrics.
For the quarter.
The stronger margin check portion of our print segment performed in line with our long term expectations decline.
We grew year-over-year comparable, adjusted ibida over 4 and a half, percent to 106 million.
We expanded our margin rate by 140 basis points to just above 20%.
Declining about 3% helped in this segment to hold onto its healthy margin rate.
Comparable, adjusted EPS, increased 3 and a half percent to 88 cents.
The low margin branded promo portion of the print segment is where revenues were challenged during the quarter.
Year to date free cash flow expanded by 200% or more than 34 million versus the first half of 2024.
In addition to the first quarter deal timing and industry demand headwinds, we signaled last quarter.
Second quarter results were impacted by non renewal of a few large one time orders requiring an attractive margin level.
We improved our leverage ratio to 3 and a half times and remain on path to be below 3 times next year.
And we're affirming our overall full year, revenue and earnings guidance and increasing our free cash flow guidance.
As we've discussed previously our strategy is to avoid source promo deals with an attractive margins even at the expense of revenue.
Now, moving on to some operating segments highlights.
Importantly, as would be expected under such a strategy, resulting revenue headwinds during the quarter had nominal impact on the segment's profitability.
The data solution. Segment continued to be the standout delivering more than 18% second quarter, Revenue expansion.
Observers of the most recent cycle of Bank earnings results. May have noted successful demand, deposit, generation campaigns as an important earnings driver.
Overall, we maintained our strong print segment margins at 32%.
As we discussed at each call, we see this margin rate and the predictable cash flows from print, especially the legacy check business continuing for the foreseeable future.
We're proud that our data segment had a role in many of those successes across our fee partners.
We would not expect the second quarter rates of decline within branded promo to recur over the balance of the year.
Merchant services growth, expanded sequentially to just under 3%, despite lingering macroeconomic uncertainty impacting, the broader domestic spending environment.
Finally on our overall outlook as I mentioned earlier, we're pleased to affirm our revenue and earnings guidance and increase our full year expectations for free cash flow.
B2B payments delivered expected low. Single-digit growth consistent with our prior guidance.
We're pleased with our margin expansion of more than 200 basis points, and have a number of customer wins and implementation across the business.
Chip will have more on all of this in a moment.
At the mid points of the year, our revenue ratio remains modestly weighted toward print at 54% to 46%.
The stronger margin, check portion of our print segment performed in line with our long-term expectations.
The declining about 3%. Help in the segment to hold on to its healthy margin rates.
For additional perspective payments and data together already deliver significantly more revenue than the legacy check portion of print alone.
The low margin branded promo portion of the print segment is where revenues were challenged during the quarter.
On a year to date basis, our combined payments and data segments have expanded year over year by a blended rate of just under seven 5% consistent with our strategy as and as shown on the current slide.
In addition to the first quarter deal timing and Industry demand headwinds, we signaled last quarter.
Second quarter results were impacted by non-renewal of a few large, 1-time orders, requiring unattractive margin levels.
Finally, I'd like to discuss two additional topics relating to our payments progress in particular.
One the small acquisition, we have announced and two partnership development across our two payments segments.
As we've discussed previously, our strategy is to avoid Source promo deals with unattractive margins even at the expense of Revenue.
First for some context around the announced acquisition our existing platform the deluxe payment network or VPN digitally connect physical lock boxes.
Importantly, as would be expected under such a strategy, resulting revenue headwinds during the quarter had nominal impact on the segment's profitability.
overall, we maintained our strong print segment margins at 32%,
This inter lockbox payment network save costs by eliminating postage envelopes labor.
as we discussed at each call, we see this margin rate and the predictable cash flows from print, especially the Legacy check business continuing for the foreseeable future.
Handling and check costs for payers, including large bill pay services across the <unk> landscape.
We would not expect the second quarter rates of decline within branded promo to recur over the balance of the year.
For PE is theres virtually no change because the payments through the VPN, followed the well established lockbox payment protocol, but now digitally.
Consistent with our capital allocation priorities, the Czech match product will bolt onto our existing DPM platform, expanding our scale and creating both revenue and cost synergy opportunities.
Finally on our overall Outlook. As I mentioned earlier, we're pleased to airm our revenue and earnings guidance and increase our full year, expectations for free cash flow.
Deluxe is the obvious neutral third party to create and manage an expanded digital network and we're already in the process of enabling VPN across more than a 5000 eligible deluxe locks boxes.
at the midpoints of the Year, our Revenue ratio remains modestly weighted toward print a 54 to 46%
For additional perspective, payments and data together, already deliver significantly more Revenue than the Legacy. Check portion of print alone.
With this acquisition J P. Morgan lock boxes, and those of several large <unk> already members of check match will be added to the VPN network.
As a trusted partner to our clients deluxe is positioned to scale the network more effectively than any individual bank our group of banks.
On a year-to-date basis, our combined payments, and data segments, have expanded year-over-year by a blended rate of just under 7 and a half percent consistent with our strategy as and as shown on the current slide.
Finally, I'd like to discuss 2 additional topics relating to our payments progress in particular.
We do not expect this acquisition to have a material impact to our 2025 <unk> segment results, but do expect.
1. The small acquisition, we have announced and 2 partnership Development Across our 2 payment segments.
Back to see positive impact as it scales across 2026 and beyond.
We would expect to see a couple of points of growth for the <unk> segment, when fully scaled and we will provide periodic updates moving forward.
First, for some context around the announced acquisition of our existing platform, the Deluxe Payment Network (DPN) digitally connects physical lockboxes.
Next I will highlight the progress our payments businesses are making in building partnerships with software vendors and other technology providers.
This interlock box payment Network saves cost by eliminating postage envelopes, labor.
You saw us announce a few of these partnerships during the recent quarter.
Handling and check cost for payers including large, bill pay services across the fee landscape.
These alliances are strategically important because our solutions get embedded in these partners' offerings. So we grow when the partner growth.
For payees, there's virtually no change because the payments do the DPN follow the well-established, lockbox payment protocol. But now digitally
Customers acquired via our partners generally have higher retention and their volumes tend to be solid.
Recently completed merchant partnerships with Isps, such as charging and embedded CRM automation solution support our go to market growth plans.
consistent with our Capital allocation priorities. The check match product will bold on to our existing DPN platform, expanding our scale and creating both revenue and costs Synergy opportunities
Partnering with fundraising platform such as school auction Dot net and childcare center operational solutions, such as my Kid reports will continue to further enable our growth outlook.
Deluxe is the obvious neutral. Third party to create and manage and expand a digital Network, and we're already in the process of enabling DPN across more than 5,000 eligible Deluxe lockss boxes.
Across BTB payments similar alliances with technology and platform partners, such as square nine Banco and accu title provide platform and vertical expansion opportunities spanning the attractive treasury automation and SaaS.
With this acquisition, JP Morgan lock boxes. And those of several large fees already members of check match will be added to the DPN Network.
Both markets.
As a trusted partner to our fee, clients Deluxe is positioned to scale the network more effectively than any individual bank or group of banks.
To summarize our overall second quarter and year to date results illustrate our ongoing operating leverage and execution focus.
Importantly, our results highlight our ongoing shift towards the growing payments and data markets.
We do not expect this acquisition to have a material impact to our 2025 B2B segment results. But do expect to see positive impact as a scales across 2026 and Beyond.
While some general macroeconomic uncertainty remains our first half progress enables us to affirm our 2025 core guidance and our strong execution allows us to raise the free cash flow outlook.
We would expect to see a couple points of growth for the B2B segment, when fully scaled, and we will provide periodic updates moving forward.
Next, I'll highlight the progress. Our payments, businesses are making in building Partnerships with software vendors and other technology providers.
Finally, before Paso, Mr. Chip I want to acknowledge the company has reached its 110th anniversary.
You saw us announce a few of these Partnerships during the recent quarter.
Since 1915 deluxe has delivered for our customers shareholders and communities because of the incredible dedication and commitment of the Luxor.
These alliances are strategically important because our Solutions get embedded in these Partners offerings. So we grow when the partner grows
Our people make the difference.
Customers acquired via our partners generally have higher attention and their volumes tend to be solid.
Over the last few years, we've made great progress transforming our paper payments company and to our powerful digital payments and data company and the best is yet to come.
With that I'll turn it over to chip.
Recently completed Merchant Partnerships with isvs such as chargent and CRM, automation Solutions, support our go to market growth plans.
Thank you Barry and good evening everyone.
As Barry noted in his opening we were pleased with our second quarter progress and particularly our very strong year to date free cash flow expansion and continued year over year comparable adjusted EBITDA and EPS growth during the period.
Partnering with fundraising platforms such as SchoolAuction.net and Child Care Center operational solutions, such as My Kid Reports, will continue to further enable our growth outlook.
As in prior quarters 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 2025 guidance ranges.
Across B2B payments, similar alliances with technology and platform Partners such as Square, 9, banko, and acute title, provide platform and vertical expansion opportunities, spanning the attractive, treasury Automation and SAS.
Growth markets.
For the quarter, we reported total revenue of $521 3 million decreasing three 1% against prior year reported results, while lower by two 5% on a comparable adjusted basis.
To summarize our overall second quarter and year-to-date results illustrate our ongoing, operating leverage and execution, Focus.
We reported GAAP net income of $22 4 million or <unk> 50 per share for the period, improving from $25 million or <unk> 46 per share in the second quarter of 2024.
Importantly, our results highlight our ongoing shift, towards the growing payments, and data markets.
This increase was driven by improved operating results, including both lower SG&A and restructuring related expense offsetting the non repeating gain on sale from business exits reported in the prior year period.
While some general macroeconomic uncertainty remains. Our first half progress enables us to affirm our 2025 core guidance, and our strong execution allows us to raise the free cash flow Outlook.
Finally, before passing this to chip, I want to acknowledge the company has reached its 110th anniversary.
Comparable adjusted EBITDA was $106 5 million up four 6% versus the second quarter of last year.
And commitment of deluxe.
Comparable adjusted EBITDA margins were 24%, improving 140 basis points versus the second quarter of 2024 as Barry noted.
Our people make the difference.
Q2 comparable adjusted EPS of <unk> 88.
Over the last few years, we've made great progress. Transforming a paper payments company into a powerful digital payments and data company. And The Best Is Yet To Come.
Improved from 85 in 2024, primarily driven by the operating income drivers previously noted.
With that, I'll turn it over to chip.
Thank you, Barry, and good evening, everyone.
Now turning to our operating segment details beginning with the merchant services business.
The merchant business grew second quarter revenue by two 9% year over year to $101 4 million accelerating from the one 3% first quarter growth on new merchant and channel partner additions and planned pricing actions net of attrition and some ongoing macro uncertainty across the domestic.
As Barry noted in his opening. We were pleased with our second quarter progressed and particularly our very strong year to date, free cash, flow expansion and continued year-over-year comparable, adjusted ibida and EPS growth During the period.
<unk> environment.
Segment, adjusted EBITDA finished at $21 7 million, improving $2 5 million or 13% versus the prior year with margins expanding 190 basis points to finish at 21, 4% driven by the revenue factors noted and ongoing cost efficiencies as we noted during prior quarters.
As in Prior quarters, 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 2025 guidance ranges.
For the quarter, we reported total revenue of 521.3 million decreasing 3.1% against prior year reported results while lower by 2 and a half percent on the comparable adjusted basis.
<unk> persistent macroeconomic uncertainty remains in the broader U S environment, leading us to continue to expect revenue growth for merchant to remain closer to a lower single digit full year trajectory.
We reported gaap net, income of 22.4 million or 50 cents per share for the period improving from 20.5 million, or 46 cents per share. In the second quarter of 2024,
Macro or discretionary spending tailwind from a potential accelerating economic turnaround could provide upside versus this outlook.
And we continue to anticipate a low 20% adjusted EBITDA margin profile consistent with our initial guidance.
This increase was driven by improved operating results, including both lower SG&A and restructuring-related expenses offsetting the non-repeating gain on sale from business exits reported in the prior year period.
Moving to BTB payments for the second quarter BW segment revenues finished at $71 million sequentially, improving from the first quarter as well as the prior year quarter by one 1% consistent with our in year cadence expectations and prior guidance.
Comparable, adjusted ibida was 106.5 million up 4.6% versus the second quarter of last year.
Comparable adjusted. But a margins were 20.4%, improving 140 basis points versus the second quarter of 2024 as Barry noted.
<unk> adjusted EBITDA finished Q2 at $15 6 million, expanding 11, 4% versus the prior year period.
Q2 comparable, adjusted EPS of 88 cents. Improved from 85 cents in 2024. Primarily driven by the operating income drivers, previously noted.
As Barry noted Q2, adjusted EBITDA margins of 22% for <unk> resulted in overall 210 basis point improvement versus 2024.
now, turning to our operating segments details, beginning with the merchant services business,
We sustained our focus on driving efficiencies across lockbox operations and have optimized segment SG&A to more closely align to the expected pipeline phasing and related onboarding initiatives for new business wins.
Within our full year <unk> outlook, we expect a low single digit revenue growth rate.
The merchant business grew second quarter Revenue by 2.9%, year-over-year to 101.4 million accelerating from the 1.3% first. Quarter growth on new merchants, and channel partner additions and plan pricing actions. Net of attrition and some ongoing macro uncertainty across the domestic economic environment
While third quarter revenues are expected to improve sequentially results will likely moderate from the prior year period due to onboarding timing of certain deals.
We expect a solid fourth quarter exit growth rate for this business as we enter 2026.
Segment. Adjusted ibida finished at 21.7 million. Improving 2.5 million or 13% versus the prior year with margins expanding. 190 basis points to finish at 21.4% driven by the revenue factors noted and ongoing cost efficiencies.
While margins are expected to remain in the low to mid 20% range.
Moving on to data solutions. This segment continued its strong performance extending the robust growth trajectory seen over the preceding two quarters.
As we noted during prior quarters persistent, macroeconomic uncertainty remains in the broader us, environment leading us to continue to expect Revenue growth for merchants to remain closer to a lower single digit for year trajectory.
Q2 revenues finished at $67 $8 million, achieving overall growth of 18, 1% versus the second quarter of 2024.
Macro or discretionary spending Tailwind from a potential accelerating economic, turnaround could provide upside versus this Outlook.
As Barry referenced during his highlights for the period. This growth included continued strong performance across core FA customer campaigns.
And we continue to anticipate a low 20%, Jesse, but a margin profile consistent with our initial guidance.
Moving to B2B payments.
The segment has also continued to expand across non <unk> verticals.
Adjusted EBITDA finished at $24 million growing 29, 1% versus Q2 of the prior year.
While adjusted EBITDA margins expanded 260 basis points to 31%.
For the second quarter B2B segment. Revenue is finished at 71 million sequentially improving from the first quarter, as well as the prior year quarter by 1.1% consistent with our in-ear, Cadence, expectations and prior guidance.
These results reflect a continued favorable mix of DBM campaign activity. The strong overall revenue growth rate and continued realization of operating efficiencies across the business.
B to be adjusted, even off, finish Q2 at 15.6 million, expanding 11.4% versus the prior year period.
The continued strong performance of the segment reinforces our updated full year outlook towards the low double digit segment growth expectations shared last quarter.
as Barry noted Q2 adjusted, but a margins of 22% for for B2B resulted in overall, 210 basis point Improvement versus 2024
We would note that the fourth quarter prior year comparison will be most challenging given the robust growth we realized during Q4.
We sustained our focus on driving efficiencies across lockbox operations and have optimized segment sgna to more closely aligned to the expected pipeline phasing and related onboarding initiatives for new business wins.
As such we would not presently forecasted year over year revenue growth and May see declines during the fourth quarter, specifically, while maintaining our overall strong full year growth expectation.
Within our full year B2B Outlook, we expect a low single digit Revenue growth rate.
Turning now to our print businesses.
While third quarter revenues are expected to improve sequentially results. Will likely moderate from the prior year period due to onboarding timing of certain deals.
Print segment second quarter revenue was $281 1 million.
We expect a solid fourth quarter exit growth rate for this business as we enter 2026.
Reflecting in an overall decline of 9% on a year over year basis as Barry discussed briefly in his comments is important to further dissect the print segment decline rate in order to better link our underlying core business trajectory and corresponding print EBITDA results in particular.
While margins are expected to remain in the low to mid 20% range.
Moving on to Data Solutions this segment continued its strong performance, extending the robust growth. Trajectory seen over the preceding 2 quarters.
As shown on the current slide and is included in each of our quarterly filings with the SEC a further breakdown of revenues by product category shows that our two core print focus areas declined more modestly during the period.
4.
Legacy check saw second quarter declines of three 2% while forms and other business products declined seven 2% during the quarter on.
As Barry referenced during his highlights for the period, this growth included continued strong performance across core FI customer campaigns.
The segment has also continued to expand across non-fee verticals.
On a combined basis. These blend to an overall four 2% rate of year over year decline largely in line with our low to mid single decline guidance for the segment.
Adjusted ibida finished at 20.4 million, growing 29.1% versus Q2 of the prior year. While it just be a bit of a margins expanded, 260 basis points to 30.1%.
Effectively all of the incremental print decline rate beyond these levels was driven via the 25, 1% decline rate within the other promotional solutions product category, which carries a lower mode margin profile.
These results were collected at a continued favorable, mix of DDM campaign activity, the strong overall, Revenue growth rate, and continued realization of operating efficiencies across the business.
Overall modest <unk>, 7% rate of year over year, adjusted EBIT declines seen within print for the quarter aligns to the Brennan rate of decline for the more core print focus areas.
The continued strong performance of of the segment, reinforces our updated. Full year outlook toward the low, double digit, segment growth, expectations, shared last quarter,
Overall print adjusted EBIT for the quarter finished at $94 million declining by three 7% year over year as noted.
We would note that the fourth quarter, prior comparison will be most challenging, given the robust growth, we realized during Q4.
Importantly, this resulted in overall margin rate of 32, 2% of revenue remaining solidly in line with our longer term low <unk> target for the segment and 180 basis points improved from the prior year rate. In addition to being reflective of overall segment mix shifting towards stronger margin offerings. We continue to remain focused.
as such we would not press presently, forecast, year-over-year, Revenue growth and may see declines during the fourth quarter, specifically while maintaining our overall Strong full year, growth expectation,
Turning now, to our print businesses.
On operating expense discipline, and overall efficiency across cost of goods sold inputs within the print segment.
These efforts helped to preserve our year to date achieved low <unk> margin profile.
Current segment. Second quarter Revenue was 281.1 Million reflecting in an overall decline of 9% on a year-over-year basis. As Barry discussed briefly in his comments is important to further dissect. The print segment decline rate in order to better link our underlying Core Business trajectory and corresponding print, Eva results in particular,
Consistent with our prior quarter commentary, while wed not expect decline rates for non core promotional solutions revenues recur at the levels seen during the isolated second quarter period. There remains an expectation that these offerings will likely decline at rates above that of the more core product groupings, including checks.
As shown on the current slide and as included in each of our quarterly filings with the SEC, a further breakdown of revenues by product category shows that our two core print focus areas decline more modestly during the period.
On balance we would continue to expect to realize mid single digit or better revenue declines across the overall print segment for the full year.
Legacy check saw second quarter. Declines of 3.2% while forms and other business products declined 7.2% during the quarter.
With adjusted EBITDA margins remaining in the low thirty's consistent with our prior rate outlook.
Turning now to our balance sheet and cash flow.
On a combined basis. These blend to an overall 4.2% rate of year-over-year. Decline largely in line with our low to mid single decline guidance for the segment.
We ended the second quarter with a net debt level of 144 billion representing.
Representing a reduction of just over $24 million versus our 24 year end levels of 1.4 dollars 7 billion.
effectively all the incremental, print decline rate Beyond these levels was driven via the 25.1% decline rate within the other promotional Solutions product category, which carries a lower mode margin profile,
This result was more materially improved from the 153 billion Mark at the end of Q2 of last year.
With our ongoing commitment to debt reduction as a top capital allocation priority.
The overall modest 3.7% rate of year of your adjusted ebit. Decline seen with imprint for the quarter aligns to the Branded rate of decline. For the more core print Focus areas.
Our net debt to adjusted EBITDA ratio finished at three five times at the end of the quarter improving from the $3 six times ratio reported at both year end and within our full first quarter results.
Overall, print adjusted, EBA for the quarter. Finished at 90.4 million declining by 3.7% year-over-year as noted
As mentioned on our last call, we anticipate sequential improvement over the balance of the year and expect to end 2025 at roughly three three times leverage.
Our long term strategic target remains three times leverage or better by the end of 2026 the.
The announced acquisition is not expected to adversely impact our path to these target leverage metrics free.
Importantly, this resulted in an overall margin rate of 32.2% of Revenue remaining solidly in line with our longer-term. Low 30s Target for the segment and 180 basis points. Improved from the prior year, rate in addition to being reflective of overall segment. Mix shifting towards stronger margin offerings. We continue to remain focused on operating expense disciplines and overall efficiency across cost of goods, sold inputs within the print segment.
Free cash flow defined as cash provided by operating activities less capital expenditures finished at $52 1 million for the year to date period. This was an improvement of $34 $5 million from the results reported through the first half of 2024.
These efforts help to preserve our year-to-date achieved low 30s margin profile.
This year to date improvement was driven by continued strong operating results, including significantly lower restructuring spend and lower year over year cash incentive payments.
Consistent with our prior quarter commentary while we had not expect decline rates for non-core, promotional Solutions, revenues to recur at the level seen during the isolated. Second quarter period, there remains an expectation that these offerings will likely decline at rates above that of the more core product groupings including checks.
As Barry noted we remain very pleased with our overall operating cash flow generation during recent quarters and in our ability to continue our delevering path consistent with our clear capital allocation priorities.
On balance. We would continue to expect to realize mid single digit or better Revenue declines across the overall print segment for the full year.
With the Jesse but the margins remaining in the low, 30s consistent with our prior rate Outlook.
We continue to be positioned well from both a liquidity and go forward capital structure perspective, following our December refinancing activity.
Turning now, to our balance sheet and cash flow.
As of the end of the second quarter, we maintained just over $390 million of available revolver capacity with no material near term maturities. We remain on track towards our overall leverage ratio target of three times or better by the end of 2026.
We ended the second quarter with a net debt, level of 1.44 billion dollars. Representing a reduction of just over 24 million versus our 24 year-end levels of 1.47 billion.
Before turning to guidance consistent with prior quarters, our board approved a regular quarterly dividend of <unk> 30 per share on all outstanding shares.
This result was more materially improved from the 1.53 billion, Mark, at the end of Q2 of last year, consistent with our ongoing commitment to debt reduction as a top Capital, allocation priority.
Dividend will be payable on September <unk> 2025 to all shareholders of record as of market closing on August 18th 2025.
Our net debt to adjust ebit or ratio finished at 3.5 times. At the end of the quarter, improving from the 3.6 times ratio reported at both year end, and within our full first quarter results,
As Barry noted within his opening commentary, we are maintaining our full year guidance for revenue and profit metrics, while raising our expectation for free cash flow.
as mentioned on our last call, we anticipate sequential improvement over the balance of the year and expect to end 2025 at roughly 3.3 times Leverage
We also acknowledge the continuing overall levels of near term uncertainty within the economic environment presenting challenges towards providing further position and narrowing of the outlook for the balance of the year.
Our long-term strategic Target remains 3 times, leverage, or better by the end of 2026.
The announced acquisition is not expected to adversely impact. Our path to these Target leverage metrics.
We remain very focused on the operating levers within our control ensuring continued strong execution across our free cash flow EBITDA and balance sheet optimization goals.
22.1 million for the year-to-date period.
Our full year guidance figures are shown on the current slide keeping in mind all figures are approximate.
This was an improvement of 34.5 million from the results reported through the first half of 2024.
Revenue of two <unk>.
Zero 9 billion to $2, <unk> 5 billion, which as a reminder represents a range of negative one to positive 2% growth on a comparable adjusted basis.
This year-to-date Improvement was driven by continued strong operating results including significantly lower restructuring spend and lower year-over-year cash incentive payments.
Adjusted EBITDA of $415 million to $435 million, reflecting between 2% and 7% comparable adjusted growth.
As Barry noted. We remain very pleased with our overall. Operating cash flow generation during recent quarters and in our ability to continue our de-levering path. Consistent with our clear Capital allocation priorities.
Adjusted EPS of $3 25 to $3.55 a range of flat to 9% comparable adjusted growth.
We continue to be positioned. Well, from both the liquidity and go forward capital structure perspective. Following our December refinancing activity.
And increased free cash flow of $130 million to $150 million.
As of the end of the second quarter, we maintain just over 390 million dollars of available revolver capacity with no material near-term maturities.
Finally to further assist in your modeling our guidance assumes the following <unk>.
We remain on track towards our overall. Leverage ratio, Target of 3 times, or better by the end of 2026.
Interest expense of $122 $5 million and adjusted tax rate of 26%.
Depreciation and amortization of $135 million of which acquisition amortization is approximately $45 million.
Before turning to guidance consistent with prior quarters, our board approved a regular quarterly dividend of 30 cents per share on all outstanding shares.
And average outstanding share count of $45 5 million shares and capital expenditures of $90 million to $100 million.
The dividend will be payable on September 2nd 2025 to all shareholders of record as of market, closing on August, 18th, 2025.
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.
As Barry noted within his opening commentary. We are maintaining our full year guidance for revenue and profit metrics while raising our expectation for free cash flow.
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 are testament to our.
We also acknowledge the continuing overall levels of near-term uncertainty within the economic environment, presenting challenges towards providing further position and narrowing of the outlook for the balance of the year.
we remain very focused on the operating levers within our control, ensuring continued strong execution across our free cash flow IA and balance sheet optimization goals,
Our 4-year guidance figures are shown on the current slide. Keeping in mind, all figures are approximate.
Continued focus on both execution and our clear long term capital allocation priorities.
Revenue of 2.
We remain confident that this diligent focus against 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're now ready to take questions.
09 billion to 2.155 billion which as a reminder represents a range of negative - 1 to positive, to present growth on a comparable adjusted basis.
Adjusted ibida of 415, to 435 million reflecting between 2% and 7% comparable, adjusted growth.
Thank you.
If you are dialed in via the telephone and would like to ask a question. Please signal by pressing star one on your telephone keypad.
Adjusted EPS of $3.25 to $3.55, a range of flat to 9% comparable, adjusted growth.
If you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment.
And increase free cash flow of 130 to 150 million.
finally, to further assist in your modeling, our guidance assumes the following
Dan Please press star one to ask a question.
And we will take our first question from Kartik Mehta with Northcoast research.
Interest expense of 122.5 million and adjusted tax rate of 26%.
Okay.
Hey, good afternoon.
Barry There was a nice turnaround in the merchant business on the margin front and I'm wondering maybe if you could expand on.
Depreciation and amortization of 135 million of which acquisition ammunition is approximately 45 million?
What <unk> been able to do to drive.
And average outstanding share counts of 45.5 million shares and capital expenditures of $90 to $100 million.
The efficiency in business and have year over year margins increase.
Such a decent amount.
Okay.
Thanks for that Kartik, we're very focused in that business like all of our businesses on operating efficiency and in the merchant business and we've also been working on price and selling into new market spaces, and winning new business and I think it's a combination of all of those things that has helped us expand our margin.
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.
Summary we remain pleased with our continued execution, during the second quarter and our overall first half year-to-date results.
Well as a pick up the pace on revenue growth and you also saw that we announced some new partnerships with software vendors. So we think over time will help us accelerate the growth further.
Our ability to demonstrate sustaining your year-over-year growth of adjusted. Eva Epps in particularly free cash flow, despite areas of anticipated Topline pressure, during the quarter, our Testament, to our continued, focus on both execution and our clear long-term capital allocation priorities.
Okay.
I know Barry Brian Mahoney took over the merchant business and obviously he has.
Some interesting ideas to make the business better I'm wondering if he's been able to implement.
We remain confident that this diligent Focus against 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.
Of those ideas yet or is he still in the data collection mode and it will be a little bit of time before he.
Is able to implement some of the thoughts.
And ideas that he has for the business.
Question please. Signal by pressing star 1 on your telephone keypad.
Okay.
Brian's after a really great start it's obvious that he knows the business inside and not having really grown up inside of a much larger merchant acquirer and is bringing some of that knowledge to bear immediately and we are seeing some of the fruits of that you've seen us announce partnerships, our expanding and investing more in our sales and go to.
If you are using a speaker-phone, please make sure your mute function is turned off to allow your signal to reach our equipment.
Again, please press star 1 to ask a question.
And we will take our first question from kartik Mehta with North Coast research.
Our market efforts.
And you can see it a bit in the business' performance already so I think while it's still early he has only been here a few months I think we're off to a really great start and we're starting to see some very very early fruit from from his efforts and.
Where we're headed I think it's pretty clear.
Hey, good afternoon. Um, Barry. There's a nice turnaround in the merchant business on the margin front. And I'm wondering maybe if you could expand on. Oh you know what's what what you've been able to do to drive, uh, the efficiency in business and um have year-over-year margins increase uh by such a decent amount.
Yeah, and then just one last question chip.
Nice increase on the free cash flow.
What are the key drivers is it.
Is there anything outside of just a greater confidence in the business.
Or are there specific drivers that you would point to is the reason for the improvement in the free cash flow guidance.
Thank you kartik for pointing that out.
We're very pleased with the execution and progress we've had not only year to date, but over the last six quarters or so in this space.
Thanks for that cardiac. We're very focused on that business. Like all of our businesses on operating efficiency and in the merchant business, and we've also been working on price and selling into New Market spaces and winning new business. And I think it's a combination of all of those things that has helped us expand our margin, uh, at as well as a pick up the pace on Revenue growth. And you also saw that we announced some new Partnerships with software vendors. So we think over time we'll help us accelerate the growth for further.
We knew coming into this year with good execution, we have the opportunity to raise this over time and so I think what youre seeing is that confidence showing through good execution in the first half first half improves our confidence for the full year. So really it's just that it's where we are in the year and feeling good about what's behind us on whats ahead.
I would say, it's a combination of the improved profitability that you're seeing in the business along with bringing down the restructuring spend which we talked about last year. The expectation is we will reduce that cash restructuring spend in half this year and so that is helping give us good execution continue to work hard on working capital efficiency and all of that comes together with higher confidence in that full year number.
Prime money took over the merchant business and obviously, he has some interesting ideas to make the business better. I'm wondering if he's been able to implement, uh, any of those ideas yet or, you know, is he still in the data collection mode and he'll be a little bit at a time before he, uh, is able to implement some of the thoughts that uh, and ideas that he has for the business.
Perfect. Thanks, Jeff I really appreciate it.
Thank you Kartik.
Thank you. Our next question comes from Charlie Strausser with C. J S.
Hi, Good evening, just had a quick question on the.
The Karthik, uh, Brian's off to a really great start. It's obvious that he knows the business inside and out having really grown up inside of a much larger. Uh, Merchant acquirer and is bringing some of that knowledge to Bear immediately. And we are seeing some of the fruits of that you've seen us announce Partnerships. Uh we're expanding and investing more in our sales and go to market efforts um and you can see it a bit in the business performance already. So I think while it's still early he's only been here a few months. I think we're off to a really great start.
The data side.
Yes.
Continued impressive growth there maybe.
Maybe help us unpack a little bit more there some color Brian.
And we're starting to see some very, very early fruit from uh, from his efforts and, uh, where we're headed, I think is pretty clear.
It continues to drive the growth in that segment.
So I'll start on ship can jump in here too.
But we're really pleased and proud of that and in my prepared comments talked about one of the areas, where we continue to have success, which is with financial institutions and helping them target and grow with their low cost deposits and it's an area where every bank has a need today and I think it goes to show that the investments we.
Yeah, and then just 1 last question. Chip uh, nice increase on the free cash flow. You know, what are the key drivers? Is it? Uh, you know, is there anything uh outside of just uh greater confidence in the business? Um, or, or Are there specific drivers that you would point to as the reason for the Improvement in the free cash flow guidance?
Thank you, Carter, for pointing that out.
Made into our database, which is now fully hosted in the cloud we believe we have the largest.
Consumer and small business marketing database out there. So we can apply to help banks in this case, our <unk> grow deposits, but if not just Charlie in the Fi channel. We're also expanding as we've been talking for some time into other market verticals, where we're also starting to see even more success winning business there to help those businesses grow.
And we're very pleased with the execution and progress. We've had not only year to date but over the last 6 quarters or so in this space,
So their business, we really do think we have something very unique to offer in the data driven marketing business and you can see it in our performance.
Because.
One of the things that makes it very unique is at a time like this when people are particularly concerned about investing in marketing dollars. We can actually show them. The return they can track and measure their return. Unlike other types of marketing. This has a direct impact to the bottom line, it's trackable and we can show.
Uh we knew coming into this year with good execution, we have the opportunity to raise this over time and so I think what you're seeing is that confidence showing through good execution, in the first half and first half, improves our confidence for the full year. So really it's just that, it's, it's where we are in the year and feeling good about what's behind us and what's ahead. I would say it's a combination of the improved profitability that you've seen in the business along with Bringing Down the restructuring, spend, which we talked about last year. The expectation is, we will reduce that cash. Restructuring spend in half this year and so that is helping give us good execution. Continue to work hard on working capital efficiency and all of it comes together with higher confidence in that full year number.
Perfect. Thanks Jeff, by really appreciate it.
Thank you, gartic.
Thank you. Our next question comes from
We can show the customer the return they are getting from working with us.
Charlie Strauss.
Ejs.
That's great thanks very much.
The Czech match acquisition.
That inventory.
Alright technology standpoint.
Bring to you.
You didn't have before and maybe.
Hi, good evening. Uh, just a quick question, if I we could on the the the data side on, uh, you know, continue to impressive growth there, maybe help us to pack a little bit more there, you know, some color behind, you know, what's what you need to drive the growth in that segment.
It kind of is the capex.
Have you had to build something like this.
Gain traction and share or is it just something.
Okay.
Of the finished it.
Sure Charlie just to make sure you and everybody else understands what check matches. It is a similar.
Platform to our platform called the deluxe payment network and that network. We are digitally connecting all of the lock boxes, where we're processing today and now ill check match, we're adding the Czech match connected lock boxes to create a network of lock boxes. So if we know that our pay or has a number of.
Of bills that they want to pay and we know the lockbox location for where those are going to be a cent rather than printing those those bill payment payments and putting a check in an envelope with a stamp and put any of the postal service to deliver it physically to our lockbox, we can cut out that entire process and now distributor delay.
It's all start on shift and jump in here too. What? But we're really pleased and proud of that. And in my prepared comments, talked about 1 of the areas where we continue to have success, which is with financial institutions and helping them Target and grow with their, uh, low cost deposits. And it's an area where every bank has a need today. And I think it goes to show that the Investments we've made into our database, which is now fully hosted in the cloud. We believe we have the largest consumer and small business marketing database out there that we can apply to help banks in this case or fees grow deposits. But it's not just Charlie in the fee channel. We're also expanding as we've been talking for some time and to other Market verticals where we're also starting to see even more success, uh, winning business there to help those businesses grow their business. We really do think we have something very unique to offer in the data, driven marketing business, and you can see it in
<unk> that same payment digitally to an existing lockbox, so completely consistent with what we've been saying we would do in our payments and data businesses. They would look for opportunities, where we could generate scale and businesses. We're already in and this fits exactly with that position, which is the check match.
The business is a it's going to be bolted into our existing VPN network. So the network becomes larger giving us more places, where we can distribute digital payments instead of having to mail a check and that gives us a great growth opportunity and a great cost savings opportunity for the payers improves.
Our performance. Because it 1 of the things that makes it very unique is at a time like this. When people are particularly concerned about investing, in marketing dollars, we can actually show them the return and they can track and measure their return unlike other types of marketing. This has a direct impact of the bottom line. It's trackable and we can show, um, we can show the customer the return, they're getting from working with us.
Cash flow for all the participants.
And really gives us a great product to go to the market and lead with as we build the rest of our <unk> business.
Has a tree, you know, from a technology standpoint what did what did they bring to you that you didn't have before? And maybe you know, is there something kind of the capex had to you know maybe had to build something like this to you know, gain traction and share or is it just something that kind of with our opposite instance?
Excellent.
Appreciate it.
Sure.
Thank you.
And if you would like to ask a question. Please signal by pressing star one on your telephone keypad.
Your next question comes from Marc Riddick with Sidoti.
Hey, good evening.
Hey, Mark.
So I think a lot of my questions have sort of already been covered but I was really curious as to maybe you could talk a little bit about the.
Pacings.
Through the quarter and the business and if there were any particular read throughs that kind of tied to the general macro headlines.
Noticed or any particular gyrations during the during the quarter that stand out a bit.
Sure. Charlie just to make sure you and everybody else. Understands what check match is it is a similar uh platform to our platform code called the deluxe payment Network. And in that Network we are digitally connecting all of the lock boxes where we're processing today. And now with check match we're adding the check match connected lock boxes to create a network of lock boxes. So if we know that a payor has a number of of bills that they want to pay and we know the lock box location for where those are going to be is sent rather than printing those. Those bills payment payments and putting a check in an envelope with a stamp and putting in the Postal Service to deliver it physically to a lock box. We can cut out that entire process and now distribute or deliver that same payment digitally to an existing lock box.
I appreciate the question Mark I don't think that we saw anything that was particularly extreme during the quarter. What we saw was.
Sort of more of the same sum.
Generalized consumer hesitancy.
And maybe some unusual spending patterns between discretionary versus more or less discretionary versus more discretionary categories.
But it feels like it perhaps it moderated a bit versus what we've seen in previous periods.
But I don't have any big headline for you that we are seeing something extraordinary in the marketplace. We're just seeing sort of a continuation of some generalized consumer.
So, completely consistent with what we've been saying we would do in our payments and data businesses. We would look for opportunities where we could generate scale and businesses were already in and this fits exactly with that position, which is the check match. Uh, business is a is going to be bolted into our existing DPN Network. So the network becomes larger, giving us more places where we can distribute digital payments instead of having to mail a check and that gives us a great growth opportunity and a great cost savings opportunity for the payers, uh, improves cash flow for all the participants. Um, and really gives us a great, uh, product to go to the market and lead with, as we build the rest of our B2B business.
Stress.
And Mark I guess I would add as we entered into the quarter end. We executed we had really good forecast accuracy and performance almost across the entire business. We went a bit long in the prepared remarks talking about that other promo portion, but that truly was the area that was softer and we've talked about that for a few quarters now.
Excellently. Clarify that.
Sure.
Thank you. Once again, if you would like to ask a question, please signal by pressing star 1 on your telephone keypad,
Your next question comes from Mark, Riddick with sidoti.
The discretionary demand nature of it the fact that we wouldn't go take low margin deals just for the sake of revenue and so really if you step back what Barry said is 100% right.
Thank you. Good evening.
Hey, Mark.
But the accuracy. The estimates we had coming into the quarter. It played out extremely well across <unk> merchant data and check. So we had pretty good handle on the direction of the business I feel like we feel good about that now with the time still to go.
The promo side did shock us a bit you were talking a few million not the end of the world.
And obviously the profitability of it was not a concern and we expanded margin nicely.
So I think a lot of my questions were sort of already covered but I was so curious as to maybe you talk a little bit about the um uh pacings through the through the um, through the quarter uh, in the business. And if there were any particular read throughs that kind of tied to the the the general macro headlines that that that you noticed or any particular gyrations during the during the quarter that stand out a bit
Okay, Great and then the announcement with the.
Check match announcement.
Curious as to maybe where you a level of the opportunity for other similar.
Opportunities out there, whether there's sort of a pipeline that youre looking at that we might see be executed on other.
Similar acquisition opportunities or partnerships that.
Are there maybe more now than there were say beginning of the year or how are you feeling about that type of pipeline, what youre seeing out there currently.
I appreciate the question I think you've seen us be incredibly disciplined on our capital allocation and making sure that we get great returns for any dollars, we're putting to work and with our chief.
Uh appreciate the question mark. I I don't think that we saw anything that was particularly extreme during the the quarter. What we saw was sort of more of the same, some um, generalized consumer, hesitancy. Um, and maybe some unusual spending patterns between discretionary versus more are less discretionary versus more discretionary categories. Um, but it, it feels like it. Perhaps it moderated a bit versus what we've seen in previous periods. Um, but you know, I don't have any big headline for you that we're seeing something extraordinary in the marketplace. We're just seeing sort of a continuation of some generalized consumer. Um uh stress
So our focus there reducing debt and our debt and our leverage leverage level.
So are there other things out there eventually perhaps we're going to be very opportunistic we.
We like the businesses, we're in and we don't feel like we need to go race to the market to spend money, but we found this a really great opportunity entirely consistent with our strategy. There was entirely consistent with what we said we were going to do which is about bolting on additional volume in and capacity to grow existing businesses faster.
Yeah, and Mark I, I guess I would add, you know, as we entered into the quarter and we executed we had really good forecast, accuracy and performance almost across the entire business. We went a bit long and the prepared remarks talking about that other promo portion, but that truly was the area that was softer. We've talked about that for a few quarters. Now the the discretionary demand nature of it, the fact that we wouldn't go take low margin deals, just for the sake of Revenue. And so really, if you step back, what Barry said is 100%, right?
If those kind of things come along for US, we'll certainly take a look at them and be as disciplined as we are now around.
The discipline around capital allocation and investing in investors' money to the maximum return.
Excellent congratulations thank you very much.
But the accuracy, the estimates we had coming into the quarter, it played out extremely well across, B2B Merchant data and check. So we had pretty good handle on the direction of the business. I feel like we feel good about that. Now with the time still to go um the promo side did shock us a bit, you're talking, a few million, not the end of the world um and obviously the profitability of it was not a concern and we expanded margin nicely.
Thanks.
Thank you.
So again, if you would like to ask a question. Please signal by pressing star one.
Your next question comes from Jonathan <unk> with TD Cowen.
Yeah.
Hey, just wanted to double click on Tek match can you guys talk about the cross selling potential.
Sure so.
The nature of creating a network Jonathan is the more endpoints that you have in Anbar participants that you have in the network the greater the value.
Their sort of a pipeline that you're looking at that that we we might see be executed on on other um, you know, similar acquisition opportunities and or or Partnerships that you know, are there, maybe more now than there were say beginning of the year or how are you feeling about that type of uh pipeline of what you're seeing out there currently?
So to begin with our existing networks. The deluxe payment network. We're in the process of implementing across all of the lock boxes that we service today and we've got a significant portion of them already enabled you add into that the J P Morgan or the Czech match lock boxes that include a couple of significant size and scale banks.
You know, I appreciate the question. I think you've seen us be incredibly disciplined on our Capital allocation and making sure that we get great returns for any dollars, we're putting to work. And with our chief uh Focus there of reducing debt and our net and our uh leverage leverage level.
You suddenly start having a significant network that allows you to move payments in a digital way, reducing some of that paper.
I also think it's a really important sort of step on our journey to become an even larger player in the digital beta be payment space by building the network, having an understanding of where all the endpoints are for payers. We think it brings additional opportunities for us and ultimately we think it'll be a nice addition.
To what we're doing on the receivable side of the business as well with our receivables 360 product being able to ultimately to help <unk>.
So, are there other things out there, eventually? Perhaps we are going to be very opportunistic. Um, we like the businesses we're in. We don't feel like we need to go race to the market to spend money, um, but we found this a really great opportunity entirely consistent with our strategy. It was entirely consistent with what we said we were going to do, which is about bolting on additional volume and, and capacity to grow existing businesses faster. And so, if those kind of things come along for us, we'll certainly take a look at them, uh, and be as disciplined as we are now around, uh, disciplinary on Capital allocation and investing investors money to the for the maximum return.
Treasurers managed payments and receivables going forward in a really.
Excellent. Congratulations. Thank you very much.
Thanks.
Digital streamlined low friction way everything that creates a nice market opportunity for us.
Thank you.
again, if you would like to ask a question,
no, by pressing star 1.
Got it and just a last one on data solutions great performance there.
You're next question comes from Jonathan. Navarrete with TD Cowen.
And just wondering how much of the revenue growth was tied to existing clients.
Spanning campaigns versus new client win thank you.
Um, hey just wanted to double. Click on check match. Can you guys talk about the cross-selling? Uh, potential there.
Jonathan I don't know that I can that I have that at my fingertips I don't know if we've disclosed that before.
Sure. So
You know what I guess, the most relevant point is that we continue to add non assai clients. While we continue to get more business from existing clients chip you want to add on that yeah, I agree with Barry what I would say Jonathan is the strategy. There is to continue to expand share of wallet with existing clients get new law.
the nature of creating a network, Jonathan is the more endpoints that you have in and more participants that you have in the network, the greater the value.
Goes move into new verticals expand the amount of revenue that comes from the core side, and then deliver more growth verticals and the channels that we targeted as part of Investor Day. If you think about the last couple of quarters. We've been signaling this trajectory of data growing at roughly absolute dollar at $1 a rolling two to <unk>.
So, to begin with our existing Network, the deluxe payment Network we're in the process of implementing a cross, all the lock boxes that we service today and we've got a significant portion of them already. Uh, enabled you, add it into that the JP Morgan or the check match, uh, lock boxes. That include a couple of significant sized and scaled Banks.
Three quarter average and I think when you look back and you see that that's been very consistent and has delivered the growth. We have so I know it can be a harder business to plan. So maybe perhaps I'll give you a little bit of insight there I still believe we anticipate another strong quarter here in Q3 from data. So I think it's a very similar guidance take.
You suddenly start having a significant Network that allows you to move payments uh in a digital way to reduce some of that paper. But we also think it's a really important sort of step on our journey to become an even larger player in the digital B2B payment Space, by building the network, having an understanding of where all the pain points are for payers. We think it's
The rolling three quarter average got a blend in that really strong fourth quarter of last year with the seasonality of the fourth quarter last year.
And I think that really will pivot that it's a business that's going to continue its momentum here in the third quarter keep in mind in the prepared remarks, I mentioned is we're expecting growth in low double digits for the full year and I did acknowledge that that may mean, it may decline in the fourth quarter again, it's there's some seasonality there were coming coming up against some tough comps.
Brings additional opportunities for us and ultimately we think it will be a nice addition to what we're doing on the receivable side of the business as well with our receivables 360 product, being able ultimately, to help uh, treasurers manage, uh, payments and receivables. Uh, going forward in a really uh, digital streamlined, low friction way everything that creates a nice Market opportunity for us.
Its campaign oriented that's not a trend that we would expect to continue it's just inherent in the business, but very very pleased overall with the business.
Got it. And, um, just the last 1 is on Data Solutions, great performance there. Um, and just wondering how much of the revenue growth was tied to existing clients, uh, expanding campaigns versus new client ones. Thank you.
So I think in terms of overall modeling I think that that's the story there for data I think we were pretty clear across the other segments with BTB I mentioned seeing sequential improvement from the third quarter versus the second and absolute dollar. So the size of the business getting bigger sequentially quarter over quarter.
Jonathan, I don't know that. I can that I have that at my fingertips. I don't know that we've disclosed that before. Um,
That may mean, it may moderate from the prior year period, as some deals need to get on boarded and implement but again heading our way to a nice fourth quarter exit rate a nice low single digit growth for the year.
Merchant no real change what we've been telling you all year long, we said it would be low single digit growth to start the year expanding as the year goes on we told you lower single digit full year expectation. So I think that business stays on its trajectory and I do want to just reiterate we're not anticipating the print side of the business to have the degree of declines.
Uh we you know what? I guess the most relevant point is that we continue to add non- fee clients while we continue to get more business from existing fee clients. Um, chip. You want to add on that? Yeah, I agree with Barry, what I would say Jonathan is, you know, the strategy there is to continue to expand Cheryl wallet with existing clients, get new logos move in a new verticals. Expand the amount of Revenue that comes from the core side and then deliver more growth verticals in the channels that we targeted as part of investor day. If you think about the last couple of quarters, we've been signaling. This trajectory of data growing at roughly absolute dollar dollars of rolling to
You saw in the second quarter, especially not from that promo piece, we would expect to see the full year decline rate for print to be in that mid single digit level or better with the third and fourth quarter, both being kind of back to those normalized levels. So I think when you put it all in a nutshell.
As I said in the prepared remarks, we think it's prudent to keep our guidance ranges, where they are because with all of the uncertainty in the time left the year, there's there's no way to get more precise.
2 to 3/4 average. And I think when you look back and you see that that's been very consistent and has delivered the growth, we have. So I know it can be a harder business to plan. So maybe perhaps I'll give you a little bit of insight there. I still believe we anticipate another strong quarter here in Q3 from data. So I think it's a very similar guidance, take the rolling 3/4, average got a blend in that really strong, fourth quarter of last year, with the seasonality of the fourth quarter last year. Um,
We think the overall top line is going to be just south of the midpoint. When you put it all together with profitability being right there towards the midpoint or higher end.
Obviously growing the free cash flow was a great result, so we think we're executing well across the board and pleased to affirm all those metrics here Tonight.
Great Super helpful. Thank you.
Keep in mind in the prepared remarks, I mentioned, it's, we're expecting growth in low, double digits for the full year, and I did acknowledge that, that may mean, it may decline in the fourth quarter. Again, it's there's some seasonality there, we're coming coming up against some tough, tough comps, its campaign oriented. That's not a trend that we would expect to continue. Its just inherent in the business, but very, very pleased overall, with the business
Thank you. This does conclude today's question and answer session I would now like to turn the call back to Brian Anderson for additional or closing remarks.
Thanks Rachel.
Before we conclude I'd like to share that management will be participating virtually at the Oppenheimer 28th annual technology Internet and Communications conference on August 13th and at the Sidoti Small cap conference on September 17th during the quarter for which additional information will be posted to our Investor Relations website.
So, I think in terms of overall modeling, I think that's that's the story there for data. I think we're pretty clear across the other segments with B2B, I mentioned seeing sequential improvement from the third quarter versus the second and absolute dollars. So, the the size of the business getting bigger sequentially quarter over quarter.
That may mean it may moderate from the prior year period as some deals need to get on boarded and and implement. But again heading our way to a nice fourth quarter, exit rate and nice low single digit growth for the year.
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 does conclude today's call. Thank you for your participation you may now disconnect.
Hmm.
Merchant no real change. What we've been telling you all year long, we said it would be low single digit growth to start the year expanding as the year goes on, we told you lower single digit full year expectations. So I think that business stays on its trajectory and I do want to just reiterate, we're not anticipating the print side of the business to have the degree of declines. You saw on the second quarter especially not from that promo piece. We would expect to see the full year decline rate for print B in that mids single digit level or better with the third and fourth quarter, both being kind of back to those normalized.
Level. So I think when you put it all in a nutshell, um as I said in the prepared remarks, we think it's prudent to keep our guidance ranges where they are. Because with all of the uncertainty and the time left the the year, there's there's no way to get more precise. We think the overall Top Line is going to be just south of the midpoint when you put it all together with profitability being right there towards the midpoint or higher and um obviously growing the free cash flow is a great result. So we think we're executing well across the board and please to a all those metrics here tonight.
Great, super helpful. Thank you.
Thank you.
This does conclude today's question and answer session, I would now like to turn the call back to Brian Anderson for additional or closing remarks.
Thanks Rachel.
Before we conclude, I'd like to share that management will be participating virtually at the Oppenheimer 28th Annual Technology, Internet, and Communications Conference on August 13th and at the Sidonie Small Cap Conference on September 17th. During the quarter, additional information will be posted to our Investor Relations webpage.
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 does conclude.
Thank you for your participation. You may now disconnect.