Meredith Burns: Welcome to the Cimpress Q1 FY 2027 Earnings Call. I am Meredith Burns, Vice President of Investor Relations and Sustainability. Thank you everyone for joining us. With us today are Robert Keane, Founder, Chairman, and Chief Executive Officer, and Sean Quinn, EVP and Chief Financial Officer. We appreciate the time that you have 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.
Meredith Burns: 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 earnings document we published yesterday on our IR website. We have also published non-GAAP reconciliations for our financial results on our IR website. We invite you to read them. Now I will turn things over to Robert.
Robert Keane: Thanks, Meredith, and thank you all for joining us today. As I noted in my letter to last night's earnings release, Q1 fiscal 2027 financial results were below our expectations. That being said, we remain confident in the financial results we will deliver for the full fiscal year because, as we mentioned at the start of the fiscal year and as we reiterated at our Investor Day, we set our fiscal 2027 public guidance below the plan we are working toward internally.
Robert Keane: The first quarter has not changed our view that we will deliver that significant profit and cash flow growth in fiscal 2027, and that the expansion will continue through fiscal 2028 and beyond. That said, the world is uncertain, and we are able to achieve deeper cost reductions because of the strong progress on the efficiency foundations which we have been working on for the past year.
Robert Keane: We are accelerating cost reduction measures as an insurance plan for meeting our financial goals. Put simply, we remain confident in our fiscal 2027 guidance, and our board, our executives, and the leaders of our businesses and central teams are all aligned on that, and we all take seriously the guidance commitments we have made to our shareholders and debt holders. Now, let me spend some time on examples of the many areas of progress we are making and are excited about, consistent with the themes we laid out in our 30 September 2026 Investor Day. This all gives us further confidence that we are doing the right things to deliver amazing customer value while also driving to our financial targets. First, we are growing high-value customer wallet share through elevated products.
Robert Keane: In Vistaprint in Q1, we grew variable gross profit per customer 7% year-over-year, and the variable gross profit from customers who generate more than $650 in annual VGP grew by 15%. Also, in Q1 versus the same quarter last year, our packaging business, BoxUp, grew its revenues with external customers by 16%, while also more than doubling its cross-Cimpress fulfillment revenue to Vistaprint. Vistaprint, in turn, is using the BoxUp product range to grow its own high-value packaging customers.
Robert Keane: These examples illustrate a fundamental transition of Cimpress' per customer lifetime value, which we have been speaking about for the past several years. We are successfully building on our foundational capabilities that traditionally addressed only a relatively small portion of our total addressable market. We are becoming a branding partner to our customers, thanks to our expanded product range, improved site merchandising, and service tailored to high-value customer needs.
Robert Keane: We are earning customer trust for a much larger portion of the small business marketing wallet, which means they become much higher LTV customers for Cimpress. That is an important tailwind for our future of healthy growth. Although the headwinds from our legacy products and our traditional base of small, low LTV customers are currently offsetting tailwinds from high-value customers, the mix of our gross profit is shifting steadily towards high LTV customers.
Robert Keane: A second theme from our Investor Day was that our investments are widening our manufacturing and supply chain advantage. For example, in Vistaprint, in the European operations, we went live with a new production line that has slashed the cost of producing beautiful full-color corrugated boxes. In the US, Pixartprinting has launched and is growing fast with booklets, catalogs, magazines, and roll labels produced in its new Pennsylvania facility.
Robert Keane: We are rapidly increasing the output of two new production facilities in Mexico that combine highly productive state-of-the-art capital equipment with low-cost operations. Third, we are developing new channels to reach customers. A great example of our new channel development is our strategic partnership with Canva, which we continue to nourish by launching in new geographic markets, and especially by growing the product footprint, and through our work to create a deep technology integration for the benefit of Canva customers and our production volumes.
Robert Keane: Fourth, we are gaining confidence in the benefits we are and will derive from the closer collaboration between Vistaprint, National Pen, and BuildASign. This collaboration includes anticipated OpEx savings from moving to a shared technology platform, the acceleration of our momentum in promotional products, apparel and signage, and optimization of advertising spend across the brands of these three businesses.
Robert Keane: We expect to see additional and significant financial benefits of this tighter collaboration in the coming quarters. Fifth, we are applying AI to drive growth and efficiency. We see AI becoming a significant tailwind for Cimpress. By democratizing design, it is expanding the online opportunity for customized physical marketing products. We are making focused investments in LLM discoverability and agentic commerce efforts to make us faster and lower cost while expanding the top of our funnel. AI is helping us become more efficient in all of our operations, which is enabling us to achieve and accelerate our planned cost reductions. Six, our tuck-in acquisitions are on track to deliver the value that we discussed at our Investor Day. Recent acquisitions in our Upload and Print segments performed in line with our expectations and positively contributed to our reported growth rates.
Robert Keane: PrintBrothers grew revenues by 28% on a reported basis, while The Print Group grew 13%. To close, the Q1 headline numbers reflected specific headwinds, but do not change our conviction for this fiscal year or for our long-term trajectory, which is firmly on track. We have clear plans across our teams to achieve FY27 and FY28 strategic and financial goals, and we remain positive on our prospects for growing per-share cash flows, anchored by a durable, scale-based, and innovation-forward competitive advantage in the mass customization of print. With that, I will hand it over to Sean to walk through the financial results and outlook. Sean?
Sean Quinn: Thanks, Robert, and thanks everyone for joining us for the call today. I will start off with the quarter. It was a quarter that we did not meet expectations, as Robert alluded to. Revenue was $934 million, up 8% on a reported basis, with organic constant currency growth of 2%. That 2% was below our expectations. The difference between our reported growth and organic constant currency growth comes from the tuck-in acquisitions that we have done recently. Vistaprint's organic constant currency growth was 2%, with strength in promotional products, apparel, marketing materials, and packaging. Just to note, the backlog in Vistaprint was elevated at the end of the quarter, which we do expect to help revenue in Q2. Upload and Print grew reported revenue 23% combined, with organic growth of 4% combined.
Sean Quinn: Our all other businesses segment grew 17%, led by BuildASign and the Canva partnership, which is growing quickly, but not material yet to our consolidated results. Adjusted EBITDA was $89.8 million, down 9% from a year ago. Most of that decline came from the cost of continuing to build out our North American manufacturing network, where start-up costs were $5.9 million higher year over year. In addition, we absorbed $4.2 million of duties and tariffs on certain goods sold to the US customers, and we had $1.8 million of higher energy-related input costs net of pricing. We also had $1.4 million of impact from the non-recurrence of a compensation benefit in the year-ago period. Those headwinds there, from a cost perspective, were partly offset by $7.5 million of IEEPA tariff refunds that were related to prior periods.
Sean Quinn: As we noted in last night's release, we expect the year-over-year impact of both manufacturing startup costs, but also the new Canadian tariffs to reduce in the second half of this year. From a segment perspective, I just wanted to point out that the new duties and tariffs, the cost there weighed primarily on Vistaprint, but the refund benefits were almost exclusively in National Pen. On cash, operating cash flow improved $3.9 million to $28.9 million for the quarter, driven by $10 million of lower net working capital outflows and also lower cash interest. Adjusted free cash flow was an outflow of $9.3 million. That was an improvement of $8.5 million versus last year, reflecting the operating cash flow improvement, but also lower capital expenditures and capitalized software.
Sean Quinn: Turning to the balance sheet, net leverage at the end of the quarter was 3.2x trailing 12 months EBITDA, as calculated under our credit agreement. That is up slightly from the 2.9x at the end of fiscal 2026, and the primary reason for that increase is the Saxoprint acquisition that closed the beginning of July. I should note that leverage calculation does not reflect the expected proceeds from the sale leaseback of the acquired facility as part of that acquisition. We ended the quarter with $120 million of cash and $35 million drawn on our $250 million revolver, which we used to partially fund the acquisition. Liquidity remains strong, and as a reminder, we have no material debt maturities until fiscal 2033. Let me turn to the outlook now.
Sean Quinn: We are maintaining our fiscal 2027 guidance, which is reported revenue growth of at least 7%, organic constant currency growth of at least 3%, adjusted EBITDA of at least $520 million, and adjusted free cash flow of approximately $200 million. For fiscal 2028, we continue to target 4% to 6% organic constant currency growth, at least $615 million of adjusted EBITDA, and approximately 45% conversion of that EBITDA to adjusted free cash flow. In September, when we had our Investor Day, I had walked through a bridge. That bridge, starting with our fiscal 2026 adjusted EBITDA of $459 million and walking across to the at least $520 million for fiscal 2027 guidance. That included tuck-in M&A, which is contributing $18 to $21 million. It included currency contribution of $5 to $10 million, and about $25 million of in-year cost savings.
Sean Quinn: Start-up costs, which as we noted, weighed on the Q1 results, are a larger year-over-year headwind in Q1 and also in Q2. That will start to reduce in the second half of the year. Also at the same time, our cost savings and the benefit from recent acquisitions will be building through the remainder of the year. The organic growth piece of that bridge, which is the minimum that we need to achieve our guidance, is the part that we need to see improve, and we are hard at work to do that.
Sean Quinn: Which brings me to cost actions, and given the first quarter results, we are behind our plans, and it is a dynamic operating environment. We are accelerating our cost reduction plan, and these actions, in our view, are an insurance policy against the risk of organic growth lagging. The reason we are able to do that and go deeper there is because of the efficiency foundations that have been put in place over the last year. From a revenue growth perspective, it is important to note that in the quarterly phasing for this year, which is not part of our guidance, we did not give quarterly revenue growth, but just in that quarterly phasing, we did plan for lower growth in our second quarter, the quarter that we are now in, the December quarter.
Sean Quinn: There are two reasons for that. The first is an expected year-over-year decline in the consumer category for Vistaprint. The second one is that we have been reducing advertising spend at National Pen, particularly in direct mail, which is the right trade-off, and we continue to see that. But seasonally, that has the most year-over-year impact on revenue for National Pen in Q2.
Sean Quinn: On the balance sheet, our path to delevering has not changed. We continue to expect net leverage to be approximately 2.5 times as we finish this year, and meaningfully below 2.0 times at the end of FY28, subject to capital allocation choices that we may make. As we reach those lower leverage levels, we expect to have more flexibility in how we allocate capital, including share repurchases. The initiatives that drive that FY27 and FY28 profit growth, they are in motion. We expect that growth to build from Q2 through the rest of FY27 and into FY28. The management team and our board are very focused on these targets. We are confident in our ability to deliver them. With that, let us turn to your questions. Meredith?
Meredith Burns: Great. Thanks, Sean. Thanks, Robert. As a reminder to folks, you can submit questions during this webcast via the questions and answers box at the bottom left of the screen. We did have a number of pre-submitted questions as well that we will get started with shortly, and we will pepper the live questions in as we go. Our first question, I am going to toss to Sean.
Meredith Burns: Sean, can you help explain where exactly performance was below your expectations? We note that the items you referenced in COGS in the earnings document, but it also looks like SG&A and advertising increased $21 to $22 million year over year, while gross profit only increased by about $5 million. I think a related question which is helpful in answering this is: Is there anything to note specifically in Vistaprint? As it looks like that segment had a tough comp year over year.
Sean Quinn: Yeah. Thanks, Meredith. I am going to start with Vistaprint. That is where the largest gap was relative to our expectations, as was alluded to. I will go into some detail here because I think it will be helpful. First of all, you are right, the Q1 last year for Vistaprint was a strong quarter, so from that perspective, it was a tougher comp. Last year we had good growth, 5% constant currency growth. We had a little bit of gross margin expansion. We also had some advertising leverage. Those were good ingredients for a strong quarter.
Sean Quinn: There are a few things that I will call out for Vistaprint as to why that was not the case this quarter. The first one was that revenue growth was muted. I mentioned in my remarks, there is some backlog increase that will flow through in Q2. We also did have, as mentioned in the release, a revenue recognition change on the Wix partnership, which it is just a presentation topic, but has a little bit of impact on the growth rate. If you normalize for those, the growth rate was consistent with what we had in Q3 and Q4 of last year for Vistaprint, which was 3%, but our ambitions and our expectations were higher than that.
Sean Quinn: From a regional perspective, Europe was slower, and we saw that in our Upload and Print businesses as well. That would be one call-out, just from a regional perspective on revenue. That was one of the main gaps to expectations overall, again, trickling into the Upload and Print businesses as well. We have seen some change in channel mix and channel performance as well, and that has the most impact on Vistaprint.
Sean Quinn: Some of that change in Vistaprint's channel mix is from changes that we have been making in how we are allocating our performance marketing. All of that is informed by incrementality studies. I think we are taking a very data-driven approach there. We have a very rigorous and continuous experimentation and iteration agenda there, which we will use to continue to optimize. But we have changed quite a bit our channel mix in terms of where we are spending, and how we are spending. That is what we are driving.
Sean Quinn: But the other part is that changes that are more structural, and that could be the role of AI Overviews in Google, could be more search traffic that is moving from organic to paid, the increasing importance of LLMs in the discovery process. This quarter, in Q1, bookings in organic search and affiliate for Vistaprint were the weakest in terms of year-over-year performance.
Sean Quinn: That definitely was a drag on the results. We do not think that that is insurmountable. It is a changing and evolving environment, but it is a near-term headwind, and especially when it comes to how we are acquiring new customers, you see that in particular, and we are evolving with that. It is an evolution, of course, that is in its early innings. I think there are a few data points that are interesting here that I will call out. One is that in AI-assisted organic discovery, so all things LLMs, it is our fastest-growing channel. We are seeing that also yield high-value customers as well, which is good to see.
Sean Quinn: Of course, it is smaller today, but I think that is a good early sign that we are there. We are seeing positive signs. It is also a big area of focus for the team. We have quite a robust agenda ahead of us in that area over the next quarters, and we have focus teams that are working just on that. The other one is that we are seeing strong growth in uploads, notably from customers that are designing in LLMs and bringing those designs to Vistaprint. Again, I think that is a strong signal here of the benefit of democratized design. We have mentioned that, including in our Investor Day.
Sean Quinn: The opportunity that that presents as we make agentic commerce easier for customers to be able to access the breadth of our product portfolio with those designs. I think that is an interesting data point as well. Robert talked about in his remarks the growth that we are seeing with high-value customers, and that is very much continued. I will not go through those examples here.
Sean Quinn: The gaps to the expectations that we had were really coming from the lower-value customers, but that still is an important part of our total base, particularly for new customers, that we can then graduate to high-value customers over time. That is kind of the picture on the revenue side, focused primarily on Vistaprint. On the cost side, there are some material year-over-year impacts that contributed to Vistaprint's gross margin decline, and in some cases were a gap to expectations. These were called out in the release. But in Vistaprint specifically, $5 million in North American manufacturing startup costs, that was an increase year over year, $3 million of duties and tariff expenses, that was up over last year. Then just under $1 million of net energy-related input costs.
Sean Quinn: On the manufacturing startup cost and the duties and tariffs, as we said in the remarks, we expect those to start to reduce in H2. On tariffs specifically, we have mitigation steps that we are executing against. They just take some time, and that is why that impact is delayed to H2 in terms of seeing those reduced. There was some reference to some other cost line items, ad spend, and our kind of overall OpEx. I would say ad spend ticked up as a percentage of revenue for Vistaprint, but it was down slightly at a consolidated level, so not much to talk about there.
Sean Quinn: That will move around quarter to quarter, but we did have some more aggressive experiments later in Q1 in Vistaprint in our performance marketing, and we will manage that across our full funnel spend as we move through the year. So not too much to call out there. On the OpEx side, I think we are seeing the efficiency initiative that we have been driving come through.
Sean Quinn: As an example, in Vistaprint, OpEx is down year over year. We will continue to see more of that across our businesses as we execute on the cost agenda that we have. There is a lot there, but I guess in summary, it would be lower growth in Vistaprint and also generally in Europe, and then the specific cost impacts, primarily the ones that we called out in the release. I would say that is the focal point.
Meredith Burns: Great. Thanks, Sean. I am going to stick with you for the next one. It is a good follow-up to that commentary. Can you help explain and break out what you view as one-time items? So startup costs, restructuring costs versus structural items, so increased depreciation and amortization or import duties or negative net pricing, or SG&A increases.
Sean Quinn: Yeah. I will do my best to contextualize these. I think one time is probably not necessarily the appropriate characterization for some of these because they will continue but fall off. Let me try and help here. I think the items that are more one time in nature, or I would say not recurring, would be the manufacturing startup costs, and we have included this in the bridges that we have done in our last two Investor Days. They are with us for a period of time as we are doing the startup activities. As volume increases, those startup costs start to fall away, and again, that is included in our bridge. So I would say that is more kind of non-recurring on a steady-state basis. We will start to see that reduce in the H2 of this year.
Sean Quinn: For tariffs and duties, that is something that we do not know what the duration of the new Canadian tariffs will be. As I said, we have mitigating actions that we are taking. Those just take some time to reorient the supply chain. So we will start to see those take hold more substantially in the H2 of the year in terms of reducing that cost. In terms of restructuring costs, we had about $4 million of restructuring costs this quarter.
Sean Quinn: Those kind of go hand in hand with some of the efficiency initiatives that we are driving. We will have more of that as we execute on our plan. But that is in service of a lower run rate cost base. So those are the ones that I would call it as maybe non-recurring is the right way to say that.
Sean Quinn: The structural ones, I described some of the revenue growth headwinds in Q1. I think the legacy product and in some regards, some of our legacy channels like resellers, those trends remain. We have been talking about those for years now. But that would be part of the structural things. I think at the same time, we are driving growth with high-value customers, and I think we cannot lose sight of that. We have a very clear strategy on the growth side as well with high-value customers growing wallet share.
Sean Quinn: That includes a lot of new product introduction. We have been investing against that over recent years. We continue to do so this year, and we are seeing strong signs of progress here. Again, Robert outlined that. I will not repeat that. Also, the progress with new channels and tuck-in M&A. So that is sort of the offset.
Sean Quinn: In terms of higher energy costs, really across all of our businesses, we saw some negative impact there in Q1. We called those out in the release. We have, in some cases, put in additional pricing offsets already there this quarter, particularly as it relates to shipping costs. So that one, I would say, is a mix. Of course, we cannot control those input costs. We will continue to test on the pricing side and do what we can there. As I said, we have already made some additional steps in Q2. But those will likely be with us for a while.
Meredith Burns: Okay. Thank you. Thank you, Sean. I am going to ask the next question of Robert. Sean just talked about structural headwinds. If we have structural headwinds, how does that factor into the company's view on keeping the guidance flat or consistent with prior messaging?
Robert Keane: Well, the headline is that we are doing more on the cost side, so I will go a little bit more into that. I think it is important to step back, and Sean, I believe you talked about this a little bit, but even before looking at Q1 results, the phasing for year-over-year profit growth we planned for, and again, we still stand by that guidance, was weighted towards the back half of the year when M&A contribution is going to be building.
Robert Keane: Currency benefits were more weighted outside of Q1. A lot of the cost-savings actions will naturally bring more benefit in later quarters because they need to be implemented or only have been recently implemented. Revenue, the drivers of that should also build as well as we continue to see the gains in high-value customers, as we gain that small business market or marketing wallet share.
Robert Keane: Again, elevated products like packaging, event booths, apparel, promotional products. As that builds, we are boosting them and supporting them with high-value customer-oriented service operations. Again, those are in the ramp stage. Finally, the relationship with, actually, I will say two things. The relationship we have with Canva is ramping, and we are building manufacturing gains, which will help mitigate some of the gross margin compression we have seen and allow us to compete more effectively. So that is all kind of before considering Q1. As of the start of this year, we have certainly ground to make up, as we have talked about last night in our release and Sean spoke about today. Our internal budget, again to repeat, is higher than our guidance, which allows us to absorb some of the headwinds relative to our public guidance.
Robert Keane: Although we have clear plans on the growth side, and I do not want to leave the impression that we are not doing that, we covered a lot of that in the 30 September Investor Day. We do not want to be, and we will not be dependent on accelerating revenue growth to hit our bottom line numbers, which is why we are taking cost-oriented actions deeper and sooner than we had originally planned. So that should cover us even if revenue were to stay lower or we were to continue to see the gross margin pressure persist. In summary, again, we are accelerating by going deeper and sooner with cost reductions. That is how it factors into our guidance.
Meredith Burns: Okay. Thank you, Robert. That is a super helpful answer. I am going to stick with you for the next one, which is about tuck-in acquisitions. Are they on track?
Robert Keane: Yes, absolutely. The financial contribution from M&A this quarter was in line with our expectations, so on track. There is no change for our expectation that for the year. That is increased revenue from acquisitions will be $165 to $175 million, and an in-year increase of EBITDA of $18 to $21 million. The Q1 revenue contribution from acquisitions was $60 million, and the EBITDA net of transaction costs was $3.5 million. I do want to say those are important financial numbers. We are on track. But beyond those financial headlines, we see great operational integration happening as planned, and we see synergies from these acquisitions that are certainly at least at plan, and we expect those to build throughout FY27 and into FY28.
Meredith Burns: Thanks, Robert. I have got a related question, Sean, because those acquisitions were in our Upload and Print businesses. So here we go. The reported EBITDA for Upload and Print combined was surprising. Based on disclosures, we had estimated about $6 million of inorganic EBITDA being layered on top of the $44 million that we had last year, leading to a pro forma $50 million of EBITDA, assuming 0% organic growth. The actual value, however, was much lower at $42 million. Can you help us understand the delta?
Sean Quinn: Yep, that is a great question. There are a few main drivers. There is a number of smaller things, too. I will call out the main ones. I should say, while my answer to the earlier question was focused on Vistaprint, which is where the largest gap was versus our expectation. As I mentioned, there was weakness generally in Europe from a revenue perspective, and that is here impacting the Upload and Print businesses. I think the question refers to 0% organic growth, so I will not cover revenue as part of that bridge to the numbers that were expected, but just wanted to call that out here.
Sean Quinn: The main drivers of First of all, on the M&A front, what Robert just said, we are on track for what we expected, and also we continue to be on track for what we expect to deliver for the full year.
Sean Quinn: That said, the impact for Q1 is not ratable in terms of the quarterly progression throughout the year. The impact for Q1 is lower than what we expect as we get to Q3, Q4, simply because of the synergy build. There is also a little bit of seasonality there as well. So the $6 million that was referenced in the question, the contribution for Q1 was $3.5 million net of transaction cost. So that is $2.5 million of the delta there that you are trying to bridge. Then just in terms of the organic operations, other than M&A, again, I will not go through the revenue drivers because it assumes 0% growth. There was a $2 million cost for a catch-up accrual, which is something that is probability-based, based on probability of achievement, so kind of an accounting concept.
Sean Quinn: That is a, I would say, a one-off, and it is not indicative of run rate operating costs. So $2 million also would feature in your bridge. I would call out the energy-related input costs in terms of things that, like what is the main thing that impacted gross margins or gross profit year over year. That was just under $1 million of impact across the combined group. Currency also for the group was unfavorable by a little under $1 million, even though on a consolidated basis, it is favorable. All of our hedging gets done outside of our segments, and so currency for the group was unfavorable by a little under $1 million. Then if you add all that up, that is roughly $7 million of the $8 million that you are trying to bridge.
Sean Quinn: Again, there is a kind of a longer tail of smaller items beyond that, but hopefully that is helpful.
Meredith Burns: Thanks. Thanks, Sean. Robert, question for you about the macro environment. Is the ongoing unrest in France expected to have a material impact on The Print Group in Q2? If so, can you please help us quantify the impact, and how might this impact our ability to reach the targets that we have set for ourselves?
Robert Keane: Well, thank you. I would say as of now, we would not call out the unrest in France as having a material impact on our ability to reach the targets based on everything we see today. Of course, it is a fluid situation, but we do not see that as impacting our ability to hit the bottom line. France is an important market for us. It is our third largest country by revenue, largely between The Print Group and Vistaprint. We have seen some impact during the last weeks, but it has not been very significant. I would say if you go back to Q1, before October, it was a tough market. I think that had more to do with the fact that we are stronger in the reseller channel, which is being disintermediated by ourselves and some others.
Robert Keane: Secondly, in the summer, there was some extreme heat and fires in Southern Europe, including France. I would say those are the more impactful areas.
Meredith Burns: Thanks, Robert. Let us stick with macro and let us stick with Robert for this next one. There has been an across-the-board deceleration across most business units over the past 4 to 6 months. To what do you attribute this?
Robert Keane: Okay. Just to make sure we are talking apples to apples, I would respond to this in our consolidated organic constant currency growth. On a segment level, when you look at it does include our push to do cross-Cimpress fulfillment. There are reasons why growth might be faster in one segment versus the other as we shift production around. Looking at the consolidated organic constant currency, yes, there has been some deceleration in the last 6 months. It is a good question. If I step back, our organic constant currency growth rate overall was 3% in FY25. It was 4% in FY26. It was 2% in this last quarter. Per our guidance, we still expect to get at least 3% for the full year. I think there are a mix of impacts that we have already commented on.
Robert Keane: But just to summarize, one, the trend in legacy products like business cards, consumer products, which is something we have talked about for the last 2 or 3 years. Secondly, legacy channels like resellers. I just mentioned that in the French context, where we have business where we sell to local printers or local graphic designers who then sell to the end customers. That market tends to move toward a direct relationship to the end customer. It benefits a lot of our Cimpress businesses, but for the Upload and Print businesses, we have a few that have been historically, they have a higher percentage in the reseller, and they are seeing that impact. Print Group is the most salient example of that. Then there is some more notable impact on Vistaprint.
Robert Keane: I think Sean just mentioned some of the channel performance that he just went through, everything from how Google is switching over to AI Mode and the other things which I will not repeat. Now, we do have very clear growth initiatives. Many of them are longer lead time because we are building up production capabilities to be highly competitive in new product areas. We have a lot of service operations moving towards high-value customers. But at the risk of repeating too many times, we are adjusting our cost structure, and we are allocating capital so we are driving efficiency in some places while also taking advantage of the assets we have and the cost advantages we have, and being more selective about where we do that, but still driving forward on growth while cutting costs.
Robert Keane: Most of the external growth comes from a small number of our businesses, in part because of our push to do cross-Cimpress fulfillment. I would say the increased collaboration across Vistaprint, BuildASign, and National Pen is a great example of that. We have decreased advertising spend in National Pen. That has led to lower revenue growth, and it is going to drag on their growth, but it is important choice for profitability. We can redirect that capital into what I would call our flagship brand in North America, Vistaprint.
Robert Keane: We are also leveraging more shared platforms, technology, specifically, to cut costs, be more efficient, and give a better experience. Again, all that is something we have talked about. I am going to pause there so I do not go on too long with a specific question. But I think we do see that across-the-board deceleration you are asking about as something we can handle.
Meredith Burns: Thanks, Robert. Okay, Sean. Next question. At Vistaprint, we would have expected slightly stronger growth and profitability given advertising investments remain flattish as a percentage of sales. PBAG continues to grow quickly, as does the GP per customer. However, top line growth was quite muted at 2%, and EBITDA came down slightly if you exclude startup costs, suggesting that there are headwinds. Are we thinking about this the right way? If so, can you describe these headwinds? For example, is a legacy product something else?
Sean Quinn: Yeah. Hopefully, much of this was covered in the earlier question that I answered in terms of where there are headwinds. I should mention just a slight correction. Vistaprint ad spend as a percentage of revenue was up a little over 100 basis points from last year. It was actually up a little bit, which only furthers the question here. Not too much to add to the earlier comments, but maybe just a few things. I would say there is no big call-outs from a product perspective in terms of a meaningful change in trend in Q1 versus you are looking at that over, call it a trailing 12-month period. I think the channel story is probably the more notable topic.
Sean Quinn: Of course, that has impact on category performance to some extent. But it was not like we saw any sort of meaningful or quick change in any category. In terms of first-time buyers, I think between the combination of just the legacy product trends that were already in place and then also the channel shifts, that has had the most impact on business cards and consumers, specific to first-time buyers. Maybe that is the other thing that is notable.
Meredith Burns: Great. Thank you. I am going to stick with you. This one should be a quick one. What are the assets that are held for sale on our balance sheet?
Sean Quinn: Yeah, it is the fair value from the Saxoprint facility that we are actively marketing for sale leaseback. That is the way that the accounting rules require you to hold that on the balance sheet at fair value. That fair value, if you look at on the balance sheet, is a little over $46 million, which could change a little bit. We are moving through that marketing process, and that is all net of any selling cost as well. That process is ongoing, but that is what that is on the balance sheet.
Meredith Burns: Thank you. Okay, next question. On holiday. As we approach the ever-important holiday season, is there anything that we are doing differently to ensure a very successful Q2?
Sean Quinn: Yeah. Great question, a very important question this time of year. There is a lot that we are improving on for this year, and there is a rhythm to this. Every year, we always do an extensive audit of what went well last year, what did not go well, and then we build that immediately into the plan for the next year. We are very much in that cycle, and now we are at the time where it is all execution mode right now. I think one of the things that was notable last year that we did was really try to lean more into rather than shift a lot of our messaging and our merchandising and our assortment to these consumer-specific products.
Sean Quinn: We try to lean much more into holiday solutions for small businesses, and we will take another step in that direction this year. You can see if you go onto the Vistaprint site, you hopefully will get that sense in terms of the creative content that you see, the messaging that you see, the products that you see. The consumer part of holiday is really important as well. That approach allows us to continue to build on the messaging and relevance that we have with small businesses throughout the entire year. I would say thematically, that is probably the biggest thing to call out.
Sean Quinn: That cuts across a lot of what we do. It cuts into how we are thinking about the assortment that we need, quality improvements that we might need, or changes in attributes. It goes into how we are thinking about discoverability.
Sean Quinn: You might naturally think of the holiday season and consumer as holiday cards, calendars, photo products, like canvas prints or photo books. But we have a very relevant holiday assortment and content that we have expanded quite a bit in promotional products, in gifts, in signage, in packaging for the small business use case for holiday. I think, again, if you just go onto the site, you should see that come to life. The other thing is that in Vistaprint, we have this new kind of brand framework and platform called Print Your Possible.
Sean Quinn: Our holiday approach kind of fits underneath that, and we are really trying to make sure that Vistaprint is positioned as the one-stop shop, which we try and do all year round, but in this case, a one-stop shop for everything that you need to create holiday magic this season, as a small business. I think, again, if you go onto the site or you see any of our brand advertising, I think we have a really good and strong collection of creative ingredients that will bring that brand platform to life in new ways for holiday.
Sean Quinn: But again, in a way that is very congruent with our messaging throughout the year. I think sets us apart from competitors as well. That is the main thing in our approach. I focus there on Vistaprint because that is the biggest area for holiday.
Sean Quinn: There is a number of our businesses, notably BuildASign and National Pen, that also have a seasonally tick up, and they equally are focused on the execution for the holiday season and are ready for what is ahead. Just maybe coming back to the financial part of all that. Consumer does, it has come down in our mix quite a bit over the years relative to our consolidated revenue. It is less than 10% today. It does tick up in the December quarter, but it is less in the mix than it once was. As I also mentioned in my earlier remarks, in terms of the quarterly phasing for growth in the Q2, we expected this year to have lower growth in the Q2 for two reasons.
Sean Quinn: One is that we do expect year-over-year decline in the consumer category for Vistaprint as we focus successfully on growing high-value, small business customers. But in the consumer category specifically, we expect some year-over-year decline. We have also been reducing advertising spend, Robert mentioned this earlier, at National Pen, particularly in direct mail, and we are seeing that that is the right trade-off. But seasonally, that has the most year-over-year impact on revenue in Q2. So a few call-outs there.
Meredith Burns: Thank you, Sean. Robert and Sean, we have exhausted the list of both pre-submitted and live questions, so I will turn things over to Robert to wrap us up.
Robert Keane: Thanks, Meredith. Before we go, I would like to leave you with a couple of thoughts that I believe matter most. First of all, our long-term trajectory is on track. We have clear plans across our teams to achieve our FY27 and FY28 strategic and financial goals. We are putting an additional insurance policy into place through added cost constraints and reductions, and we are certainly expecting the profit and cash flow benefits of our efforts to build in the back half of the year based on the timing of the revenue momentum and the planned cost reductions. With that, thank you for joining the call. Thank you for your continuing willingness to entrust your capital with us.
