Deluxe NYSE: DLX reported a stronger first quarter of 2026, with management pointing to growth in its payments and data businesses, margin expansion and progress on debt reduction as key drivers of the results.
President and Chief Executive Officer Barry McCarthy said the company delivered organic growth across revenue, adjusted EBITDA, earnings per share and free cash flow. He also highlighted two milestones: Deluxe reached its long-term 3x net leverage target earlier than previously expected, and its Payments and Data segments together accounted for more than 50% of total revenue for the first time in the company’s history.
“This marks the first time in the company’s nearly 112-year history that the Print businesses represented less than 50% of overall revenues,” McCarthy said, adding that the company’s strategy remains focused on using cash flow from its legacy checks business to invest in digital payments and data.
Revenue rises modestly as earnings expand
Chief Financial Officer Chip Zint said Deluxe reported total revenue of $538.1 million for the quarter, up 0.3% from the prior-year reported period and up 2.7% on a comparable adjusted basis. GAAP net income rose to $35.8 million, or $0.77 per share, from $14 million, or $0.31 per share, in the first quarter of 2025.
Zint attributed the improvement to better operating results, lower restructuring and SG&A expenses, lower interest expense and a gain related to a business exit, partly offset by a higher tax provision.
Adjusted EBITDA was $117.9 million, up 19.7% on a comparable adjusted basis. Adjusted EBITDA margin improved 310 basis points to 21.9%. Adjusted diluted EPS was $1.05, compared with $0.72 on a comparable adjusted basis a year earlier.
McCarthy said Deluxe also reduced SG&A expense by just over 7% from the prior year, helping drive the company’s 13th consecutive quarter of year-over-year comparable adjusted EBITDA growth.
Payments and data businesses lead growth
Deluxe’s combined Payments and Data segments grew revenue 12.5% year over year, led by Data Solutions. The Data segment generated $97.5 million in revenue, up 26.3% from the first quarter of 2025, driven by campaign demand from financial institutions and adjacent markets. Segment adjusted EBITDA rose 15.7% to $22.8 million, with a 23.4% margin.
McCarthy said Deluxe uses what it believes is one of the largest aggregated consumer and small business marketing data lakes in the industry, along with generative AI-enabled tools, to help clients target high lifetime value customers.
Merchant Services revenue increased 7.3% to $104.9 million, reflecting stable processing volumes and continued wins across the company’s pipeline. Segment adjusted EBITDA rose 25.2% to $26.8 million, and margins expanded 360 basis points to 25.5%.
McCarthy cited a new strategic merchant partnership with Washington Trust Bank, which will offer Deluxe Merchant Services to its clients. He also pointed to a newly announced partnership with MRI Software, a real estate and rent payment solutions provider, as an example of Deluxe’s growth in integrated software vendor relationships. McCarthy said MRI was already a B2B payments customer using Deluxe’s Lockbox services.
B2B Payments revenue rose 4.7% to $73.5 million, helped by stable Lockbox volumes and continued migration toward treasury management offerings that support more digital payment flows. Adjusted EBITDA for the segment rose 29.3% to $17.2 million, with a 23.4% margin.
Print declines but margins improve
The Print segment generated $262.2 million in first-quarter revenue, down 5.9% on a comparable adjusted basis after factoring in the sale of Safeguard, which closed March 1. Legacy check revenue declined 4.4% on a comparable adjusted basis, while the rest of the segment declined 8.4%.
Print adjusted EBITDA was $85.7 million, down 3.8% on a comparable adjusted basis. However, comparable adjusted EBITDA margin improved 70 basis points to 32.7%, which management attributed to operating expense discipline and efficiency across print operations.
McCarthy said the company continues to prioritize stronger-margin insourced offerings and operational efficiencies across its print manufacturing footprint.
Debt reduction and cash flow remain priorities
Deluxe ended the quarter with net debt of $1.37 billion, down from $1.39 billion at the end of 2025. Its net debt-to-adjusted EBITDA ratio improved to 3x, compared with 3.6x a year earlier.
Free cash flow, defined as cash from operating activities less capital expenditures, was $27.3 million, up $3 million from the prior-year quarter. Zint said the improvement reflected stronger operating results, lower restructuring spending, lower cash taxes and lower SG&A expenses, partly offset by higher cash incentive payments.
The company reported $381 million of available revolver capacity at quarter-end. Zint said all material debt maturities remain aligned with a 2029 horizon following the company’s late-2024 refinancing.
Deluxe’s board approved a regular quarterly dividend of $0.30 per share, payable June 2, 2026, to shareholders of record as of May 19, 2026.
Guidance updated after Safeguard divestiture
Deluxe updated its full-year 2026 guidance to reflect the Safeguard divestiture while maintaining its free cash flow outlook. The company now expects:
- Revenue of $1.985 billion to $2.05 billion, representing comparable adjusted growth of -1% to 2% versus 2025.
- Adjusted EBITDA of $430 million to $455 million, representing comparable adjusted growth of 4% to 10%.
- Adjusted EPS of $3.60 to $4.00, representing comparable adjusted growth of 9% to 21%.
- Free cash flow of approximately $200 million, unchanged and representing 14% growth versus 2025.
Zint said the free cash flow outlook was unchanged because Safeguard was a relatively lower-margin business and the cash flow impact, after taxes and other items, was immaterial.
During the question-and-answer session, McCarthy said Deluxe views artificial intelligence as a “net positive.” He said generative AI helps improve marketing campaign models in the Data business and is also being applied in B2B Lockbox processing to reduce manual intervention. McCarthy said Deluxe has achieved about a two-thirds reduction in manual intervention through AI in that area.
McCarthy also said the company is not seeing direct impacts from global uncertainty in its promotional business, though that area remains “a bit soft” in line with broader market trends.
About Deluxe NYSE: DLX
Deluxe Corporation, founded in 1915 and headquartered in Shoreview, Minnesota, is a provider of integrated business and financial technology solutions. Originally established as a check printing company, Deluxe has evolved its offerings to support small businesses, financial institutions and entrepreneurs with a comprehensive suite of services spanning print, digital and software platforms.
The company's core business activities include printing checks, forms and promotional materials, as well as delivering digital marketing and customer engagement solutions.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Deluxe, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Deluxe wasn't on the list.
While Deluxe currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
The space race is growing fast, and you don’t have to wait for SpaceX to go public to invest. This report shows seven space stocks you can buy today that may grow as rockets, satellites, defense, space internet, and new space technology become more important.
Get This Free Report
