What Deluxe (DLX) Said on Its Q3 Earnings Call

Key Points

• Third-quarter results improved operationally: Revenue rose 2.5% to $553.9 million, while comparable adjusted EBITDA increased 9.6% to $127.1 million and its margin expanded to 22.9%. Net income fell to $13 million, partly due to restructuring, acquisition-related costs and higher interest expense.
• Payments and Data Solutions drove growth: Together they accounted for 57% of revenue, with Data Solutions revenue up 15.4% and Merchant Services up 37.9%, including Celero. Deluxe said the Celero integration was on track and reaffirmed its target of at least $15 million in cost synergies.
• Deluxe raised its 2026 outlook: It now forecasts revenue of $2.13 billion to $2.15 billion and adjusted EBITDA of $470 million to $480 million, while keeping its free cash flow outlook near $200 million. Net debt rose to $1.93 billion following the Celero acquisition; the company aims to reduce leverage to 3 times or lower by the end of 2028.

Deluxe NYSE: DLX raised its full-year revenue and adjusted EBITDA guidance after reporting third-quarter sales growth, helped by its Celero acquisition and continued demand for its data and marketing services.

The company reported third-quarter revenue of $553.9 million, up 2.5% from a year earlier. Revenue rose 9.1% on a comparable adjusted basis, which removes the effects of business exits. Net income fell to $13 million, or $0.28 per share, from $33.7 million, or $0.74 per share, a year earlier.

Chief Financial Officer Chip Zint attributed the decline in net income primarily to $8.9 million in nonrecurring restructuring and integration expenses, $9.8 million in transaction costs and higher interest expense, partly offset by incremental operating profit from higher revenue.

Adjusted EBITDA was $127.1 million, up 9.6% on a comparable adjusted basis. The adjusted EBITDA margin expanded 90 basis points to 22.9%, while adjusted diluted earnings per share rose to $1.06 from $1.04 on a comparable adjusted basis.

Payments and Data Businesses Gain Share

President and Chief Executive Officer Barry McCarthy said Deluxe continued to shift its business mix toward payments and Data Solutions, which together accounted for 57% of third-quarter revenue. The quarter included two months of revenue from Celero, which Deluxe acquired on July 31.

Excluding acquisition impacts, combined payments and Data Solutions revenue grew 8.3% in the quarter, McCarthy said. He noted that the company expects a full quarter of Celero revenue to be reflected beginning in the fourth quarter.

Merchant Services revenue increased 37.9% to $135.1 million, including Celero. Excluding the acquisition, the standalone Deluxe Merchant Services business grew approximately 4%, Zint said. The segment’s adjusted EBITDA rose 57.4% to $32.1 million, and its margin expanded 300 basis points to 23.8%.

McCarthy said the Celero integration was progressing as expected and, in some cases, ahead of schedule. Deluxe remains confident it can achieve its commitment of at least $15 million in cost synergies over 24 months following the transaction’s closing, he said.

Data Solutions revenue rose 15.4% to $102.9 million, marking its eighth consecutive quarter of growth above 15% and its first reported quarter above $100 million. Zint said demand for marketing campaigns continued into the second half of the year. The company now expects low-double-digit segment revenue growth for 2026.

B2B Payments revenue increased 5.7% to $77.3 million, while its adjusted EBITDA margin reached 29.1%. Zint said some opportunistic wins, including a higher-margin deal associated with bank mergers, boosted the quarter. He expects the segment’s margin to moderate toward the mid-20% range.

Print revenue declined 3.6% on a comparable adjusted basis to $238.6 million. Its adjusted EBITDA margin was 35.3%, as the company continued to prioritize higher-margin in-house products over lower-margin promotional offerings.

Higher Outlook and Debt Reduction Plans

Deluxe raised its 2026 revenue outlook by roughly $30 million and increased its adjusted EBITDA guidance. Its updated forecast calls for:

• Revenue: $2.13 billion to $2.15 billion.
• Adjusted EBITDA: $470 million to $480 million.
• Adjusted earnings per share: $3.80 to $4.00, a range narrowed upward.
• Free cash flow: Approximately $200 million, unchanged from the prior outlook.

Zint said the revenue increase reflected strength across the baseline Deluxe businesses, while the company maintained its previous expectations for Celero. The outlook includes expected Celero results from August through December.

Free cash flow for the first nine months increased 40.7% to $134.9 million. Net debt stood at $1.93 billion at the end of the third quarter, up from $1.39 billion at the end of 2025, reflecting financing for the Celero acquisition.

Including targeted cost synergies and other acquisition-related impacts, net debt to adjusted EBITDA was approximately 3.8 times at quarter-end, Zint said. Deluxe reiterated its goal of reducing that ratio to 3 times or lower by the end of 2028.

The board approved a quarterly dividend of $0.30 per share, payable Dec. 1 to shareholders of record as of the close of trading on Nov. 17. Deluxe plans to provide initial 2027 guidance and more detail on its businesses at its Dec. 2 investor day.

About Deluxe (NYSE:DLX)

Deluxe Corporation is a provider of payments, marketing and business technology solutions serving small businesses, financial institutions and consumers. The company's offerings include checks and related forms, business supplies, promotional products, website and digital marketing services, customer relationship management tools, data-driven marketing solutions and payment processing services.

Deluxe also provides receivables management, fraud prevention and other financial technology services designed to help businesses and financial institutions manage transactions and customer relationships.

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