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Dec 31, 2022
Cimpress Q2 2023 Earnings Report
Second quarter results were mixed due to currency impacts, but revenue grew in constant currencies.
Key Takeaways
Cimpress' second quarter financial results were mixed, with currency impacts dampening reported revenue. However, total revenue grew in constant currencies across all segments, including growth in revenue from new customers in the Vista business. The company is taking steps to reduce its cost base to support expanding profitability.
Total revenue grew in constant currencies across all segments, including new customers in Vista.
All businesses adjusted pricing to mitigate increased costs of raw materials, energy, and labor.
Operating cost containment measures helped offset some of the year-over-year decline in gross profit.
The company acquired noncontrolling interests in its businesses, including over 90% of PrintBrothers.
Cimpress
Cimpress
Cimpress Revenue by Segment
Revenue by Segment
PrintBrothers Revenue
CapyFin.comThe Print Group Revenue
CapyFin.comNational Pen Revenue
CapyFin.comAll Other Businesses Revenue
CapyFin.com Forward Guidance
Cimpress anticipates cost reduction measures will allow them to return to their prior fiscal year high adjusted EBITDA of $400 million in FY2024, which would bring net leverage levels to approximately 3.5x or below.
Positive Outlook
- Organic constant-currency revenue growth in January has accelerated above the year-to-date Q2 FY2023 consolidated growth rate.
- Plan to take further steps to significantly reduce our cost base in support of expanding profitability as we exit the fiscal year.
- Anticipated cost reduction measures, we expect that in FY2024 we will be able to return to our prior fiscal year high adjusted EBITDA of $400 million that we reported in FY2020.
- Expected free cash flow generation, would bring net leverage levels to approximately 3.5x or below.
- Continue to execute against our operational and strategic priorities, and we are encouraged by both our strong revenue growth in Upload and Print (the businesses in our PrintBrothers and The Print Group segments) and by the underlying improvement to our capabilities in Vista and our other businesses.
Challenges Ahead
- Year-over-year currency impacts dampened reported revenue.
- Constant-currency revenue from consumer products during this seasonally important quarter was down slightly.
- The impact of cost inflation (net of our own pricing increases) continues to weigh on year-over-year profitability.
- In Vista, unfavorable product mix shift was also a significant contributor to a year-over-year reduction in gross margin.
- Net leverage of 5.52 times trailing-twelve-month EBITDA as defined by our credit facility was higher sequentially as expected including the impact of the non-controlling interest payments.
Revenue & Expenses
Visualization of income flow from segment revenue to net income