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Mar 31, 2024
Cimpress Q3 2024 Earnings Report
Cimpress delivered strong Q3 financial results driven by revenue growth and margin expansion.
Key Takeaways
Cimpress delivered strong financial results in the third quarter, driven by a combination of revenue growth, gross margin expansion, and year-over-year operating expense efficiencies. The company's outlook remains positive.
Revenue grew 5% on a reported basis and 4% on an organic constant-currency basis.
Consolidated operating income increased $51.4 million year over year to $39.2 million.
Adjusted EBITDA increased $25.0 million year over year to $94.2 million.
The company repurchased 1.1 million shares for $100.7 million during the third quarter.
Cimpress
Cimpress
Cimpress Revenue by Segment
Revenue by Segment
Vista Revenue
CapyFin.comPrintBrothers Revenue
CapyFin.comThe Print Group Revenue
CapyFin.comNational Pen Revenue
CapyFin.comAll Other Businesses Revenue
CapyFin.com Forward Guidance
Cimpress expects to grow consolidated constant-currency organic revenue on an annual basis at mid-single-digit growth rates, possibly a little higher. They also expect to drive further adjusted EBITDA margin leverage, resulting in annual adjusted EBITDA that grows slightly faster than revenue. The annual conversion rate of adjusted EBITDA to adjusted free cash flow is expected to be approximately 45% to 50%.
Positive Outlook
- Anticipates mid-single-digit growth rates in consolidated constant-currency organic revenue annually.
- Expects adjusted EBITDA to grow slightly faster than revenue, indicating improved profitability.
- Projects an annual conversion rate of adjusted EBITDA to adjusted free cash flow to be approximately 45% to 50%.
- Plans to continue with roughly similar levels of operating expense growth investment as the current run rate.
- Aims to increase capital expenditures based on opportunities seen for new products and productivity-enhancing production equipment.
Challenges Ahead
- Fluctuations within the 45% to 50% range for the annual conversion rate of adjusted EBITDA to adjusted free cash flow from year to year.
- Potential for increasing leverage to as high as approximately 3.0x for investments.
- Possible exit from FY2025 with net leverage at or below approximately 2.75x if attractive opportunities for share repurchases continue.
- Net leverage target at or below approximately 2.5x trailing-twelve-month EBITDA as defined by their credit facility.
- Not planning to deploy significant capital to M&A.
Revenue & Expenses
Visualization of income flow from segment revenue to net income