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Jun 30, 2023
CPI Card Group Q2 2023 Earnings Report
CPI Card Group's financial performance in Q2 2023 showed resilience with a slight revenue increase and significant profitability growth.
Key Takeaways
CPI Card Group Inc. reported a 1% increase in net sales to $115 million for Q2 2023. Net income rose by 6% to $6.5 million, and Adjusted EBITDA increased by 18% to $23.3 million, driven by reduced operating expenses. The company has updated its full-year net sales outlook for 2023 to a range of flat to low single-digit growth and affirmed its outlook for mid-to-high single-digit Adjusted EBITDA growth, as well as its projections for Free Cash Flow to more than double and the year-end Net Leverage Ratio to improve to between 2.5x and 3.0x.
Net sales increased by 1% to $115 million, driven by Prepaid Debit growth offset by Debit and Credit slight decline.
Net income increased by 6% to $6.5 million, driven by reduced operating expenses.
Adjusted EBITDA increased by 18% to $23.3 million, driven by reduced operating expenses.
Company updated its full-year net sales outlook for 2023 to flat to low single-digit growth and affirmed Adjusted EBITDA growth outlook.
CPI Card Group
CPI Card Group
CPI Card Group Revenue by Segment
Revenue by Segment
Debit & Credit Revenue
CapyFin.comPrepaid Debit Revenue
CapyFin.com Forward Guidance
The Company updated its full-year net sales outlook for 2023 to a range of flat to low single-digit growth and affirmed its outlook for mid-to-high single-digit Adjusted EBITDA growth, as well as its projections for Free Cash Flow to more than double and the year-end Net Leverage Ratio to improve to between 2.5x and 3.0x.
Positive Outlook
- Affirmed outlook for mid-to-high single-digit Adjusted EBITDA growth.
- Projecting Free Cash Flow to more than double.
- Expecting year-end Net Leverage Ratio to improve to between 2.5x and 3.0x.
- Confident in long-term secular trends for the U.S. market.
- Supported by reoccurring nature of the business, ongoing strong card issuance.
Challenges Ahead
- Updated full-year net sales outlook to flat to low single-digit growth.
- Previous outlook for net sales was mid-single digit growth.
- Sales outlook change reflects softness in customer demand in the Debit and Credit segment.
- Expecting third quarter sales and Adjusted EBITDA to decline.
- Debit and Credit segment sales are being negatively impacted by cautious spending and utilization of existing inventory by certain customers in the banking industry.
Revenue & Expenses
Visualization of income flow from segment revenue to net income