CPI Card Group Q3 2021 Earnings Report
Key Takeaways
CPI Card Group Inc. reported a 20% increase in net sales, reaching $99.6 million, and a 14% increase in net income, totaling $6.6 million. Adjusted EBITDA also saw a significant rise of 23% to $21.5 million. The company's success reflects its focus on delivering high-quality products and services, and resilience in navigating ongoing supply-chain and labor shortage challenges.
Comprehensive end-to-end solutions contributed to earning new FinTech and traditional financial services customers.
Innovative tamper-evident packaging solutions contributed to strong growth in the Prepaid Debit segment.
Incremental net sales were generated from customer demand for higher-priced contactless cards.
The company sold over 40 million eco-focused cards since launch in 2019.
CPI Card Group
CPI Card Group
CPI Card Group Revenue by Segment
Forward Guidance
CPI has delivered substantial growth in the first three quarters of 2021 with year-to-date increases in net sales of 24%, net income of 73%, and adjusted EBITDA of 57%. Customer demand for CPI’s products and services remains strong.
Positive Outlook
- Net sales growth in the first nine months benefitted from significant new customer onboarding and prepaid debit card retail inventory replenishment
- The Company is responding to the strong customer demand by hiring additional labor
- The Company is responding to the strong customer demand by investing in state-of-the-art equipment to increase future capacity
- The Company is responding to the strong customer demand by adding new capabilities
- The Company is also implementing selective price increases
Challenges Ahead
- The Company expects increased labor to begin to be more impactful in the fourth quarter
- The Company expects increased materials to begin to be more impactful in the fourth quarter
- The Company expects increased certain other costs to begin to be more impactful in the fourth quarter
- Benefits of price increases are expected to have limited impact in the 2021 fourth quarter.
- Benefits of equipment investments are expected to have limited impact in the 2021 fourth quarter.
Revenue & Expenses
Visualization of income flow from segment revenue to net income