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Mar 31, 2020
Deluxe Q1 2020 Earnings Report
Deluxe reported solid results despite COVID-19 impact, with payments revenue growing, but total revenue declining slightly.
Key Takeaways
Deluxe Corporation reported a slight decrease in revenue compared to the previous year, primarily due to the impact of COVID-19. The company's Payments segment showed strong growth, but this was offset by weakness in other segments. Deluxe is taking steps to preserve financial flexibility and liquidity during this period of uncertainty.
Deluxe's 'One Deluxe' strategy and structure delivered solid results, despite COVID-19 impact.
Total revenue declined 2.5% from last year, primarily driven by COVID-19.
Payments revenue grew 18% over last year.
The company ended the first quarter with $310 million in cash and short-term investments.
Forward Guidance
Due to the significant uncertainties surrounding the current business environment, the Company previously announced that it was suspending its 2020 outlook, and it is not providing second quarter or full year financial guidance at this time.
Positive Outlook
- Payments segment is expected to see year-over-year revenue growth, driven by new client wins and strong demand for its services.
- Management believes Cloud Solutions business will recover slightly as the year progresses.
- Management currently expects the Company to remain cash flow positive.
- The company continues to take actions to manage expenses in line with revenue trends.
- Some stabilization exiting April entering May.
Challenges Ahead
- Revenue began to soften in March, and total Company revenue in April declined 28%.
- Cloud Solutions is experiencing revenue declines in data-driven marketing.
- The decline of web hosting revenue will largely depend on the resilience of small businesses.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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