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Dec 31, 2019
Deluxe Q4 2019 Earnings Report
Reported fourth quarter 2019 results and record full year revenue.
Key Takeaways
Deluxe Corporation reported its fourth quarter and full year results ended December 31, 2019, achieving a record full year revenue exceeding $2 billion for the first time. The company signed three of the top ten largest deals in the past decade and highlighted the progress of its 'New Deluxe' business transformation.
Revenue was slightly lower than last year, as strong performance in the data-driven marketing business was offset by the continuing decline in checks and forms.
Marketing solutions and other services (MOS) revenue was 45.9% of total revenue which was a new all-time high.
Net income decreased $12.4 million, driven primarily by $18.4 million of additional costs from previously disclosed investments in the Company’s business transformation.
The Company had $883.5 million of total debt outstanding under its revolving credit facility at the end of the fourth quarter.
Forward Guidance
Deluxe anticipates full year revenue growth without acquisitions for the first time in nearly a decade. The company plans to increase operating expenses to implement new deals. Adjusted EBITDA is expected to decline from 2019 due to revenue mix changes and secular declines in check-related services, but management affirms the 2023 outlook for revenue and adjusted EBITDA margins.
Positive Outlook
- Full year revenue is expected to grow without acquisitions for the first time in nearly a decade.
- Management affirms 2023 outlook for revenue to be approximately $2.3 billion
- Management affirms 2023 outlook adjusted EBITDA margins to be in the low-to mid-20 percent range.
- New go-to-market strategy is delivering results.
- Signed three of the top ten largest deals in the past decade.
Challenges Ahead
- The Company will increase operating expenses to implement the three new deals referred to earlier.
- Adjusted EBITDA below is expected to decline from 2019 primarily from revenue mix changes in webhosting and data-driven marketing
Historical Earnings Impact
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Avg. Return Before/After Earnings
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