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Dec 31, 2022
Deluxe Q4 2022 Earnings Report
Deluxe reported mixed results with revenue declining slightly but net income increasing significantly, driven by Payments, Data, and Promotional Solutions.
Key Takeaways
Deluxe reported a slight decrease in Q4 revenue, but comparable adjusted revenue increased by 1.2%. Net income saw a significant increase, and the company is focusing on Payments and Data solutions following the divestiture of its web hosting business.
Fourth quarter revenue declined 1.2% on a reported basis driven by business exits, while comparable adjusted revenue increased 1.2%, led by Payments, Data, and Promotional Solutions.
Fourth quarter net income was $19.0 million and adjusted EBITDA margin rate was 19.9%.
Deluxe recently announced the divestiture of the Company's North American web hosting and logo businesses, and the name change of the Cloud Solutions segment to Data Solutions
Deluxe has now delivered its second consecutive year of sales-driven growth, an achievement not seen in over a decade.
Revenue by Segment
Forward Guidance
The Company expects the following for full-year 2023, inclusive of expected divestitures, and all figures are approximate: •Revenue of $2.145 to $2.210 billion •Adjusted EBITDA of $390 to $405 million •Adjusted EPS of $2.90 to $3.25 •Free cash flow of $80 to $100 million
Positive Outlook
- Revenue of $2.145 to $2.210 billion
- Adjusted EBITDA of $390 to $405 million
- Adjusted EPS of $2.90 to $3.25
- Free cash flow of $80 to $100 million
- 2023 revenue is expected to range from -1 to +2% growth, and EBITDA is expected to range from -2 to +2% growth on an adjusted comparable basis.
Challenges Ahead
- Adjusted EPS is expected to decline year-over-year due to the full year impact of rising interest rates, incremental depreciation and amortization, and an estimated $0.25 impact from the announced divestiture.
- The guidance outlined above is subject to, among other things, the closure of the web hosting and logo divestiture by April 1, 2023, prevailing macroeconomic conditions, labor supply issues, inflation, and the impact of other divestitures.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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