Deluxe Corporation

Q1 revenue was $538.1 million, up 0.3% reported and up 2.7% on a comparable adjusted basis. GAAP net income was $35.8 million, or $0.77 per share, versus $14 million, or $0.31 per share, a year ago. Adjusted EBITDA was $117.9 million, up 19.7% comparable adjusted, and adjusted EBITDA margin was 21.9%, up 310 basis points. Adjusted diluted EPS was $1.05 versus $0.72 comparable adjusted last year. Free cash flow was $27.3 million, up $3 million year over year. For the full year 2026, management guided to revenue of $1.985 billion to $2.05 billion, adjusted EBITDA of $430 million to $455 million, adjusted EPS of $3.60 to $4.00, and free cash flow of approximately $200 million. They also assumed interest expense of approximately $110 million, an adjusted tax rate of 26%, depreciation and amortization of approximately $135 million, average diluted shares of about 46.5 million, and capital expenditures of $90 million to $100 million.

Barry McCarthy framed the quarter as evidence that Deluxe’s transformation is gaining traction, with payments and data now more than half of revenue. He emphasized the company’s three strategic priorities: shifting mix toward higher-growth businesses, improving operating efficiency, and using cash flow to reduce debt. His tone was confident and upbeat, citing 13 straight quarters of comparable adjusted EBITDA expansion and saying the company is well positioned for the rest of the year.

Chip Zint highlighted the quarter’s financial strength: total revenue of $538.1 million, adjusted EBITDA of $117.9 million, adjusted diluted EPS of $1.05, and free cash flow of $27.3 million. He said net debt fell to $1.37 billion, net debt to adjusted EBITDA reached 3x, and the company had $381 million of available revolver capacity at quarter-end. He also pointed to continued SG&A improvement, with management noting more than a 7% decline in SG&A, and reiterated full-year guidance of $1.985 billion to $2.05 billion revenue, $430 million to $455 million adjusted EBITDA, and about $200 million of free cash flow.

Analysts focused on AI, SG&A efficiency, customer demand drivers, and whether macro/geopolitical uncertainty was affecting the promo business. Management said AI is a net positive, helping improve data marketing models and reducing manual intervention in B2B lockbox processing by about 2/3. On free cash flow guidance, Chip Zint said the Safeguard divestiture was relatively low margin, so the impact on cash flow was immaterial, and the company’s underlying execution supported holding the roughly $200 million target. Barry also said promo remains soft, but not specifically because of global conflict or current uncertainty.