CPI Card : 1Q26 Earnings Conference Call Presentation

Published: 2026-05-05 07:23:29 ET PMTS

Published on 05/05/2026 at 07:23 am EDT

May 5, 2026

Overview and Strategy

Q1 Financial Review

2026 Outlook

Summary

Q & A

Good start to 2026; on track for full year expectations

Q1 performance

Arroweye strong contribution

Strong sales of contactless cards, including metal, and personalization services

1) Adjusted EBITDA and Adjusted EBITDA margin are not measurements of financial performance prepared in accordance with GAAP. See "Reconciliations of Non-GAAP Financial Measures" at the end of this document for more information and reconciliations to the most directly comparable GAAP financial measures.

CPI is a payments technology company that provides a comprehensive range of physical and digital solutions for thousands of customers

CPI's Growth Pillars:

Proprietary Technology Platform

providing vast connections into the

U.S. payments ecosystem

Marketable Base of thousands of deep and broad relationships across the U.S. payments market

Proven track record of delivering Evolving Payment Solutions that reflect changing market needs

We will help our customers win by expanding our growth pillars

Secure Card Solutions

Prepaid Solutions

Integrated Paytech

+ 35%

- 17%

+ 1%

$81.6

$22.0

$19.4

$19.3

$26.7

$109.9

2025

2026

2025

2026

2025

2026

(in millions, except per share data)

Q1 26

Q1 25

% Change

Revenue

$ 147.1

$ 122.8

20%

Gross Profit

$ 44.1

$ 40.7

% Margin

30.0%

33.2%

SG&A (including D&A)

$ 33.1

$ 26.6

25%

Net Income

$ 2.1

$ 4.8

-57%

Commentary

Diluted EPS

$ 0.17

$ 0.40

-56%

Adjusted EBITDA1

$ 23.2

$ 21.2

% Margin 1

15.7%

17.2%

Net Income as a % of sales 1.4% 3.9%

including the addition of Arroweye

2026 Highlights:

Balance Sheet, Liquidity and Net Leverage Ratio

Mar. 31,

2026

Dec. 31,

2025

Cash on hand

$ 19.3

$ 21.7

Available Liquidity1

$ 101

$ 96

Total Debt1

$ 311.3

$ 321.1

Adjusted EBITDA (LTM)2

$ 98.5

$ 96.5

Net Leverage Ratio1

3.0x

3.1x

Cash Flow YTD 2026 YTD 2025

Cash provided by Operating Activities

$ 13.6

$ 5.6

Capital Expenditures

$ (3.5)

$ (5.3)

Free Cash Flow2

$ 10.1

$ 0.3

"Available Liquidity" is cash plus borrowing available on our ABL Revolver. "Net Leverage Ratio" is a Supplemental Financial Measure, see "Supplemental Financial Measures" at the end of this document for more information. "Total Debt" includes finance leases.

Adjusted EBITDA (LTM) and Free Cash Flow are not measurements of financial performance prepared in accordance with GAAP. See "Reconciliations of Non-GAAP Financial Measures" at the end of this document for more

information and reconciliations to the most directly comparable GAAP financial measures.

Good growth expected in 2026

Full-year outlook 2026

Revenue: high single-digit growth

Growth expected from each segment; including 15%+ growth from Integrated Paytech

Adjusted EBITDA¹: low-to-mid single-digit growth Continued investment in strategic initiatives

Free Cash Flow conversion similar to 2025 levels Year-end net leverage between 2.5x and 3x

1) Adjusted EBITDA is not a measurement of financial performance prepared in accordance with GAAP. We have provided non-GAAP Adjusted EBITDA expectations for 2026 because certain reconciling items are dependent on future events that either cannot be controlled or cannot be reliably predicted because they are not part of the Company's routine activities, any of which could be significant.

Summary

The Contactless Indicator mark, consisting of four graduating arcs, is a trademark owned by and used with permission of EMVCo, LLC.

(877) 369-9016

[email protected] https://www.cpicardgroup.com

Cards in circulation have grown at a 6% CAGR over the last three years to 2.3B, up from 1.95B

2,253

2,232

2,269

2,309

2,092

2,116

2,162

2,241

1,953

1,914

1,977

2,005

2,047

830

846

884

762

783

863

880

715

693

725

738

751

760

1,238

1,221

1,252

1,267

1,296

1,332

1,354

1,379

1,411

1,407

1,369

1,389

1,425

Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 Q2'25 Q3'25 Q4'25

Adjusted EBITDA and Adjusted EBITDA Margin

EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA (which represents earnings before interest,

Reconciliation of net income to EBITDA and Adjusted EBITDA:

Three Months Ended March 31, 2026 2025

($ in millions)

taxes, depreciation and amortization) adjusted for litigation; stock-based compensation expense; restructuring and other charges, including executive retention and severance and acquisition-related costs; costs related to production facility modernization efforts; loss on debt extinguishment; gross profit related to the impact from the accounting change related to revenue; and other items that are unusual in nature, infrequently occurring or not considered part of our core operations. Adjusted EBITDA is intended to show our unleveraged, pre-tax operating results and therefore reflects our financial performance based on operational factors, excluding non-operational, unusual or non-recurring losses or gains. Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for, analysis of our results as reported under GAAP. For example, Adjusted EBITDA does not reflect: (a) our capital expenditures, future requirements for capital expenditures or contractual commitments; (b) changes in, or cash requirements for, our working capital needs; (c) the significant interest expenses or the cash requirements necessary to service interest or principal payments on our debt; (d) tax payments that represent a reduction in cash available to us; (e) any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future; (f) the impact of earnings or charges resulting from matters that we and the lender under our credit agreement may not consider indicative of our ongoing operations; or (g) the impact of any discontinued operations. In particular, our definition of Adjusted EBITDA allows us to add back certain non-operating, unusual or non-recurring charges that are deducted in calculating net income, even though these are expenses that may recur, vary greatly and are difficult to predict and can represent the effect of long-term strategies as opposed to short-term results. In addition, certain of these expenses represent the reduction of cash that could be used for other purposes.

Net income $ 2.1 $ 4.8

Interest, net 7.7 7.7

Income tax expense 1.2 1.7

Depreciation and amortization 6.4 4.2

EBITDA $ 17.3 $ 18.4

Adjustments to EBITDA:

Stock-based compensation expense

1.4

1.7

Acquisition and integration costs (1)

3.2

0.6

Restructuring and other charges (2)

1.2

0.5

Equity in losses of unconsolidated affiliates (3)

0.2

Subtotal of adjustments to EBITDA

$ 5.9

2.8

Adjusted EBITDA

$ 23.2

21.2

Net income margin (% of Revenue)

1.4%

3.9%

Net income growth (% Change 2025 vs. 2024)

(56.9)%

Adjusted EBITDA margin (% of Revenue)

15.7%

17.2%

Adjusted EBITDA growth (% Change 2025 vs. 2024)

9.4%

Balance represents acquisition and integration costs related to the Arroweye acquisition that occurred on May 6, 2025.

Balance includes expenses related to executive retention and severance. The 2025 balance also includes expenses related to production facility modernization efforts.

On October 7, 2025, the Company entered into a strategic relationship with and acquired a 20% equity interest in Karta (Gift Card Co Pty Ltd), an Australia-based payments technology firm also backed by the Commonwealth Bank of Australia. This balance represents the Company's equity in Karta's net losses for the quarter ended March 31, 2026.

LTM Adjusted EBITDA

We define LTM Adjusted EBITDA as adjusted EBITDA (defined previously) for the last twelve months.

Balance represents acquisition and integration costs related to the Arroweye acquisition that occurred on May 6, 2025.

Balance includes expenses related to executive retention and severance, as well as production facility modernization efforts.

In the second quarter of 2025, the Company reassessed certain aspects of its revenue recognition accounting under ASC 606 and prospectively began recognizing revenue for certain contracts at a point-in-time rather than over-time.

Net income

12.2

15.0

Interest, net

32.4

32.5

Income tax expense

6.2

6.7

Depreciation and amortization

24.6

22.5

EBITDA

75.4

76.5

Adjustments to EBITDA:

Stock-based compensation expense

6.7

7.0

Acquisition and integration costs (1)

8.5

6.0

Restructuring and other charges (2)

4.4

3.7

Loss on debt extinguishment

0.3

Change in revenue recognition (3)

2.9

Equity in losses of unconsolidated affiliates (4)

0.3

0.1

Subtotal of adjustments to EBITDA

23.1

20.0

LTM Adjusted EBITDA

98.5

96.5

Reconciliation of net income to LTM EBITDA and Adjusted EBITDA:

Last Twelve Months Ended

March 31, 2026 December 31, 2025

($ in millions)

Free Cash Flow

We define Free Cash Flow as cash flow from

Three Months Ended March 31,

2026 2025

Reconciliation of cash provided by operating activities - (GAAP) to Free Cash Flow:

($ in millions)

operating activities less capital expenditures. We use this metric in analyzing our ability to service and repay our debt. However, this measure does not represent funds available for investment or other discretionary uses since it does not deduct cash used to make principal payments on outstanding debt and financing lease liabilities.

Cash provided by operating activities $ 13.6 $ 5.6

Capital expenditures for plant, equipment and leasehold improvements, net (3.5) (5.3)

Free Cash Flow $ 10.1 $ 0.3

Net Leverage Ratio

Management and various investors use the ratio of debt principal outstanding, plus finance lease obligations, less cash divided by LTM Adjusted EBITDA, or "Net Leverage Ratio," as a measure of our financial strength when making key investment decisions and evaluating us against peers.

As of

March 31, 2026 December 31, 2025

Senior Notes

265.0

ABL Revolver

15.0

25.0

Finance lease obligations

31.3

31.1

Total debt

311.3

321.1

Less: Cash and cash equivalents

(19.3)

(21.7)

Total net debt (a)

292.0

299.4

LTM Adjusted EBITDA (b)

98.5

96.5

Net Leverage Ratio (a)/(b)

3.0

3.1

Calculation of Net Leverage Ratio:

($ in millions)

Disclaimer

CPI Card Group Inc. published this content on May 05, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 05, 2026 at 11:22 UTC.