Ladies and gentlemen, thank you for standing by, and welcome to the Deluxe Quarterly Earnings Conference Call. At this time, I would like to turn the conference over to your host, Vice President of Strategy and Investor Relations, Brian Anderson. Please go ahead.

Thank you, operator, and welcome to the Deluxe Fourth Quarter and Full Year 2025 Earnings Call. Joining me on today's call are Barry McCarthy, our President and Chief Executive Officer, and Chip Zint, our Chief Financial Officer. At the end of today's prepared remarks, we will take questions. Before we begin, and as seen on the current slide, I would like to remind everyone that comments made today regarding management's intentions, projections, financial estimates, and expectations about the company's future strategy or performance are forward-looking in nature as defined in the Private Securities Litigation Reform Act of 1995. Additional information about factors that may cause actual results to differ from projections is set forth in the press release we furnished today in our Form 10-K for the year ended 12/31/2024 and in other company SEC filings. On the call today, we will discuss non-GAAP financial measures, including comparable adjusted revenue, adjusted and comparable adjusted EBITDA and EBITDA margin, adjusted and comparable adjusted EPS, and free cash flow. All comparable adjusted metrics reflect the removal of impacts from business exits. In our press release, today's presentation, and our filings with the SEC, you will find additional disclosures regarding the non-GAAP measures, including reconciliations of these measures to the most comparable measures under US GAAP. Within the materials, we are also providing reconciliations of GAAP EPS to adjusted EPS, which may assist with your modeling. And with that, I will hand it over to Barry.

Thanks, Brian. And good evening, everyone. I am pleased to share our strong fourth quarter and full year 2025 results. Across the past year, our team executed with discipline, and each of our businesses performed well, driving robust growth of all profit metrics directly benefiting our balance sheet. Here are five key highlights for the year. Number one, revenue and profit growth. Comparable adjusted EBITDA expanded more than 6% at the top of our value creation framework, with organic revenue growing 1%. 2025 was the third consecutive year with EBITDA growing faster than revenue, demonstrating our ability to scale profits. Two, EPS and operating income. Comparable adjusted EPS grew 13%, and operating income increased by 23%. Three, cash generation and balance sheet improvement. We generated $175 million of free cash flow, delivering our 2026 goal in 2025, a full year early. We reduced net debt by $76 million, lowering our year-end leverage ratio to 3.2 times, also ahead of schedule. And we have paid our regular dividend for more than thirty consecutive years. Four, strategic mix shift towards payments and data. Payments and data now account for 47% of revenue, up from 43% a year ago, and around 30% in early 2021. The payments and data businesses combined grew 12% during Q4 and 10% for the full year. We expect to achieve our strategic goal of payments and data achieving revenue parity with the print businesses later this year, delivering on our promise of transforming Deluxe into a payments and data company. Five, exit rate provides optimism for 2026. Chip will introduce our guidance in a minute, but we are pleased with our Q4 exit rates, with all businesses performing well, giving us confidence in 2026. You will recall that at our Investor Day in December 2023, we promised Deluxe…

Thank you, Barry, and good evening, everyone. As Barry noted in his opening, we were very pleased with our strong 2025 progress, including our better-than-anticipated free cash flow conversion and resulting delevering pace. Expansion of comparable adjusted EBITDA and EPS growth rates, lowered overall operating expense, and reduced restructuring-related spending during the year clearly highlight our progress. Our strong momentum toward key Investor Day outcomes is clearly embedded within our 2026 guidance ranges, which I am pleased to be able to share this evening. Our 2025 results also demonstrate continued improvement in the health of our balance sheet. We are pleased with our recently upgraded credit standing across key capital markets and our strengthened quality of earnings as we execute our clear strategy. I will begin by reviewing some of the consolidated highlights for the year before moving on to operating segment results and our 2026 guidance ranges. For the full year, we posted total revenue of $2,133 million, increasing 0.5% versus 2024 reported results while expanding by 1.1% year over year on a comparable adjusted basis. We reported full-year GAAP net income of $85.3 million or $1.87 per share for the year, improving from $52.9 million or $1.18 per share in 2024. This increase was driven by overall revenue growth, improved operating margins, and lower restructuring spend during 2025. Full-year comparable adjusted EBITDA was $431.5 million, improving $25 million or 6.2% from the prior year results. Adjusted EBITDA margins were 20.2%, expanding by 90 basis points from the 2024 levels. Full-year comparable adjusted EPS came in at $3.67, improving 12.6% from $3.26 in 2024. This improvement was primarily driven by expanded operating profits, along with slightly lower interest expense. Now turning to our operating segment details, beginning with Merchant Services. For the full year, Merchant segment revenue finished at…

Thank you. If you are dialed in via the telephone and would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using the speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. A voice prompt on the phone line will indicate when your line is open. Please limit yourself to one question and one follow-up. You may rejoin the queue with additional questions. Again, please press star 1 to ask a question. And we will take our first question from Kartik Mehta with Northcoast Research. Please go ahead. We are unable to hear you. If you are out of speakerphone, please pick up your handset or depress your mute function. And then hearing silence, we will go on. To our next question from Charlie Strauzer with CJS Securities.

This is Will on for Charlie. You made note about the use of AI-enabled tools supporting the data segment and developments and payments around embedded solutions such as Deluxe Fast Funds. As the largest financial players increasingly discuss investment in Agents e-commerce and the impacts of AI across industries, how would you say Deluxe is positioned to respond to or to take advantage of some of these trends?

So Will, appreciate the question. I would tell you that we are very proud and believe that Deluxe is very well positioned. We are a company that actually has applied AI technology in multiple places across our business. We are not experimenting with it. We have gone live, and it is delivering improved performance. So as I mentioned in my prepared remarks, it is a part of how we are winning with our data-driven marketing business. As I said in my remarks, we built what we believe is one of the largest consumer and small business data lakes, and we pair that with great talent but also great tools that are Gen AI-based that get smarter with every campaign that we run. And if you compare our results and the number of at-bats we have, we do thousands of campaigns a year, and any individual bank might do a large bank might do hundreds. So not only do we have more at-bats, but given the nature of Gen AI, we also have the opportunity for some exponential increase in our capabilities and success from a campaign performance perspective. And you can see that in our revenue performance. You know, we grew 30% in the full year, and that is a direct result of having great tools, great technology, great customer support, and being able to move quickly to help an institution solve its problems around growth, customer acquisition, or however we can apply that data to help them be successful.

Very helpful. Thank you. Just to follow-up, given the release of your updated outlook, how are you feeling about macroeconomic or other risks potentially impacting your growth segments in particular? And what factors could drive upside to the higher end of the outlook provided?

Sure. I will start to give you some there, and then Chip can jump in too. But on previous calls, during the whole last year, we have been talking a bit about macroeconomic uncertainty, but we will tell you what we have seen in the sort of back half of the year, 3Q4 and even into the start of this year. We are seeing what we would consider just more traditional patterns of consumer behavior. Now the shift has still happened between discretionary and less discretionary categories that we saw earlier in the year, but that shift seems to have stabilized. And so we believe that that gives us a good, you know, it gives us good confidence as we look forward to this new year. We are optimistic that the consumer is going to stay healthy. And that that will help not just our merchant business but our businesses overall that tend to track pretty darn well with the economy overall.

Yeah. I think well said, Barry. I guess two points I would make. First of all, we are just fundamentally in a different place coming out of 2025 and going into 2026 than we were a year ago. If you look at the execution and the performance across all four segments just from a year ago, everything is in a different place in terms of momentum and how we are performing. I think the other thing I would call your attention to is just the data segment in particular. Obviously, that was a business that experienced extraordinary demand last year. And obviously, at times outperformed even our expectations. But what we know is we are going to face some monster comps in the back half of the year. And I will just remind you, this is a campaign-oriented business. And because of that, the nature of it is we have better visibility to the next one to two quarters than we necessarily do the third or fourth one out. So as we think about the momentum of the business, that puts us on a path to see some solid growth continue for data for the first half of the year, not as strong as what you just saw, but we would expect data to continue a nice double growth rate in the first half of the year. And then obviously, once we come up against those comps in the half, things will more normalize, getting to that overall guidance range. So I think to overall answer, we can drift up throughout the year. It is going to be getting more visibility to the pipeline, continuing the momentum across all the segments, and just continuing to execute the way we have over the last four straight quarters or so. Thank you.

Thank you. We will take our next question from Kartik Mehta with Northcoast Research.

Hey, good afternoon, Barry and Chip. Sorry about that. I was having phone issues. But, Barry, you know, you talked about the business exiting 2025 with some growth trajectory, which is great to see. As you look at 2026, what are your primary objectives for the business? Maybe, you know, your top two objectives you would like to accomplish in 2026.

Sure. So let me just reiterate that we think there are three big strategic planks of what we are continuing to drive in this business. The first one is to shift the mix towards our payments and data business. You heard us say that we added 400 basis points of revenue to our mix there going from 43% to 47%, and we think that we get to parity as the year unfolds. And Kartik is following our story for a while. You know why that is so important because it puts a bigger percentage of our revenue every day on growth segments to make it easier to offset the secular declines on the print side of the business. And as we continue to grow the payments and data business, it gets easier and easier for us to accelerate our overall growth rate. The second area is driving efficiency in everything we do. Coming out of the work we did on the North Star project that has now moved to business as usual. We have built a good amount of muscle in operating the business even more efficiently than ever. And the third, of course, is to generate cash flow through EBITDA, etcetera, to lower our debt net debt, and our leverage ratio. So those are the big three things that we are working on as a company. And each one of the businesses, they are specific strategic things they are trying to achieve, everything from building the ISV channel more strongly in the merchant business, to accelerating the software side of the B2B business and working on the margin. In the data business, of course, continuing the phenomenal trajectory thereon. And in the print business is holding on to those fantastic margins. Renewing customers and continuing the healthy cash generation of that business. So if all those things work together, to deliver what we think is going to be a very another very nice year in 2026. Consistent with our ability to execute that hopefully, we highlighted in our prepared remarks.

Very good. And then did you look at the merchant business, I know one of the objectives was to grow the distribution. As you kind of look at the pipeline, you talked a little bit about the ISV distribution system channel. I am wondering, you know, as you look at the pipeline, what does the pipeline look like for 2026 in terms of adding additional distribution?

Sure. So, Kartik, I think we talked on the last call about the fact that we have really been working on putting more muscle into our ISV channel. We have a new-ish leader there now that is helping us build a very nice and robust pipeline. We have also paired that with responsible investments in improving our API suite, working on our reporting tools, and other features and functionality that we think will make our program even more appealing to ISVs. And I think you should expect to hear from us about more about the ISV channel and, hopefully, knock on wood, some wins that we can share with you as the year unfolds. But we are very optimistic that we have the right service model as well as the right feature set and now with the right leadership driving distribution, we think we have got a real opportunity there.

Perfect. Thank you very much. I appreciate it.

Great.

Thank you. Once again, if you would like to ask a question, please. Your next question comes from Marc Riddick with Sidoti.

Hey, Marc. So, first of all, thanks for all the detail that has already been provided and certainly quite a bit has been accomplished. Was wondering if you could talk a little bit about maybe some of the opportunities that you see before you. And specifically, I was sort of thinking about some of the maybe build versus buy kind of decisions as far as investments. And we had the CheckMatch acquisition over the summer last year. You could talk a little bit about the capabilities that you are looking to continue to enhance and possibly maybe your appetite for a build versus buy kind of decision around those lines.

Sure. Let me just start with the point that we believe we are very fiscally responsible and good stewards of shareholder capital. And as you have seen us continue to help this business perform, paying down debt, improving our leverage ratio. We did make two small acquisitions, the one that you mentioned with CheckMatch, which helps our B2B business, and then bought the residuals from an ISO or an independent sales organization that was on the merchant business. Both of those we believe will deliver nicely for us, that there are logical tuck-ins that will help deliver improved performance, particularly around profitability over time. We also have a pretty great track record, Marc, of being able to deliver capabilities ourselves to help the business grow. So, for example, we were one of the first companies in the merchant processing space to get approval and certification from Apple for a program they called Tap on Glass. That allows two different phones to pay each other. You just saw us announce an integration with Visa into our product, Deluxe Fast Pay. You have heard us about our investment in building the database and the AI tools that have led to and created the opportunity for this massive growth in our data-driven marketing business. And even in our check business, we have been very responsible and making responsible investments to secure the margin profile of our check business for the intermediate to long term. So we think about these things all the time and finding a balance between building things ourselves, which hopefully has the highest rate of return for shareholders. But when we see opportunities like we saw with the two things that we have talked about, as long as they are responsible and they meet our high hurdles, we are going to move forward with those because they are accretive to the company. Help us succeed.

Yeah. And, Marc, it is Chip. I will just add a couple more comments. So first of all, you saw us guide $90 million to $100 million worth of CapEx spend. We have been spending at that level pretty consistently the last few years. And as Barry said, we feel like we are good stewards of shareholder capital. So think of that as the right balance of investments that the business needs to drive efficiencies, remain competitive, and invest in new growth opportunities to attack the market and win, obviously, in the competition. So embedded in our guidance is an organic continued investment in the business. And the second point to Barry's comment, we are continuing to stay very clear on our existing capital allocation priorities. So as we watch the generation of free cash flow and as that has been expanding and getting better and more improving north of 40%, last year, in fact, we are able to look at that in the direct impact it has on our leverage ratio and the trajectory we are on, and we are able to balance various levers, which gives us a chance to be opportunistic, as Barry said. Again, if it is the right opportunity with the right returns. So I think the way he described our fiscal responsibility is exactly how I would think about it, and it is how we have said we would prioritize capital allocation from the get-go. Be able to invest internally for organic ads, while also continuing to delever and improve the balance sheet, which just gives us continued optionality as we go on. So I think all of those things are embedded in how you should think about we think of this going forward.

Great. Thank you very much for that. And then I guess maybe I want to sort of shift over to sort of the AI focus opportunities? And maybe is there sort of an area where you see greater client receptivity? And by that, I am speaking of industry verticals or geography, if that is more appropriate. Are there any particular areas that are sort of leading as far as acting on those opportunities? Through Deluxe that you are seeing currently? Thanks.

Sure. Appreciate the question. I really do not think about it as a geography or client type. I really think about how we are applying AI, which is to solve specific problems. And we have applied AI in virtually every part of our company's business. In our B2B space, we are using it in our lockbox operation to improve matching rates very dramatically, taking out labor and cost for our customers. Already talked about in our data business how we are applying AI tools to get better outcomes and better ROI for our customers. And in our merchant business, we are using it specifically to drive our self-service chatbot at a very, very human experience. We also use it in the B2B space for the similar chatbot and even on our deluxe.com. So we are applying AI technology to solve customer problems. And we have seen great receptivity and uptake on each one of those opportunities because they deliver and they fix a problem for a customer. It is not about technology for technology's sake. It is not about having a shiny new toy. It is actually about delivering value, and that is one of the things that this company does so well is find the to help a customer fix or solve a problem and then deliver for them. And AI is one more really big tool now in our toolkit and our toolbox to help solve those problems, and we are doing it across our full portfolio of products and solutions.

Great. Thank you very much.

Thank you.

And at this time, we have no further questions. I will now turn the call back to Brian Anderson for additional and closing remarks.

Thanks, Rachel. Before we conclude, I would like to share that management will be attending the JPMorgan Global High Yield and Leverage Finance Conference, March in Miami. And the Sidoti Small Cap Virtual Conference, March 19 during the quarter. Thank you again for joining us today, we look forward to speaking with you all again in May as we share our first quarter 2026 results.

This does conclude today's call. Thank you for your participation. You may now disconnect.