CPI Card Group (PMTS) investor relations material

Executive summary

• Q3 2025 net sales rose 11% year-over-year to $138.0 million, driven by the Arroweye acquisition and instant issuance growth, partially offset by lower Prepaid sales and services revenue.

• Net income increased 78% to $2.3 million, mainly due to the absence of prior year debt retirement costs, despite margin pressures from tariffs and sales mix.

• Gross profit margin declined to 29.7% from 35.8% year-over-year, impacted by unfavorable sales mix, tariffs, and higher production costs.

• Strategic initiatives advanced, including digital solutions, closed-loop prepaid, and a partnership with Karta for chip-enabled prepaid cards.

• Indiana production facility fully operational, supporting efficiency and future cost savings.

Financial highlights

• Q3 2025 net sales: $138.0 million (+11% YoY); gross profit: $41.0 million (-8% YoY); net income: $2.3 million (+78% YoY); diluted EPS: $0.19 (+79% YoY).

• Adjusted EBITDA for Q3: $23.4 million (-7% YoY); margin: 17.0% (down from 20.1%).

• Year-to-date net sales: $390.5 million (+10% YoY); gross profit: $121.8 million (-5% YoY); net income: $7.6 million (-40% YoY).

• Free cash flow for the first nine months was $6.1 million, down from $12.5 million, due to higher capital expenditures.

• Cash and cash equivalents at quarter-end: $16.0 million; total debt: $340.6 million.

Outlook and guidance

• 2025 net sales outlook refined to low double-digit to low teens growth; Adjusted EBITDA outlook revised to flat to low single-digit growth.

• Margin impacts in debit and credit expected to persist in Q4; some prepaid orders may shift to 2026.

• Outlook does not include potential impacts from proposed semiconductor chip tariffs.

• Management expects continued macroeconomic uncertainty, including tariff impacts and supply chain challenges, to affect costs and demand.

• The company is evaluating pricing actions and cost savings to offset increased costs for the remainder of 2025.