CPI Card Group (PMTS) investor relations material

Executive summary

• Net sales rose 9% year-over-year to $129.8M in Q2 2025, or 15% excluding a one-time accounting change; Arroweye acquisition and debit/credit card growth were key drivers.

• Net income dropped 91% to $0.5M due to Arroweye acquisition costs, restructuring charges, and higher interest expense; Adjusted EBITDA increased 3% to $22.5M.

• Margin pressures arose from tariffs, sales mix, and increased production costs, impacting gross margin and profitability.

• Arroweye contributed ~$10M in net sales in less than two months, exceeding expectations for both sales and profitability.

• Strategic investments in healthcare payments, closed-loop prepaid, digital solutions, and facility expansion are expanding growth opportunities.

Financial highlights

• Q2 2025 net sales: $129.8M (up 9% year-over-year; 15% excluding accounting change); six months: $252.5M (up 9%).

• Q2 2025 net income: $0.5M (down 91% year-over-year); six months: $5.3M (down 54%).

• Q2 2025 gross profit: $40.1M (down 5% year-over-year); gross margin: 30.9% (down from 35.7%).

• Adjusted EBITDA grew 3% to $22.5M; margin declined to 17.3% from 18.4%.

• Free cash flow for H1 2025 was $0.8M, down from $1.4M prior year, due to higher capital spending.

Outlook and guidance

• 2025 net sales outlook raised to low double-digit to mid-teens growth, reflecting Arroweye acquisition; prior outlook was mid- to high single-digit growth.

• Adjusted EBITDA outlook unchanged at mid- to high single-digit growth, as Arroweye benefits are offset by tariffs and sales mix.

• Guidance does not include potential impacts from proposed chip tariffs announced August 6, 2025; company has ample chip inventory.

• Margin pressures expected to persist in Q3, with improvement anticipated in Q4 as Indiana facility ramps up.

• Management continues to evaluate pricing and cost-saving measures amid ongoing supply chain and macroeconomic uncertainty.