CPI Card Group (PMTS) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue rose 20% year-over-year to $147.1 million, exceeding expectations, driven by Arroweye acquisition, secure card solutions, and strong contactless card sales.

• Net income declined 57% to $2.1 million due to $3 million in Arroweye integration costs and lower gross margin.

• Adjusted EBITDA increased 9% year-over-year to $23.2 million.

• Gross margin fell to 30.0% from 33.2%, impacted by higher production costs, tariffs, and unfavorable sales mix.

• Full-year outlook reaffirmed for high single-digit revenue growth and low-to-mid single-digit adjusted EBITDA growth, with continued strategic investments and diversification.

Financial highlights

• Q1 2026 revenue: $147.1 million (+20% YoY); gross profit: $44.1 million (+8% YoY); gross margin: 30.0%.

• Net income: $2.1 million (-57% YoY); diluted EPS: $0.17 (down from $0.40 YoY).

• Adjusted EBITDA: $23.2 million (+9% YoY); margin: 15.7% (down from 17.2% YoY).

• Free cash flow improved to $10.1 million from $0.3 million prior year; operating cash flow rose to $13.6 million.

• Net leverage ratio improved to 3.0x from year-end.

Outlook and guidance

• Full-year 2026 guidance: high single-digit revenue growth, low-to-mid single-digit adjusted EBITDA growth, and year-end net leverage ratio between 2.5x and 3.0x.

• Q2 revenue expected to be similar to Q1, with adjusted EBITDA slightly lower due to timing of investment spending.

• Prepaid segment and overall gross margins expected to improve in the second half of the year.

• Sufficient liquidity anticipated to fund operations, capital expenditures, and debt service.