CPI Card Group (PMTS) Q2 2025 earnings summary

Executive summary

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

• Arroweye contributed nearly $10M in net sales in less than two months and outperformed profitability expectations.

• Card@Once instant issuance solution grew over 20% in the first half, expanding to 17,000+ locations and entering the government disbursement vertical.

• Margin pressures arose from sales mix, higher production costs, and tariffs.

• Strategic investments in automation, new facilities, and market expansion are expected to drive long-term growth.

Financial highlights

• Q2 2025 net sales: $129.8M (up 9% year-over-year; up 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%).

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

• Gross margin fell to 30.9% from 35.7% year-over-year, pressured by sales mix, higher tariffs, and costs from the Indiana facility transition.

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

Outlook and guidance

• 2025 net sales outlook raised to low double-digit to mid-teens growth, reflecting Arroweye addition; 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.

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

• Long-term growth trends remain positive, supported by recurring business and adoption of higher-value cards.