Deluxe (DLX) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue declined 5.9% year-over-year to $537.8 million, mainly due to business exits and secular declines in checks and forms.

• Net income rose 25% to $20.5 million ($0.46/share), driven by pricing actions, cost optimization, and lower restructuring costs.

• Adjusted EBITDA increased 1.6% to $101.8 million, with margin expanding to 19.2% in Q2 2024.

• Free cash flow for the first half of 2024 was $17.6 million, up $26.2 million year-over-year.

• Full-year 2024 guidance for adjusted EBITDA, adjusted EPS, and free cash flow reaffirmed, with revenue range modestly lowered due to macro uncertainty and business exits.

Financial highlights

• Q2 2024 revenue: $537.8 million (down 5.9% YoY); comparable adjusted revenue down 3.0%.

• Q2 2024 net income: $20.5 million (up 25% YoY); diluted EPS: $0.46 (up from $0.37); adjusted diluted EPS: $0.85 (up from $0.81).

• Comparable adjusted EBITDA: $101.8 million, margin expanded 80 bps to 19.0%.

• Free cash flow for the first half: $17.6 million, compared to negative $8.6 million in 2023.

• Gross margin for Q2 2024: 53.7% (up from 52.8% YoY); SG&A expense as % of revenue: 43.5%.

Outlook and guidance

• 2024 revenue guidance: $2.12–$2.16 billion, reflecting business exits and macro uncertainty.

• Adjusted EBITDA: $400–$420 million (2–7% comparable adjusted growth).

• Adjusted EPS: $3.10–$3.40 (3–13% comparable adjusted growth).

• Free cash flow: $80–$100 million.

• Guidance assumes interest expense of $120–$125 million, adjusted tax rate of 26%, D&A of $160 million, and capex of $100 million.