Deluxe (DLX) Sidoti March Small-Cap Virtual Conference summary

Company overview and transformation

• Revenue exceeds $2.1 billion, with over $2 trillion in payments processed annually and $175 million in free cash flow in 2024.

• Business mix is shifting from legacy print to payments and data, surpassing 50% in 2024 and projected to reach 60%+ in the next few years.

• Strategic divestitures and portfolio focus have transformed the company from a check printer to a digital payments and data leader.

• Four main business segments: print, B2B, data-driven marketing, and merchant services.

Financial performance and guidance

• Achieved $175 million in free cash flow in 2024, a 75% year-over-year increase, reaching 2026 targets two years early.

• EBITDA and margins have improved, with leverage ratio expected to fall below 3x by mid-2026.

• 2026 guidance projects low single-digit revenue growth, 3%-9% EBITDA growth, and $200 million in free cash flow.

• Long-term goals include 2%-4% annual revenue growth, expanding margins, and 15%+ annual shareholder returns.

Strategic priorities and capital allocation

• Focused on shifting revenue mix to payments and data, driving operational efficiency, and deleveraging.

• Recent sale of Safeguard print distribution channel reduces print exposure, improves profitability, and supports strategic goals.

• Maintains disciplined capital allocation, investing $90-$100 million annually in growth and product development.

• Dividend maintained as enterprise value grows, with strong liquidity and debt maturities extended to 2029.