CPI Card Group (PMTS) investor relations material

Executive summary

• Net sales for Q3 2025 rose 11% year-over-year to $138.0 million, driven by the Arroweye acquisition and instant issuance growth, partially offset by lower Prepaid sales and services revenue.

• Net income surged 78% to $2.3 million, mainly due to the absence of prior year debt retirement costs, despite margin pressures from tariffs and sales mix.

• Gross profit margin declined to 29.7% from 35.8% year-over-year, impacted by tariffs, higher production costs, and depreciation.

• Strategic initiatives advanced, including digital solutions, closed-loop prepaid, and a partnership with Karta for chip-enabled prepaid cards.

• Indiana production facility fully operational, supporting efficiency and future cost savings.

Financial highlights

• Q3 2025 net sales: $138.0 million (+11% YoY); gross profit: $41.0 million (-8% YoY); net income: $2.3 million (+78% YoY); diluted EPS: $0.19 (+79% YoY).

• Adjusted EBITDA for Q3: $23.4 million (-7% YoY); margin: 17.0%.

• Year-to-date net sales: $390.5 million (+10% YoY); net income: $7.6 million (-40% YoY); diluted EPS: $0.64 (-41% YoY).

• Free cash flow for nine months: $6.1 million, down from $12.5 million prior year due to higher capital spending.

• Cash on hand: $16.0 million; total debt: $340.6 million; Senior Notes outstanding: $265 million.

Outlook and guidance

• 2025 net sales outlook revised to low double-digit to low teens growth; Adjusted EBITDA expected to be flat to low single-digit growth.

• Margin impacts in Debit and Credit expected to persist in Q4; some Prepaid orders may shift to 2026.

• Outlook excludes potential impact of proposed semiconductor chip tariffs announced August 6.

• Management expects continued macroeconomic uncertainty, including tariff impacts and supply chain challenges, to affect costs and demand.

• The company is evaluating pricing actions and cost savings to offset increased costs for the remainder of 2025.