Cimpress reports higher-than expected second-quarter results

February 16, 2024February 22, 2024 GaryPageau Cimpress, Vista, Vistaprint

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Vista parent Cimpress reported improved second-quarter results, including consolidated revenue growth of 9% on a reported basis and 6% on an organic constant-currency basis. The company’s cost-reduction plans will bring in approximately $25 million of year-over-year savings remaining that will benefit our fiscal third quarter.

By segment

Vista Q2 revenue grew 11% year over year on a reported basis and 9% on an organic constant-currency basis, fueled by the second consecutive quarter of growth in total customer count paired with the continued increase of revenue per customer. Revenue grew at similar constant currency rates across all regions. Revenue growth was very strong across business products categories and we had stronger than expected year-over-year growth of 7% in the consumer product category. This was the first Q2 that Vista has grown the consumer product category since the company began Vista’s restructuring in 2019 and made significant reductions in advertising and discounting that “were disproportionately targeted at improving the returns on serving consumer customers.”

Revenue growth combined with improved costs contributed to an increase in Vista’s segment EBITDA of $48.0 million in Q2 FY2024, up 87% from the year-ago period. Gross profit per customer continued to grow year over year and Vista’s gross margin improved over 400 basis points versus Q2 FY2023 to 56.4%.

PrintBrothers and The Print Group (combined Upload & Print businesses) Q2 revenue grew year over year by 11% and 4%, respectively, on a reported basis (or 9% for the combined businesses), and 5% and (1)%, respectively, on an organic constant-currency basis (or 3% for the combined businesses). These businesses are lapping strong revenue growth rates in the year-ago period that were influenced by price increases, but continue to see order growth. Similar to Q1, this order growth has been partially offset by customers purchasing lower quantities in certain product categories and headwinds in the reseller channel, which is more prominent in The Print Group.

Combined Upload & Print profitability expanded $13.6 million, or 41%, from the year-ago period driven by lower input costs and operating expenses, as well as year-over-year currency benefits of $2.6 million. Additionally, PrintBrothers benefited from a favorable timing item of $2.6 million in cost of goods (offsetting a related Q1 negative impact) and $1.5 million from the realization of government incentives.

National Pen delivered revenue growth of 8% on a reported basis and 5% on an organic constant-currency basis during Q2 FY2024. This growth was driven by strong results in National Pen’s growing e-commerce business. Segment EBITDA expanded $1.1 million year over year as a result of revenue growth and gross margin improvement.

All Other Businesses Q2 revenue was flat year over year on a reported and constant-currency basis. BuildASign continued to see softer sales of real estate-related products as well as home decor products. Printi revenue continued to grow. Segment EBITDA expanded from the year-ago period, driven by lower operating costs in BuildASign and savings from the FY2023 divestiture of our loss-making business in China.

The board has authorized the repurchase of up to $150 million of Cimpress shares. This authorization does not have an expiration date or a defined time frame for repurchases.

REVENUE BY REPORTABLE SEGMENT, TOTAL REVENUE AND INCOME FROM OPERATIONS:

	Q2 FY2022	Q2 FY2023	Q2 FY2024	YTD FY2022	YTD FY2023	YTD FY2024
Vista	$ 448,114	$ 437,736	$ 485,151	$ 797,594	$ 807,105	$ 881,798
PrintBrothers	137,694	148,598	165,148	263,051	281,297	317,369
The Print Group	90,130	89,336	93,268	162,950	166,159	173,807
National Pen	124,717	120,621	130,572	193,981	202,287	217,827
All Other Businesses	57,719	59,998	60,283	105,590	111,825	112,083
Inter-segment eliminations	(8,658)	(11,087)	(13,059)	(15,851)	(20,056)	(24,227)
Total revenue	$ 849,716	$ 845,202	$ 921,363	$ 1,507,315	$ 1,548,617	$ 1,678,657
Reported revenue growth	9 %	(1) %	9 %	10 %	3 %	8 %
Organic constant currency revenue growth	9 %	5 %	6 %	9 %	9 %	5 %
Income from operations	$ 85,981	$ 33,578	$ 107,679	$ 102,920	$ 15,611	$ 141,779
Income from operations margin	10 %	4 %	12 %	7 %	1 %	8 %

EBITDA BY REPORTABLE SEGMENT (“SEGMENT EBITDA”) AND ADJUSTED EBITDA:

	Q2 FY2022	Q2 FY2023	Q2 FY2024	YTD FY2022	YTD FY2023	YTD FY2024
Vista	$ 90,766	$ 55,157	$ 103,176	$ 157,686	$ 85,894	$ 177,600
PrintBrothers	18,605	19,509	28,341	34,888	34,500	48,167
The Print Group	16,358	13,681	18,442	30,747	25,901	32,050
National Pen	31,599	24,783	25,865	23,551	23,486	17,562
All Other Businesses	6,264	5,406	7,983	11,155	11,584	14,441
Total segment EBITDA	$ 163,592	$ 118,536	$ 183,807	$ 258,027	$ 181,365	$ 289,820
Central and corporate costs	(32,803)	(35,569)	(32,084)	(65,825)	(71,104)	(64,212)
Unallocated share-based compensation	(1,900)	1,767	(3,883)	(3,031)	2,724	(3,535)
Exclude: share-based compensation expense¹	12,505	11,547	17,649	23,511	22,022	30,102
Include: Realized gains (losses) on certain currency derivatives not included in segment EBITDA	674	14,901	945	(2,998)	21,770	2,995
Adjusted EBITDA	$ 142,068	$ 111,182	$ 166,434	$ 209,684	$ 156,777	$ 255,170
Adjusted EBITDA margin	17 %	13 %	18 %	14 %	10 %	15 %
Adjusted EBITDA year-over-year (decline) growth	(1) %	(22) %	50 %	(10) %	(25) %	63 %