Fourth Quarter Revenue Increased 22% to a Record $153 Million
Fourth Quarter Net Income Increased 9% to $7 Million; Adjusted EBITDA Increased 34% to $29 Million
Full Year 2025 Revenue $544 Million; Net Income $15 Million; Adjusted EBITDA $97 Million; Operating Cash Flow $60 Million; Free Cash Flow $41 Million
LITTLETON, Colo.--(BUSINESS WIRE)--March 05, 2026--
CPI Card Group Inc. (Nasdaq: PMTS) ("CPI" or the "Company"), a payments technology company providing a comprehensive range of physical and digital payment solutions for U.S. financial institutions, processors, fintechs, prepaid program managers and more, today reported financial results for the quarter and full year ended December 31, 2025, and provided its initial financial outlook for 2026.
CPI's fourth quarter revenue increased 22% to $153.1 million, driven by the addition of Arroweye and increased sales of contactless cards. Net income in the quarter increased 9% to $7.4 million and Adjusted EBITDA increased 34% to $29.4 million.
For the full year, revenue increased 13% to $543.5 million, driven by Arroweye, contactless cards, and instant issuance solutions. Net income was impacted by acquisition and integration costs and decreased 23% to $15.0 million, while Adjusted EBITDA increased 5% to $96.5 million. The Company generated operating cash flow of $60 million, a 37% increase from $43 million in the prior year, and Free Cash Flow of $41 million, a 21% increase from $34 million in 2024.
"Our teams delivered exceptional fourth quarter performance, leading to solid results in a year defined by significant strategic and operational advancements," said John Lowe, President and Chief Executive Officer. "In addition to the acquisition and successful integration of Arroweye's on-demand solutions, we also completed our new state-of-the-art secure card production facility, entered the closed loop prepaid market, and added new digital solutions integrations, expanding our payments ecosystem penetration."
Through years of investment and development, CPI has evolved to become a key player in the U.S. payments ecosystem, building a proprietary technology platform that enables payment programs to offer their customers the payment options they want, both physically and digitally. The Company's value proposition is driven by its proprietary technology platform, its marketable base of thousands of deep and broad relationships across the U.S. payments market, and its proven track record of delivering payment solutions that reflect evolving market needs.
Lowe added, "Our proprietary platform and expertise uniquely position CPI to deliver today, tomorrow, and into the future as our markets expand and payment methods continue to evolve. We continue to transform alongside the market, extending our long track record of building deep connections in the payment ecosystem and providing flexible solutions for our customers, enabling them to win with their customers."
To advance CPI's strategies and drive long-term growth, the Company has implemented a new operating structure. The new structure consists of three business units, which will also reflect the Company's financial reporting segments in 2026:
-- Secure Card Solutions, wherein CPI is a leading U.S. provider of debit
and credit cards and personalization services, focusing on quality,
innovation, and customer service to drive share gains in growing markets.
Secure Card Solutions also includes our Arroweye on-demand solutions.
-- Prepaid Solutions, wherein CPI is the leader in U.S. open loop prepaid
cards and secure packaging solutions. Prepaid Solutions also includes
closed loop and healthcare payment solutions.
-- Integrated Paytech, which includes our relatively stronger growth,
higher margin payment solutions that leverage our technology platform and
deep connections into the U.S. payments ecosystem. Integrated Paytech
includes our Software-as-a-Service-based instant issuance and other
digital solutions.
CPI today also provided its initial financial outlook for 2026, which projects high single-digit revenue growth and low-to-mid single-digit Adjusted EBITDA growth. The Adjusted EBITDA outlook reflects significant investments to accelerate market penetration and growth of our Integrated Paytech segment, as well as other technology investments. The Company expects growth from each of its new business segments in 2026, led by the Integrated Paytech segment, where we are targeting greater than 15% revenue growth for the year.
The Company continues to believe long-term growth trends for the U.S. card market remain strong, led by ongoing consumer card growth. Based on figures released by the networks, Visa and Mastercard$(R)$ U.S. debit and credit cards in circulation increased at a compound annual growth rate of 7.5% for the three-year period ending September 30, 2025.
2025 Strategic, Business, and Capital Highlights
Strategic Highlights
-- On May 6, 2025, CPI acquired Arroweye Solutions, Inc. ("ASI"), a
leading provider of on-demand payment card solutions for the U.S. market,
for a purchase price of $46 million. A press release providing details of
the acquisition can be found on CPI's investor relations website at
https://investor.cpicardgroup.com. In the approximately 8 months
following acquisition, ASI delivered $43 million of revenue and $6
million of Adjusted EBITDA, with additional synergies expected to take
effect in mid-2026 and beyond.
-- On October 7, 2025, the Company entered into a strategic relationship
with Karta (Gift Card Co Pty Ltd), an Australia-based payments technology
firm also backed by the Commonwealth Bank of Australia, that included
acquisition of a 20% equity interest for total consideration of $10
million. CPI and Karta are teaming to integrate Karta's SafeToBuy
technology with CPI's prepaid solutions in the U.S. market, with ongoing
pilots underway with a large national retailer. A press release providing
details of the agreement can be found on CPI's investor relations website
at https://investor.cpicardgroup.com. The Company also retains an option
to purchase an additional 31% of Karta.
Business Highlights
-- CPI continues to be the leading provider of Software-as-a-Service-based
instant issuance solutions in the U.S., with growth of approximately 20%
in 2025, and installations across more than 2,500 financial institutions.
This business generates strong recurring revenue streams due to high
customer retention rates and a unique value proposition in the market.
The Company recently signed a new referral agreement with a large
national processor resulting in CPI being a preferred partner with
preferential access to more than 450 additional financial institutions
over the next several years.
-- CPI continues to advance its market and product expansion strategies,
including healthcare payment solutions, digital offerings such as push
provisioning capabilities for mobile wallets and payment card fraud
solutions, and closed loop prepaid solutions.
Capital Highlights
-- On July 15, 2025, CPI exercised the optional redemption feature on its
10% Senior Notes due 2029 and retired $20 million of principal at a
redemption price of 103% of par, plus accrued interest. Following the
retirement, the Company had $265 million of Senior Notes outstanding.
-- The Company's major investments in 2025 included the acquisition of
Arroweye for $45.8 million, the $10 million equity investment in Karta
($2.5 million upfront cash), and the completion of a new secure card
production facility in Indiana.
-- The Company ended 2025 with a Net Leverage Ratio of 3.1x.
Fourth Quarter 2025 Financial Highlights
Revenue increased 22% to $153.1 million in the fourth quarter of 2025, compared to the prior year period.
-- Debit and Credit segment revenue increased 40% to $128.9 million,
driven by the addition of Arroweye, which contributed $18 million of
revenue in the quarter, and increased sales of contactless cards. Sales
of instant issuance solutions and other personalization services also
increased in the quarter.
-- Prepaid Debit segment revenue decreased 27% to $24.4 million, primarily
due to comparisons with strong sales of higher-value packaging solutions
in the prior year period.
Gross profit increased 13% to $48.3 million and gross profit margin of 31.5% decreased from 34.1% in the prior year, as benefits from increased sales were offset by increased production costs, including the impact of higher depreciation expense and tariffs, and unfavorable sales mix.
Net income increased 9% to $7.4 million, or $0.62 diluted earnings per share, primarily due to sales growth, partially offset by Arroweye integration costs. Adjusted EBITDA increased 34% to $29.4 million, driven by sales growth and operating leverage.
Full Year 2025 Financial Highlights
Revenue increased 13% year-over-year to $543.5 million in 2025, or 15% excluding the impact of an accounting change implemented in the second quarter related to revenue recognition timing for work-in-process orders.
-- Debit and Credit segment revenue increased 20% to $451.5 million,
driven by the addition of Arroweye, which contributed $43 million of
revenue for the year, and increased sales of contactless cards, including
metal cards, and instant issuance solutions.
-- Prepaid Debit segment revenue decreased 12% to $93.6 million, or
decreased 3% excluding the accounting change, due to comparisons with
strong sales of higher-value packaging solutions to existing customers in
the prior year.
Gross profit decreased 1% to $170.1 million and gross profit margin of 31.3% decreased from 35.6% in the prior year, as benefits of operating leverage from increased sales were offset by impacts from increased production costs, including the impact of tariffs and higher depreciation expense, and unfavorable sales mix.
Net income decreased 23% to $15.0 million, or $1.25 diluted earnings per share, impacted by Arroweye acquisition and integration costs and a higher tax rate, partially offset by lower debt retirement costs. Adjusted EBITDA increased 5% to $96.5 million, as benefits from increased sales were partially offset by the impact of unfavorable sales mix and tariff expenses.
Balance Sheet, Liquidity and Cash Flow
The Company generated cash from operating activities of $59.5 million in 2025, which compared to $43.3 million in the prior year period; and Free Cash Flow of $41.3 million, which compared to $34.1 million in the prior year. The increase in Free Cash Flow was primarily driven by strong working capital management, partially offset by an $8.9 million increase in capital expenditures, including spending related to the new Indiana secure card production facility.
As of December 31, 2025, the Company had $21.7 million of cash and cash equivalents, $265 million of 10% Senior Secured Notes due 2029, and $25 million of borrowings from its ABL revolving credit facility outstanding.
The Company's capital structure and allocation priorities are focused on investing in the business, including strategic acquisitions; deleveraging the balance sheet; and returning funds to stockholders.
Outlook for 2026
The Company anticipates growth across its portfolio in 2026. The initial financial outlook for the year projects:
-- Revenue: high single-digit growth -- Adjusted EBITDA: low-to-mid single-digit -- Free Cash Flow conversion similar to 2025 levels -- Year-end Net Leverage Ratio between 2.5x and 3.0x
The Adjusted EBITDA outlook assumes benefits from sales growth and cost savings activities are partially offset by incremental operating expense, including approximately $4 million of costs related to accelerating Integrated Paytech growth and market penetration and other technology investments. The outlook also reflects approximately $6 million of tariff expenses.
Conference Call and Webcast
CPI Card Group Inc. will hold a conference call on March 5, 2026 at 9:00 a.m. Eastern Time to review its fourth quarter results. To participate in the Company's conference call via telephone or online:
U.S. dial-in number (toll-free): 888-330-3573
International: 646-960-0677
Conference ID: 8062733
Webcast Link: CPI Q4 Webcast or at https://investor.cpicardgroup.com
Participants are advised to login for the webcast 10 minutes prior to the scheduled start time.
A replay of the conference call will be available until March 12, 2026 at:
U.S. and Canada (toll-free): 800-770-2030
International: 609-800-9909
Canada: 647-362-9199
Conference ID: 8062733
A webcast replay of the conference call will also be available on CPI Card Group Inc.'s Investor Relations website: https://investor.cpicardgroup.com
Non-GAAP Financial Measures
In addition to financial results reported in accordance with U.S. generally accepted accounting principles ("GAAP"), we have provided the following non-GAAP financial measures in this release: Revenue excluding the Impact of an Accounting Change, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow, LTM Adjusted EBITDA and Net Leverage Ratio. These non-GAAP financial measures are utilized by management in comparing our operating performance on a consistent basis between fiscal periods and serve as a basis for certain Company compensation programs. We believe that these financial measures are appropriate to enhance an overall understanding of our underlying operating performance trends compared to historical and prospective periods and our peers. Management also believes that these measures are useful to investors in their analysis of our results of operations and provide improved comparability between fiscal periods. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Our non-GAAP measures may be different from similarly titled measures of other companies. Investors are encouraged to review the reconciliation of these historical non-GAAP measures to their most directly comparable GAAP financial measures included in Exhibit E and Exhibit F to this press release.
Revenue excluding the Impact of an Accounting Change
Revenue excluding the Impact of an Accounting Change has been presented in Exhibit F and defined as revenue excluding the impact from an accounting change implemented in the second quarter of 2025 resulting from the Company moving from over-time revenue recognition for certain WIP orders to point-in-time recognition (revenue booked when shipped). This adjustment reflects WIP orders that were recognized at the end of the first quarter of 2025 as if such orders were consistently recognized using point-in-time recognition during the second quarter of 2025 for the results for the second quarter of 2025 and reflects WIP orders that were recognized at December 31, 2024 as if such orders were consistently recognized using point-in-time recognition during the year to date period presented for 2025.
EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and LTM Adjusted EBITDA
Adjusted EBITDA is defined as EBITDA (which represents earnings before interest, taxes, depreciation and amortization) adjusted for litigation; stock-based compensation expense; restructuring and other charges, including executive retention and severance and acquisition-related costs; costs related to production facility modernization efforts; loss on debt extinguishment; gross profit related to the impact from the accounting change related to revenue described above; and other items that are unusual in nature, infrequently occurring or not considered part of our core operations, as set forth in the reconciliation in Exhibit E. Adjusted EBITDA is intended to show our unleveraged, pre-tax operating results and therefore reflects our financial performance based on operational factors, excluding non-operational, unusual or non-recurring losses or gains. Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for, analysis of our results as reported under GAAP. For example, Adjusted EBITDA does not reflect: (a) our capital expenditures, future requirements for capital expenditures or contractual commitments; (b) changes in, or cash requirements for, our working capital needs; (c) the significant interest expenses or the cash requirements necessary to service interest or principal payments on our debt; (d) tax payments that represent a reduction in cash available to us; (e) any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future; (f) the impact of earnings or charges resulting from matters that we and the lender under our credit agreement may not consider indicative of our ongoing operations; or (g) the impact of any discontinued operations. In particular, our definition of Adjusted EBITDA allows us to add back certain non-operating, unusual or non-recurring charges that are deducted in calculating net income, even though these are expenses that may recur, vary greatly and are difficult to predict and can represent the effect of long-term strategies as opposed to short-term results. In addition, certain of these expenses represent the reduction of cash that could be used for other purposes. Adjusted EBITDA margin as shown in Exhibit E is computed as Adjusted EBITDA divided by total revenue.
We define LTM Adjusted EBITDA as Adjusted EBITDA (defined previously) for the last twelve months. LTM Adjusted EBITDA is used in the computation of Net Leverage Ratio, and is reconciled in Exhibit E.
Free Cash Flow
We define Free Cash Flow as cash flow provided by (used in) operating activities less capital expenditures. We use this metric in analyzing our ability to service and repay our debt. However, this measure does not represent funds available for investment or other discretionary uses since it does not deduct cash used to make principal payments on outstanding debt and financing lease liabilities. Free Cash Flow should not be considered in isolation, or as a substitute for, cash (used in) provided by operating activities or any other measures of liquidity derived in accordance with GAAP.
Net Leverage Ratio
Management and various investors use the ratio of debt principal outstanding, plus finance lease obligations, less cash, divided by LTM Adjusted EBITDA, or "Net Leverage Ratio", as a measure of our financial strength when making key investment decisions and evaluating us against peers.
Financial Expectations for 2026
We have provided Adjusted EBITDA expectations for 2026 on a non-GAAP basis because certain reconciling items are dependent on future events that either cannot be controlled or cannot be reliably predicted because they are not part of the Company's routine activities, any of which could be significant.
About CPI
CPI is a payments technology company that is integral to the payments ecosystem. CPI's connections, people, and solutions enable payments for a broad and expanding customer base including thousands of U.S. financial institutions, processors, fintechs, prepaid program managers and more, and these customers count on us to deliver what's next.
We continue to transform alongside the market, and for decades have invested in building deep connections and flexible solutions for our customers. Our proprietary platform and expertise uniquely position CPI to deliver today, tomorrow, and into the future as the market expands and payment methods evolve. Learn more at www.cpicardgroup.com.
Forward-Looking Statements
Certain statements and information in this release (as well as information included in other written or oral statements we make from time to time) may contain or constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The words "believe," "estimate," "project," "expect," "anticipate, " "affirm," "plan," "intend," "foresee," "should," "would," "could," "continue," "committed," "attempt," "aim," "target," "objective," "guides," "seek," "focus," "provides guidance," "provides outlook" or other similar expressions are intended to identify forward-looking statements, which are not historical in nature. These forward-looking statements, including statements about our strategic initiatives and market opportunities, including our financial outlook for 2026, the impact of our investments in Arroweye and other solutions, and our qualitative color on our business in 2026 and beyond; are based on our current expectations and beliefs concerning future developments and their potential effect on us and other information currently available. Such forward-looking statements, because they relate to future events, are by their very nature subject to many important risks and uncertainties that could cause actual results or other events to differ materially from those contemplated.
These risks and uncertainties include, but are not limited to: (i) risks relating to our business and industry, such as a deterioration in general economic conditions, including due to inflationary conditions, resulting in reduced consumer confidence and business spending, and a decline in consumer credit worthiness impacting demand for our products; the unpredictability of our operating results, including an inability to anticipate changes in customer inventory management practices and its impact on our business; our failure to retain our existing key customers or identify and attract new customers; the highly competitive, saturated and consolidated nature of our marketplace; our inability to develop, introduce and commercialize new products and related services, including due to our inability to undertake research and development activities; new and developing technologies that make our existing technology solutions and products obsolete or less relevant or our failure to introduce new products and related services in a timely manner or at all; system security risks, data protection breaches and cyber-attacks; the usage, or lack thereof, of artificial intelligence technologies; disruptions, delays or other failures in our supply chain, including as a result of inflationary pressures, single-source suppliers, failure or inability of suppliers to comply with our code of conduct or contractual requirements, trade restrictions, tariffs, foreign conflicts or political unrest in countries in which our suppliers operate, and our inability to pass related costs on to our customers or difficulty meeting customers' delivery expectations due to extended lead times; changes in U.S. and global trade policy and the impact of tariffs on our business and results of operations; interruptions in our operations, including our information technology systems, or in the operations of the third parties that operate computing infrastructure on which we rely; defects in our software and computing systems; disruptions in production at one or more of our facilities due to weather conditions, climate change, political instability, or social unrest; problems in production quality, materials and process and costs relating to product defects and any related product liability and/or warranty claims and damage to our reputation; our inability to recruit, retain and develop qualified personnel, including key personnel, and implement effective succession processes; our substantial indebtedness, including the restrictive terms of our indebtedness and covenants of future agreements governing indebtedness and the resulting restraints on our ability to pursue our business strategies; our inability to make debt service payments or refinance such indebtedness; our inability to successfully execute on, integrate, or achieve the anticipated benefits of acquisitions, including the acquisition of Arroweye Solutions, Inc. ("Arroweye"), or execute on divestitures, strategic relationships, or investments; our status as an accelerated filer and complying with the Sarbanes-Oxley Act of 2002 and the costs associated with such compliance and implementation of procedures thereunder; our failure to maintain effective internal control over financial reporting and risks relating to investor confidence in our financial reporting; environmental, social and governance ("ESG") preferences and demands of various stakeholders and the related impact on our ability to access capital, produce our products in conformity with stakeholder preferences, comply with stakeholder demands and comply with any related legal or regulatory requirements or restrictions; negative perceptions of our products due to the impact of our products and production processes on the environment and other ESG-related risks; damage to our reputation or brand image; our inability to adequately protect our trade secrets and intellectual property rights from misappropriation, infringement claims brought against us and risks related to open source software; our inability to renew licenses with key technology licensors; our limited ability to raise capital, which may lead to delays in innovation or the abandonment of our strategic initiatives; costs and impacts related to additional tax collection efforts by states, unclaimed property laws, or future increases in U.S. federal or state income taxes, resulting in additional expenses which we may be unable to pass along to our customers; our inability to realize the full value of our long-lived assets; costs and potential liabilities associated with compliance or failure to comply with laws and regulations, customer contractual requirements and evolving industry standards regarding consumer privacy and data use and security; our failure to operate our business in accordance with the Payment Card Industry Security Standards Council security standards or other industry standards; the effects of ongoing foreign conflicts on the global economy; adverse conditions in the banking system and financial markets, including the failure of banks and financial institutions; our failure to comply with environmental, health and safety laws and regulations that apply to our products and the raw materials we use in our production processes; (ii) risks relating to ownership of our common stock, such as those associated with concentrated ownership of our stock by our significant stockholders and potential conflicts of interests with other stockholders; the impact of concentrated ownership of our common stock and the sale or perceived sale of a substantial amount of common stock on the trading volume and market price of our common stock; potential conflicts of interest that may arise due to our Board of Directors being comprised in part of directors who are principals of or were nominated by our significant stockholders; the influence of securities analysts over the trading market for and price of our common stock, particularly due to the lack of substantial research coverage of our common stock; the impact of stockholder activism or actual or threatened securities litigation on the trading price and volatility of our common stock; certain provisions of our organizational documents and other contractual provisions that may delay or prevent a change in control and make it difficult for stockholders other than our significant stockholders to change the composition of our Board of Directors; and (iii) general risks, such as relating to our ability to comply with a wide variety of complex evolving laws and regulations and the exposure to liability for any failure to comply; the effect of legal and regulatory proceedings and the adequacy of our insurance policies; and other risks that are described in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 5, 2026, and our other reports filed from time to time with the Securities and Exchange Commission (the "SEC").
We caution and advise readers not to place undue reliance on forward-looking statements, which speak only as of the date hereof. These statements are based on assumptions that may not be realized and involve risks and uncertainties that could cause actual results or other events to differ materially from the expectations and beliefs contained herein. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
For more information:
CPI encourages investors to use its investor relations website as a way of easily finding information about the Company. CPI promptly makes available on this website the reports that the Company files or furnishes with the SEC, corporate governance information and press releases.
CPI Card Group Inc. Earnings Release Supplemental Financial Information
Exhibit A Condensed Consolidated Statements of Operations and Comprehensive
Income -- Unaudited for the three months and full years ended
December 31, 2025 and 2024
Exhibit B Condensed Consolidated Balance Sheets -- Unaudited as of December
31, 2025 and 2024
Exhibit C Condensed Consolidated Statements of Cash Flows -- Unaudited for
the full years ended December 31, 2025 and 2024
Exhibit D Segment Summary Information -- Unaudited for the three months and
full years ended December 31, 2025 and 2024
Exhibit E Supplemental GAAP to Non-GAAP Reconciliations -- Unaudited for the
three months and full years ended December 31, 2025 and 2024
Exhibit F Supplemental GAAP to Non-GAAP Reconciliations -- Unaudited for the
three months and full years ended December 31, 2025 and 2024
EXHIBIT A
CPI Card Group Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Income
(in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended December
31, Year Ended December 31,
----------------------------- ----------------------------
2025 2024 2025 2024
--------------- ------------ ------------ --------------
Revenue $ 153,054 $ 125,096 $ 543,534 $ 480,601
Cost of goods sold 104,767 82,481 373,438 309,382
---------- ---------- ---------- ----------
Gross profit 48,287 42,615 170,096 171,219
Selling, general and
administrative
expenses 29,991 26,675 115,255 108,427
---------- ---------- ---------- ----------
Income from
operations 18,296 15,940 54,841 62,792
---------- ---------- ---------- ----------
Other expense, net:
Interest, net (7,966) (7,674) (32,466) (34,087)
Loss on debt
extinguishment -- -- (287) (2,987)
Other expense, net (111) (14) (348) (691)
---------- ---------- ---------- ----------
Total other
expense, net (8,077) (7,688) (33,101) (37,765)
---------- ---------- ---------- ----------
Income before income
taxes and equity in
losses of
unconsolidated
affiliates 10,219 8,252 21,740 25,027
Income tax expense (2,735) (1,480) (6,656) (5,506)
Equity in losses of
unconsolidated
affiliates (134) -- (134) --
---------- ---------- ---------- ----------
Net income $ 7,350 $ 6,772 $ 14,950 $ 19,521
========== ========== ========== ==========
Basic and diluted
earnings per share:
Basic earnings per
share $ 0.64 $ 0.61 $ 1.32 $ 1.75
Diluted earnings
per share $ 0.62 $ 0.57 $ 1.25 $ 1.64
Basic
weighted-average
shares outstanding 11,411,970 11,186,797 11,327,232 11,152,648
Diluted
weighted-average
shares outstanding 11,829,422 11,926,466 11,921,875 11,878,076
Comprehensive
income:
Net income $ 7,350 $ 6,772 $ 14,950 $ 19,521
---------- ---------- ---------- ----------
Total
comprehensive
income $ 7,350 $ 6,772 $ 14,950 $ 19,521
========== ========== ========== ==========
EXHIBIT B
CPI Card Group Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(Unaudited)
December 31,
------------------------
2025 2024
---------- ------------
Assets
Current assets:
Cash and cash equivalents $ 21,700 $ 33,544
Accounts receivable, net 95,436 85,491
Inventories, net 72,243 72,660
Prepaid expenses and other current assets 15,565 11,347
-------- --------
Total current assets 204,944 203,042
Plant, equipment, leasehold improvements and
operating lease right-of-use assets, net 108,433 68,648
Intangible assets, net 18,544 10,492
Goodwill 48,764 47,150
Other assets 22,506 20,325
-------- --------
Total assets $ 403,191 $ 349,657
======== ========
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable $ 27,802 $ 16,123
Accrued expenses 52,379 57,979
Deferred revenue and customer deposits 3,916 1,485
-------- --------
Total current liabilities 84,097 75,587
Long-term debt 286,668 280,405
Deferred income taxes 2,251 3,318
Other long-term liabilities 47,508 25,968
-------- --------
Total liabilities 420,524 385,278
-------- --------
Commitments and contingencies
Stockholders' deficit:
Series A Preferred Stock; $0.001 par
value--100,000 shares authorized; 0 shares
issued and outstanding at December 31, 2025
and 2024 -- --
Common stock; $0.001 par value--100,000,000
shares authorized; 11,456,061 and
11,240,507 shares issued and outstanding at
December 31, 2025 and 2024, respectively 11 11
Capital deficit (102,091) (105,429)
Accumulated earnings 84,747 69,797
-------- --------
Total stockholders' deficit (17,333) (35,621)
-------- --------
Total liabilities and stockholders'
deficit $ 403,191 $ 349,657
======== ========
EXHIBIT C
CPI Card Group Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Year Ended December 31,
-----------------------------
2025 2024
-------------- -------------
Operating activities
Net income $ 14,950 $ 19,521
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation expense 18,113 12,790
Amortization expense 4,348 3,630
Stock-based compensation expense 6,963 8,545
Amortization of debt issuance costs 1,311 1,536
Loss on early extinguishment of debt 887 8,763
Deferred income taxes and other, net 5,617 (3,935)
Changes in operating assets and
liabilities:
Accounts receivable, net (686) (11,786)
Inventories 3,608 (1,990)
Prepaid expenses and other assets 9,722 (19,665)
Income taxes, net (3,024) 985
Accounts payable 7,512 2,762
Accrued expenses and other
liabilities (12,248) 21,512
Deferred revenue and customer
deposits 2,431 645
--------- ---------
Cash provided by operating activities 59,504 43,313
--------- ---------
Investing activities
Capital expenditures for plant, equipment
and leasehold improvements, net (18,176) (9,257)
Cash paid for acquisition, net of cash
acquired (44,197) --
Cash paid for purchase of equity method
investment (2,819) --
Other 63 36
--------- ---------
Cash used in investing activities (65,129) (9,221)
--------- ---------
Financing activities
Proceeds from borrowings on debt 67,000 285,000
Payments on debt (62,000) (267,897)
Payments on finance lease obligations (8,372) (5,221)
Common stock repurchased -- (8,678)
Debt issuance costs (264) (6,583)
Payment for debt early redemption premium (600) (5,776)
Taxes withheld and paid on stock-based
compensation awards (1,983) (3,806)
--------- ---------
Cash used in financing activities (6,219) (12,961)
--------- ---------
Net (decrease) increase in cash and
cash equivalents (11,844) 21,131
Cash and cash equivalents, beginning of
period 33,544 12,413
--------- ---------
Cash and cash equivalents, end of period $ 21,700 $ 33,544
========= =========
Supplemental disclosures of cash flow
information
Interest paid $ 32,360 $ 26,319
Right-of-use assets obtained in exchange
for lease obligations:
Operating leases $ 12,122 $ 1,292
Financing leases $ 15,896 $ 9,929
Accounts payable and accrued expenses for
capital expenditures for plant,
equipment and leasehold improvements $ 1,992 $ 662
Non-cash equity method investment $ 7,500 $ --
Non-cash equity in losses of
unconsolidated affiliates $ (134) $ --
EXHIBIT D
CPI Card Group Inc. and Subsidiaries
Segment Summary Information
For the Three Months and Year Ended December 31, 2025 and 2024
(dollars in thousands)
(Unaudited)
Revenue
Three Months Ended December 31,
-----------------------------------------
2025 2024 $ Change % Change
------------ --------- -------- ----------
Revenue by
segment:
Debit and
Credit $128,926 $ 91,913 $37,013 40.3%
Prepaid Debit 24,355 33,355 (9,000) (27.0)%
Eliminations (227) (172) (55) *%
------- ------- ------
Total $153,054 $125,096 $27,958 22.3%
======= ======= ======
* Calculation not meaningful
Year Ended December 31,
-------------------------------------------
2025 2024 $ Change % Change
--------- --------- --------- ----------
Revenue by
segment:
Debit and
Credit $451,475 $375,261 $ 76,214 20.3%
Prepaid Debit 93,625 106,541 (12,916) (12.1)%
Eliminations (1,566) (1,201) (365) *%
------- ------- -------
Total $543,534 $480,601 $ 62,933 13.1%
======= ======= =======
* Calculation not meaningful
Gross Profit
Three Months Ended December 31,
----------------------------------------------------------
% of Net % of Net
2025 Sales 2024 Sales $ Change % Change
------- -------- ------- -------- -------- ----------
Gross profit
by segment:
Debit and
Credit $38,307 29.7% $26,305 28.6% $12,002 45.6%
Prepaid
Debit 9,980 41.0% 16,310 48.9% (6,330) (38.8)%
------ ------ ------
Total $48,287 31.5% $42,615 34.1% $ 5,672 13.3%
====== ====== ======
Year Ended December 31,
-------------------------------------------------------------
% of Net % of Net
2025 Sales 2024 Sales $ Change % Change
-------- -------- -------- -------- --------- ----------
Gross profit
by segment:
Debit and
Credit $138,154 30.6% $128,095 34.1% $ 10,059 7.9%
Prepaid
Debit 31,942 34.1% 43,124 40.5% (11,182) (25.9)%
------- ------- -------
Total $170,096 31.3% $171,219 35.6% $ (1,123) (0.7)%
======= ======= =======
Income from Operations
Three Months Ended December 31,
--------------------------------------------------------------
% of Net % of Net
2025 Sales 2024 Sales $ Change % Change
------- -------- ------- -------- -------- ----------
Income
(loss) from
operations
by segment:
Debit and
Credit $ 25,397 19.7% $ 17,678 19.2% $ 7,719 43.7%
Prepaid
Debit 8,646 35.5% 14,436 43.3% (5,790) (40.1)%
Other (15,747) *% (16,174) *% 427 (2.6)%
------- ------- ------
Total $ 18,296 12.0% $ 15,940 12.7% $ 2,356 14.8%
======= ======= ======
* Calculation not meaningful
Year Ended December 31,
---------------------------------------------------------------
% of Net % of Net
2025 Sales 2024 Sales $ Change % Change
------- -------- ------- -------- --------- ----------
Income
(loss) from
operations
by segment:
Debit and
Credit $ 91,430 20.3% $ 92,856 24.7% $ (1,426) (1.5)%
Prepaid
Debit 26,699 28.5% 37,201 34.9% (10,502) (28.2)%
Other (63,288) *% (67,265) *% 3,977 (5.9)%
------- ------- -------
Total $ 54,841 10.1% $ 62,792 13.1% $ (7,951) (12.7)%
======= ======= =======
* Calculation not meaningful
EBITDA
Three Months Ended December 31,
--------------------------------------------------------------
% of Net % of Net
2025 Sales 2024 Sales $ Change % Change
--------- -------- --------- -------- -------- ----------
EBITDA by
segment:
Debit and
Credit $ 29,684 23.0% $ 19,897 21.6% $ 9,787 49.2%
Prepaid
Debit 9,829 40.4% 15,498 46.5% (5,669) (36.6)%
Other (14,878) *% (15,267) *% 389 (2.5)%
------- ------- ------
Total $ 24,635 16.1% $ 20,128 16.1% $ 4,507 22.4%
======= ======= ======
* Calculation not meaningful
Year Ended December 31,
--------------------------------------------------------------
% of Net % of Net
2025 Sales 2024 Sales $ Change % Change
--------- -------- --------- -------- -------- ----------
EBITDA by
segment:
Debit and
Credit $105,351 23.3% $101,628 27.1% $ 3,723 3.7%
Prepaid
Debit 31,263 33.4% 41,087 38.6% (9,824) (23.9)%
Other (60,081) *% (67,181) *% 7,100 (10.6)%
------- ------- ------
Total $ 76,533 14.1% $ 75,534 15.7% $ 999 1.3%
======= ======= ======
* Calculation not meaningful
Reconciliation of Income (Loss) from
Operations by Segment to EBITDA by Segment
Three Months Ended December 31, 2025
------------------------------------------
Debit and Prepaid
Credit Debit Other Total
--------- -------- --------- ----------
EBITDA by
segment:
Income (loss)
from
operations $ 25,397 $ 8,646 $(15,747) $18,296
Depreciation
and
amortization 4,396 1,316 872 6,584
Other income
(expenses) (109) (133) (3) (245)
------- ------ ------- ------
EBITDA $ 29,684 $ 9,829 $(14,878) $24,635
======= ====== ======= ======
Three Months Ended December 31, 2024
------------------------------------------
Debit and Prepaid
Credit Debit Other Total
--------- -------- --------- ----------
EBITDA by
segment:
Income (loss)
from
operations $ 17,678 $14,436 $(16,174) $15,940
Depreciation
and
amortization 2,269 1,069 864 4,202
Other income
(expenses) (50) (7) 43 (14)
------- ------ ------- ------
EBITDA $ 19,897 $15,498 $(15,267) $20,128
======= ====== ======= ======
Year Ended December 31, 2025
------------------------------------------
Debit and Prepaid
Credit Debit Other Total
--------- -------- --------- ----------
EBITDA by
segment:
Income (loss)
from
operations $ 91,430 $26,699 $(63,288) $54,841
Depreciation
and
amortization 14,308 4,692 3,461 22,461
Other income
(expenses) (387) (128) (254) (769)
------- ------ ------- ------
EBITDA $105,351 $31,263 $(60,081) $76,533
======= ====== ======= ======
Year Ended December 31, 2024
------------------------------------------
Debit and Prepaid
Credit Debit Other Total
--------- -------- --------- ----------
EBITDA by
segment:
Income (loss)
from
operations $ 92,856 $37,201 $(67,265) $62,792
Depreciation
and
amortization 8,854 3,896 3,670 16,420
Other income
(expenses) (82) (10) (3,586) (3,678)
------- ------ ------- ------
EBITDA $101,628 $41,087 $(67,181) $75,534
======= ====== ======= ======
EXHIBIT E
CPI Card Group Inc. and Subsidiaries
Supplemental GAAP to Non-GAAP Reconciliation
(dollars in thousands)
(Unaudited)
Three Months Ended December
31, Year Ended December 31,
--------------------------- -------------------------
2025 2024 2025 2024
------------- ------------ ------------ -----------
EBITDA and
Adjusted
EBITDA:
Net income $ 7,350 $ 6,772 $ 14,950 $19,521
Interest, net
(1) 7,966 7,674 32,466 34,087
Income tax
expense 2,735 1,480 6,656 5,506
Depreciation
and
amortization 6,584 4,202 22,461 16,420
------ ---- ------ --- ------- ------
EBITDA $24,635 $20,128 $ 76,533 $75,534
====== ==== ====== === ======= ======
Adjustments to
EBITDA:
Stock-based
compensation
expense $ 2,426 $ 1,609 $ 6,963 $ 8,545
Acquisition and
integration
costs (2) 1,844 -- 5,954 --
Restructuring
and other
charges (3) 399 171 3,716 4,810
Loss on debt
extinguishment
(4) -- -- 287 2,987
Change in
revenue
recognition
(5) -- -- 2,929 --
Equity in
losses of
unconsolidated
affiliates
(6) 134 -- 134 --
------ ---- ------ --- ------- ------
Subtotal of
adjustments
to EBITDA $ 4,803 $ 1,780 $ 19,983 $16,342
------ ---- ------ --- ------- ------
Adjusted
EBITDA $29,438 $21,908 $ 96,516 $91,876
====== ==== ====== === ======= ======
Net income
margin (% of
Revenue) 4.8% 5.4% 2.8% 4.1%
Net income
growth (%
Change 2025
vs. 2024) 8.5% (23.4)%
Adjusted EBITDA
margin (% of
Revenue) 19.2% 17.5% 17.8% 19.1%
Adjusted EBITDA
growth (%
Change 2025
vs. 2024) 34.4% 5.1%
Three Months Ended December
31, Year Ended December 31,
--------------------------- -------------------------
2025 2024 2025 2024
------------- ------------ ------------ -----------
Free Cash Flow:
Cash provided
by operating
activities $39,593 $26,661 $ 59,504 $43,313
Capital
expenditures
for plant,
equipment and
leasehold
improvements,
net (4,399) (5,058) (18,176) (9,257)
------ --- ------ ------- ------
Free Cash
Flow $35,194 $21,603 $ 41,328 $34,056
====== ==== ====== === ======= ======
(1) The 2024 balance includes the payment of an early redemption premium of
$5.8 million related to the redemption of the 8.625% Senior Secured
Notes due 2026.
(2) Balance represents acquisition and integration costs related to the
Arroweye acquisition that occurred on May 6, 2025.
(3) Balance includes expenses related to executive retention and severance,
as well as production facility modernization efforts.
(4) In July 2024, the Company redeemed the entire principal balance of
$267.9 million of the 8.625% Senior Secured Notes due 2026 and also
repaid in full and terminated a prior Credit Agreement with Wells Fargo
Bank, N.A. entered into in March 2021, and expensed the remaining
unamortized deferred financing costs. Additionally, the Company
redeemed a portion of the 8.625% Senior Secured Notes due 2026 in 2023
and expensed the associated portion of the unamortized deferred
financing costs.
(5) In the second quarter of 2025, the Company reassessed certain aspects
of its revenue recognition accounting under ASC 606 and prospectively
began recognizing revenue for certain contracts at a point-in-time
rather than over-time.
(6) On October 7, 2025, the Company entered into a strategic relationship
with and acquired a 20% equity interest in Karta (Gift Card Co Pty
Ltd), an Australia-based payments technology firm also backed by the
Commonwealth Bank of Australia. This balance represents the Company's
equity in Karta's net losses for the quarter ended December 31, 2025.
As of
----------------------
December 31,
----------------------
2025 2024
--------- -----------
Calculation of Net Leverage Ratio:
Senior Notes $265,000 $285,000
ABL Revolver 25,000 --
Finance lease obligations 31,058 22,801
------- -------
Total debt 321,058 307,801
Less: Cash and cash equivalents (21,700) (33,544)
------- -------
Total net debt (a) $299,358 $274,257
------- -------
LTM Adjusted EBITDA (b) * $ 96,516 $ 91,876
------- -------
Net Leverage Ratio (a)/(b) 3.1 3.0
======= =======
* The LTM Adjusted EBITDA above reflects Adjusted EBITDA for the years ended
December 31, 2025 and 2024.
EXHIBIT F
CPI Card Group Inc. and Subsidiaries
Supplemental GAAP to Non-GAAP Reconciliation
(dollars in thousands)
(Unaudited)
Three Months Ended December 31, 2025 Three Months Ended December 31, 2024
------------------------------------------ -------------------------------------
Impacts Impacts
from Change from Change
in Revenue As in Revenue As
As Reported Recognition As Adjusted Reported Recognition Adjusted
------------- ------------- ------------ -------- --------------- ----------
Consolidated CPI
------------------
Revenue (1) $153,054 $ -- $153,054 $125,096 $ 910 $126,006
Revenue growth
(% Change 2025
vs. 2024) 22.3% 21.5%
Debit and Credit
------------------
Revenue $128,926 $ -- $128,926 $ 91,913 $ 1,222 $ 93,135
Revenue growth
(% Change 2025
vs. 2024) 40.3% 38.4%
Prepaid Debit
------------------
Revenue $ 24,355 $ -- $ 24,355 $ 33,355 $ (312) $ 33,043
Revenue growth
(% Change 2025
vs. 2024) (27.0)% (26.3)%
Year Ended December 31, 2025 Year Ended December 31, 2024
------------------------------------------ -------------------------------------
Impacts Impacts
from Change from Change
in Revenue As in Revenue As
As Reported Recognition As Adjusted Reported Recognition Adjusted
------------- ------------- ------------ -------- --------------- ----------
Consolidated CPI
------------------
Revenue (1) $543,534 $ 7,427 $550,961 $480,601 $ (2,608) $477,993
Revenue growth
(% Change 2025
vs. 2024) 13.1% 15.3%
Debit and Credit
------------------
Revenue $451,475 $ 2,059 $453,534 $375,261 $ 1,592 $376,853
Revenue growth
(% Change 2025
vs. 2024) 20.3% 20.3%
Prepaid Debit
------------------
Revenue $ 93,625 $ 5,368 $ 98,993 $106,541 $ (4,200) $102,341
Revenue growth
(% Change 2025
vs. 2024) (12.1)% (3.3)%
(1) For the three months ended December 31, 2025 and 2024, consolidated
revenue include $227 and $172 of intersegment eliminations,
respectively. For the years ended December 31, 2025 and 2024,
consolidated revenue include $1,566 and $1,201 of intersegment
eliminations, respectively.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260305711785/en/
CONTACT: CPI Card Group Inc. Investor Relations:
(877) 369-9016
InvestorRelations@cpicardgroup.com
CPI Card Group Inc. Media Relations:
Media@cpicardgroup.com
(END) Dow Jones Newswires
March 05, 2026 07:00 ET (12:00 GMT)
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