Company: DLX
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000027996-25-000189
Chunk: 73

Company: DELUXE CORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 8
Chunk 73
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,(in thousands)2025202420252024Total cost of revenue$24 $234 $965 $1,132 Operating expenses2,910 11,031 14,625 35,899 Restructuring and integration expense$2,934 $11,265 $15,590 $37,031 Restructuring and integration expense for each period was comprised of the following: Quarter EndedSeptember 30,Nine Months EndedSeptember 30,(in thousands)2025202420252024Employee severance benefits$1,580 $902 $7,651 $2,459 External consulting and other costs324 8,614 3,584 25,733 Internal labor597 381 2,297 1,602 Other433 1,368 2,058 7,237 Restructuring and integration expense$2,934 $11,265 $15,590 $37,031 Our restructuring and integration accruals are included in accrued liabilities on the consolidated balance sheets. These accruals represent the anticipated cash payments necessary to fulfill the remaining severance obligations for employees who have already been terminated, as well as those expected to be terminated under our various initiatives. We expect that the majority of employee reductions and the associated severance payments will be completed by mid-2026.Changes in our restructuring and integration accruals were as follows:(in thousands)Employee severance benefitsBalance, December 31, 2024$3,755 Charges8,109 Reversals(458)Payments(7,517)Balance, September 30, 2025$3,889 The charges and reversals shown in the rollforward of our restructuring and integration accruals exclude items that are expensed as incurred, as these items are not included in accrued liabilities on the consolidated balance sheets.

NOTE 9: INCOME TAX PROVISIONOur effective income tax rate for interim periods is based on the estimated annual effective tax rate, adjusted for discrete items occurring within the period. For the nine months ended September 30, 2025, our effective income tax rate of 28.4% differed from the federal statutory tax rate of 21.0% mainly due to the impact of foreign income tax expense, including the impact of the repatriation of foreign earnings, as well as corporate state income taxes, the tax impact of non-deductible executive compensation expense, and the benefit