Company: DLX
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0000027996-25-000163
Chunk: 109

Company: DELUXE CORP
Filing Date: 2025-08-07
Form: 10-Q
Item: Item 2
Chunk 109
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, depreciation and 

26

amortization of assets used in production and in support of digital service offerings, residuals paid to independent sales organizations (ISOs), and related overhead.

In the second quarter and first half of 2025, total cost of revenue decreased compared to the same periods in 2024. This reduction was driven by a decline in revenue volume, attributed to soft demand for certain promotional products and the ongoing secular decline in checks, business forms, and various business accessories within our Print segment. Additionally, our cost management initiatives contributed to the decrease, and the impact of business exits reduced costs by approximately $2 million in the second quarter and $9 million in the first half of the year, including the impact of accelerated amortization expense in 2024. These reductions in total cost of revenue were partially offset by an increase in costs related to the revenue growth in data-driven marketing, as well as inflationary pressures affecting materials and delivery costs.

Despite the decreases, total cost of revenue as a percentage of total revenue increased for the second quarter and first half of 2025 compared to the same periods in 2024. This was due to the inflationary impacts and a shift in revenue towards our lower-margin growth businesses, which outweighed the benefits of our pricing and cost management actions and the accelerated amortization expense in the previous year.

Selling, General and Administrative (SG&A) Expense

 Quarter Ended June 30,Six Months Ended June 30,(in thousands)20252024Change20252024ChangeSG&A expense$214,426 $233,818 (8.3%)$439,737 $467,911 (6.0%)SG&A expense as a percentage of total revenue41.1%43.5%(2.4) pts.41.6%43.6%(2.0) pts.

In the second quarter and first half of 2025, SG&A expense decreased compared to the same periods in 2024. This decrease was largely driven by various cost management actions, including workforce adjustments across functional areas and the optimization of our marketing and sourcing strategies. Additionally, there was a reduction in amortization expense, stemming from accelerated amortization in 2024 related to a trade name intangible asset, as well as lower acquisition-related amortization expense in 2025. Bad debt expense decreased $4 million in the second quarter and $6 million in the first half of the year, primarily within our Print segment, and external commissions declined due to reduced Print revenue