Company: DLX
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000027996-25-000189
Chunk: 89

Company: DELUXE CORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 8
Chunk 89
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 of business exits, which drove a 0.2 point year-over-year decline. The increase in adjusted EBITDA margin was primarily driven by our pricing and cost management actions, partially offset by the impact of inflationary pressures. A reconciliation of net income to adjusted EBITDA can be found in the Consolidated Results of Operations section.

•Net cash provided by operating activities – Increased by $34 million to $169 million. Key contributors included the positive impacts of our pricing and cost management actions, reduced payouts for performance-based employee bonuses, and lower expenditures associated with restructuring and integration activities. Additional contributions came from growth in our data-driven marketing business and positive changes in working capital, particularly within other current assets and prepaid expenses. These positive impacts were partially offset by softer demand for certain promotional products, the continuing secular declines in the Print segment, variations in the timing of accounts payable settlements, inflationary pressures on our cost structure, and the impact of business exits.

•Free cash flow – Increased by $32 million to $96 million, driven by the same factors impacting net cash provided by operating activities. We continue to reinvest the free cash flow generated by our Print business into our other businesses. Free cash flow is defined as net cash provided by operating activities less purchases of capital assets. 

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A reconciliation of free cash flow to its comparable GAAP financial measure can be found in the Consolidated Results of Operations section.

Recent Market Conditions

We continually monitor the interest rate environment and its effect on our outstanding debt. As of September 30, 2025, 63% of our debt carried a weighted-average fixed interest rate of 8.1%, providing us with some protection against potential future interest rate increases.

In addition to interest rate considerations, we closely monitor the impact of inflation on our cost structure, including labor, delivery, and material costs. In response to inflationary pressures, we have implemented targeted price increases, particularly within our Print and Merchant Services segments. Additionally, ongoing global unrest and uncertainties related to trade policies, treaties, and tariffs could disrupt the global supply chain and lead to increased costs. To mitigate these risks, we actively monitor our supply chain to prevent delays or disruptions and to effectively leverage our purchasing power. The severity and duration of inflation remains difficult to predict and could continue to impact our business, financial position, and results of operations.

We also monitor trends in small business sentiment and consumer discretionary spending. We analyze various data sources, including information from credit card brands, the Federal Reserve, other economic forecast providers, and our proprietary