Company: DLX
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000027996-25-000189
Chunk: 41

Company: DELUXE CORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 1
Chunk 41
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7 million, both of which did not recur in 2025.

•Adjusted EBITDA – Increased $17 million to $326 million, including the impact of business exits, which drove a $6 million decrease year-over-year. The increase was primarily driven by the benefits of our pricing strategies and cost management initiatives, as well as the year-over-year growth in data-driven marketing. These positive impacts were partially offset by softer demand for certain promotional products and the continuing secular declines in the Print segment, as well as inflationary pressures on our cost structure.

Adjusted EBITDA margin increased to 20.4% for the first nine months of 2025, compared to 19.3% for the first nine months of 2024, including the impact 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