Company: DLX
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000027996-25-000051
Chunk: 32

Company: DELUXE CORP
Filing Date: 2025-02-21
Form: 10-K
Item: Item 1A
Chunk 32
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 enforce our intellectual property rights. If we fail to maintain intellectual property protection or cannot effectively secure or enforce it, we risk losing market share, experiencing reduced revenue, and seeing a decline in brand value. Such outcomes would ultimately harm our business and our ability to compete in the marketplace.

FINANCIAL RISKS

Economic conditions can significantly influence business and consumer spending trends, which in turn may negatively impact the demand for our products and services.

Our results of operations and financial position are closely tied to prevailing economic conditions. Factors such as inflation, business and consumer spending levels, business and consumer confidence, unemployment rates, and the availability of credit, as well as uncertainty or volatility in our customers' businesses, can adversely affect our business and results of operations. In a challenging economic environment, existing and potential customers may delay or forgo purchasing our products and services. Persistent inflationary pressure could diminish our customers' purchasing power, thereby negatively impacting our revenue and results of operations.

A substantial portion of our business depends on spending by small businesses, which we believe are more vulnerable to economic fluctuations than larger, more established companies. During economic downturns, small businesses may find it harder to secure credit and may prioritize other expenditures over our products and services. Consequently, factors such as small business confidence, the rate of small business formations and closures, and the availability of credit to small businesses are critical to our business performance.

Additionally, our business relies on the health of the financial services industry. Past global economic conditions have led to financial institutions seeking additional capital, merging with other institutions, or, in some cases, failing. The failure of one or more of our major financial institution clients, or a significant portion of our customer base, could adversely affect our operating results. Beyond the potential loss of a major client, the inability to recover prepaid product discount payments, collect accounts receivable, or secure contractually required termination payments from these clients could negatively impact our financial performance.

Other factors affecting the financial services industry may also lead to an increase in mergers and acquisitions among financial institutions. Such consolidation could adversely affect our operating results, as newly combined entities often seek to reduce costs by leveraging economies of scale in purchasing, including check supply and business services contracts. This competitive pressure may force providers to compete intensely on price to retain their existing business and gain additional business from the merged entity. Despite our efforts to offer competitively priced, high-quality products and services, there is no guarantee that we will retain financial institution clients or offset the loss of a major client through new client acquisitions or expanded sales