Deluxe (NYSE:DLX) Releases Earnings Results, Beats Expectations By $0.06 EPS

Deluxe (NYSE:DLX) released its earnings results on Wednesday. The business services provider reported $0.87 earnings per share for the quarter, topping analysts’ consensus estimates of $0.81 by $0.06, FiscalAI reports. Deluxe had a net margin of 4.91% and a return on equity of 23.75%. The firm had revenue of $499.30 million for the quarter, compared to the consensus estimate of $486.30 million. During the same period in the prior year, the firm earned $0.88 EPS. The company’s revenue was down 4.2% compared to the same quarter last year.

Here are the key takeaways from Deluxe’s conference call:

• Q2 execution remained strong, with comparable adjusted revenue up 2.6%, adjusted EBITDA up 5.3%, adjusted EPS increasing to $0.87, and adjusted EBITDA margin expanding to 21.8%. Year-to-date free cash flow rose nearly 65% to $85.9 million, supporting $75.2 million of net debt reduction.
• Deluxe closed its Celero acquisition, expanding the merchant-services platform to more than 210,000 merchants and over $70 billion in annual payment volume. Management expects cost synergies and longer-term revenue opportunities, while raising full-year 2026 revenue guidance to $2.095 billion-$2.12 billion and adjusted EBITDA guidance to $455 million-$475 million.
• The payments and data businesses continued to drive the transformation, growing 11% year to date and reaching 52% of revenue. Data Solutions revenue increased 21.4% in Q2, marking more than 15% growth for seven consecutive quarters, while merchant-services revenue grew 6.1%.
• Print remains a declining business, with comparable adjusted revenue down 4.3% in Q2; legacy check revenue fell 1.7% and other print revenue declined 10.1%. Management expects low- to mid-single-digit print revenue declines for the full year, while warning that difficult comparisons could moderate Data Solutions growth in the second half.
• Despite higher revenue and EBITDA guidance from Celero, Deluxe left adjusted EPS guidance at $3.60-$4.00 and free cash flow guidance at approximately $200 million because incremental interest expense, integration costs, and tax effects are expected to offset much of the acquisition’s near-term contribution. The company expects Celero to be EPS-accretive in the first full year after closing and plans to return to approximately 3.0 times net leverage within two years.

Deluxe Stock Performance

NYSE DLX traded down $0.89 during trading hours on Friday, hitting $25.20. The company’s stock had a trading volume of 245,638 shares, compared to its average volume of 452,233. Deluxe has a 12 month low of $17.76 and a 12 month high of $32.07. The company’s 50 day simple moving average is $24.55 and its two-hundred day simple moving average is $26.11. The company has a debt-to-equity ratio of 1.98, a current ratio of 1.15 and a quick ratio of 1.05. The company has a market cap of $1.15 billion, a P/E ratio of 11.17, a price-to-earnings-growth ratio of 0.67 and a beta of 1.24.

Deluxe Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, September 1st. Stockholders of record on Tuesday, August 18th will be issued a dividend of $0.30 per share. This represents a $1.20 dividend on an annualized basis and a dividend yield of 4.8%. The ex-dividend date of this dividend is Tuesday, August 18th. Deluxe’s dividend payout ratio is presently 53.33%.

Institutional Trading of Deluxe

Institutional investors have recently made changes to their positions in the stock. UMB Bank n.a. boosted its holdings in Deluxe by 3,597.9% in the fourth quarter. UMB Bank n.a. now owns 1,738 shares of the business services provider’s stock worth $39,000 after purchasing an additional 1,691 shares during the last quarter. Strs Ohio purchased a new position in Deluxe in the first quarter worth about $30,000. Raymond James Financial Inc. bought a new stake in shares of Deluxe during the 2nd quarter valued at about $31,000. Kemnay Advisory Services Inc. bought a new stake in shares of Deluxe during the 4th quarter valued at about $114,000. Finally, Tower Research Capital LLC TRC boosted its holdings in shares of Deluxe by 476.6% in the second quarter. Tower Research Capital LLC TRC now owns 8,148 shares of the business services provider’s stock worth $130,000 after buying an additional 6,735 shares during the last quarter. Hedge funds and other institutional investors own 93.90% of the company’s stock.

Analysts Set New Price Targets

A number of brokerages have weighed in on DLX. Wall Street Zen upgraded shares of Deluxe from a “buy” rating to a “strong-buy” rating in a report on Saturday, June 6th. Weiss Ratings lowered Deluxe from a “buy (b-)” rating to a “hold (c+)” rating in a research report on Wednesday, July 15th. Finally, Zacks Research downgraded Deluxe from a “strong-buy” rating to a “hold” rating in a report on Friday, April 10th. Three investment analysts have rated the stock with a Hold rating, According to data from MarketBeat, the company presently has a consensus rating of “Hold”.

About Deluxe

Deluxe Corporation, founded in 1915 and headquartered in Shoreview, Minnesota, is a provider of integrated business and financial technology solutions. Originally established as a check printing company, Deluxe has evolved its offerings to support small businesses, financial institutions and entrepreneurs with a comprehensive suite of services spanning print, digital and software platforms.

The company’s core business activities include printing checks, forms and promotional materials, as well as delivering digital marketing and customer engagement solutions.