Deluxe Corp (NYSE:DLX)

Q2 2026 Deluxe Corp Earnings Call Transcript

Aug 5, 2026 / 09:00 PM GMT

Release Date Price: $26.62 (-1.33%)

Transcript 10-Q8-K

Key Points

Positve

Deluxe Corp (DLX) delivered strong Q2 2026 results with comparable adjusted revenue growth of 2.6%, adjusted EBITDA growth of 5.3%, and adjusted EPS growth to $0.87, marking the fourth consecutive year of consistent operating leverage and growth across all core earnings metrics.
The company's strategic transformation is accelerating, with payments and data businesses now representing 52% of total revenue and growing 11% year-to-date, highlighted by the data segment's 21.4% revenue growth in Q2, marking its seventh consecutive quarter of over 15% growth.
Free cash flow expanded significantly, growing nearly 65% year-to-date to $85.9 million, enabling over $75 million of net debt reduction and improving the pre-acquisition leverage ratio to 2.9 times.
The acquisition of Solero, which closed on July 31, 2026, is expected to be highly accretive, immediately enhancing merchant services scale to over $70 billion in annual volume and 210,000 merchants, positioning Deluxe Corp (DLX) as a top 10 nonbank merchant acquirer with significant cost and revenue synergy opportunities.
The company raised its full-year 2026 revenue and adjusted EBITDA guidance to reflect the Solero acquisition, while affirming strong adjusted EPS growth of 7-19% and free cash flow of approximately $200 million, demonstrating confidence in the combined business's future performance.
Print segment margins improved by 110 basis points year-over-year, driven by the strategic exit of the lower-margin Safeguard business, better-than-expected legacy check revenue decline of only 1.7%, and a focus on higher-margin insourced printed offerings.

Negative

GAAP net income declined to $19.2 million or $0.41 per share in Q2 2026, down from $22.4 million or $0.50 per share in the prior year, due to $5.6 million in one-time transaction-related expenses and a slightly higher tax provision.
The company's overall revenue on a reported basis decreased 4.2% year-over-year to $499.3 million, reflecting the ongoing secular decline in the print segment, which saw comparable adjusted revenue fall 4.3%.
The print segment's non-check revenue declined by 10.1% in Q2, and while the legacy check decline was contained at 1.7%, the overall segment continues to face structural headwinds, with management expecting low to mid-single-digit revenue declines for the full year.
The company chose not to raise its adjusted EPS or free cash flow guidance despite the Solero acquisition, citing incremental interest costs, integration-related expenses, and tax uncertainties that are expected to offset the acquisition's earnings contribution in the near term.
The data segment's exceptional growth is expected to moderate significantly in the back half of 2026 as the company laps increasingly difficult prior-year comparisons, with full-year guidance reflecting only high single-digit growth versus the 21.4% achieved in Q2.
The Solero acquisition increases the company's debt load, and management expects it will take approximately two years to return to the 3 times net leverage target, with the company entering into $600 million of interest rate swaps to manage floating rate exposure.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

DLX.N - Deluxe Corporation
Q2 2026 Deluxe Corp Earnings Call
Aug 05, 2026 / 09:00PM GMT

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Presentation
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Okay.

You are currently holding for today's deluxe second quarter 2026 earnings conference call, we are admitting additional participants and plan to be underway shortly.

We appreciate your patience and ask to please remain on the line.

Ladies and gentlemen, thank you for standing by and welcome to the deluxe second quarter 2026 earnings conference call.

All participants are currently in a listen-only mode, and today's call is being recorded.

At this time, I would like to turn the conference over to your host, Vice President of Strategy and Investor Relations, Brian Anderson, please go ahead.

Thank you, operator.

Welcome to the deluxe second quarter 2026 earnings call.

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