Open the filing on EDGARCPI Reports Strong Second Quarter 2026 Results
Date: August 6, 2026
Second Quarter Revenue Increased 15% to $149 Million
Net Income Increased 294% to $2 Million; Adjusted EBITDA Increased 7% to $24 Million
Record Cash Flow From Operations of $42 Million in the First Half; Net Leverage Ratio Down to 2.7x
Raising Revenue Growth and Free Cash Flow Guidance; Increasing IPT Revenue Guidance to 20%
Denver, Colo. August 6, 2026 -- CPI Card Group Inc. (Nasdaq: PMTS) (“CPI” or the “Company”), a payments technology leader providing a comprehensive range of physical and digital payment solutions for U.S. financial institutions, processors, fintechs, prepaid program managers and more, today reported financial results for the quarter ended June 30, 2026 and increased its 2026 financial guidance targets for revenue growth and Free Cash Flow, while affirming all other guidance targets.
CPI’s second quarter exceeded the Company’s expectations, increasing revenue 15% to $149 million, driven by strong performance in its Secure Card Solutions segment. Net income in the quarter increased 294% to more than $2 million and Adjusted EBITDA increased 7% to $24 million, primarily driven by Secure Card Solutions overperformance and the benefit of more than $3 million of tariff refunds, partially offset by uneven demand in our Prepaid Solutions segment. Strong performance in CPI's Secure Card Solutions segment is driving significant operating cash flow growth as higher volumes accelerate inventory optimization initiatives.
The Company further advanced its strategy of providing payment technology solutions that help its customers win, driven by three primary growth pillars that underpin CPI’s value proposition:
- A proprietary technology platform with a vast reach into the U.S. payments eco-system;
- A marketable base of thousands of deep and broad relationships across the U.S. payments market; and
- A proven track record of delivering evolving payment solutions that reflect changing market needs.
“Through the first six months of the year CPI generated double-digit revenue growth, strong Adjusted EBITDA growth and record Free Cash Flow, while continuing to gain share by investing in our long-term strategy of growth and diversification to help our customers win,” said John Lowe, President and Chief Executive Officer. "The acquisition of TRISM is an excellent example of how we continue to execute on our strategy and grow our addressable market and solutions with strong profitability and growth potential. With the TRISM acquisition, we believe we have doubled our addressable market in U.S. instant issuance and are now the clear leader."
CPI today also increased its financial guidance for revenue and Free Cash Flow for 2026. The Company now projects high-single-digit to low-double-digit revenue growth, up from previous guidance of high-single-digit growth, and Free Cash Flow ranging from $45 million to $50 million, up from a conversion rate in-line with 2025 results of $41 million. All other financial guidance targets including low-to-mid single-digit Adjusted EBITDA growth and a Net Leverage Ratio between 2.5x to 3.0x were reaffirmed. The Company's Adjusted EBITDA outlook remains unchanged as the benefits from stronger Secure Card Solutions performance and tariff refunds are expected to largely be offset by continued investment in Integrated Paytech ("IPT") and ongoing uneven demand in the higher-margin Prepaid Solutions segment. The Company also raised its
2026 annual revenue growth guidance in the IPT segment from 15% plus to approximately 20% with the acquisition of TRISM.
Strategic, Business, and Capital Highlights
- CPI acquired TRISM to further advance its market leadership position and effectively double CPI's addressable market in U.S. instant issuance solutions by enabling the Company to serve mid-to-large financial institutions that prefer on-premise solutions, complementing Card@Once cloud-based offerings focused on Small and Medium-sized Enterprises ("SME") financial institutions. With the addition of TRISM, CPI now serves more than 3,000 U.S. financial institutions with instant issuance, compared to approximately 2,500 prior to the acquisition.
- The Company continued to successfully integrate Arroweye, a leading provider of digitally-driven on-demand payment card solutions for the U.S. market, which is performing ahead of CPI's original investment case and delivering meaningful revenue and cost synergies.
- CPI is progressing well with Karta, an Australia-based payments technology firm in which CPI purchased a minority investment during 2025, to integrate their SafeToBuy chip-based technology solution with CPI's prepaid solutions in the U.S. market, including the expansion of a pilot with one of the U.S. national retailers.
- The Company continues to advance its market and product expansion strategies, including closed loop prepaid payment solutions and digital offerings such as push provisioning leveraging tokenization capabilities for mobile wallets.
- The Company generated strong Free Cash Flow in the second quarter, ended the quarter with a Net Leverage Ratio of 2.7x, and on July 15 redeemed $26.5 million, or 10%, of its Senior Notes, reflecting a continued focus on reducing leverage and lowering future interest expense.
Second Quarter 2026 Financial Highlights
Revenue increased 15% to $149.2 million in the second quarter of 2026, compared to the prior year period.
- Secure Card Solutions segment revenue increased 17% to $110.9 million, driven by increased sales of contactless cards and personalization services, as well as the addition of Arroweye. Segment gross profit increased 29% and gross margin increased 250 basis points, primarily due to increased revenue and tariff refunds.
- Prepaid Solutions segment revenue increased 18% to $22.6 million, primarily due to the change in accounting that was implemented in the second quarter of 2025, partially offset by comparisons with strong sales of higher-value packaging solutions in the prior year period. Segment gross profit increased 17% and gross margin remained consistent at over 28%.
- Integrated Paytech segment revenue increased 4% to $20.1 million, while gross profit margin remained consistent at over 55%.
Gross profit increased 21% to $48.5 million, driven primarily by sales growth and tariff refunds.
Net income increased 294% to $2.0 million, or $0.17 diluted earnings per share, impacted by $2.8 million of integration costs primarily related to Arroweye, and Adjusted EBITDA increased 7% to $24.1 million.
First Half 2026 Financial Highlights
Revenue increased 17% to a company record of $296.3 million in the first half of 2026, compared to the prior year period.
- Secure Card Solutions segment revenue increased 25% to $220.7 million, driven by increased sales of contactless cards and personalization services, as well as the addition of Arroweye. Segment gross profit increased 31% and gross margin increased 110 basis points, primarily due to increased revenue and tariff refunds.
- Prepaid Solutions segment revenue decreased 3% to $44.7 million, primarily due to comparisons with strong sales of higher-value packaging solutions in the prior year period, partially offset by the change in accounting that was implemented in the second quarter of 2025. Gross profit and gross margin decreased primarily due to lower operating leverage, partially offset by the change in accounting that was implemented in the second quarter of 2025.
- Integrated Paytech segment revenue increased 2% to $39.5 million compared to strong revenue levels in 2025, while gross profit margins remained consistent at over 55%. Segment revenue growth in the second half of the year is expected to increase driven by momentum in Card@Once and Digital solutions and the addition of TRISM instant issuance.
Gross profit increased 15% to $92.6 million, driven by sales growth. Gross profit margin of 31.3% decreased from 32.0% prior year, primarily due to negative segment sales mix and increased depreciation expenses, partially offset by increased revenue and tariff refunds.
Net income decreased 23% to $4.1 million, or $0.34 diluted earnings per share, impacted by $5.9 million of integration costs primarily related to Arroweye, and Adjusted EBITDA increased 8% to $47.2 million.
Balance Sheet, Liquidity and Cash Flow
The Company generated cash from operating activities of $42.1 million in the first half, which compared to $9.9 million in the prior year period; and set a company record for Free Cash Flow of $36.1 million in the first half, which compared to $0.8 million in the prior year. The increase in Free Cash Flow was primarily driven by company performance, strong working capital management and lower capital spending compared to the prior year period.
As of June 30, 2026, the Company had $21.4 million of cash and cash equivalents and $265.0 million of 10% Senior Secured Notes due 2029. The Net Leverage Ratio decreased to 2.7x, down from 3.6x in the second quarter last year and 3.1x at year-end.
“We are pleased with our execution in the second quarter as we continued to balance disciplined expense management with targeted investments in growth and margin initiatives, technology and the integration of recent acquisitions,” said Terra Grantham, Chief Financial Officer. “We also generated a record $36 million of Free Cash Flow in the first half of 2026, reduced our Net Leverage Ratio to 2.7x, and redeemed $26.5 million of Senior Notes in July, further strengthening our balance sheet while maintaining the flexibility to invest in long-term growth opportunities.”
The Company’s capital structure and allocation priorities are focused on investing in the business, including strategic acquisitions; deleveraging the balance sheet; and returning funds to stockholders.
Outlook for 2026
The Company raised its financial outlook for 2026 revenue growth and Free Cash Flow and reiterated all other guidance targets:
- Revenue: high-single to low-double-digit growth
- Adjusted EBITDA: low-to-mid single-digit growth
- Free Cash Flow in the $45 million to $50 million range
- Year-end Net Leverage Ratio between 2.5x and 3.0x
Conference Call and Webcast
CPI will hold a conference call on August 6, 2026, at 9:00 a.m. Eastern Time to review its second quarter results. To participate in the Company's conference call via telephone or online:
To participate by phone, dial 1-833-461-5787 (U.S. and Canada) or 1-585-542-9983 (international) and enter conference ID 620163779.
In order to join the webcast in a live or archived format, please visit CPI Card Group Inc.’s Investor Relations website: https://investor.cpicardgroup.com.
Non-GAAP Financial Measures
In addition to financial results reported in accordance with U.S. generally accepted accounting principles (“GAAP”), we have provided the following non-GAAP financial measures in this release: Revenue excluding the Impact of an Accounting Change, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow, Free Cash Flow conversion, LTM Adjusted EBITDA and Net Leverage Ratio. These non-GAAP financial measures are utilized by management in comparing our operating performance on a consistent basis between fiscal periods and serve as a basis for certain Company compensation programs. We believe that these financial measures are appropriate to enhance an overall understanding of our underlying operating performance trends compared to historical and prospective periods and our peers. Management also believes that these measures are useful to investors in their analysis of our results of operations and provide improved comparability between fiscal periods. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Our non-GAAP measures may be different from similarly titled measures of other companies. Investors are encouraged to review the reconciliation of these historical non-GAAP measures to their most directly comparable GAAP financial measures included in Exhibit E and Exhibit F to this press release.
Revenue excluding the Impact of an Accounting Change
Revenue excluding the Impact of an Accounting Change has been presented in Exhibit F and defined as revenue excluding the impact from an accounting change implemented in the second quarter of 2025 resulting from the Company moving from over-time revenue recognition for certain WIP orders to point-in-time recognition (revenue booked when shipped). This adjustment reflects WIP orders that were recognized at the end of the first quarter of 2025 as if such orders were consistently recognized using point-in-time recognition during the second quarter of 2025 for the results for the second quarter of 2025 and reflects WIP orders that were recognized at December 31, 2024 as if such orders were consistently recognized using point-in-time recognition during the year to date period presented for 2025.
EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and LTM Adjusted EBITDA
Adjusted EBITDA is defined as EBITDA (which represents earnings before interest, taxes, depreciation and amortization) adjusted for litigation; stock-based compensation expense; restructuring and other charges, including executive retention and severance and acquisition-related costs; costs related to production facility modernization efforts; loss on debt extinguishment; gross profit related to the impact from the accounting change related to revenue described above; and other items that are unusual in nature, infrequently occurring or not considered part of our core operations, as set forth in the reconciliation in Exhibit E. Adjusted EBITDA is intended to show our unleveraged, pre-tax operating results and therefore reflects our financial performance based on operational factors, excluding non-operational, unusual or non-recurring losses or gains. Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for, analysis of our results as reported under GAAP. For example, Adjusted EBITDA does not reflect: (a) our capital expenditures, future requirements for capital expenditures or contractual commitments; (b) changes in, or cash requirements for, our working capital needs; (c) the significant interest expenses or the cash requirements necessary to service interest or principal payments on our debt; (d) tax payments that represent a reduction in cash available to us; (e) any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future; (f) the impact of earnings or charges resulting from matters that we and the lender under our credit agreement may not consider indicative of our ongoing operations; or (g) the impact of any discontinued operations. In particular, our definition of Adjusted EBITDA allows us to add back certain non-operating, unusual or non-recurring charges that are deducted in calculating net income, even though these are expenses that may recur, vary greatly and are difficult to predict and can represent the effect of long-term strategies as opposed to short-term results. In addition, certain of these expenses represent the reduction of cash that could be used for other purposes. Adjusted EBITDA margin as shown in Exhibit E is computed as Adjusted EBITDA divided by total revenue.
We define LTM Adjusted EBITDA as Adjusted EBITDA (defined previously) for the last twelve months. LTM Adjusted EBITDA is used in the computation of Net Leverage Ratio, and is reconciled in Exhibit E.
Free Cash Flow
We define Free Cash Flow as cash flow provided by (used in) operating activities less capital expenditures. We use this metric in analyzing our ability to service and repay our debt. However, this measure does not represent funds available for investment or other discretionary uses since it does not deduct cash used to make principal payments on outstanding debt and financing lease liabilities. Free Cash Flow should not be considered in isolation, or as a substitute for, cash (used in) provided by operating activities or any other measures of liquidity derived in accordance with GAAP.
Net Leverage Ratio
Management and various investors use the ratio of debt principal outstanding, plus finance lease obligations, less cash, divided by LTM Adjusted EBITDA, or “Net Leverage Ratio”, as a measure of our financial strength when making key investment decisions and evaluating us against peers.
Financial Expectations for 2026
We have provided Adjusted EBITDA expectations for 2026 on a non-GAAP basis because certain reconciling items are dependent on future events that either cannot be controlled or cannot be reliably predicted because they are not part of the Company’s routine activities, any of which could be significant.
About CPI
CPI is a payments technology company that is integral to the payments ecosystem. CPI’s connections, people, and solutions enable payments for a broad and expanding customer base including thousands of U.S. financial institutions, processors, fintechs, prepaid program managers and more, and these customers count on us to deliver what's next.
We continue to transform alongside the market, and for decades have invested in building deep connections and flexible solutions for our customers. Our proprietary platform and expertise uniquely position CPI to deliver today, tomorrow, and into the future as the market expands and payment methods evolve.Learn more at www.cpicardgroup.com.
Forward-Looking Statements
Forward-looking statements notice
Certain statements and information in this release (as well as information included in other written or oral statements we make from time to time) may contain or constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The words “believe,” “estimate,” “project,” “expect,” “anticipate,” “affirm,” “plan,” “intend,” “foresee,” “should,” “would,” “could,” “continue,” “committed,” “attempt,” “aim,” “target,” “objective,” “guides,” “seek,” “focus,” “provides guidance,” “provides outlook” or other similar expressions are intended to identify forward-looking statements, which are not historical in nature. These forward-looking statements, including statements about our strategic initiatives and market opportunities, including our financial outlook for 2026, the impact of our investments in Arroweye and other solutions, and our qualitative color on our business in 2026 and beyond; are based on our current expectations and beliefs concerning future developments and their potential effect on us and other information currently available. Such forward-looking statements, because they relate to future events, are by their very nature subject to many important risks and uncertainties that could cause actual results or other events to differ materially from those contemplated.
These risks and uncertainties include, but are not limited to: (i) risks relating to our business and industry, such as a deterioration in general economic conditions, including due to inflationary conditions, resulting in reduced consumer confidence and business spending, and a decline in consumer credit worthiness impacting demand for our products; the unpredictability of our operating results, including an inability to anticipate changes in customer inventory management practices and its impact on our business; our failure to retain our existing key customers or identify and attract new customers; the highly competitive, saturated and consolidated nature of our marketplace; our inability to develop, introduce and commercialize new products and related services, including due to our inability to undertake research and development activities; new and developing technologies that make our existing technology solutions and products obsolete or less relevant or our failure to introduce new products and related services in a timely manner or at all; system security risks, data protection breaches and cyber-attacks; the usage, or lack thereof, of artificial intelligence technologies; disruptions, delays or other failures in our supply chain, including as a result of inflationary pressures, single-source suppliers, failure or inability of suppliers to comply with our code of conduct or contractual requirements, trade restrictions, tariffs, foreign conflicts or political unrest in countries in which our suppliers operate, and our inability to pass related costs on to our customers or difficulty meeting customers’ delivery expectations due to extended lead times; changes in U.S. and global trade policy and the impact of tariffs on our business and results of operations; interruptions in our operations, including our information technology systems, or in the operations of the third parties that operate computing infrastructure on which we rely; defects in our software and computing systems; disruptions in production at one or more of our facilities due to weather conditions, climate change, political instability, or social unrest; problems in production quality, materials and process and costs relating to product defects and any related product liability and/or warranty claims and damage to our reputation; our inability to recruit, retain and develop qualified personnel, including key personnel, and implement effective succession processes; our substantial indebtedness, including the restrictive terms of our indebtedness and covenants of future agreements governing indebtedness and the resulting restraints on our ability to pursue our business strategies; our inability to make debt service payments or refinance such indebtedness; our inability to successfully execute on, integrate, or achieve the anticipated benefits of acquisitions, including the acquisition of Arroweye Solutions, Inc. (“Arroweye”), or execute on divestitures, strategic relationships, or investments; our status as an accelerated filer and complying with the Sarbanes-Oxley Act of 2002 and the costs associated with such compliance and implementation of procedures thereunder; our failure to maintain effective internal control over financial reporting and risks relating to investor confidence in our financial reporting; environmental, social and governance (“ESG”) preferences and demands of various stakeholders and the related impact on our ability to access capital, produce our products in conformity with stakeholder preferences, comply with stakeholder demands and comply with any related legal or regulatory requirements or restrictions; negative perceptions of our products due to the impact of our products and production processes on the environment and other ESG-related risks; damage to our reputation or brand image; our inability to adequately protect our trade secrets and intellectual property rights from misappropriation, infringement claims brought against us and risks related to open source software; our inability to renew licenses with key technology licensors; our limited ability to raise capital, which may lead to delays in innovation or the abandonment of our strategic initiatives; costs and impacts related to additional tax collection efforts by states, unclaimed property laws, or future increases in U.S. federal or state income taxes, resulting in additional expenses which we may be unable to pass along to our customers; our inability to realize the full value of our long-lived assets; costs and potential liabilities associated with compliance or failure to comply with laws and regulations, customer contractual requirements and evolving industry standards regarding consumer privacy and data use and security; our failure to operate our business in accordance with the Payment Card Industry Security Standards Council security standards or other industry standards; the effects of ongoing foreign conflicts on the global economy; adverse conditions in the banking system and financial markets, including the failure of banks and financial institutions; our failure to comply with environmental, health and safety laws and regulations that apply to our products and the raw materials we use in our production processes; (ii) risks relating to ownership of our common stock, such as those associated with concentrated ownership of our stock by our significant stockholders and potential conflicts of interests with other stockholders; the impact of concentrated ownership of our common stock and the sale or perceived sale of a substantial amount of common stock on the trading volume and market price of our common stock; potential conflicts of interest that may arise due to our Board of Directors being comprised in part of directors who are principals of or were nominated by our significant stockholders; the influence of securities analysts over the trading market for and price of our common stock, particularly due to the lack of substantial research coverage of our common stock; the impact of stockholder activism or actual or threatened securities litigation on the trading price and volatility of our common stock; certain provisions of our organizational documents and other contractual provisions that may delay or prevent a change in control and make it difficult for stockholders other than our significant stockholders to change the composition of our Board of Directors; and (iii) general risks, such as relating to our ability to comply with a wide variety of complex evolving laws and regulations and the exposure to liability for any failure to comply; the effect of legal and regulatory proceedings and the adequacy of our insurance policies; and other risks that are described in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 5, 2026, and our other reports filed from time to time with the Securities and Exchange Commission (the “SEC”).
We caution and advise readers not to place undue reliance on forward-looking statements, which speak only as of the date hereof. These statements are based on assumptions that may not be realized and involve risks and uncertainties that could cause actual results or other events to differ materially from the expectations and beliefs contained herein. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
CPI Card Group Inc. Earnings Release Supplemental Financial Information
Exhibit A
Condensed Consolidated Statements of Operations and Comprehensive Income - Unaudited for the three and six months ended June 30, 2026 and 2025
Exhibit B
Condensed Consolidated Balance Sheets - Unaudited as of June 30, 2026 and December 31, 2025
Exhibit C
Condensed Consolidated Statements of Cash Flows - Unaudited for the six months ended June 30, 2026 and 2025
Exhibit D
Segment Summary Information - Unaudited for the three and six months ended June 30, 2026 and 2025
Exhibit E
Supplemental GAAP to Non-GAAP Reconciliations - Unaudited for the three and six months ended June 30, 2026 and 2025
Exhibit F
Supplemental GAAP to Non-GAAP Reconciliations - Unaudited for the three and six months ended June 30, 2026 and 2025
EXHIBIT A
CPI Card Group Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Income
(in thousands, except share and per share amounts)
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, |
|---|
| 2026 | 2025 | 2026 | 2025 |
|---|
| Revenue | $149,181 | | $129,753 | | $296,289 | | $252,514 | |
| Cost of goods sold | 100,695 | | 89,633 | | 203,679 | | 171,698 | |
| Gross profit | 48,486 | | 40,120 | | 92,610 | | 80,816 | |
| Selling, general and administrative expenses | 36,622 | | 30,697 | | 69,752 | | 57,289 | |
| Income from operations | 11,864 | | 9,423 | | 22,858 | | 23,527 | |
| Other expense, net: | | | | |
| Interest, net | (7,405) | | (8,069) | | (15,061) | | (15,754) | |
| Other (expense) income, net | (35) | | (13) | | (3) | | 5 | |
| Total other expense, net | (7,440) | | (8,082) | | (15,064) | | (15,749) | |
| Income before income taxes and equity in losses of unconsolidated affiliates | 4,424 | | 1,341 | | 7,794 | | 7,778 | |
| Income tax expense | (2,137) | | (823) | | (3,295) | | (2,486) | |
| Equity in losses of unconsolidated affiliates | (247) | | - | | (403) | | - | |
| Net income | $2,040 | | $518 | | $4,096 | | $5,292 | |
| Basic and diluted earnings per share: | | | | |
| Basic earnings per share | $0.18 | | $0.05 | | $0.36 | | | 0.47 |
| Diluted earnings per share | $0.17 | | $0.04 | | $0.34 | | | 0.44 |
| Basic weighted-average shares outstanding | 11,486,626 | | 11,297,785 | | 11,472,100 | | 11,271,815 | |
| Diluted weighted-average shares outstanding | 12,039,657 | | 11,927,943 | | 11,957,587 | | 11,969,909 | |
| Comprehensive income: | | | | |
| Net income | $2,040 | | $518 | | $4,096 | | $5,292 | |
| Total comprehensive income | $2,040 | | $518 | | $4,096 | | $5,292 | |
EXHIBIT B
CPI Card Group Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(Unaudited)
| June 30, 2026 | December 31, 2025 |
|---|
| Assets | | |
| Current assets: | | |
| Cash and cash equivalents | $21,368 | $21,700 |
| Accounts receivable, net | 88,363 | 95,436 |
| Inventories, net | 62,900 | 72,243 |
| Prepaid expenses and other current assets | 15,520 | 15,565 |
| Total current assets | 188,151 | 204,944 |
| Plant, equipment, leasehold improvements and operating lease right-of-use assets, net | 105,189 | 108,433 |
| Intangible assets, net | 19,690 | 18,544 |
| Goodwill | 52,740 | 48,764 |
| Other assets | 24,638 | 22,506 |
| Total assets | $390,408 | $403,191 |
| Liabilities and stockholders’ deficit | | |
| Current liabilities: | | |
| Accounts payable | $30,581 | $27,802 |
| Accrued expenses | 56,613 | 52,379 |
| Deferred revenue and customer deposits | 2,946 | 3,916 |
| Total current liabilities | 90,140 | 84,097 |
| Long-term debt | 262,139 | 286,668 |
| Deferred income taxes | 3,840 | 2,251 |
| Other long-term liabilities | 45,763 | 47,508 |
| Total liabilities | 401,882 | 420,524 |
| Commitments and contingencies | | |
| Stockholders’ deficit: | | |
| Series A Preferred Stock; $0.001 par value - 100,000 shares authorized; 0 shares issued and outstanding at June 30, 2026 and December 31, 2025 | | |
| Common stock; $0.001 par value - 100,000,000 shares authorized; 11,520,159 and 11,456,061 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively | 12 | 11 |
| Capital deficit | (100,329) | (102,091) |
| Accumulated earnings | 88,843 | 84,747 |
| Total stockholders’ deficit | (11,474) | (17,333) |
| Total liabilities and stockholders’ deficit | $390,408 | $403,191 |
EXHIBIT C
CPI Card Group Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
| Six Months Ended June 30, |
|---|
| 2026 | 2025 |
|---|
| Operating activities | | |
| Net income | $4,096 | | $5,292 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | |
| Depreciation expense | 10,792 | | 7,815 | |
| Amortization expense | 1,954 | | 1,947 | |
| Stock-based compensation expense | 2,717 | | 3,038 | |
| Amortization of debt issuance costs | 656 | | 658 | |
| Deferred income taxes and other, net | 1,889 | | 850 | |
| Changes in operating assets and liabilities: | | |
| Accounts receivable, net | 7,048 | | 7,451 | |
| Inventories | 9,678 | | (7,769) | |
| Prepaid expenses and other assets | (2,356) | | 2,253 | |
| Income taxes, net | 57 | | (3,154) | |
| Accounts payable | 2,972 | | 4,977 | |
| Accrued expenses and other liabilities | 3,734 | | (13,471) | |
| Deferred revenue and customer deposits | (1,088) | | 50 | |
| Cash provided by operating activities | 42,149 | | 9,937 | |
| Investing activities | | |
| Capital expenditures for plant, equipment and leasehold improvements, net | (6,098) | | (9,112) | |
| Cash paid for acquisition, net of cash acquired | (6,300) | | (42,442) | |
| Other | 291 | | 50 | |
| Cash used in investing activities | (12,107) | | (51,504) | |
| Financing activities | | |
| Proceeds from borrowings on debt | - | | 35,000 | |
| Payments on debt | (25,000) | | (5,000) | |
| Payments on financing lease obligations | (4,805) | | (3,776) | |
| Taxes withheld and paid on stock-based compensation awards | (569) | | (1,077) | |
| Cash (used in) provided by financing activities | (30,374) | | 25,147 | |
| Net decrease in cash and cash equivalents | (332) | | (16,420) | |
| Cash and cash equivalents, beginning of period | 21,700 | | 33,544 | |
| Cash and cash equivalents, end of period | $21,368 | | $17,124 | |
| Supplemental disclosures of cash flow information | | |
| Cash paid (refunded) during the period for: | | |
| Interest paid | $15,172 | | $15,453 | |
| Income taxes paid | $2,140 | | $6,381 | |
| Income taxes refunded | $(529) | | $(60) | |
| Right-of-use assets obtained in exchange for lease obligations: | | |
| Operating leases | $187 | | $10,844 | |
| Financing leases | $4,073 | | $8,761 | |
| Accounts payable and accrued expenses for capital expenditures for plant, equipment and leasehold improvements | $616 | | $1,815 | |
| Non-cash equity in losses of unconsolidated affiliates | $(403) | | $ - | |
EXHIBIT D
CPI Card Group Inc. and Subsidiaries
Segment Summary Information
For the Three and Six Months Ended June 30, 2026 and 2025
(dollars in thousands)
(Unaudited)
| Three Months Ended June 30, |
|---|
| 2026 | 2025 | $ Change | % Change |
|---|
| Revenue | | | | |
| Revenue by segment: | | | | |
| Secure Card Solutions | $110,867 | | $94,673 | | $16,194 | 17.1% | |
| Prepaid Solutions | 22,645 | | 19,222 | | 3,423 | 17.8% | |
| Integrated Paytech | 20,141 | | 19,326 | | 815 | 4.2% | |
| Eliminations | (4,472) | | (3,468) | | (1,004) | | * |
| Total | $149,181 | | $129,753 | | $19,428 | 15.0% | |
| Six Months Ended June 30, |
| | 2026 | | 2025 | $ Change | % Change |
| Revenue by segment: | | | | |
| Secure Card Solutions | $220,718 | | | $176,315 | $44,403 | 25.2% | |
| Prepaid Solutions | 44,694 | | 45,935 | | (1,241) | (2.7)% | |
| Integrated Paytech | 39,523 | | 38,579 | | 944 | 2.4% | |
| Eliminations | (8,646) | | (8,315) | | (331) | | * |
| Total | $296,289 | | $252,514 | | $43,775 | 17.3% | |
| Three Months Ended June 30, |
|---|
| 2026 | % of Revenue | 2025 | % of Revenue | $ Change | % Change |
|---|
| Gross Profit | | | | | | |
| Gross profit by segment: | | | | | | |
| Secure Card Solutions | $30,869 | | 27.8% | | $23,918 | | 25.3% | | $6,951 | 29.1% | |
| Prepaid Solutions | 6,419 | | 28.3% | | 5,471 | | 28.5% | | 948 | 17.3% | |
| Integrated Paytech | 11,198 | | 55.6% | | 10,731 | | 55.5% | | 467 | 4.4% | |
| Total | $48,486 | | 32.5% | | $40,120 | | 30.9% | | $8,366 | 20.9% | |
| Six Months Ended June 30, |
| | 2026 | % of Revenue | | 2025 | % of Revenue | $ Change | % Change |
| Gross profit by segment: | | | | | | |
| Secure Card Solutions | $58,571 | | | 26.5% | $44,737 | | | 25.4% | $13,834 | | 30.9% |
| Prepaid Solutions | 12,085 | | | 27.0% | 14,913 | | | 32.5% | (2,828) | | (19.0)% |
| Integrated Paytech | 21,954 | | | 55.5% | 21,166 | | | 54.9% | 788 | | 3.7% |
| Total | $92,610 | | | 31.3% | $80,816 | | | 32.0% | $11,794 | | 14.6% |
| Three Months Ended June 30, |
|---|
| 2026 | % of Revenue | 2025 | % of Revenue | $ Change | % Change |
|---|
| Income from Operations | | | | | | |
| Income (loss) from operations by segment: | | | | | | |
| Secure Card Solutions | $21,020 | | 19.0% | | $15,636 | | 16.5% | | $5,384 | 34.4% | |
| Prepaid Solutions | 4,982 | | 22.0% | | 4,171 | | 21.7% | | 811 | 19.4% | |
| Integrated Paytech | 6,576 | | 32.6% | | 7,417 | | 38.4% | | (841) | (11.3)% | |
| Corporate | (20,714) | | | * | (17,801) | | | * | (2,913) | (16.4)% | |
| Total | $11,864 | | 8.0% | | $9,423 | | 7.3% | | $2,441 | 25.9% | |
| Six Months Ended June 30, |
| | 2026 | % of Revenue | | 2025 | % of Revenue | $ Change | % Change |
| Income (loss) from operations by segment: | | | | | | |
| Secure Card Solutions | $38,288 | | | 17.3% | $29,946 | | | 17.0% | $8,342 | | 27.9% |
| Prepaid Solutions | 9,075 | | | 20.3% | 12,170 | | | 26.5% | (3,095) | | (25.4)% |
| Integrated Paytech | 13,441 | | | 34.0% | 14,810 | | | 38.4% | (1,369) | | (9.2)% |
| Corporate | (37,946) | | | * | (33,399) | | | * | (4,547) | | (13.6)% |
| Total | $22,858 | | | 7.7% | $23,527 | | | 9.3% | $(669) | | (2.8)% |
| Three Months Ended June 30, |
|---|
| 2026 | % of Revenue | 2025 | % of Revenue | $ Change | % Change |
|---|
| EBITDA | | | | | | |
| EBITDA by segment: | | | | | | |
| Secure Card Solutions | $25,247 | | 22.8% | $19,100 | | 20.2% | $6,147 | 32.2% |
| Prepaid Solutions | 5,975 | | 26.4% | 5,297 | | 27.6% | 678 | 12.8% |
| Integrated Paytech | 6,754 | | 33.5% | 7,448 | | 38.5% | (694) | (9.3)% |
| Corporate | (20,051) | | * | (16,920) | | * | (3,131) | (18.5)% |
| Total | $17,925 | | 12.0% | $14,925 | | 11.5% | $3,000 | 20.1% |
| Six Months Ended June 30, |
| | 2026 | % of Revenue | | 2025 | % of Revenue | $ Change | % Change |
| EBITDA by segment: | | | | | | |
| Secure Card Solutions | $46,895 | | 21.2% | $35,643 | | 20.2% | $11,252 | 31.6% |
| Prepaid Solutions | 11,186 | | 25.0% | 14,418 | | 31.4% | (3,232) | (22.4)% |
| Integrated Paytech | 13,709 | | 34.7% | 14,872 | | 38.5% | (1,163) | (7.8)% |
| Corporate | (36,592) | | * | (31,639) | | * | (4,953) | (15.7)% |
| Total | $35,198 | | 11.9% | $33,294 | | 13.2% | $1,904 | 5.7% |
Operations by Segment to EBITDA by Segment
| Three Months Ended June 30, 2026 |
|---|
| Secure Card Solutions | Prepaid Solutions | Integrated Paytech | Corporate | Total |
|---|
| EBITDA by segment: | | | | | |
| Income (loss) from operations | $21,020 | $4,982 | $6,576 | $(20,714) | $11,864 |
| Depreciation and amortization | 4,258 | 1,241 | 178 | 666 | 6,343 |
| Other expense, net | (31) | (248) | - | (3) | (282) |
| EBITDA | $25,247 | $5,975 | $6,754 | $(20,051) | $17,925 |
| Three Months Ended June 30, 2025 |
| Secure Card Solutions | Prepaid Solutions | Integrated Paytech | Corporate | Total |
| EBITDA by segment: | | | | | |
| Income (loss) from operations | $15,636 | $4,171 | $7,417 | $(17,801) | $9,423 |
| Depreciation and amortization | 3,497 | 1,126 | 31 | 861 | 5,515 |
| Other (expense) income, net | (33) | - | - | 20 | (13) |
| EBITDA | $19,100 | $5,297 | $7,448 | $(16,920) | $14,925 |
| Six Months Ended June 30, 2026 |
| Secure Card Solutions | Prepaid Solutions | Integrated Paytech | Corporate | Total |
| EBITDA by segment: | | | | | |
| Income (loss) from operations | $38,288 | $9,075 | $13,441 | $(37,946) | $22,858 |
| Depreciation and amortization | 8,604 | 2,515 | 268 | 1,359 | 12,746 |
| Other income (expense), net | 3 | (404) | - | (5) | (406) |
| EBITDA | $46,895 | $11,186 | $13,709 | $(36,592) | $35,198 |
| Six Months Ended June 30, 2025 |
| Secure Card Solutions | Prepaid Solutions | Integrated Paytech | Corporate | Total |
| EBITDA by segment: | | | | | |
| Income (loss) from operations | $29,946 | $12,170 | $14,810 | $(33,399) | $23,527 |
| Depreciation and amortization | 5,737 | 2,242 | 62 | 1,721 | 9,762 |
| Other (expense) income, net | (40) | 6 | - | 39 | 5 |
| EBITDA | $35,643 | $14,418 | $14,872 | $(31,639) | $33,294 |
*Calculation not meaningful
EXHIBIT E
CPI Card Group Inc. and Subsidiaries
Supplemental GAAP to Non-GAAP Reconciliation
(dollars in thousands)
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, |
|---|
| 2026 | 2025 | 2026 | 2025 |
|---|
| EBITDA and Adjusted EBITDA: | | | | |
| Net income | | $2,040 | | $518 | | $4,096 | | $5,292 |
| Interest, net | | 7,405 | | 8,069 | | 15,061 | | 15,754 |
| Income tax expense | | 2,137 | | 823 | | 3,295 | | 2,486 |
| Depreciation and amortization | | 6,343 | | 5,515 | | 12,746 | | 9,762 |
| EBITDA | | $17,925 | | $14,925 | | $35,198 | | $33,294 |
| Adjustments to EBITDA: | | | | |
| Stock-based compensation expense | | $1,314 | | $1,367 | | $2,717 | | $3,038 |
| Acquisition and integration costs | | 2,760 | | 1,621 | | 5,913 | | 2,261 |
| Restructuring and other charges | | 1,806 | | 1,645 | | 2,978 | | 2,127 |
| Change in revenue recognition | | - | | 2,929 | | - | | 2,929 |
| Equity in losses of unconsolidated affiliates | | 247 | | - | | 403 | | - |
| Subtotal of adjustments to EBITDA | | $6,127 | | $7,562 | | $12,011 | | $10,355 |
| Adjusted EBITDA | | $24,052 | | $22,487 | | $47,209 | | $43,649 |
| Net income margin (% of Revenue) | 1.4% | | 0.4% | | 1.4% | | 2.1% | |
| Net income growth (% Change 2026 vs. 2025) | 293.8% | | | (22.6)% | | |
| Adjusted EBITDA margin (% of Revenue) | 16.1% | | 17.3% | | 15.9% | | 17.3% | |
| Adjusted EBITDA growth (% Change 2026 vs. 2025) | 7.0% | | | 8.2% | | |
| Three Months Ended June 30, | Six Months Ended June 30, |
|---|
| 2026 | 2025 | 2026 | 2025 |
|---|
| Free Cash Flow: | | | | |
| Cash provided by operating activities | $28,501 | $4,344 | $42,149 | $9,937 |
| Capital expenditures for plant, equipment and leasehold improvements, net | (2,585) | (3,811) | (6,098) | (9,112) |
| Free Cash Flow | $25,916 | $533 | $36,051 | $825 |
(1)Balance represents acquisition and integration costs primarily related to the Arroweye acquisition that occurred on May 6, 2025.
(2)Balance includes expenses related to executive retention and severance. The 2025 balance also includes expenses related to production facility modernization efforts.
(3)In the second quarter of 2025, the Company reassessed certain aspects of its revenue recognition accounting under ASC 606 and prospectively began recognizing revenue for certain contracts at a point-in-time rather than over-time.
(4)On October 7, 2025, the Company entered into a strategic relationship with and acquired a 20% equity interest in Karta (Gift Card Co Pty Ltd), an Australia-based payments technology firm also backed by the Commonwealth Bank of Australia. This balance represents the Company’s equity in Karta’s net losses for the quarter ended June 30, 2026.
| Last Twelve Months Ended |
|---|
| June 30, | December 31, |
|---|
| 2026 | 2025 |
|---|
| Reconciliation of net income to LTM EBITDA and Adjusted EBITDA: | | |
| Net income | $13,754 | $14,950 |
| Interest, net | 31,773 | 32,466 |
| Income tax expense | 7,465 | 6,656 |
| Depreciation and amortization | 25,445 | 22,461 |
| EBITDA | $78,437 | $76,533 |
| Adjustments to EBITDA: | | |
| Stock-based compensation expense | $6,642 | $6,963 |
| Acquisition and integration costs | 9,606 | 5,954 |
| Restructuring and other charges | 4,567 | 3,716 |
| Loss on debt extinguishment | 287 | 287 |
| Change in revenue recognition | - | 2,929 |
| Equity in losses of unconsolidated affiliates | 537 | 134 |
| Subtotal of adjustments to EBITDA | $21,639 | $19,983 |
| LTM Adjusted EBITDA | $100,076 | $96,516 |
(1)Balance represents acquisition and integration costs primarily related to the Arroweye acquisition that occurred on May 6, 2025.
(2)Balance includes expenses related to executive retention and severance, as well as production facility modernization efforts.
(3)In the second quarter of 2025, the Company reassessed certain aspects of its revenue recognition accounting under ASC 606 and prospectively began recognizing revenue for certain contracts at a point-in-time rather than over-time.
(4)On October 7, 2025, the Company entered into a strategic relationship with and acquired a 20% equity interest in Karta (Gift Card Co Pty Ltd), an Australia-based payments technology firm also backed by the Commonwealth Bank of Australia. This balance represents the Company’s equity in Karta’s net losses for the quarter ended June 30, 2026.
| As of |
|---|
| June 30, | December 31, |
|---|
| 2026 | 2025 |
|---|
| Calculation of Net Leverage Ratio: | | |
| Senior Notes | $265,000 | $265,000 |
| ABL Revolver | - | 25,000 |
| Financing lease obligations | 30,581 | 31,058 |
| Total debt | 295,581 | 321,058 |
| Less: Cash and cash equivalents | (21,368) | (21,700) |
| Total net debt (a) | $274,213 | $299,358 |
| LTM Adjusted EBITDA (b) | $100,076 | $96,516 |
| Net Leverage Ratio (a)/(b) | 2.7 | 3.1 |
EXHIBIT F
CPI Card Group Inc. and Subsidiaries
Supplemental GAAP to Non-GAAP Reconciliation
(dollars in thousands)
(Unaudited)
| Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 |
|---|
| As Reported | Impacts from Change in Revenue Recognition | As Adjusted | As Reported | Impacts from Change in Revenue Recognition | As Adjusted |
|---|
| Consolidated CPI | | | | | | |
| Revenue | | $149,181 | | $ - | $149,181 | $129,753 | $7,723 | | $137,474 |
| Revenue growth (% Change 2026 vs. 2025) | 15.0% | | | 8.5% | | | |
| Secure Card Solutions | | | | | | |
| Revenue | | $110,867 | | $ - | $110,867 | $94,673 | $2,671 | | $97,344 |
| Revenue growth (% Change 2026 vs. 2025) | | 17.1% | | 13.9% | | | |
| Prepaid Solutions | | | | | | |
| Revenue | | $22,645 | | $ - | $22,645 | $19,222 | | $5,052 | $24,274 |
| Revenue growth (% Change 2026 vs. 2025) | | 17.8% | | (6.7)% | | | |
| Integrated Paytech | | | | | | |
| Revenue | | $20,141 | | $ - | $20,141 | $19,326 | $ - | $19,326 |
| Revenue growth (% Change 2026 vs. 2025) | | 4.2% | | 4.2% | | | |
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 |
| As Reported | Impacts from Change in Revenue Recognition | As Adjusted | As Reported | Impacts from Change in Revenue Recognition | As Adjusted |
| Consolidated CPI | | | | | | |
| Revenue | | $296,289 | | $ - | $296,289 | $252,514 | $7,427 | | $259,939 |
| Revenue growth (% Change 2026 vs. 2025) | | 17.3% | | 14.0% | | | |
| Secure Card Solutions | | | | | | |
| Revenue | | $220,718 | | $ - | $220,718 | $176,315 | $2,059 | | $178,374 |
| Revenue growth (% Change 2026 vs. 2025) | | 25.2% | | 23.7% | | | |
| Prepaid Solutions | | | | | | |
| Revenue | | $44,694 | | $ - | $44,694 | $45,935 | | $5,368 | $51,303 |
| Revenue growth (% Change 2026 vs. 2025) | | (2.7)% | | (12.9)% | | | |
| Integrated Paytech | | | | | | |
| Revenue | | $39,523 | | $ - | $39,523 | $38,579 | $ - | $38,579 |
| Revenue growth (% Change 2026 vs. 2025) | | 2.4% | | 2.4% | | | |
(1)For the three months ended June 30, 2026 and 2025, consolidated revenue include $4,472 and $3,468 of intersegment eliminations, respectively. For the six months ended June 30, 2026 and 2025, consolidated revenue include $8,646 and $8,315 of intersegment eliminations, respectively.
Contacts
CPI encourages investors to use its investor relations website as a way of easily finding information about the Company. CPI promptly makes available on this website the reports that the Company files or furnishes with the SEC, corporate governance information and press releases.
CPI Investor Relations:
Davis Barker, Head of Investor Relations & Corporate Development
(877) 369-9016
InvestorRelations@cpicardgroup.com
Media@cpicardgroup.com