CPI Card Group Inc. Reports Financial Results for the Quarter Ended September 30, 2025

Press release · 11/04/2025 12:12

CPI Card Group Inc. reported its financial results for the quarter ended September 30, 2025. The company’s revenue increased by 10% to $123.4 million, driven by growth in its payment card and digital payment solutions businesses. Net income was $4.4 million, or $0.39 per diluted share, compared to a net loss of $2.1 million, or $0.19 per diluted share, in the same period last year. The company’s gross margin expanded by 150 basis points to 24.5%, driven by improved pricing and cost savings initiatives. CPI Card Group’s cash and cash equivalents increased by $10.3 million to $43.1 million, and the company had no debt outstanding. The company’s management believes that its strong financial performance and cash position position it well to continue investing in its growth initiatives and returning value to shareholders.

Overview

CPI is a leading payments technology company that provides a comprehensive range of payment cards and related digital solutions. The company operates in three reportable segments: Debit and Credit, Prepaid Debit, and Other.

Financial Performance

Net sales increased 10.6% in Q3 2025 and 9.8% in the first 9 months of 2025 compared to the prior year periods, driven by higher product sales, including contributions from the Arroweye acquisition.
Gross profit and gross profit margin declined in Q3 2025 and the first 9 months of 2025 due to negative sales mix, increased production costs, and higher tariff and depreciation expenses.
Operating expenses increased in Q3 2025 and the first 9 months of 2025, primarily due to higher professional fees and integration costs related to the Arroweye acquisition.
Interest expense decreased due to lower debt levels and redemption premiums compared to the prior year.
The effective tax rate increased in 2025 due to limitations on executive compensation deductions and non-deductible acquisition costs.

Segment Performance

Debit and Credit segment net sales increased, driven by higher product sales, including from the Arroweye acquisition, partially offset by lower services revenue.
Prepaid Debit segment net sales declined due to reduced revenue recognition for work-in-process orders and lower sales to existing customers.
Corporate expenses (Other segment) decreased due to lower compensation-related costs, partially offset by higher acquisition-related expenses.

Liquidity and Capital Resources

CPI had $16 million in cash and cash equivalents as of September 30, 2025.
Cash flow from operations increased, driven by reduced working capital usage.
The company acquired Arroweye for $45.8 million in May 2025, funded through a combination of cash on hand and the ABL Revolver.
CPI has $265 million in outstanding Senior Notes and $47 million drawn on its $100 million ABL Revolver as of September 30, 2025.

Outlook

CPI continues to face macroeconomic uncertainties related to tariffs, trade restrictions, and inflationary pressures, which have impacted its supply chain and production costs. The company is focused on pricing actions, cost savings, and integration of the Arroweye acquisition to mitigate these challenges.