CPI Card Group Inc (PMTS) 2025 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to CPI Card Group's third-quarter 2025 earnings call. My name is Janine, and I will be your operator for today. (Operator Instructions) And now I would like to turn the call over to Mike Salop, CPI's Head of Investor Relations. Sir, please go ahead.

女士們、先生們，感謝你們的耐心等待。歡迎參加 CPI Card Group 2025 年第三季財報電話會議。我叫珍妮，今天由我來為您接聽電話。（操作員指示）現在，我將把電話交給 CPI 的投資人關係主管 Mike Salop。先生，請繼續。

Thanks, operator, and welcome to the CPI Card Group third-quarter 2025 earnings webcast and conference call. Today's date is November 4, 2025. And on the call today from CPI Card Group are John Lowe, President and Chief Executive Officer; and Jeff Hochstadt, Chief Financial Officer.

謝謝接線員，歡迎參加 CPI Card Group 2025 年第三季收益網路直播和電話會議。今天是2025年11月4日。今天出席電話會議的 CPI Card Group 代表有總裁兼執行長 John Lowe 和財務長 Jeff Hochstadt。

Before we begin, I'd like to remind everyone that this call may contain forward-looking statements as they are defined under the Private Securities Litigation Reform Act of 1995. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements.

在開始之前，我想提醒大家，本次電話會議可能包含前瞻性陳述，這些陳述是根據 1995 年《私人證券訴訟改革法案》定義的。這些聲明存在一定的風險和不確定性，可能導致實際結果與前瞻性聲明中表達的結果有重大差異。

For a discussion of such risks and uncertainties, please see CPI Card Group's most recent filings with the SEC. All forward-looking statements made today reflect our current expectations only, and we undertake no obligation to update any statement to reflect the events that occur after this call.

有關此類風險和不確定性的討論，請參閱 CPI Card Group 向美國證券交易委員會提交的最新文件。今天所作的所有前瞻性陳述僅反映我們目前的預期，我們不承擔任何義務更新任何陳述以反映本次電話會議之後發生的事件。

Also, during the course of today's call, the company will be discussing one or more non-GAAP financial measures, including, but not limited to, EBITDA, adjusted EBITDA, adjusted EBITDA margin, net leverage ratio, free cash flow, and net sales growth, excluding the impact of the accounting change implemented in the second quarter. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in the press release and slide presentation we issued this morning.

此外，在今天的電話會議中，公司將討論一項或多項非GAAP財務指標，包括但不限於EBITDA、調整後EBITDA、調整後EBITDA利潤率、淨槓桿率、自由現金流和淨銷售額增長，但不包括第二季度實施的會計變更的影響。我們今天早上發布的新聞稿和幻燈片簡報中包含了這些非GAAP指標與最直接可比較的GAAP指標的調節表。

Copies of today's press release as well as the presentation that accompanies this conference call are accessible on CPI's Investor Relations website, investor.cpicardgroup.com. In addition, CPI's Form 10-Q for the third quarter will be available on CPI's Investor Relations website.

今天的新聞稿以及本次電話會議的簡報均可在CPI的投資者關係網站investor.cpicardgroup.com上查閱。此外，CPI第三季的10-Q表格也將在CPI的投資者關係網站上提供。

For today's call, all growth rates refer to comparisons with the prior year period unless otherwise noted. The agenda for today's call can be found on slide 3. After our remarks, we will open the call for questions. We can start on slide 4, and I'll turn the call over to John.

除非另有說明，本次電話會議中的所有成長率均指與去年同期相比的成長率。今天的電話會議議程請見投影片3。發言結束後，我們將開放提問環節。我們可以從第 4 張投影片開始，然後我把電話交給約翰。

Thanks, Mike, and good morning, everyone. As we come closer to wrapping up the year, I'm going to spend some time updating you on our strategic initiatives, where we are making great progress growing our core businesses and diversified, including in our digital solutions. But first, let me touch on the highlights of our third quarter performance.

謝謝你，麥克，大家早安。隨著年末臨近，我將花些時間向大家匯報我們的策略舉措，我們在發展核心業務和實現多元化（包括數位化解決方案）方面取得了巨大進展。但首先，讓我先談談我們第三季業績的亮點。

Overall, the third-quarter results were largely in line with our expectations. Our Software-as-a-Service instant issuance business once again delivered strong growth and Arroweye continued to perform well. In our Debit and Credit segment, we believe we gained market share as contactless card volumes increased nicely.

整體而言，第三季業績基本上符合我們的預期。我們的軟體即服務即時發卡業務再次實現了強勁成長，Arroweye 也持續保持良好表現。在我們的金融卡和信用卡業務領域，隨著非接觸式卡交易量的良好增長，我們相信我們獲得了市場份額。

Card revenue, though, was impacted by a mix shift to higher volume orders and lower average selling prices. This mix, combined with tariff impacts and other in-year investments has continued to impact margins.

不過，由於訂單量增加、平均售價降低，信用卡收入受到了影響。這種組合，再加上關稅影響和其他年內投資，持續對利潤率造成影響。

Overall, sales increased 11% for the quarter due to the addition of Arroweye, compared to a very strong level in the prior year, which benefited from strong growth across our portfolio. Adjusted EBITDA decreased 7% in the quarter, primarily due to the unfavorable sales mix and tariff expenses.

總體而言，由於新增了 Arroweye 產品，本季銷售額成長了 11%，而去年同期則處於非常強勁的水平，這得益於我們整個產品組合的強勁成長。本季調整後 EBITDA 下降 7%，主要原因是銷售組合不利和關稅支出。

We continue to work on various initiatives to counter these margin pressures in 2026 and beyond, including key supplier negotiations, driving automation and operational efficiencies in production, achieving Arroweye synergies, and general overhead cost management. We have already obtained future savings on key components in our supply chain and our new Indiana facility is now fully operational with all work moved over from the previous facility, which should aid efficiencies in 2026.

我們將繼續推動各項舉措，以應對 2026 年及以後的利潤壓力，包括與主要供應商進行談判、推動生產自動化和營運效率、實現 Arroweye 協同效應以及一般間接成本管理。我們在供應鏈的關鍵部件方面已經實現了未來的成本節約，我們位於印第安納州的新工廠現已全面投入運營，所有工作都已從先前的工廠轉移過來，這應該有助於在 2026 年提高效率。

For 2025, we have updated our full-year outlook to low-double-digit to low-teens net sales growth and flat to low-single-digit adjusted EBITDA growth as we expect margin impacts in debit and credit to continue in the fourth quarter, and we anticipate certain prepaid orders may move into 2026.

對於 2025 年，我們已將全年展望更新為淨銷售額低兩位數至低兩位數增長，調整後 EBITDA 持平至低個位數增長，因為我們預計借記卡和信用卡的利潤率影響將在第四季度繼續，並且我們預計某些預付訂單可能會延至 2026 年。

Our Prepaid business remains a clear market leader. And as the pace of package innovation rises to combat fraud, order timing has been a bit uneven. That said, more prepaid complexity, including the potential for the use of chip technology is a positive over the long term as this increases values and demand for our solutions.

我們的預付業務依然保持著市場領先地位。隨著包裝創新步伐加快以打擊欺詐，訂單送達時間也變得有些不穩定。也就是說，預付費系統的複雜性增加，包括晶片技術的應用潛力，從長遠來看是一件好事，因為這會提高我們解決方案的價值和需求。

We still expect strong year-on-year growth in the fourth quarter for both net sales and adjusted EBITDA with levels significantly higher than the third quarter. Jeff will give you more details on the quarter and our outlook in a few minutes. But first, I want to update you on our strategy execution.

我們仍預期第四季淨銷售額和調整後 EBITDA 將實現強勁的年成長，且水準將顯著高於第三季。傑夫稍後會詳細介紹本季的情況以及我們的展望。但首先，我想向你們報告我們的策略執行情況。

Our vision and strategy can be seen on slide 5. With everything we do, our organization is focused on the customer, quality and efficiency, innovation and diversification, and our people and culture as we strive to be the most trusted partner for innovative payment technology solutions. We have made great progress on multiple strategy initiatives in 2025, including our efforts to expand our addressable markets to enhance growth for the future, and I'll highlight some of the most recent developments on slide 6.

我們的願景和策略請見第5頁投影片。我們所做的一切都以客戶為中心，注重品質和效率、創新和多元化，以及我們的員工和文化，並努力成為創新支付技術解決方案領域最值得信賴的合作夥伴。我們在 2025 年的多項策略性舉措中取得了巨大進展，包括我們為擴大目標市場以促進未來成長所做的努力，我將在第 6 張投影片上重點介紹一些最新的進展。

We are starting to provide tours to customers in our new Indiana production facility, and we believe we should be able to leverage our innovation and automation investments across our Debit and Credit portfolio to drive share gains and do so even more efficiently. We are continuing to expand and cross-sell our Arroweye solutions and are very excited about the initial progress and interest from new and existing customers.

我們開始為客戶提供參觀我們在印第安納州新生產設施的機會，我們相信，我們應該能夠利用我們在藉記卡和信用卡產品組合中的創新和自動化投資來提高市場份額，並且效率更高。我們正在不斷擴展和交叉銷售我們的 Arroweye 解決方案，並對新舊客戶的初步進展和興趣感到非常興奮。

We believe our Software-as-a-Service instant issuance business is headed to a record year with growth in new verticals and from additional financial institution penetration. The value proposition of our integrations into the US payments ecosystem continues to drive our share growth and is starting to show realization in our other digital solutions, too.

我們相信，隨著新垂直領域的成長和金融機構滲透率的提高，我們的軟體即服務即時發卡業務將迎來創紀錄的一年。我們與美國支付生態系統整合的價值主張持續推動著我們的市場份額成長，也開始在我們的其他數位解決方案中得到體現。

Although revenue in our other digital solutions is small today and will still take time to build, we continue to sign more issuers and build out even more integrations to broaden our addressable market. When we provide our full-year 2025 results, we look forward to sharing more on our higher-margin digital solutions performance.

儘管我們其他數位解決方案目前的收入還很小，而且還需要時間才能實現成長，但我們仍在不斷簽約更多發行商，並建立更多集成，以擴大我們的目標市場。在公佈 2025 年全年業績時，我們期待與大家分享更多關於我們高利潤率數位解決方案業績的資訊。

Healthcare payment card expansion is also progressing with share gains of additional programs with existing customers and advances into new areas. Our value-based metal card offerings are also generating good interest with incremental sales again in the third quarter.

醫療保健支付卡業務也在穩步發展，現有客戶透過更多項目獲得了市場份額，並向新領域邁進。我們以價值為導向的金屬卡產品也引起了消費者的濃厚興趣，第三季銷售額再次成長。

In closed-loop prepaid, we are now in production and expect shipments in the fourth quarter. We've also invested in go-to-market for the space to expand beyond existing program managers we work with for open loop and are in discussions with several potential new customers. As I mentioned before, complexity continues to rise for open loop packages, which not only further solidifies our position as a market leader, but also benefits our go-to-market plans for closed loop.

閉環預付費模式目前已投入生產，預計第四季開始出貨。我們也投資了該領域的市場推廣，以拓展到我們目前合作的開環專案經理之外，並且正在與幾位潛在的新客戶進行洽談。正如我之前提到的，開環封裝的複雜性不斷增加，這不僅進一步鞏固了我們作為市場領導者的地位，而且有利於我們閉環的市場推廣計劃。

And our most recent expansion initiative builds on this growth in prepaid complexity as we have entered into a strategic relationship with Karta, an Australia-based prepaid program manager and digital technology provider. We will be Karta's exclusive US supplier of its digital card validation solution, producing contactless prepaid cards with chip technology, embedding Karta's SafeToBuy outlet. Karta's solution eliminates the need for data to be printed on cards, significantly reducing the risk of prepaid fraud.

我們最新的擴張計畫正是建立在預付費複雜性不斷增長的基礎上，我們與總部位於澳洲的預付費專案管理和數位技術提供商 Karta 建立了策略合作關係。我們將成為 Karta 在美國的獨家數位卡驗證解決方案供應商，生產具有晶片技術的非接觸式預付卡，並嵌入 Karta 的 SafeToBuy 支付終端。Karta 的解決方案無需將資料列印在卡片上，從而大大降低了預付詐欺的風險。

As a reminder, prevention of prepaid gift card fraud can be accomplished through more complexity in packaging or through the adoption of chip technology and prepaid gift cards. As CPI is uniquely positioned in our markets with deep expertise in both areas, we believe this can be a great complement to our secure prepaid solutions and will provide more choice for prepaid customers in the market.

再次提醒，防止預付禮品卡詐欺可以透過增加包裝的複雜性或採用晶片技術和預付禮品卡來實現。由於 CPI 在我們的市場中擁有獨特的地位，並且在這兩個領域都擁有深厚的專業知識，我們相信這將很好地補充我們安全的預付費解決方案，並為市場上的預付費客戶提供更多選擇。

We are already piloting the solution with a large national retailer in the US and look forward to further developing our relationship with Karta. Many of these growth initiatives are starting to yield tangible results, and we look forward to continuing to update you on the progress as we move forward.

我們已在美國一家大型全國性零售商處試用該解決方案，並期待進一步發展與 Karta 的合作關係。這些成長計畫中的許多都開始取得實際成果，我們期待在未來繼續向您報告進展。

I will now turn the call over to Jeff to cover the third-quarter results and 2025 outlook in more detail. Jeff?

現在我將把電話交給傑夫，讓他更詳細地介紹第三季業績和 2025 年展望。傑夫？

Thanks, John, and good morning, everyone. Let's start on slide 8 with the third-quarter results. Third-quarter net sales increased 11%, which was primarily driven by the addition of Arroweye and growth in our instant issuance business, partially offset by a decline in Prepaid sales.

謝謝你，約翰，大家早安。讓我們從第 8 張投影片開始，了解第三季的業績。第三季淨銷售額成長 11%，主要得益於 Arroweye 的加入和即時發卡業務的成長，但部分被預付卡銷售額的下降所抵銷。

Debit and Credit segment sales increased 16% as Arroweye contributed $15 million of sales and our Card@Once instant issuance business delivered strong growth, led by solution sales. Contactless card sales were flat in the quarter compared to a very strong prior year sales level, which includes some large eco-focused card orders. Contactless volumes increased, but average selling prices were down due to sales mix.

金融卡和信用卡業務銷售額增長了 16%，其中 Arroweye 貢獻了 1500 萬美元的銷售額，而我們的 Card@Once 即時發卡業務在解決方案銷售的帶動下實現了強勁增長。與去年同期強勁的銷售水準相比，本季非接觸式銀行卡銷售額持平，去年同期銷售水準包括一些大型環保銀行卡訂單。非接觸式交易量增加，但由於銷售組合的變化，平均售價下降。

Personalization services were also flat in the quarter, an improvement from the first half trend. Prepaid sales declined 7%, largely due to timing and comparisons to large sales in the prior year period. Similar to the second quarter, gross profit margin in the third quarter decreased from 35.8% in the prior year to 29.7%, driven by unfavorable sales mix resulting in lower average selling prices and increased production costs.

本季個人化服務也保持平穩，較上半年的趨勢有所改善。預付銷售額下降了 7%，這主要是由於銷售時間以及與上年同期大額銷售額的比較。與第二季類似，第三季毛利率從去年同期的 35.8% 下降至 29.7%，主要原因是銷售組合不利，導致平均售價下降和生產成本增加。

Production costs in the quarter included $1.6 million of tariff expenses and $1.7 million of increased depreciation, which was primarily related to the Arroweye acquisition as well as the new Indiana production facility. SG&A expenses in the third quarter, including depreciation and amortization, increased approximately $1 million from the prior year, primarily due to acquisition and integration costs of $1.8 million and the inclusion of Arroweye operating expenses, partially offset by reduced employee performance-based incentive compensation and lower severance costs.

本季生產成本包括 160 萬美元的關稅支出和 170 萬美元的折舊增加，這主要與收購 Arroweye 以及新建的印第安納州生產設施有關。第三季銷售、一般及行政費用（包括折舊和攤提）比上年同期增加約 100 萬美元，主要原因是收購和整合成本 180 萬美元以及 Arroweye 營運費用的增加，部分被員工績效激勵薪酬減少和遣散費降低所抵銷。

Our tax rate for the quarter was 38%, which brought our year-to-date rate to 34%, higher than anticipated coming into the year, due primarily to nondeductible expenses related to the Arroweye acquisition. For the full year, we expect an effective rate between 30% and 35%.

本季我們的稅率為 38%，使年初至今的稅率達到 34%，高於年初的預期，這主要是由於與收購 Arroweye 相關的不可抵扣費用造成的。我們預計全年有效利率在 30% 到 35% 之間。

Net income increased 78% in the quarter as the prior year quarter included debt retirement costs related to the full redemption of our previous senior notes and replacement of our previous ABL revolving credit facility. Third-quarter adjusted EBITDA decreased 7% to $23.4 million and margins declined from 20.1% to 17.0% as the impact of higher sales was offset by unfavorable sales mix and tariffs.

本季淨收入增加了 78%，因為上一季包含了與我們先前全部贖回優先票據和更換先前 ABL 循環信貸安排相關的債務償還成本。第三季調整後 EBITDA 下降 7% 至 2,340 萬美元，利潤率從 20.1% 下降至 17.0%，因為銷售額成長的影響被不利的銷售組合和關稅所抵消。

Year-to-date results and variance explanations can be found on slide 9. Year-to-date variances generally reflect the same factors that impacted the third quarter with year-to-date reported sales also negatively impacted by the revenue recognition change implemented in the second quarter, which primarily affected the Prepaid segment.

年初至今的績效與差異解釋請見第 9 頁投影片。年初至今的差異通常反映了與第三季度相同的因素，年初至今的銷售額也受到第二季度實施的收入確認變更的負面影響，該變更主要影響了預付卡業務。

Prepaid sales decreased 5% through the first nine months on a reported basis, but increased 8%, excluding the accounting change. A reconciliation of the accounting change impact on sales can be found in the exhibits of our earnings press release.

以報告數據計算，前九個月的預付銷售額下降了 5%，但若不考慮會計變更的影響，則增加了 8%。有關會計變更對銷售額的影響的核對情況，請參閱我們獲利新聞稿的附錄。

Turning to segment results on slide 10. Income from operations for the Debit and Credit segment decreased for the quarter and year-to-date as sales growth, including the addition of Arroweye, was offset by lower gross margins and increased SG&A expenses, including the impact of additional headcount from the Arroweye acquisition. Debit and Credit gross margins were impacted by sales mix and higher production costs, including tariffs, which primarily impact the Debit and Credit segment and increased depreciation related to Arroweye, the new Indiana production facility, and other capital equipment purchases.

接下來請看第 10 頁的細分結果。由於銷售成長（包括收購 Arroweye）被較低的毛利率和增加的銷售、管理及行政費用（包括收購 Arroweye 帶來的額外人員影響）所抵消，借記卡和信用卡業務的營業收入在本季度和年初至今均有所下降。金融卡和信用卡毛利率受到銷售組合和較高生產成本（包括關稅）的影響，這主要影響借記卡和信用卡業務，以及與 Arroweye、新的印第安納州生產設施和其他資本設備採購相關的折舊增加。

Prepaid Debit segment income from operations decreased in the quarter and year-to-date due to decreased net sales. On a year-to-date basis, the decline was a direct result of the revenue recognition accounting change.

由於淨銷售額下降，預付借記卡業務的營業收入在本季和年初至今均有所下降。從年初至今來看，下滑是收入確認會計變更的直接結果。

Turning to the balance sheet, liquidity and cash flow on slide 11. Our cash flow generated from operating activities for the first nine months increased from $16.7 million last year to $19.9 million in the current year, driven by lower working capital usage. As we have discussed previously, 2025 has been a major investment year, including spending for our new Indiana production facility and other advanced machinery to support operating efficiency, capacity expansion, and new capabilities such as closed-loop prepaid. Year-to-date, our capital spending has increased almost $10 million compared to prior year, resulting in free cash flow of $6.1 million in the first nine months of this year, down from $12.5 million in the prior year.

接下來請看第 11 頁的資產負債表、流動性和現金流量。由於營運資金使用量減少，我們前九個月的營運活動產生的現金流從去年的 1,670 萬美元增加到今年的 1,990 萬美元。正如我們之前討論過的，2025 年是一個重要的投資年，包括為我們在印第安納州的新生產設施和其他先進設備進行投資，以支持營運效率、產能擴張和新的能力，例如閉環預付費。今年迄今為止，我們的資本支出比去年同期增加了近 1,000 萬美元，導致今年前九個月的自由現金流為 610 萬美元，低於去年的 1,250 萬美元。

Following the third quarter, as John mentioned, we finalized a strategic relationship with the Australian prepaid technology firm, Karta. This relationship also included an equity investment of $10 million to acquire 20% of the company, which is also backed by the Commonwealth Bank of Australia. For the investment, we paid $2.5 million in upfront cash with the remaining $7.5 million expected to be settled through performance of commercial arrangements as we work together to bring new digital technology to prepaid cards in the US market.

正如約翰所提到的，第三季結束後，我們與澳洲預付費技術公司 Karta 建立了策略合作關係。這項合作關係還包括向該公司投資 1,000 萬美元，收購其 20% 的股份，該公司也得到了澳洲聯邦銀行的支持。對於這項投資，我們預付了 250 萬美元現金，剩餘的 750 萬美元預計將透過履行商業安排來支付，因為我們將共同努力，把新的數位技術引入美國市場的預付卡。

Turning to the balance sheet. At quarter end, we had $16 million of cash, $47 million of borrowings on our ABL revolver, and $265 million of senior notes outstanding. As we mentioned last quarter, in July, we exercised an optional redemption feature on our 10% coupon senior notes and retired $20 million of notes at a redemption price of 103% of par value.

接下來看一下資產負債表。截至季末，我們有 1,600 萬美元現金，ABL 循環信貸額度借款 4,700 萬美元，以及 2.65 億美元的未償還高級票據。正如我們上個季度提到的，7 月份，我們行使了票面利率為 10% 的優先票據的贖回權，以票面價值的 103% 的贖回價格贖回了 2000 萬美元的票據。

We have utilized our $100 million ABL facility to help fund the Arroweye acquisition and the senior notes redemption and plan to pay down borrowings over time as we generate cash flow. Our net leverage ratio at quarter end was 3.6 times, which we also plan to work down as cash flow is generated.

我們利用 1 億美元的 ABL 融資額度來幫助資助 Arroweye 的收購和高級票據的贖回，並計劃隨著現金流的產生逐步償還借款。本季末我們的淨槓桿率為 3.6 倍，隨著現金流的產生，我們也計劃逐步降低這一比率。

Before we move on to our 2025 outlook, we have provided the latest US cards and circulation trends from Visa and Mastercard on slide 12. For the three years ended June 30, cards in circulation in the US increased at a 7% CAGR. Large issuers have continued to report card and account growth in their latest earnings reports, which indicate card issuance remains healthy.

在我們展望 2025 年之前，我們在第 12 頁幻燈片中提供了 Visa 和 Mastercard 的最新美國信用卡和流通趨勢。截至 6 月 30 日的三年間，美國流通中的銀行卡年複合成長率為 7%。大型發卡機構在最新的獲利報告中繼續報告信用卡和帳戶成長，這表明信用卡發行依然保持健康。

I will now turn to our 2025 outlook on slide 13. We have updated our 2025 outlook to reflect sales mix in our Debit and Credit segment and timing of orders in our Prepaid segment. Our net sales outlook is now low-double-digit to low-teens growth, which compares to low-double-digit to mid-teens growth in our prior outlook.

接下來，我將在第 13 頁介紹我們對 2025 年的展望。我們已更新 2025 年展望，以反映金融卡和信用卡業務的銷售組合以及預付卡業務的訂單時間。我們現在的淨銷售額預期為兩位數低段到十幾段的成長，而我們先前的預期為兩位數低段到十幾段的成長。

Adjusted EBITDA outlook is now flat to low-single-digit growth, down from our previous range of mid- to high-single-digits due to the margin impact of sales mix trends. Our current outlook reflects existing tariff rates and does not reflect potential impacts from the proposed semiconductor chip tariffs, which have not been enacted and details on implementation timing and exemption criteria remain unclear.

由於銷售組合趨勢對利潤率的影響，調整後的 EBITDA 預期目前為持平或低個位數成長，低於我們先前預測的中高個位數成長範圍。我們目前的展望反映了現有的關稅稅率，並未反映擬議的半導體晶片關稅可能帶來的影響，這些關稅尚未生效，實施時間和豁免標準等細節仍不清楚。

I'll now turn the call back to John for some closing remarks.

現在我將把電話轉回給約翰，請他做些總結發言。

Thanks, Jeff. Turning to slide 14 to summarize before we open the call for Q&A. The third quarter was largely what we expected with good sales contribution from Arroweye and good demand from our core solutions, while we still face margin pressures, which we are working to counter. We have updated our outlook, and we expect strong sales and adjusted EBITDA growth in the fourth quarter.

謝謝你，傑夫。接下來請看第 14 張投影片進行總結，之後我們將開放問答環節。第三季基本上符合我們的預期，Arroweye 的銷售貢獻良好，核心解決方案的需求也不錯，但我們仍然面臨利潤率壓力，我們正在努力應對。我們已更新了預期，預計第四季度銷售額和調整後 EBITDA 將實現強勁成長。

We continue to execute our strategy and are pleased to have transitioned our new Indiana production facility and advanced multiple long-term growth initiatives, including entry into closed-loop prepaid and our agreement to bring new prepaid chip-enabled technology solutions to the US prepaid market with Karta. We have faced many challenges this year, but we are confident in our core business growth moving forward and are excited to see many of our growth initiatives begin to yield results.

我們繼續執行我們的策略，並很高興地宣布，我們位於印第安納州的新生產設施已完成過渡，並推進了多項長期增長計劃，包括進入閉環預付市場，以及我們與 Karta 達成協議，將新的預付晶片技術解決方案引入美國預付市場。今年我們面臨了許多挑戰，但我們對核心業務未來的成長充滿信心，並很高興看到我們許多成長的舉措開始取得成效。

Operator, we will now open the call up for any questions.

接線生，現在我們將開放通話，接受大家的提問。

(Operator Instructions) Andrew Scutt, Roth Capital Partners.

（操作說明）Andrew Scutt，Roth Capital Partners。

First one for me is just if you could provide some more details around the impact of tariffs. I know this is tough for you guys to parse out. But following your previous call, you guys said you expected around $5 million in charges on the year. I believe it was a $1 million headwind to EBITDA in the second quarter. So any further details around that in the third quarter would be great.

我的第一個問題是，您能否提供更多關於關稅影響的細節？我知道這對你們來說很難理解。但根據你們上次的通話，你們表示預計今年的費用約為 500 萬美元。我認為這給第二季的 EBITDA 帶來了 100 萬美元的負面影響。所以，如果第三季能提供更多相關細節就太好了。

Morning, Andrew. I'll let Jeff cover that.

早安，安德魯。這件事就交給傑夫來處理吧。

Hey, Andrew. Yeah, we said $1 million, you're right, in Q2. In Q3, we mentioned about $1.6 million of tariffs. So -- and we did think in Q2, it's going to be closer to $5 million. China -- we did get a reduction in the China rate to 45% recently. And just -- we're still trying to push back every single day on our suppliers to some of that tariff impact. So we're actually thinking more in the range of $4 million to $5 million now; we're hoping it's closer to $4 million.

嘿，安德魯。是的，我們說的是100萬美元，你說得對，是第二季。第三季度，我們提到了約 160 萬美元的關稅。所以——我們當時認為第二季會接近 500 萬美元。中國——我們最近確實將中國的稅率降至了 45%。而且──我們每天都在努力向供應商施壓，以減輕關稅的影響。所以我們現在考慮的金額實際上在 400 萬到 500 萬美元之間；我們希望最終金額能接近 400 萬美元。

But every day, we're trying to push back on our suppliers to try to reduce the impact to us. (multiple speakers) And then I would just say that started in April. I'm not -- we're not giving color for next year, but obviously, that would probably grow a little bit into 2026 just because you got a full-year impact next year.

但我們每天都在努力向供應商施壓，以減少對我們的影響。（多人發言）然後我只想說，這件事是從四月開始的。我不會——我們不會透露明年的具體情況，但很顯然，這種情況可能會持續到 2026 年，因為明年會產生一整年的影響。

Yeah. Understood. And I appreciate the color. Second one for me, and then I'll hop back in the queue. Your Prepaid segment, you guys have added a bunch of additional programs now, healthcare, some payroll cards and whatnot. So previously, analyzing the segment, it was just gift cards. So can you give us the puts and takes in Prepaid among your different sales verticals?

是的。明白了。我很喜歡這個顏色。這是我第二個，然後我再重新排隊。你們的預付費業務部門現在新增了許多項目，例如醫療保健、一些薪資卡等等。之前分析這個細分市場時，只發現了禮品卡。那麼，您能否介紹一下貴公司不同銷售管道中預付費業務的投入和收益狀況？

Yeah. Let me cover the overview of what we're doing in Prepaid because it has changed a little bit, and Jeff can give any color on the numbers for Q3 and the rest of the year. Our Prepaid business, just as a reminder, we're the market leader in prepaid packaging solutions in the United States.

是的。讓我來概述一下我們在預付費業務方面所做的工作，因為它發生了一些變化，傑夫可以就第三季和今年剩餘時間的具體數據給出更詳細的說明。再次提醒大家，我們的預付業務是美國預付包裝解決方案的市場領導者。

And so as fraud rises within the prepaid market, the complexity of what our customers are asking for, what we're innovating with our customers continues to rise. That's actually created lumpiness in orders, I would say, for this year within our open-loop packages. But that's a good thing. It creates greater value over the longer term of what we're producing.

因此，隨著預付費市場詐欺行為的增加，我們的客戶提出的要求以及我們與客戶共同進行的創新也變得越來越複雜。實際上，這導致了今年我們開放式套餐訂單的波動。但這其實是好事。從長遠來看，它能為我們生產的產品創造更大的價值。

And then we're also investing in closed loop, which is operational. We expect to have orders shipping in Q4. And that's, again, because fraud impacts are bleeding into the closed loop side of the prepaid market.

此外，我們也正在投資閉環系統，該系統已經投入運作。我們預計訂單將在第四季出貨。這再次表明，詐欺的影響正在蔓延到預付費市場的封閉環節。

But additionally, I think you saw the announcement a couple of days ago, we issued a press release. We talked about it this morning on the call. We invested in a innovative technology company based in Australia. They're a program manager.

此外，我想你們幾天前也看到了公告，我們發布了一份新聞稿。我們今天早上在電話會議上討論過這件事。我們投資了一家總部位於澳洲的創新科技公司。他們是專案經理。

They're backed by the largest bank in Australia as well; that's another one of their big investors. And they've got unique technology that we're working with our program managers to actually chip-enabled payment cards in the prepaid space. We're already piloting that with a large national retailer in the US.

他們也得到了澳洲最大銀行的支持；那也是他們的主要投資者之一。他們擁有獨特的技術，我們正在與專案經理合作，將這項技術應用於預付卡領域，實現晶片支付。我們目前已在美國一家大型全國性零售商處進行試點。

So you look at the prepaid space, you look at our unique position to both lead in the packaging side, lead in our unique chip capabilities, and we believe our strategic initiatives entering into closed loop as well as expanding our capabilities in the open loop side are going to benefit us over the longer term. So we're happy about the prepaid performance, but definitely this year, a little bit lumpy on the revenue side.

所以，縱觀預付費領域，我們擁有獨特的優勢，既在封裝方面處於領先地位，又在獨特的晶片能力方面處於領先地位。我們相信，我們進入閉環領域的策略性舉措以及擴展我們在開環領域的能力，都將使我們長期受益。所以我們對預付費業務的表現感到滿意，但今年的收入方面確實有些波動。

Yeah. And Andrew, I'll just add a little bit color on the revenue side. Last year, there was a lot of -- our clients were looking to increase the security of the packaging. So we did a lot of innovation. We actually rolled out some new security measures, fraud prevention packaging last year.

是的。安德魯，我再補充一點關於收入方面的狀況。去年，我們的客戶有很多需求——他們希望提高包裝的安全性。所以我們做了很多創新。去年我們推出了一些新的安全措施，例如防詐騙包裝。

And you saw a pretty really strong growth here last year, especially in the second half. So as John said, it can be a little bit lumpy, but we do have pretty strong comps to grow over this year. I mean, we still feel really good with the Prepaid business that does, especially in the second half, have some strong comps year-over-year.

去年，尤其是下半年，這裡出現了非常強勁的成長。正如約翰所說，情況可能會有些波動，但我們今年確實有相當強勁的同業比較可以推動成長。我的意思是，我們仍然對預付費業務感到非常滿意，尤其是在下半年，這項業務的同比增速強勁。

Great. Well, appreciate the color. Cards certainly sounds like an exciting opportunity. And I'll jump back in the queue.

偉大的。嗯，欣賞一下這顏色。撲克牌聽起來確實是一個令人興奮的機會。那我再重新排隊。

(Operator Instructions) Jacob Stephan, Lake Street Capital Markets.

（操作說明）Jacob Stephan，Lake Street Capital Markets。

First, I just wanted to ask on the Visa and Mastercard data, obviously, the graph in your chart or in your presentation shows prepaid actually decreasing but credit being up. And most recent guidance here talks about timing of prepaid shipments.

首先，我想問一下關於 Visa 和 Mastercard 的數據，很明顯，你們圖表或簡報中的圖表顯示預付卡的實際成長率為 100%，而信用卡的成長率為 100%。而最新的指導意見則談到了預付貨款的出貨時間。

I guess maybe help us think through what the timing in prepaid -- what that portion of guidance was? And maybe do you expect that in 2026? Or are these pushed out indefinitely?

我想或許可以幫助我們思考一下預付費的時機──那部分指導意見具體指的是什麼？你預計到 2026 年會是這樣嗎？還是這些計劃會被無限期延後？

Hey, Jacob. Let me comment on that first, and then I'll let Jeff add color. The credit side actually went up quarter-to-quarter. The debit side, not prepaid actually reduced a little bit. That said, it's one quarter. You look back over the last three years, your CAGR is still 7%.

嘿，雅各。我先就此發表一下看法，然後再讓傑夫補充細節。信貸方面實際上環比成長。借記卡（非預付卡）的實際支出反而略有減少。也就是說，這只是四分之一。回顧過去三年，你的複合年增長率仍然是 7%。

What we're seeing within our markets, what we're hearing from banks opening new accounts, we continue to see growth. So we're pretty confident on card growth and what we hear from our customers, we're still seeing growth in new programs coming on board. This year, our card volumes are actually up, so we're winning share. So winning share in a growing market, we're happy about it.

從我們的市場情況來看，從銀行開設新帳戶的情況來看，我們看到成長動能持續強勁。因此，我們對信用卡業務的成長相當有信心，而且從客戶那裡我們也了解到，新項目的推出仍在持續成長。今年，我們的信用卡交易量實際上有所增長，因此我們正在贏得市場份額。在不斷增長的市場中贏得份額，我們對此感到高興。

Yeah. And I would just say, I don't think that that chart is correlated necessarily to delay in orders. Just as John mentioned, the prepaid ordering can be lumpy at times. And if something does get pushed off to early 2026, it would be more delayed to early 2026, not necessarily going away.

是的。我想說的是，我不認為該圖表與訂單延遲有必然的相關性。正如約翰所提到的那樣，預付費訂單有時會出現問題。如果某項活動真的延後到 2026 年初，那也只是延後到 2026 年初，並不一定會消失。

So it's really -- we're just talking about the timing. Is it going to hit really in December? Is it going to hit in January, February? That's more of what we're talking about.

所以實際上──我們只是在討論時機問題。真的會在12月來襲嗎？會在一月還是二月爆發？這才是我們真正想討論的。

Okay. That's helpful. And then also wanted to touch on Karta a little bit. I guess my perception of them is that they're a credit card provider. I know they have a travel -- a premium travel card launch, but help us think through the SafeToBuy technology. What -- overall, I know fraud preventative packaging has been a big growth driver for you. But what is adding the chip capability to -- for you in prepaid along with the fraud preventative packaging?

好的。那很有幫助。然後我還想稍微談談卡塔。我印像中的他們應該是信用卡提供者。我知道他們推出了一款高階旅行卡，但請幫我們了解一下 SafeToBuy 技術。總的來說，我知道防詐騙包裝一直是你們公司成長的重要驅動力。但是，對於預付費用戶來說，在防詐騙包裝的基礎上增加晶片功能意味著什麼呢？

Well, let me cover the first part. I think you're mixing them up with another company that has a similar name based in Southern Florida. That's a different company than we're investing in. This company is based in Australia. They're a prepaid program manager there.

好，讓我先介紹第一部分。我認為你把它們和另一家位於佛羅裡達州南部、名稱相似的公司搞混了。那和我們投資的公司是兩家不同的公司。這家公司總部位於澳洲。他們是那裡的預付費專案經理。

But just to touch on why the capability is unique and why it will benefit our markets as well as our company over the long term, they have the ability to essentially enable chips in a payment card and create a payment card where the PAN, the 16-digit number, is constantly changing.

但為了說明這項功能為何獨特，以及它為何能從長遠來看惠及我們的市場和公司，他們有能力在支付卡中啟用晶片，並創建一種支付卡，其中 PAN（16 位數）會不斷變化。

So your fraud and ability to pull that 16-digit number off of the card, deal it, if you will, significantly reduced through putting their technology onto a chip into a payment card. Why that's good for our market is because the fraud volumes, the amount of fraud has significantly increased in the prepaid market; it hurts the reputation of our customers, hurts the reputation of those retailers out there, the 100,000-plus points of distribution that have to deal with it every day.

因此，透過將他們的技術應用到支付卡的晶片上，大大降低了詐欺行為以及從卡上獲取 16 位數的能力。這對我們的市場來說是好事，因為預付卡市場的詐欺數量顯著增加；這損害了我們客戶的聲譽，損害了零售商的聲譽，以及每天不得不處理此類詐欺的 10 萬多個分銷點的聲譽。

But additionally, if you think about our debit and credit market and you think about the transition in our debit and credit market from mag stripe to chip-enabled cards, and now, fully to contactless, the value grows. And that's exactly what we're starting to see hints of in the prepaid market, and we want to be on the front end of it. So that's why we made this investment.

此外，如果你想想我們的金融卡和信用卡市場，想想我們的金融卡和信用卡市場從磁條卡到晶片卡，再到現在的完全非接觸式支付的轉變，它的價值就增長了。而這正是我們在預付費市場開始看到的跡象，我們希望走在時代的前端。所以這就是我們進行這項投資的原因。

We have a right to buy a majority share of the company if we choose to. They're great partners of ours. And like I said, we're already piloting this with a large national retailer. So to the extent that this is successful and to the extent that the market moves more towards chips and prepaid payment cards, not only does it help our customers, help our market, but it also rises the value of what we're selling into that prepaid market and benefits our prepaid business.

我們有權選擇是否收購該公司的大部分股份。他們是我們非常棒的合作夥伴。正如我所說，我們已經在與一家大型全國性零售商進行試點。因此，如果這項技術取得成功，並且市場更多地轉向晶片和預付支付卡，這不僅有助於我們的客戶和市場，而且還會提高我們在預付卡市場銷售的產品的價值，從而使我們的預付卡業務受益。

Very helpful. Maybe just a quick last one. Adding the chip to prepaid, how significantly does that change the ASP?

很有幫助。或許就最後快速地問一個吧。在預付費系統中加入晶片，會對平均售價產生多大影響？

Yeah, I wouldn't comment on the exact ASPs, but just for context, if you're on the debit and credit side, mag stripe card versus a chip-enabled card, I mean, the chip-enabled card is generally more than two times the cost. It's a little bit different on the prepaid side, but the price is higher. We'll try to put more pen to paper and give more color as we give more color on how the pilot is going when we released in March.

是的，我不會評論特定的平均售價，但就背景而言，如果你是藉記卡和信用卡用戶，磁條卡和晶片卡相比，我的意思是，晶片卡的成本通常是磁條卡的兩倍以上。預付費方面略有不同，但價格較高。我們將嘗試多寫些東西，多提供些細節，就像我們在三月發布試播集時那樣，提供更多細節來說明試播集的進展。

Peter Heckmann, DA Davidson.

Peter Heckmann，DA Davidson。

I had some follow-ups. In terms of thinking about the potential for tariffs on semiconductors and thinking about your suppliers and whether or not they have manufacturing facilities in the US. I guess, any additional thoughts and then how you're positioned? How you might be positioning inventories ahead of this? And potentially, depending upon the timing and whether it's retroactive or a date in the future, do you think there's the potential to pull forward some larger projects ahead of a tariff implementation?

我還有一些後續問題。考慮到半導體可能面臨的關稅問題，以及你的供應商是否在美國設有製造工廠。我想，您還有什麼其他想法嗎？以及您的立場是什麼？您打算如何提前佈局庫存？而且，根據時機以及是否具有追溯效力或針對未來某個日期，您認為是否有可能在關稅實施之前提前一些較大的項目？

Yeah. Fair question. Everything we hear today in the market about semiconductor, we thought we would hear something late summer. It hasn't happened. The administration really hasn't come out with anything new in the last several months that we've been aware of.

是的。問得好。我們原本以為會在夏末聽到一些關於半導體產業的消息，但現在市場上卻充斥著各種各樣的消息。這事還沒發生。據我們所知，政府在過去幾個月並沒有推出任何新措施。

Our providers are pretty confident that if there was a tariff that they would be exempt just because of their -- like you said, their production facilities in the US and their investment in the US. No one can be certain at this point. We also know if semiconductor tariffs do go into effect, it's going to affect the entire industry equally.

我們的供應商非常有信心，即使徵收關稅，他們也會因為——就像你說的——在美國的生產設施和在美國的投資而獲得豁免。目前誰也無法確定。我們也知道，如果半導體關稅生效，將會對整個產業產生同等的影響。

So we're aware of that. We're really hoping either they're exempt or it doesn't impact the industry. But we'll just see. We're just waiting like everyone else. So we don't really have any more color than we did three months ago.

所以我們知道這一點。我們真心希望他們能夠獲得豁免，或者這件事不會對產業造成影響。但我們拭目以待。我們和其他人一樣，都在等待。所以，我們現在的色彩水平和三個月前相比並沒有增加。

But with that said, if you look at our balance sheet, we did we did have a high inventory balance. So we've been buying chips at a little bit higher rate than we normally would have, just knowing what could potentially happen. I mean that could help us for a little bit of time if we had a higher balance of inventory. It's not completely sustainable, but it would help us in the short term.

但話雖如此，如果你看一下我們的資產負債表，你會發現我們的庫存餘額確實很高。所以，考慮到可能發生的情況，我們購買晶片的速度比平常略高一些。我的意思是，如果我們庫存充足，那或許能幫我們暫時緩解一些問題。這雖然不完全可持續，但短期內會對我們有幫助。

So we have been purchasing chips at a higher rate so far this year. We do expect just the timing of chips, that that inventory balance may come down a little bit in Q4. But we do have a higher-than-average amount of chips on hand right now. So we've been taking a little bit aggressive approach on keeping that balance relatively high. (inaudible)

所以今年到目前為止，我們一直以較高的速度採購晶片。我們預計晶片的到貨時間可能會導致第四季庫存餘額略有下降。但我們目前手頭上的籌碼數量確實高於平均水平。因此，我們一直採取比較積極的方式來保持這一平衡在較高水平。（聽不清楚）

Sorry, yeah, I was on mute. I was going to say, just as regards to the instant issuance business, in terms of thinking about other use cases there outside of the financial institution channel, you talked about a public sector customer last quarter. Any additional thoughts there in terms of opportunities to roll that out? And remind us, that subset of revenue for 2025, would you expect Card@Once grows faster than the overall company?

抱歉，是的，我當時是靜音的。我本來想說，就即時發行業務而言，在考慮金融機構管道之外的其他用例時，您上個季度談到了公共部門客戶。關於如何推廣這項技術，您還有其他想法嗎？另外，請提醒我們，在 2025 年，Card@Once 的這部分收入預計會比公司整體成長更快嗎？

Yeah. Card@Once, our instant issuance business, is growing faster. Just as a reminder, Pete, it's a higher-margin business than the rest of our business. It goes hand-in-hand with our other digital solutions. And the value proposition there is really the solution, the technology, and the fact that we're integrated to most all processors and cores that support banks across the payments ecosystem.

是的。我們的即時發卡業務 Card@Once 成長速度更快。提醒一下，皮特，這項業務的利潤率比我們其他業務高。它與我們的其他數位化解決方案相輔相成。而真正的價值主張在於解決方案、技術，以及我們與支付生態系統中幾乎所有支援銀行的處理器和核心的整合這一事實。

That's the exact same value proposition that we're using to win with our other digital solutions where we've been signing a number of issuers and growing, again, with higher-margin products. But our other digital solutions are fairly small right now.

這與我們在其他數位解決方案中取得成功所採用的價值主張完全相同，我們已經與許多發行商簽約，並且再次透過更高利潤的產品實現了成長。但我們其他的數位化解決方案目前規模還比較小。

That said, our instant issuance business, we're on track to have a record year. You're exactly right, there's a value proposition not only in the FI space, but in any location where you'd want to issue a payment card on spot. And so we are continuing to push to expand that market and diversify. And we're happy with our instant issuance business performance. They've done a great job this year, and we expect them to have a record year and then look forward to what they're going to do in coming years.

也就是說，我們的即時發卡業務預計將迎來創紀錄的一年。您說得完全正確，這不僅在金融機構領域具有價值，而且在任何您想要現場發行支付卡的地方都具有價值。因此，我們將繼續努力擴大市場並實現多元化發展。我們對即時發卡業務的表現感到滿意。他們今年表現出色，我們期待今年能創下紀錄，並期待他們在未來幾年取得更大的成就。

And just as a reminder, we said this in the call, our instant issuance business historically has been roughly 10% of the business. That's a little bit more now. Our digital solutions that we're adding continue to add to our broader digital solution suite, if you will.

再次提醒大家，我們在電話會議中說過，我們的即時發卡業務歷來約佔總業務的 10%。現在多了一些。我們正在不斷增加的數位化解決方案，也進一步豐富了我們更廣泛的數位化解決方案套件。

And so we plan more on the performance, more metrics, if you will, when we release in March going into next year. So I look forward to sharing more on those businesses and especially given the value they create for CPIs (inaudible).

因此，我們計劃在明年三月發布新版本時，更加重視效能，更多指標（或說更多衡量標準）。因此，我期待與大家分享更多關於這些企業的信息，特別是考慮到它們為 CPI（聽不清楚）創造的價值。

Thank you. As there are no further questions in the queue, I would now like to turn the call over back to John Lowe for closing remarks.

謝謝。由於隊列中沒有其他問題，我現在想把電話轉回給約翰·洛，請他做總結發言。

Thanks, operator. As we head into the holiday season, I want to thank all of our CPI employees for their contributions and dedication to the company and our customers and wish everyone a safe and happy holiday. Thank you all for joining our call this morning, and we hope you have a great day.

謝謝接線生。值此佳節將至之際，我要感謝所有 CPI 員工對公司和客戶的貢獻和奉獻，並祝大家節日快樂，平安健康。感謝各位今天上午參加我們的電話會議，祝您今天過得愉快。

Thank you for joining the call today. You may now disconnect.

感謝您今天參加電話會議。您現在可以斷開連線了。