CPI Card Group Inc.

you for questions. Please press star followed by the number one on your touchtone phone. And now, I would like to turn the call over to Mike Salib, CPI's Head of Investor Relations. Sir, please go ahead.

Thanks, Operator. Welcome to the CPI Card Group Third Quarter 2025 Earnings Webcast and Conference Call. Today's date is November 4th, 2025, and on the call today from CPI Card Group are John Lowe, President and Chief Executive Officer, and Jeff Hochstadt, Chief Financial Officer. 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. For 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. 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, the most directly comparable GAAP measures are included in the press release and slide presentation we issued this morning. 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. 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 three. After our remarks, we will open the call for questions. We can start on slide four, and I'll turn the call over to John.

Thanks, Mike, and good morning, everyone. As we come closer to wrapping up the year, we're going to spend some time updating you on our strategic initiatives, where we are making great progress, growing our core businesses, and diversifying, including in our digital solutions. But first, let me touch on the highlights of our third quarter performance. 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 ROI continued to perform well. In our Debit and Credit segment, We believe we gained market share as contactless card volumes increased nicely. Card revenue, though, was impacted by a mixed 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. Overall, sales increased 11% for the quarter due to the addition of ROI 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. 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 airwise synergies, and general overhead cost management. We have already attained 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. For 2025, we have updated our four-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. 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. We still expect strong year-on-year growth in the fourth quarter for both net sales and adjusted EBITDA, but 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. Our vision and strategy can be seen on slide five. 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 six. 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 dividend credit portfolio to drive share gains and do so even more efficiently. We are continuing to expand and cross-sell our ROI solutions and are very excited about the initial progress and interest from new and existing customers. 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 U.S. payments ecosystem continues to drive our share growth and is starting to show realization in our other digital solutions too. 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. Healthcare payment card expansion is also progressing. We 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. 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 OpenLoop and are in discussions with several potential new customers. As I mentioned before, complexity continues to rise for OpenLoop packages, which not only further solidifies our position as a market leader, but also benefits our go-to-market plans for closed-loop. And our most recent expansion initiative builds on this growth in prepaid complexity, as we have entered into a strategic relationship with CARTA, an Australia-based prepaid program manager and digital technology provider. We will be CARTA's exclusive US supplier of its digital card validation solution, producing contactless prepaid cards with chip technology, embedding CARTA's safe-to-buy applet. CARTA's solution eliminates the need for data to be printed on cards, significantly reducing the risk of prepaid fraud. 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. We are already piloting the solution with a large national retailer in the U.S. and look forward to further developing our relationship with Carta. 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. I will now turn the call over to Jeff to cover the third quarter results and 2025 outlook in more detail.