Pitney Bowes Inc.

Good day and welcome to the Pitney Bowes second quarter 2026 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Alex Brown, Director of Investor Relations. Please go ahead.

Good morning, and thank you for joining us. Included in today's presentation are forward-looking statements about our future business and financial performance. Forward-looking statements involve risks and uncertainties that could cause actual results to be materially different from our projections. More information about these items can be found in our earnings press release, our Form 10-K, and other reports filed with the SEC that are located on our website at www.pb.com and clicking on Investor Relations. Please keep in mind that we do not undertake any obligation to update forward-looking statements as a result of new information or developments. Also included in today's presentation are non-GAAP measures. specifically EBIT, EBITDA, EPS, and Free Cash Flow are all on an adjusted basis. You can find a reconciliation for these items to the appropriate gap measures in the tables attached to our press release. We've also provided a slide presentation and spreadsheet with historical segment information on our website. With that, I'd like to turn the call over to Kurt.

Good morning, and thank you for joining us today. Second quarter results built on first quarter momentum and give us confidence to raise our adjusted EBIT, EPS and free cash flow guidance. I will now cover a few key highlights from the quarter. PreSort continues to win new business and maintains a robust sales pipeline. That said, higher transportation costs materially impacted PreSort's second quarter profitability. Moving to Centec, continued operational improvements led to higher margins despite increased spending on future growth. At Pitney Bowes Bank, Steve and his team have made significant progress on building out our infrastructure, which will support future growth. Also, the bank is now originating loans through three pilot programs which leverage and enhance existing client relationships. Moving to capital allocation, we reduced debt by more than $200 million over the past four months and pushed out our nearest maturity to March of 2029. Having reduced debt by approximately $55 million year-to-date, we are once again in a solid position to allocate capital opportunistically. Additionally, last month, we initiated the second phase of our strategic review. Given the nature of the review, we will not be commenting on potential outcomes or timeline on this call. The highlights I just covered reflect the momentum we continue to build toward achieving profitable organic growth in the coming years. Finally, I would like to thank my leadership team and our more than 6,000 team members for their hard work and dedication, which drove our strong second quarter results. And with that, we will open the call for questions.