Pitney Bowes Inc.

Good morning and welcome to Pitney Bowes' third quarter 2026 earnings conference call. Today's call will include remarks by Pitney Bowes Management followed by a question and answer session. In order to ask a question, please press the star key followed by the number one on your touchtone phone at any time. I will now turn the call over to Alex Brown, Assistant Treasurer and Director, 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 can 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 by 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 reconciliations for these items to the appropriate GAAP measures in the tables attached to our press release. We have also provided a slide presentation and a spreadsheet with historical segment information on our website. With that, I'd now like to turn the call over to Kurt. Good morning and thank you for joining us today.

We continue to deliver strong results in the third quarter with year-over-year improvements in EPS, adjusted EBIT, and adjusted free cash flow despite our increase in investment and growth. Our results in Q3 and the start of Q4 have given us confidence to up the midpoints of our revenue and adjusted free cash flow guidance range. Now I'd like to quickly address our five key strategic priorities. Presort picked up significant volume late in the quarter as a result of PCI's exit from the market. These volumes will create a year-over-year tailwind over the next four quarters, but I also believe this exit is further evidence that the industry margins are near a cyclical low and that more rational industry pricing is likely in the near future. Regarding our CENTEC segment, we were able to achieve higher margins despite increased growth in focused investment thanks to continued cost discipline. That said, the previously mentioned termination of a non-core contract during Q4 will create a headwind for this business during 2027. Moving to Pitney Bowes Bank, we continue to invest in technology and infrastructure to support future lending platforms, and all three pilot programs continue to make progress, particularly our logistics lending platform. With respect to capital allocation, We completed a tender offer for $46 million worth of our long-dated debt at a discount to par and also reduced our Term Loan B interest rate by 75 basis points through a repricing. Finally, our strategic process has entered the external review phase. As mentioned at the start of our last call, we will not answer questions related to the process, but will provide updates as appropriate. In summary, we executed well across all of our strategic priorities and momentum continues to build as we focus on achieving profitable revenue growth by the end of 2028. As always, I will end the call by thanking the exceptional team of more than 6,000 Pitney Bowes employees that I have the pleasure of working with. The results we are delivering and the momentum that we are building is entirely thanks to their hard work and dedication. With that, let's open the call to questions.