Cimpress（CMPR）2027年度第1四半期決算説明会：EBITDA低下もガイダンスを維持

シンプレス（NASDAQ: CMPR）は2027年度第1四半期決算で増収を記録したものの、製造立ち上げコストや関税、オーガニック成長の減速が響き、調整後EBITDAは減少しました。経営陣は通期見通しを維持する一方、売上回復への依存を抑えるためコスト削減を加速しています。

主要なポイント

• 売上高は9億3,400万ドルに達し、前年同期比8%増（報告ベース）となりました。一方、為替影響を除くオーガニック成長率は2%となり、経営陣の予想を下回りました。
• 調整後EBITDAは9%減少して8,980万ドルとなりました。これは主に、北米における製造立ち上げコストの増加、関税や税金、エネルギー関連コストの上昇によるものです。
• 営業キャッシュフローは390万ドル増加し、合計で2,890万ドルとなりました。調整後フリーキャッシュフローは850万ドル改善しましたが、依然として930万ドルの流出となりました。
• シンプレスは2027年度の業績予想を維持し、少なくとも7%の報告ベース売上成長、少なくとも3%の為替影響を除くオーガニック成長、少なくとも5億2,000万ドルの調整後EBITDA、および約2億ドルの調整後フリーキャッシュフローを見込んでいます。
• 経営陣は、オーガニック成長の鈍化に対する「保険」としてコスト削減を加速させています。利益およびキャッシュフローの改善は、2027年度後半に偏ると予想されています。
• 当四半期末の純レバレッジ倍率は3.2倍（直近12ヶ月EBITDA比）となりました。同社は引き続き、2027年度末までに約2.5倍、2028年度末までに2.0倍を大幅に下回ると予想していますが、これは資本配分の決定に左右されます。

主要財務データ

調整後EBITDAには、590万ドルの製造立ち上げ費用の増加、420万ドルの関税費用、180万ドルの価格転嫁控除後のエネルギー関連投入コストの上昇、および140万ドルの前期報酬に関する一時的利益の剥落による影響が含まれています。これらの圧迫要因は、750万ドルの過去期間に関連するIEEPA関税の還付金によって一部相殺されました。

事業および業績の動向

VistaPrintは、為替変動の影響を除くオーガニック成長率2%を達成しました。これは商用製品、アパレル、マーケティング資材、パッケージングに支えられました。四半期末の受注残高は高水準にあり、経営陣はこれが第2四半期の売上高をサポートすると見込んでいます。

VistaPrintの顧客当たり変動粗利益は7%増加した一方、年間で650ドルを超える売上をもたらす顧客からの変動粗利益は15%増加しました。経営陣によると、従来型製品や低価値顧客セグメントの低迷が引き続き相殺要因となっているものの、粗利益の構成比は顧客生涯価値（LTV）の高い顧客へとシフトし続けているとのことです。

オーガニック検索およびアフィリエイト経由の受注は、前年同期比でVistaPrintの最も低調なチャネルとなりました。経営陣は理由として、パフォーマンスマーケティング配分の変更、グーグルの「AI Overviews」、オーガニック検索から有料検索へのトラフィックの移行、顧客の検索・発見における大規模言語モデル（LLM）の役割拡大などを挙げました。AIを活用したオーガニック検索・発見は、規模はまだ小さいものの、VistaPrintで最も急成長しているチャネルであると説明されています。

Upload & Printの売上高は、報告ベースで23%増加し、オーガニックベースで4%増加しました。欧州の需要は軟調で、リセラーチャネルは引き続き圧迫に直面しました。PrintBrothersは28%の売上増加を報告し、The Print Groupは13%拡大しました。

「その他すべての事業」セグメントは17%増加し、BuildASignおよびCanvaとの提携が牽引しました。シンプレスは、Canvaとの関係は急速に拡大しているものの、連結業績に対してはまだ重大な影響を与えるものではないと説明しました。

BoxUpの外部売上高は16%増加した一方、他のシンプレス事業からのフルフィルメント売上高は2倍以上に拡大しました。シンプレスはまた、欧州、ペンシルベニア州、メキシコにおける新施設や新設備を通じて生産能力の拡張を継続しました。

最近行ったタックイン買収により、第1四半期売上高に6,000万ドル、取引費用控除後のEBITDAに350万ドルがもたらされました。経営陣は、統合および予想されるシナジー効果は順調に進んでいると述べました。

経営陣による業績見通し

シンプレスは2027年度について以下の業績見通しを維持しました：

• 報告ベースの売上高成長率：少なくとも7%
• 為替変動の影響を除くオーガニック売上高成長率：少なくとも3%
• 調整後EBITDA：少なくとも5億2,000万ドル
• 調整後フリーキャッシュフロー：約2億ドル

同社は引き続き、タックイン買収により2027年度の売上高に1億6,500万ドル〜1億7,500万ドル、当年度のEBITDAに1,800万ドル〜2,100万ドルが上乗せされると予想しています。為替のプラス影響として500万ドル〜1,000万ドルが見込まれ、当年度に計画されているコスト削減額は約2,500万ドルとなります。

経営陣は、製造の立ち上げコストやカナダによる新たな関税の影響が下半期に緩和すると予想しています。また、買収による寄与、コスト削減、製造の効率化も、2027年度の残りの期間を通じて徐々に拡大していくと見込まれています。

2028年度について、シンプレスは引き続き以下を目標としています：

• 為替変動の影響を除くオーガニック成長率：4%〜6%
• 調整後EBITDA：少なくとも6億1,500万ドル
• 調整後フリーキャッシュフロー転換率：約45%（調整後EBITDAに対する割合）

経営陣は、ビスタプリントのコンシューマー向けカテゴリーにおける前年同期比での減少予想や、ナショナル・ペンでのダイレクトメール広告の縮小を反映し、第2四半期の売上高成長率はあらかじめ低く計画されていたと注意を促しました。

リスクと注視点

• 第1四半期の為替変動の影響を除くオーガニック成長率は2%にとどまり、経営陣の計画を下回りました。これにより、2027年度の目標達成に向けて、同社はさらなる施策の実行とコスト削減への取り組みを一層強化することが求められています。
• ビスタプリントは、名刺や一般消費者向け製品を含む従来型製品からの圧力に加え、検索や顧客獲得チャネルの変化に直面しています。
• ビスタプリントおよびUpload & Print全体において、欧州での売上動向はやや軟調でした。
• 製造の立ち上げコストと関税は、第2四半期においても前年同期比で引き続き大きな逆風となり、下半期に和らぐと予想されています。
• シンプレスは追加の値上げ措置を実施したものの、エネルギーコストや輸送費の高止まりが続く可能性があります。
• 経営陣は、第2四半期におけるビスタプリントのコンシューマー向け売上高が前年同期比で減少すると予想しており、ナショナル・ペンの広告縮小も季節的な成長の重荷になると見込んでいます。
• フランスは依然として重要な市場であり、一部で混乱が生じているものの、経営陣は現在の状況に基づき、この混乱が財務目標に重大な影響を及ぼすことはないと述べています。

Q&Aハイライト

VistaPrintの業績が経営陣の予想を下回った理由は何ですか？

経営陣は、売上成長の伸び悩み、欧州需要の軟化、オーガニック検索やアフィリエイト予約の減少、ならびに製造コスト、関税、エネルギーコストの上昇を指摘しました。また、VistaPrintの広告宣伝費も売上高比で100ベーシスポイントをわずかに上回る増加となりました。

構造的な逆風にもかかわらず、Cimpressはどのようにして業績予想（ガイダンス）を維持できるのですか？

経営陣によると、社内計画は公表しているガイダンスよりも高く設定されており、当初計画よりも早期かつ大幅なコスト削減を進めているとのことです。同社は、最終利益（ボトムライン）目標の達成を売上成長の加速に依存するつもりはありません。

Upload & PrintのEBITDAが一部の投資家の予想を下回ったのはなぜですか？

第1四半期の買収関連EBITDAは350万ドル（取引費用控除後）であり、質問で言及された600万ドルではありませんでした。その他の要因としては、200万ドル のキャッチアップ計上、約100万ドルのエネルギー関連コスト、および100万ドルをわずかに下回る同セグメント内でのマイナスの為替影響が挙げられます。

売却目的で保有されている資産は何ですか？

この残高は、セール・アンド・リースバック目的で売却手続きが進められているSAXOPRINTの施設を表しています。その公正価値は4,600万ドル（推定売却費用控除後）をわずかに上回っていました。

決算説明会トランスクリプト全文

決算説明会の完全なトランスクリプト

経営陣による説明

Meredith Burns

Welcome to the Cimpress Q1 FY '27 Earnings Call. I'm Meredith Burns, Vice President of Investor Relations and Sustainability. Thank you, everyone, for joining us. With us today are Robert Keane, Founder, Chairman and Chief Executive Officer; and Sean Quinn, EVP and Chief Financial Officer. We appreciate the time that you've dedicated to understand our results, commentary and outlook. This live Q&A session will last about 45 minutes or so and we will answer both pre-submitted and live questions. You can submit questions live via the questions and-answers box at the bottom left of the screen. Before we start, I'll note that in this session, we will make statements about the future. Our actual results may differ materially from these statements due to risk factors that are outlined in detail in our SEC filings and the earnings document we published yesterday on our IR website. We've also published non-GAAP reconciliations for our financial results on our IR website. We invite you to read them. And now I will turn things over to Robert.

Robert Keane

Thanks, Meredith, and thank you all for joining us today. As I noted in my letter to last night's earnings release, first quarter fiscal '27 financial results were below our expectations. That being said, we remain confident in the financial results we will deliver for the full fiscal year because, as we mentioned at the start of the fiscal year and as we reiterated at our investor day, we set our fiscal '27public guidance below the plan we are working toward internally. The first quarter has not changed our view that we will deliver that significant profit and cash flow growth in fiscal '27, and that the expansion will continue through fiscal '28and beyond. That said, the world is uncertain, and we are able to achieve deeper cost reductions because of the strong progress on the efficiency foundations which we have been working on for the past year.

So we are accelerating cost reduction measures as an insurance plan for meeting our financial goals. Put simply, we remain confident in our fiscal '27 guidance, and our board, our executives, and the leaders of our businesses and central teams are all aligned on that, and we all take seriously the guidance commitments we have made to our shareholders and debt holders. Now, let me spend some time on examples of the many areas of progress we are making and are excited about, consistent with the themes we laid out in our September 30th Investor Day. This all gives us further confidence that we are doing the right things to deliver amazing customer value while also driving to our financial targets. First, we are growing high-value customer wallet share through elevated products.

In VistaPrint in Q1, we grew variable gross profit per customer 7% year-over-year, and the variable gross profit from customers who generate more than $650 in annual VGP grew by 15%. Also, in Q1 versus the same quarter last year, our packaging business, BoxUp, grew its revenues with external customers by 16%, while also more than doubling its cross-Cimpress fulfillment revenue to VistaPrint. VistaPrint, in turn, is using the BoxUp product range to grow its own high-value packaging customers. These examples illustrate a fundamental transition of Cimpress' per customer lifetime value, which we've been speaking about for the past several years. We are successfully building on our foundational capabilities that traditionally addressed only a relatively small portion of our total addressable market. We are becoming a branding partner to our customers thanks to our expanded product range, improved site merchandising, and service tailored to high-value customer needs.

We are earning customer trust for a much larger portion of the small business marketing wallet, which means they become much higher lifetime value customers for Cimpress. That is an important tailwind for our future of healthy growth. Although the headwinds from our legacy products and our traditional base of small, low LTV customers are currently offsetting tailwinds from high-value customers, the mix of our gross profit is shifting steadily towards high LTV customers. A second theme from our investor day was that our investments are widening our manufacturing and supply chain advantage. For example, in VistaPrint in the European operations, we went live with a new production line that has slashed the cost of producing beautiful full-color corrugated boxes. In the U.S., Pixartprinting has launched and is growing fast with booklets, catalogs, magazines, and roll labels produced in its new Pennsylvania facility.

And we are rapidly increasing the output of two new production facilities in Mexico that combine highly productive state-of-the-art capital equipment with low-cost operations. Third, we are developing new channels to reach customers. A great example of our new channel development is our strategic partnership with Canva, which we continue to nourish by launching in new geographic markets and especially by growing the product footprint, and through our work to create a deep technology integration for the benefit of Canva customers and our production volumes.

Fourth, we are gaining confidence in the benefits we are and will drive from the closer collaboration between VistaPrint, National Pen, and BuildASign. This collaboration includes anticipated OpEx savings from moving to a shared technology platform, the acceleration of our momentum in promotional products, apparel, and signage, and optimization of advertising spend across the brands of these three businesses.

And we expect to see additional and significant financial benefits of this tighter collaboration in the coming quarters. Fifth, we are applying AI to drive growth and efficiency. We see AI becoming a significant tailwind for Cimpress. By democratizing design, it is expanding the online opportunity for customized physical marketing products. We are making focused investments in LLM discoverability and agentic commerce efforts to make us faster and lower cost while expanding the top of our funnel. AI is helping us become more efficient in all of our operations, which is enabling us to achieve and accelerate our planned cost reductions. Sixth, our tuck-in acquisitions are on track to deliver the value that we discussed at our Investor Day. Recent acquisitions in our Upload & Print segments performed in line with our expectations and positively contributed to our reported growth rates.

PrintBrothers grew revenues by 28% on a reported basis, while The Print Group grew 13%. To close, the Q1 headline numbers reflected specific headwinds, but do not change our conviction for this fiscal year or for our long-term trajectory, which is firmly on track. We have clear plans across our teams to achieve fiscal '27 and fiscal '28 strategic and financial goals, and we remain positive on our prospects for growing per-share cash flows, anchored by a durable, scale-based, and innovation-forward competitive advantage in the mass customization of print. With that, I will hand it over to Sean to walk through the financial results and outlook. Sean?

Sean Quinn

Thanks, Robert, and thanks, everyone, for joining us for the call today. I will start off with the quarter. It was a quarter that we did not meet expectations, as Robert alluded to. Revenue was $934 million, up 8% on a reported basis, with organic constant currency growth of 2%. That 2% was below our expectations. The difference between our reported growth and organic constant currency growth comes from the tuck-in acquisitions that we have done recently. VistaPrint's organic constant currency growth was 2%, with strength in commercial products the apparel, marketing materials, and packaging. Just to note, the backlog in VistaPrint was elevated at the end of the quarter, which we do expect to help revenue in Q2. Upload & Print grew reported revenue 23% combined, with organic growth of 4% combined.

Our all other businesses segment grew 17%, led by BuildASign and the Canva partnership, which is growing quickly, but not material yet to our consolidated results. Adjusted EBITDA was $89.8 million, down 9% from a year ago. Most of that decline came from the cost of continuing to build out our North American manufacturing network, where startup costs were $5.9 million higher year-over-year. In addition, we absorbed $4.2 million of duties and tariffs on certain goods sold to the U.S. customers, and we had $1.8 million of higher energy-related input costs net of pricing. We also had $1.4 million of impact from the nonrecurrence of a compensation benefit in the year ago period. And then those headwinds there, from a cost perspective, were partly offset by $7.5 million of IEEPA tariff refunds that were related to prior periods.

As we noted in last night's release, we expect the year-over-year impact of both manufacturing startup costs, but also the new Canadian tariffs to reduce in the second half of this year. From a segment perspective, I just wanted to point out that the new duties and tariffs, the cost there weighed primarily on VistaPrint, but the refund benefits were almost exclusively in National Pen. On cash, operating cash flow improved $3.9 million to $28.9 million for the quarter, driven by $10 million of lower net working capital outflows and also lower cash interest. And adjusted free cash flow was an outflow of $9.3 million. That was an improvement of $8.5 million versus last year, reflecting the operating cash flow improvement, but also lower capital expenditures and capitalized software.

Turning to the balance sheet, net leverage at the end of the quarter was 3.2 times trailing 12 months EBITDA, as calculated under our credit agreement. That is up slightly from the 2.9 times at the end of fiscal 2026, and the primary reason for that increase is the SAXOPRINT acquisition that closed at the beginning of July. And I should note that that leverage calculation does not reflect the expected proceeds from the sale-leaseback of the acquired facility as part of that acquisition. We ended the quarter with $120 million of cash and $35 million drawn on our $250 million revolver, which we used to partially fund the acquisition. So, liquidity remains strong, and as a reminder, we have no material debt maturities until fiscal 2033. Let me turn to the outlook now.

We are maintaining our fiscal '27 guidance, which is reported revenue growth of at least 7%, organic constant currency growth of at least 3%, adjusted EBITDA of at least $520 million, and adjusted free cash flow of approximately $200 million. For fiscal '28, we continue to target 4% to 6% organic constant currency growth, at least $615 million of adjusted EBITDA, and approximately 45% conversion of that EBITDA to adjusted free cash flow. in September, when we had our Investor Day, I had walked through a bridge. That bridge, starting with our fiscal '26 adjusted EBITDA of $459 million and walking across to the at least $520 million for fiscal '27 guidance. That included tuck-in M&A, which is contributing $18 million-$21 million. It included currency contribution of $5 million-$10 million and about $25 million of in-year cost savings.

Start-up costs, which as we noted, weighed on the Q1 results, are a larger year-over-year headwind in Q1 and also in Q2. And then that will start to reduce in the second half of the year. Also, at the same time, our cost savings and the benefit from recent acquisitions will be building through the remainder of the year. The organic growth piece of that bridge, which was the minimum that we need to achieve our guidance, is the part that we need to see improve, and we are hard at work to do that. Which brings me to cost actions and given the first quarter results were behind our plans, and it is a dynamic operating environment, we are accelerating our cost reduction plan, and these actions, in our view, are an insurance policy against the risk of organic growth lagging.

The reason we are able to do that and go deeper there is because of the efficiency foundations that have been put in place over the last year. From a revenue growth perspective, it is important to note that in the quarterly phasing for this year, which is not part of our guidance, we did not give quarterly revenue growth. Just in that quarterly phasing, we did plan for lower growth in our second quarter, the quarter that we are now in, the December quarter. There are two reasons for that. The first is an expected year-over-year decline in the consumer category for VistaPrint. And the second one is that we have been reducing advertising spend at National Pen, particularly in direct mail, which is the right trade-off, and we continue to see that. But seasonally, that has the most year-over-year impact on revenue for National Pen in Q2.

On the balance sheet, our path to delevering has not changed. We continue to expect net leverage to be approximately 2.5 times as we finish this year, and meaningfully below 2.0 times at the end of fiscal 2028, subject to capital allocation choices that we may make. As we reach those lower leverage levels, we expect to have more flexibility in how we allocate capital, including share repurchases. The initiatives that drive that fiscal '27 and fiscal 2028 profit growth, they are in motion. We expect that growth to build from Q2 through the rest of fiscal '27 and into fiscal '28. And the management team and our board are very focused on these targets. We are confident in our ability to deliver them. And so with that, let's turn to your questions. Meredith?

Meredith Burns

Great. Thanks, Sean. Thanks, Robert. [Operator Instructions] We did have a number of pre-submitted questions as well that we will get started with shortly, and we will pepper the live questions in as we go. Our first question, I am going to toss to Sean. Sean, can you help explain where exactly performance was below your expectations? We note that the items you referenced in COGS in the earnings document, but it also looks like SG&A and advertising increased $21 million-$22 million year-over-year, while gross profit only increased by about $5 million. And then I think a related question which is helpful in answering this is there anything to note specifically in VistaPrint, as it looks like that segment had a tough comp year-over-year?

Sean Quinn

Yes. I am going to start with VistaPrint. That is where the largest gap was relative to our expectations, as was alluded to. I will go into some detail here because I think it will be helpful. First of all, you are right, the Q1 last year for VistaPrint was a strong quarter, so from that perspective, it was a tougher comp. Last year, we had good growth, 5% constant currency growth. We had a little bit of gross margin expansion. We also had some advertising leverage. So those were good ingredients for a strong quarter. There are a few things that I will call out for VistaPrint as to why that was not the case this quarter. The first one was that revenue growth was muted. I mentioned in my remarks, there is some backlog increase that will flow through in Q2.

We also did have, it is mentioned in the release, a revenue recognition change on the Wix partnership, which it is just a presentation topic, but has a little bit of impact on the growth rate. If you normalize for those, the growth rate was consistent with what we had in Q3 and Q4 of last year for VistaPrint, which was 3%, but our ambitions and our expectations are for higher than that. From a regional perspective, Europe was slower, and we saw that in our Upload & Print businesses as well, so that would be one call-out just from a regional perspective on revenue. And that was one of the main gaps to expectations overall, again, trickling into the Upload & Print businesses as well. We have seen some change in channel mix and channel performance as well, and that has the most impact on VistaPrint.

Some of that change in VistaPrint's channel mix is from changes that we've been making in how we're allocating our performance marketing. All of that's informed by incrementality studies. I think we're taking a very data-driven approach there. We have a very rigorous and continuous experimentation and iteration agenda there, which we'll use to continue to optimize. But we have changed quite a bit our channel mix in terms of where we're spending and how we're spending. So that's what we're driving. The other part is that changes that are more structural, and that could be the role of AI Overviews in Google, could be more search traffic that's moving from organic to paid, the increasing importance of LLMs in the discovery process. And so this quarter, in Q1, bookings in organic search and affiliate for VistaPrint were the weakest in terms of year-over-year performance.

And that definitely was a drag on the results. We don't think that that is insurmountable. It is a changing and evolving environment, but it is a near-term headwind, and especially when it comes to how we're acquiring new customers, you see that in particular, and we're evolving with that. It's an evolution, of course, that's in its early innings. I think there's a few data points that are interesting here that I'll call out. One is that an AI-assisted organic discovery, so all things LLMs, it's our fastest growing channel. We're seeing that also yield high value customers as well, which is good to see. Of course, it's smaller today, but I think that's a good early sign that we're there. We're seeing positive signs. And it's also a big area of focus for the team.

We have quite a robust agenda ahead of us in that area over the next quarters, and we have focus teams that are working just on that. The other one is that we're seeing strong growth in uploads, notably from customers that are designing in LLMs and bringing those designs to VistaPrint. And again, I think that's a strong signal here of the benefit of democratized design. We've mentioned that, including in our investor day, and the opportunity that presents as we make agentic commerce easier for customers to be able to access the breadth of our product portfolio with those designs. I think that's an interesting data point as well. The Robert talked about in his remarks, the growth that we're seeing with high value customers, and that's very much continued. I won't go through those examples here.

The gap to the expectations that we had were really coming from the lower value customers, but that still is an important part of our total base, particularly for new customers, that we can then graduate to high value customers over time. So that's kind of the picture on the revenue side, focused primarily on VistaPrint. On the cost side, there are some material year-over-year impacts that contributed to VistaPrint's gross margin decline, and in some cases, were a gap to expectations. These were called out in the release. In VistaPrint specifically, $5 million in North American manufacturing startup cost, that was the increase year-over-year, $3 million of duties and tariff expenses, that was up over last year. Then just under $1 million of net energy related input costs.

On the manufacturing startup cost and the duties and tariffs, as we said in the remarks, we expect those to start to reduce in the second half of the year. And on tariffs specifically, we have mitigation steps that we're executing against. They just take some time, and that's why that impact is delayed to the second half of the year in terms of seeing those reduced. There was some reference to some other cost line items, ad spend, and our kind of overall OpEx. I would say ad spend ticked up as a percentage of revenue for VistaPrint, but it was down slightly at a consolidated level, not much to talk about there.

That will move around quarter to quarter, but we did have some more aggressive experiments later in Q1 in VistaPrint in our performance marketing, and we'll manage that across our full funnel spend as we move through the year. Not too much to call out there. And then on the OpEx side, I think we're seeing the efficiency initiatives that we have been driving come through. As an example, in VistaPrint, OpEx is down year over year. We'll continue to see more of that across our businesses as we execute on the cost agenda that we have. There's a lot there, but I guess in summary, it would be lower growth in VistaPrint and also generally in Europe, and then the specific cost impacts, primarily the ones that we called out in the release. I would say that's the focal point.

Meredith Burns

I'm going to stick with you for the next one. It's a good follow-up to that commentary. Can you help explain and break out what you view as one-time items? So, startup costs, restructuring costs versus structural items. So increased depreciation and amortization or import duties or negative net pricing, or SG&A increases.

Sean Quinn

Yes. I'll do my best to contextualize these. I think one time is probably not necessarily the appropriate characterization for some of these because they will continue but fall off. So anyway, let me try and help here. So I think the items that are more one time in nature, or I would say not recurring, would be the manufacturing startup cost, and we've included this in the bridges that we've done in our last two investor days. They are with us for a period of time as we are doing the startup activities. As volume increases, those startup costs start to fall away, and again, that's included in our bridge. So I would say that's more kind of non-recurring on a steady state basis, and we'll start to see that reduce in the second half of this year.

For tariffs and duties, that is something that we do not know what the duration of the new Canadian tariffs will be. As I said, we have mitigating actions that we are taking. Those just take some time to reorient the supply chain. We will start to see those take hold more substantially in the second half of the year in terms of reducing that cost. And then in terms of restructuring cost, we had about $4 million of restructuring costs this quarter. Those kind of go hand in hand with some of the efficiency initiatives that we are driving. We will have more of that as we execute on our plans. That is in service of a lower run rate cost base. So those are the ones that I would call it as maybe non-recurring is the right way to say that.

The structural ones, I described some of the revenue growth headwinds in Q1. I think the legacy product and in some regards, some of our legacy channels like resellers, those trends remain. We have been talking about those for years now. So that would be part of the structural things. Then, I think at the same time, we are driving growth with high-value customers, and I think we cannot lose sight of that. We have a very clear strategy on the growth side as well, with high-value customers growing wallet share. That includes a lot of new product introduction. We have been investing against that over recent years. And we continue to do so this year, and we are seeing strong signs of progress here. Again, Robert outlined that, I will not repeat that. Also, the progress with new channels and tuck-in M&A. That is the sort of the offset.

In terms of higher energy costs, we have really, across all of our businesses, we saw some negative impact there in Q1. We called those out in the release. We have, in some cases, put in additional pricing offsets already there this quarter, particularly as it relates to shipping costs. So that one, I would say, is a mix. Of course, we cannot control those input costs. We will continue to test on the pricing side and do what we can there. And as I said, we have already made some additional steps in Q2. But those will likely be with us for a while.

Meredith Burns

Okay. I am going to ask the next question of Robert. Sean just talked about structural headwinds. If we have got structural headwinds, how does that factor into the company's view on keeping the guidance flat or consistent with prior messaging?

Robert Keane

Well, the headline is that we are doing more on the cost side, so I will go a little bit more into that. I think it is important to step back, and Sean, I believe you talked about this a little bit, but even before looking at Q1 results, the phasing for year-over-year profit growth we planned for, and again, we still stand by that guidance, was weighted towards the back half of the year, when M&A contribution is going to be building. Currency benefits were more weighted outside of Q1. A lot of the cost-savings actions will naturally bring more benefit in later quarters because they need to be implemented or only have been recently implemented. Revenue, the drivers of that should also build as well as we continue to see the gains in high-value customers, as we gain that small business market or marketing wallet share.

Again, elevated products like packaging, event booths, apparel, promotional products. And as that builds, we are boosting them and supporting them with high-value customer-oriented service operations. Again, those are in the ramp stage. Finally, the relationship with, actually, I will say two things. The relationship we have with Canva is ramping, and we are building manufacturing gains, which will help mitigate some of the gross margin compression we have seen, and allow us to compete more effectively. So, that is all kind of before considering Q1. And as of the start of this year, we have certainly ground to make up, as we have talked about last night in our release and Sean spoke about today. Our internal budget, again to repeat, is higher than our guidance, which allows us to absorb some of the headwinds relative to our public guidance.

Although we have clear plans on the growth side, and I do not want to leave the impression that we are not doing that, we covered a lot of that in the September 30th investor day. We do not want to be, and we will not be dependent on accelerating revenue growth, to hit our bottom-line numbers, which is why we are taking cost-oriented actions deeper and sooner than we had originally planned. So that should cover us even if revenue were to stay lower or we were to continue to see the gross margin pressure persist. In summary, again, we are accelerating by going deeper and sooner with cost reductions. And that is how it factors into our guidance.

Meredith Burns

Okay. That is a super helpful answer. I am going to stick with you for the next one, which is about tuck-in acquisitions. Are they on track?

Robert Keane

Yes, absolutely. The financial contribution from M&A this quarter was in line with our expectations, so on track. There is no change for our expectation that for the year, that is increased revenue from acquisitions will be $165 million-$175 million, and an in-year increase of EBITDA of $18 million-$21 million. The Q1 revenue contribution from acquisitions was $60 million, and the EBITDA net of transaction costs was $3.5 million. I do want to say those are important financial numbers. We are on track. But beyond those financial headlines, we see great operational integration happening as planned, and we see synergies from these acquisitions that are certainly at least at plan, and we expect those to build throughout fiscal '27 and into fiscal '28.

Meredith Burns

I have a related question, Sean, because those acquisitions were in our Upload & Print businesses. Here we go. The reported EBITDA for Upload & Print combined was surprising. Based on disclosures, we had estimated about $6 million of inorganic EBITDA being layered on top of the $44 million that we had last year, leading to a pro forma $50 million of EBITDA, assuming 0% organic growth. The actual value, however, was much lower at $42 million. Can you help us understand the delta?

Sean Quinn

There are a few main drivers. There are a number of smaller things, too. I will call out the main ones. I should say, while my answer to the earlier question was focused on VistaPrint, which is where the largest gap was versus our expectation. As I mentioned, there was weakness generally in Europe from a revenue perspective, and that is here impacting the Upload & Print businesses. And I think the question refers to 0% organic growth, so I will not cover revenue as part of that bridge to the numbers that were expected but just wanted to call that out here. So the main drivers of, first of all, on the M&A front, what Robert just said. We are on track for what we expected, and also we continue to be on track for what we expect to deliver for the full year.

That said, the impact for Q1 is not ratable in terms of the quarterly progression throughout the year. The impact for Q1 is lower than what we expect as we get to Q3, Q4, simply because of the synergy build. There is also a little bit of seasonality there as well. So the $6 million that was referenced in the question, the contribution for Q1 was $3.5 million net of transaction cost, so that is $2.5 million of the delta there that you are trying to bridge. And then, just in terms of the organic operations other than M&A, again, I will not go through the revenue drivers because you have assumed 0% growth. There was a $2 million cost for a catch-up accrual, which is something that is probability-based, based on the probability of achievement, so kind of an accounting concept.

That is, I would say, a one-off, and it is not indicative of run rate operating costs. So, $2 million also would feature in your bridge. I would call out the energy-related input costs in terms of things that, like what is the main thing that impacted gross margins or gross profit year-over-year. That was just under $1 million of impact across the combined group. Currency also for the group was unfavorable by a little under $1 million, even though on a consolidated basis, it is favorable. All of our hedging gets done outside of our segments, and so currency for the group was unfavorable by a little under $1 million. And then if you add all that up, that is roughly $7 million of the $8 million that you are trying to bridge. Again, there is a longer tail of smaller items beyond that, but hopefully that is helpful.

Meredith Burns

Robert, question for you about the macro environment. Is the ongoing unrest in France expected to have a material impact on The Print Group in Q2? If so, can you please help us quantify the impact, and how might this impact our ability to reach the targets that we have set for ourselves?

Robert Keane

No, I would say, as of now, we would not call out the unrest in France as having a material impact on our ability to reach the targets based on everything we see today. Of course, it is a fluid situation. But we do not see that as impacting our ability to hit the bottom line. France is an important market for us. It is our third largest country by revenue, largely between Print Group and VistaPrint. We have seen some impact during the last weeks, but it has not been very significant. And I would say if you go back to Q1, before October, it was a tough market. But I think that had more to do with the fact that we are stronger in the reseller channel, which is being disintermediated by ourselves and some others.

Secondly, in the summer, there was some extreme heat and fires in Southern Europe, including France. So, I would say those are the more impactful areas.

Meredith Burns

Let's stick with macro, and let's stick with Robert for this next one. There's been an across-the-board deceleration across most business units over the past 4 months to 6 months. To what do you attribute this?

Robert Keane

Just to make sure we're talking apples-to-apples, I respond to this in our consolidated organic constant currency growth. On a segment level, when you look at it does include our push to do cross-Cimpress fulfillment. So, there are reasons why growth might be faster in one segment versus the other as we shift production around. So looking at the consolidated organic constant currency, yes, there's been some deceleration in the last 6 months. If I step back, our organic constant currency growth rate overall was 3% in fiscal '25. It was 4% in fiscal '26. It was 2% in this last quarter. Per our guidance, we still expect to get at least 3% for the full year. I think there are a mix of impacts that we've already commented on.

But just to summarize, one, the trend in legacy products like business cards, consumer products, which is something we've talked about for the last 2 years or 3 years. Secondly, legacy channels like resellers. I just mentioned that in the French context, where we have business where we sell to local printers or local graphic designers who then sell to the end customers. That market tends to move toward a direct relationship to the end customer. It benefits a lot of our Cimpress businesses, but for the Upload & Print businesses, we have a few that have been historically, they have a higher percentage in the reseller, and they're seeing that impact. So, I think The Print Group is the most salient example of that. And then there's some more notable impact on VistaPrint.

We mentioned, I think Sean just mentioned some of the channel performance that he just went through, everything from how Google is switching over to AI Mode and the other things which I won't repeat. Now we do have very clear growth initiatives. Many of them are longer lead time because we're building up production capabilities to be highly competitive in new product areas. And we have a lot of service operations moving towards high-value customers. But at the risk of repeating too many times, we are adjusting our cost structure, and we're allocating capital, so we're driving efficiency in some places while also taking advantage of the assets we have and the cost advantages, we have. And being more selective about where we do that but still driving forward on growth whilst cutting costs.

So most of the external growth comes from a small number of our businesses, in part because of our push to do cross-Cimpress fulfillment. I would say the increased collaboration across VistaPrint, BuildASign, National Pen is a great example of that. We have decreased advertising spend in National Pen. That has led to lower revenue growth, and it has been a drag on their growth, but it is important choice for profitability.

And we can redirect that capital into what I would call our flagship brand in North America, VistaPrint. We are also leveraging more shared platforms, technology specifically, to cut costs, be more efficient, and give a better experience. Again, all that is something we have talked about. I am going to pause there so I do not go on too long with a specific question, but I think we do see that across-the-board deceleration you are asking about as something we can handle.

Meredith Burns

Sean. Next question. At VistaPrint, we would have expected slightly stronger growth and profitability given advertising investments remain flattish as a percentage of sales. PPAG continues to grow quickly, as does VGP per customer. However, top line growth was quite muted at 2%, and EBITDA came down slightly if you exclude startup costs, suggesting that there are headwinds. Are we thinking about this the right way? If so, can you describe these headwinds? For example, is a legacy product something else?

Sean Quinn

Yes. Hopefully, much of this was covered in the earlier question that I answered in terms of where there are headwinds. I should mention just a slight correction. VistaPrint ad spend as a percentage of revenue was up a little over 100 basis points from last year. It was actually up a little bit, which only furthers the question here. And not too much to add to the earlier comments, but maybe just a few things. I would say there is no big call outs from a product perspective in terms of a meaningful change in trend in Q1 versus looking at that over, call it a trailing 12-month period. I think the channel story is probably the more notable topic. And of course, that has impact on category performance to some extent, but it was not like we saw any sort of meaningful or quick change in any category.

In terms of first-time buyers, I think between the combination of just the legacy product trends that were already in place and then also the channel shifts, that has had the most impact on business cards and consumers, specific to first-time buyers. Maybe that is the other thing that is notable.

Meredith Burns

I am going to stick with you. This one should be a quick one. What are the assets that are held for sale on our balance sheet?

Sean Quinn

Yes, it is the fair value from the SAXOPRINT facility that we are actively marketing for sale-leaseback. So that is the way that the accounting rules require you to hold that on the balance sheet at fair value. That fair value, if you look at on the balance sheet, is a little over $46 million, which could change a little bit. We are moving through that marketing process, and that is all net of any selling cost as well. So that process is ongoing, but that is what that is on the balance sheet.

Meredith Burns

Okay, next question. On holiday. As we approach the ever important holiday season, is there anything that we are doing differently to ensure a very successful Q2?

Sean Quinn

There is a lot that we are improving on for this year. And there is a rhythm to this. Every year, we always do an extensive audit of what went well last year, what did not go well, and then we build that immediately into the plan for the next year. So we are very much in that cycle, and now we are at the time where it is all execution mode right now.

But I think one of the things that was notable last year that we did was really try to lean more into rather than shift a lot of our messaging and our merchandising and our assortment to these consumer-specific products. We try to lean much more into holiday solutions for small businesses, and we will take another step in that direction this year. You can see if you go onto the VistaPrint site, you hopefully will get that sense in terms of the creative content that you see, the messaging that you see, the products that you see. The consumer part of holiday is really important as well. But that approach allows us to continue to build on the messaging and relevance that we have with small businesses throughout the entire year. I would say thematically, that is probably the biggest thing to call out.

And that cuts across a lot of what we do. It cuts into how we are thinking about the assortment that we need, quality improvements that we might need, or changes in attributes. It goes into how we are thinking about discoverability. And you might naturally think of the holiday season and consumer as holiday cards, calendars, photo products, like canvas prints or photo books. We have a very relevant holiday assortment and content that we have expanded quite a bit in promotional products, in gifts, in signage, in packaging for the small business use case for holiday. I think, again, if you just go onto the site, you should see that come to life. And then the other thing is that in VistaPrint, we have a new kind of brand framework and platform called Print Your Possible™.

And so our holiday approach kind of fits underneath that, and we are really trying to make sure that VistaPrint is positioned as the one-stop shop, which we try and do all year round, but in this case, a one-stop shop for everything that you need to create holiday magic this season, as a small business. I think, again, if you go onto the site or you see any of our brand advertisement, I think we have a really good and strong collection of creative ingredients that will bring that brand platform to life, in new ways for holiday, but again, in a way that is very congruent with our messaging throughout the year, and I think sets us apart from competitors as well. So that is the main thing in our approach.

I focus there on VistaPrint because that is the biggest area for holiday, but there is a number of our businesses, notably BuildASign and National Pen that also have a seasonally tick up and they equally are focused on the execution for the holiday season and are ready for what is ahead. Just maybe coming back to the financial part of all that. Consumer, it has come down in our mix quite a bit over the years, relative to our consolidated revenue. It is less than 10% today. It does tick up in the December quarter, but it is less in the mix than it once was. But as I also mentioned in my earlier remarks, in terms of the quarterly phasing for growth in the second quarter, we expected this year to have lower growth in the second quarter for two reasons.

One is that we do expect year-over-year decline in the consumer category for VistaPrint, as we focus successfully on growing high-value, small business customers. But in the consumer category specifically, we expect some year-over-year decline. And then we have also been reducing advertising spend, Robert mentioned this earlier, at National Pen, particularly in direct mail, and we are seeing that that is the right trade-off. But seasonally, that has the most year-over-year impact on revenue in Q2. So, a few call outs there.

Meredith Burns

Thank you, Sean. Robert and Sean, we have exhausted the list of both pre-submitted and live questions, so I will turn things over to Robert to wrap us up.

Robert Keane

Thanks, Meredith. Before we go, I would like to leave you with a couple of thoughts that I believe matter most. First of all, our long-term trajectory is on track. We have clear plans across our teams to achieve our FY '27and FY '28 strategic and financial goals. We are putting in an additional insurance policy into place, through added cost constraints, and reductions. And we are certainly expecting the profit and cash flow benefits of our efforts to build in the back half of the year based on the timing of the revenue momentum and the planned cost reductions. And with that, thank you for joining the call. Thank you for your continuing willingness to entrust your capital with us.