디럭스(DLX) 2026년 3분기 실적 발표 컨퍼런스 콜: 결제 및 데이터 부문이 매출의 57%를 차지하며 가이던스 상향

핵심 요약

• 디럭스의 2026년 3분기 매출은 5억 5,390만 달러로, 전년 동기 대비 2.5% (보고 기준), 비교 조정 기준으로는 9.1% 증가했다.
• 조정 EBITDA는 비교 조정 기준으로 9.6% 증가하여 1억 2,710만 달러를 기록했다. 조정 EBITDA 마진은 22.9%로, 전년 동기 대비 90bp 상승했다.
• 결제 및 데이터 부문은 전체 매출의 57%를 차지했으며, 이는 셀레로 인수 및 지속적인 자체 성장을 반영한다. 인수 효과를 제외하면 두 사업 부문은 합산 8.3% 성장했다.
• 연초 대비 누적 잉여현금흐름은 40.7% 증가한 1억 3,490만 달러를 기록했다. 경영진은 연간 잉여현금흐름 전망치를 약 2억 달러로 유지했다.
• 디럭스는 2026년 매출 가이던스를 21억 3,000만~21억 5,000만 달러(으)로, 조정 EBITDA 가이던스를 4억 7,000만~4억 8,000만 달러(으)로 상향 조정했다.
• 순부채는 셀레로 인수 자금 조달 영향으로 19억 3,000만 달러로 증가했다. 경영진은 2028년 말까지 순차입금 비율 3.0배 이하를 목표로 유지하고 있다.

주요 재무 실적

GAAP 실적에는 890만 달러의 일회성 구조조정 및 통합 비용과 980만 달러의 거래 비용이 포함되었습니다.

사업 및 운영 실적

가맹점 서비스

가맹점 서비스 매출은 37.9% 증가한 1억 3,510만 달러를 기록했으며, 여기에는 7월 31일 인수 완료일부터의 셀레로 실적이 포함됩니다. 셀레로를 제외한 기존 디럭스 가맹점 서비스 사업은 약 4% 성장하여 경영진의 한 자릿수 중반 성장 전망치에 부합했습니다.

부문 조정 EBITDA는 57.4% 증가한 3,210만 달러를 기록했습니다. 마진은 300베이시스포인트(bp) 확대된 23.8%를 기록했으며, 셀레로 편입과 운영 규모 확대의 수혜를 입었습니다.

경영진은 일부 영역에서 통합 작업이 일정보다 앞서 진행되고 있다고 밝혔습니다. 디럭스는 최소 거래 종결 후 24개월 이내 1,500만 달러의 비용 시너지 창출. 2026년 4분기부터 셀레로(Celero) 실적이 분기 전체에 반영될 예정입니다.

B2B 결제

B2B 결제 매출은 5.7% 증가한 7,730만 달러를 기록했으며, 이는 안정적인 록박스 물량과 자금관리 부문의 기회적 수주 성과에 힘입은 결과입니다.

조정 EBITDA는 33.9% 증가한 2,250만 달러를 기록하며 29.1%의 이익률을 나타냈습니다. 경영진은 이번 분기 실적 호조의 일부 원인을 은행 통폐합과 관련된 고마진 사업 기회 덕분으로 돌렸으며, 성장세와 이익률은 전분기 대비 완화될 것으로 예상하고 있습니다. 장기 이익률 전망치는 20%대 중반 수준을 유지하고 있습니다.

데이터 솔루션

데이터 솔루션 부문은 처음으로 분기 매출 1억 달러를 돌파했습니다. 매출은 15.4% 증가한 1억 290만 달러를 기록하며 8분기 연속 15% 이상의 성장세를 이어갔습니다.

조정 EBITDA는 2,760만 달러였으며, 26.8%의 이익률을 기록했습니다. 경영진은 금융기관 및 관련 시장 전반에서 디럭스(Deluxe)의 AI 기반 분석 및 마케팅 상품에 대한 수요 덕분이라고 밝혔습니다.

회사 측은 이제 2026년 전체 데이터 솔루션 매출이 10%대 초반의 성장률을 기록할 것으로 전망하고 있습니다. 또한 연휴 기간 동안의 일반적인 전분기 대비 성장 둔화를 감안하더라도, 4분기에도 전년 동기 대비 두 자릿수 성장세가 지속될 것으로 예상합니다.

인쇄

인쇄 부문 매출은 3.6% 감소해 동일 비교 조정 기준 2억 3,860만 달러를 기록했습니다. 조정 EBITDA는 총 8,430만 달러였으며, 이익률은 35.3%를 나타냈습니다.

디럭스는 저마진 판촉 상품보다 고마진 내재화 제품을 지속적으로 우선시하고 있습니다. 경영진은 동일 비교 조정 매출이 1~5% 수준 감소하고, 연간 이익률은 30%대 초중반 범위를 기록할 것으로 예상하고 있습니다.

경영진 가이던스

이번 가이던스는 딜럭스의 기준 매출 성장을 M&A 효과 제외 1%~2% 수준으로 전제합니다. 경영진은 이번 전망이 거시경제 여건, 금리, 노동 공급, 인플레이션 및 추가적인 포트폴리오 인수나 매각 여부에 따라 변동될 수 있다고 밝혔습니다.

리스크 및 주요 관전 포인트

• 셀레로 인수 자금 조달로 인해 순부채가 증가했으며, 분기 말 기준 프로포마 순레버리지 비율은 약 3.8배였습니다. 부채 감축(디레버리징)은 현금 창출력, 영업 실적 및 시너지 실현 여부에 달려 있습니다.
• 2026년 이자비용은 약 1억 3,000만 달러로 예상됩니다. 딜럭스는 이자율 스왑을 통해 전체 차입금의 75%에 대해 고정 금리를 적용하고 있습니다.
• B2B 결제 부문의 3분기 마진은 일회성 고마진 거래의 수혜를 입었으나, 경영진은 이 거래가 해당 사업 부문의 일반적인 경상 실적 수준(run rate)을 나타낸다고 보지 않습니다.
• 데이터 솔루션 부문은 연휴 기간 동안 금융기관의 마케팅 활동 감소로 인해 4분기 매출이 계절적 영향으로 둔화되는 일반적인 양상을 보일 것으로 예상됩니다.
• 경영진은 소비자들이 여전히 경제적 압박을 받고 있다고 말했지만, 최근 총수요에서 유의미한 변화는 관측되지 않았다고 덧붙였습니다.

애널리스트 Q&A 주요 내용

• 가맹점 성장률: 경영진은 결제 및 데이터 부문의 합산 자체 성장률이 8.3%였으며, 셀레로를 제외한 별도 가맹점 서비스 성장률은 약 4%였다고 설명했습니다. 셀레로 인수의 투자 논리는 통합, 교차 판매 및 영업 시너지를 통해 장기적으로 가맹점 성장을 가속화하는 것입니다.
• 셀레로 통합: 통합 경영진은 셀레로와 딜럭스 양사의 임원진으로 구성되어 있습니다. 경영진은 해당 팀이 시너지 추진, 파이프라인 개발 및 제품 출시에 착수했으며, 일부 통합 작업은 내부 예상보다 빠르게 진행되고 있다고 밝혔습니다.
• 마진 잠재력: 딜럭스는 셀레로를 통합하고 합산 플랫폼의 규모를 확장함에 따라 가맹점 서비스의 마진이 추가로 확장될 여지가 있다고 보고 있습니다. B2B 및 데이터 마진은 각각 20%대 중반과 20%대 초중반 수준에서 정상화될 것으로 보이며, 인쇄 부문은 30%대 중반을 목표로 하고 있습니다.
• 자본 지출: 회사는 가맹점 서비스 플랫폼 통합, 데이터 솔루션, B2B 결제 부문에 투자하는 동시에 AI 및 효율성 제고 이니셔티브에도 자금을 집행하고 있습니다. 경영진은 현재의 자본 배분 구성이 성장 투자에 맞춰져 있다고 설명했습니다.
• 포트폴리오 전략: 딜럭스는 인쇄 부문의 현금 흐름, 유통망, 브랜드 및 고객 관계를 활용해 결제 및 데이터 부문의 성장에 자금을 집행할 계획입니다. 경영진은 포트폴리오 내에서 전략적 검토가 필요한 대상이 거의 남아 있지 않지만, 자사의 목표에 부합하는 기회가 있다면 검토할 것이라고 밝혔습니다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Deluxe Quarterly Earnings Conference Call.

[Operator Instructions]

Today's call is being recorded.

At this time, I'd like to turn the conference over to your host, Vice President of Strategy and Investor Relations, Brian Anderson. Please go ahead.

Brian Anderson

Thank you operator, and welcome to the Deluxe Third Quarter 2026 Earnings Call. Joining me on today's call are Barry McCarthy, our President and Chief Executive Officer; and Chip Zint, our Chief Financial Officer. At the end of today's prepared remarks, we will take questions. Before we begin and as seen on the current slide, I'd like to remind everyone that comments made today regarding management's intentions, projections, financial estimates and expectations about the company's future strategy or performance are forward-looking in nature as defined in the Private Securities Litigation Reform Act of 1995.

Additional information about factors that may cause actual results to differ from projections is set forth in the press release we furnished today in our Form 10-K for the year ended December 31, 2025, and in other company SEC filings. On the call today, we will discuss non-GAAP financial measures, including comparable adjusted revenue, adjusted and comparable adjusted EBITDA and EBITDA margin, adjusted and comparable adjusted EPS and free cash flow. In our press release, today's presentation and our filings with the SEC, you will find additional disclosures regarding these non-GAAP measures, including reconciliations to the most comparable measures under U.S. GAAP.

Within the materials, we are also providing reconciliations of GAAP EPS to adjusted EPS, which may assist with your modeling. As a reminder, all comparable adjusted metrics reflect the removal of impacts from business exits including prior year adjustments to reflect removal of the Safeguard business effective with the closing of that divestiture as of March 1, 2026. Financial metrics discussed also exclude any pro forma figures or historical financial results relating to the Celero acquisition for periods prior to the transaction closing on July 31, 2026. Our pro forma reporting of these results in line with SEC requirements, was filed separately last month and is available via EDGAR for further review.

And with that, I'll hand it over to Barry.

Barry McCarthy

Thanks, Brian, and good evening, everyone. I'm pleased to report our continued strong performance across the enterprise through the third quarter. During the period, we delivered robust growth across key metrics aligned to each of the 3 strategic planks of our core value creation algorithm, mix shift, operating leverage and cash flow improvement to strengthen our balance sheet.

First, our overall revenue expanded by 2.5% during the third quarter as we continue to shift our business mix toward the growing Payments and Data segments. We meaningfully accelerated this mix shift via the Celero acquisition that closed July 31. The acquisition expanded both our scale and overall growth rates for the third quarter Merchant Services segment results. We're also very pleased with our integration progress. We're realizing benefits from this combination consistent with our expectations and overall business case, in some cases, ahead of schedule. Incremental impacts from the Celero acquisition will be reflected for a full quarter, beginning with our Q4 and ongoing results.

Second, operating leverage. We remain focused on our core execution principles and driving efficiencies, expanding our adjusted EBITDA margins to nearly 23%, while growing comparable adjusted EBITDA dollars at rates above that of revenue. And third, cash flow expansion supporting balance sheet improvement. We continue to convert these expanded earnings into strong free cash flow, which grew by more than 40% year-to-date through the third quarter. This expanding cash generation further enhances our deleveraging ability as we progress through the balance of the year, consistent with our ongoing clear capital allocation priorities. Importantly, following from our strong third quarter performance across each of our key value creation metrics, together with the progress we made on the Celero integration, we're raising our full year guidance this evening across core revenue and adjusted EBITDA metrics.

We're also affirming and narrowing our ranges for the balance of our outlook measures. Chip will provide additional detail during his comments.

Next, I'd like to briefly detail additional highlights from the quarter across each business unit. Let's start with a bit more perspective on our mix shift progress. After reaching a Q1 milestone with just over 50% of our revenue, from nonprint sources for the first time in our more than 100-year history, we saw our Payments and Data businesses together reach 57% of overall revenue during Q3. Although the third quarter included only 2 months of Celero related revenues, the balance of overall Payments and Data mix reached the 57 to 43 ratio that we signaled on a pro forma basis when we announced the acquisition. This is a clear signal of the ongoing acceleration of the business towards these growth areas, a trend we would expect to sustain as full quarter Celero related revenues are reflected beginning in the fourth quarter.

Total reported year-to-date revenues across combined Payments and Data segments have expanded year-over-year by more than 14%. Adjusting out any acquisition impacts from Q3 results, our revenue for the Payments and Data businesses together grew by 8.3%, further signaling the underlying strength of our core offerings in each of these spaces. Our third quarter and year-to-date revenue results were inclusive of another strong growth quarter for the Data segment, which expanded revenues by more than 15% for an eighth consecutive quarter. Third quarter Data segment revenues expanded year-over-year by 15.4%, continuing to reflect the demonstrated strength of our AI-supported data analytics and marketing offerings and continued demand from customers across verticals.

We remain particularly pleased with the trajectory of this business, which achieved its first $100 million reported revenue quarter during Q3. Our teams continue to deliver proven data-driven marketing solutions targeting conversion of high lifetime value prospects across our core FI client base as well as expanding adjacent market spaces. During the quarter, our Payments businesses together also saw strong continued revenue growth rates, in line with our guidance outlook across both the base Deluxe Merchant Services and B2B payment segments. Beyond our expanded top line trajectory, highlights for the quarter included our continued ability to drive expansion of our overall adjusted EBITDA margins, as I noted previously. Our Payments segments led the way towards this margin expansion through the third quarter, continued focus towards driving cost efficiency and our increased scale across the businesses resulted in year-to-date margin expansion across both the B2B and merchant segments, reflecting 440 basis points and 270 basis points of growth, respectively.

For Print, improving year-to-year product mix within the segment and delivering ongoing operational efficiencies, resulted in 250 basis points of year-to-date adjusted EBITDA expansion as well. These overall expanded profitability rates contributed toward our more than 40% year-to-date growth of free cash flow as well.

Finally, the Celero acquisition is not only adding revenue but also contributing to overall merchant margin growth across the segment, which expanded by 300 basis points for the quarter, consistent with our forecasts. We're pleased with our overall integration progress so far and remain highly confident toward realization of our $15 million threshold level cost synergy commitment over the 24-month horizon, the transaction closing. We look forward to sharing more about the strength of our integrated merchant offerings and our improved growth outlook from the combination at our December Investor Day.

Before turning over to Chip, I want to quickly reinforce the strong overall Q3 performance and our year-to-date progress on core strategic priorities. This progress is solidly aligned within the framework of our shareholder value creation algorithm, which we share each quarter. First, mix shift. We accelerated our mix shift towards Payments and Data, achieving 57% of total company revenue, driving expanded overall revenue growth. This shift clearly positions the company for meaningfully improved growth prospects moving forward aligned to robust secular growth trends across Payments and Data markets. Second, cash flow expansion toward balance sheet strengthening. We leveraged revenue growth and operating discipline to continue our robust expansion of year-to-date free cash flows enabling our ongoing capital allocation commitment to overall debt reduction over our planning horizon.

And third, operating leverage. We drove operating leverage and overall efficiency across the business, expanding our adjusted EBITDA margins by 90 basis points versus the prior year period. We also maintained our commitment to return capital to shareholders via the dividend. Deluxe is well positioned to drive consistent growth of revenue and profitability with a significant majority of revenue now coming from Payments and Data. We will continue to optimize our balance sheet over the near-term horizon. Our future is bright and our confidence is reflected in our updated full year guidance ranges.

We look forward to sharing additional details regarding our promising multiyear growth prospects, our initial 2027 guidance ranges and the outlook for each line of business during our December 2 Investor Day. Brian will provide some additional details about this upcoming event following our Q&A at the end of this call.

Finally, before passing the baton to Chip, I'd like to take a moment as always, to thank my fellow Deluxers as we progress toward the company's 112th year, our strong enduring culture and a clear commitment to meeting and exceeding our customers' needs while delivering value for shareholders, truly reflects the Deluxe difference. Thank you to my fellow Deluxers for your continued dedication and focused efforts enabling our transformation.

With that, I'll turn it over to Chip.

Chip Zint

Thank you, Barry, and good evening, everyone. As Barry mentioned, we were very pleased with our strong third quarter results, reflecting improved top line growth, continued expansion of our profit margins and robust conversion of our adjusted EBITDA to free cash flow in support of our capital allocation priorities. These results once again reflected solid growth of our year-over-year revenue comparable adjusted EBITDA and EPS and were accompanied by strong execution across each of these metrics relative to our full year guidance objectives. As I do each quarter, I'll begin by reviewing some of the consolidated highlights for the period.

Before moving on to the individual operating segment results, our strong cash generation, other balance sheet items; and finally, our updated full year 2026 outlook ranges, which Barry referenced during his comments. For the third quarter, we reported total revenue of $553.9 million increasing 2.5% against prior year reported results while expanding 9.1% after removing prior year revenues from our Print business exits on a comparable adjusted basis. We reported GAAP net income of $13 million or $0.28 per share, down from $33.7 million or $0.74 per share in the third quarter of 2025. This reduction was driven primarily as a result of $8.9 million of nonrecurring restructuring and integration expenses and $9.8 million of transaction costs, as well as increased year-over-year interest expense included in the period, net of overall incremental operating profits generated from higher third quarter revenues.

Adjusted EBITDA was $127.1 million, increasing 9.6% on a comparable adjusted basis versus the third quarter of last year. Adjusted EBITDA margins were 22.9%, improving by 90 basis points overall and 10 basis points on a comparable adjusted basis. Q3 adjusted diluted EPS came in at $1.06, improving from $1.04 on a comparable adjusted basis driven primarily by our improved adjusted operating results, net of increased year-over-year interest expense.

Turning next to our operating segment details, beginning with the Merchant Services segment. Overall, merchant revenues, including results from the Celero acquisition as of July 31 transaction closing, expanded during the third quarter by 37.9% year-over-year to $135.1 million. Removing Celero related revenues, which will be detailed within our quarterly filings for the balance of this year, Base Deluxe Merchant Services stand-alone revenues expanded by roughly 4%. This reflected continuation of the year-to-date mid-single-digit growth trajectory consistent with our full year guidance expectations for the stand-alone DMS outlook. Segment adjusted EBITDA finished at $32.1 million, representing year-over-year expansion of 57.4% including Celero impacts, while overall margins finished the quarter at 23.8%, expanding by 300 basis points versus prior year levels.

These margin levels reflected expected accretion from the 2-month Celero margin inclusion within the quarterly results, while remaining in line with our overall guidance for full year margins trending towards a mid-20s profile in our prior outlook. We continue to expect the base DMS business to achieve overall mid-single-digit revenue growth, consistent within our updated guidance ranges provided this evening. As full quarter Celero results are integrated to the merchant segment performance for the balance of year periods, we're expecting significant upside to the total reported merchant segment revenue and adjusted EBITDA outlook. We will provide further detail on these overall impacts as our integration efforts come into clearer view, and we provide initial 2027 guidance at our Investor Day next month.

Turning to B2B payments. For the third quarter, B2B segment revenues reflected an accelerated growth trajectory, finishing at $77.3 million, representing an increase of 5.7% versus Q3 of 2025. The results reflected continued stability across our installed lockbox volumes in line with our expectations in addition to some opportunistic wins across our broader suite of treasury management offerings during the quarter. While pleased with this increased level of B2B revenue growth for the specific period, we would forecast some moderation of these growth figures on a sequential basis, in line with our overall low single-digit revenue growth outlook for this segment across the full year period.

Adjusted EBITDA for B2B finished at $22.5 million, reflecting an overall strong 29.1% margin. This represented a particularly robust expansion of adjusted EBITDA results growing by 33.9% from the prior year, benefiting from the expanded revenue growth and particularly the noted opportunistic wins during the period. We expect overall segment margin results to also moderate sequentially in line with our full year rate guidance expectations around the mid-20s for the segment.

Moving to Data Solutions. This segment continued to overdeliver against our year-over-year revenue growth expectations in support of ongoing marketing campaign demand extending to the back half quarters. As Barry noted, revenues finished at $102.9 million, reaching 9 figures for the quarter for the first time since segment reporting began, driving overall growth of 15.4% versus Q3 of 2025. Third quarter adjusted EBITDA finished at $27.6 million, with the margin rate finishing at 26.8% for the period, benefiting modestly from the higher-than-expected revenue growth, while remaining in line on a year-to-date basis at 24.3% through 3 quarters with our longer-term low to mid-20s expectation for the segment.

We have updated our overall full year 2026 guidance expectations for the Data segment to now reflect expected low double-digit overall segment revenue growth. With this increase, we're now expecting Data revenues to sustain their double-digit year-over-year growth rates into the fourth quarter, while also noting normal sequential fourth quarter moderation of segment revenues overall, on typically lower FI marketing activities spanning the Q4 holiday periods. We remain very pleased with the continuing strong year-over-year trajectory for the Data business. Overperforming our initial guidance forecast as noted, and we look forward to providing additional color around the long-term trajectory for the Data business as part of our 2027 guidance at our upcoming Investor Day event.

Turning finally to our Print businesses. Print segment third quarter revenue finished at $238.6 million, declining by 3.6% year-over-year on a comparable adjusted basis, with both legacy check and remaining promotional solution lines of business stabilizing towards this overall blended comparable adjusted trajectory. Overall adjusted EBITDA for Print finished the period at $84.3 million. The resulting 35.3% margin rate continue to align to our full year margin outlook for the segment as we continue to prioritize the mix of Print revenue away from lower-margin promo offerings towards our higher-margin in-sourced products. Consistent with prior quarters, we continue to expect to see low to mid-single-digit comparable adjusted revenue declines across the Print segment, with full year adjusted EBITDA margins remaining in the low to mid-30s within our updated full year 2026 guidance ranges.

Moving now to our balance sheet and cash flow. We ended the third quarter with a net debt level of $1.93 billion, an increase of $536.7 million from $1.39 billion at year-end 2025, reflective of our updated debt financing supporting the Celero acquisition, as we shared previously during both the announcement and the closing of the transaction. Including our targeted cost synergy estimates and other impacts related to the Celero transaction, our Q3 net debt to adjusted EBITDA ratio would represent approximately 3.8x leverage as of the end of the period. Consistent with our forecast at the announcement of the deal and the starting point for our committed multiyear deleveraging path to a 3x or lower ratio by the end of 2028.

Free cash flow, defined as cash provided by operating activities less capital expenditures finished at $134.9 million for the year-to-date period. This was an improvement of $39 million or 40.7% from the results reported through the first 3 quarters of 2025. This continuing expansion of cash flows was reflective of our improved year-to-date adjusted operating results, including lower overall year-to-date SG&A and restructuring-related expenses, net of transaction and integration costs for the Celero acquisition, and increased year-over-year CapEx investment. Continuation of our strong conversion of adjusted EBITDA to cash flow remains a top priority for the enterprise as we reset our deleveraging expectations against the updated capital structure, inclusive of our acquisition financing activity. As we shared during the transaction announcement in June, we expect to return to 3x net leverage by the end of 2028.

Our updated long-term capital structure across the balance sheet remains well positioned from both a liquidity and go-forward maturity position with all material debt maturities extended over a 2029 or later horizon. This structure allows us to continue to assess market conditions relative to our 2029 bond maturities opportunistically as warranted over coming periods. As a reminder, in conjunction with the funding of the Celero acquisition, we entered into interest rate swaps, fixing our interest costs across 75% of our overall borrowing mix. This structure enables improved confidence to our planned cash flow generation and debt reduction trajectory while insulating us from some of the volatility associated with an uncertain interest rate environment. Consistent with past quarters, our Board approved a regular quarterly dividend of $0.30 per share on all outstanding shares. The dividend will be payable on December 1, 2026, and to all shareholders of record as market closing on November 17, 2026.

As Barry noted, we are increasing our prior revenue and adjusted EBITDA guidance ranges to reflect our year-to-date results and updated outlook across the operating segments, inclusive of August through December expected Celero results, for which you will recall, we updated our ranges last quarter. We are also narrowing our guidance ranges for adjusted EPS, increasing the overall midpoint of that range, while affirming our strong free cash flow outlook from prior quarters. Our updated full year ranges are as follows: Revenue of $2.13 billion to $2.15 billion. This reflects a roughly $30 million improvement to the prior range from strength across baseline Deluxe segments now growing positive 1% to 2%, excluding impacts from M&A activity while maintaining our previous expectations for Celero.

Adjusted EBITDA of $470 million to $480 million increased to reflect between 9% and 11% growth versus prior year reported results. Adjusted EPS of $3.80 to $4, narrowed upward to reflect between 5% and 11% growth and free cash flow of approximately $200 million continuing to reflect 14% growth versus our 2025 results.

Finally, to assist with your balance of your modeling, our guidance also assumes the following: interest expense of approximately $130 million and adjusted tax rate of 26%; depreciation and amortization of approximately $170 million of which acquisition amortization is approximately $70 million, an average outstanding share count of approximately 46.5 million shares and capital expenditures of approximately $110 million. This guidance remains subject to, among other things, prevailing macroeconomic conditions, including interest rates, labor supply issues, inflation and the impact of any incremental portfolio additions or exits.

To summarize, we remain very pleased with our year-to-date results and momentum through the third quarter, particularly our sustained revenue growth, continuing operating leverage, strong free cash flow conversion and comparable adjusted expansion of our earnings metrics in line with our expectations and updated outlook. As we progress through the final quarter of the year, this strong execution focus and our capital allocation discipline provide a solid foundation for further expansion of our growth prospects, enhanced scale across Payments and Data and achievement of our longer-term balance sheet improvement objectives in support of our long-term value creation algorithm. We look forward to sharing more details regarding our Celero integration progress and extended outlook at our Investor Day event next month.

Operator, we are now ready to take questions.

Operator

[Operator Instructions]

And the first question will come from Kartik Mehta with North First Research.

질의응답

Kartik Mehta

Barry, if we could just focus on the merchant business a little bit, I think you said that the organic growth of that business is 8% or excluding Celero. And I'm wondering as you look forward, what do you think the organic growth of that business or the merchant business can be now that you have a couple of assets integrating them and you have an opportunity to cross-sell and provide other products.

Barry McCarthy

Sure. So Kartik, first of all, great to hear your voice. We are really pleased with how the Payments and Data businesses together are growing at that 8% level. And we announced -- when we announced the acquisition of Celero, we believed that we will be able to, over time, accelerate the growth of those businesses from mid-single digits upwards, and we'll have a much more deep conversation about that at the Investor Day when the leader of that business, Kevin Jones, will be able to provide a detailed analysis and look -- and forward view for what 2027 beyond will look like. But we're very optimistic that it's going to deliver what our expectations were, which was to accelerate growth over time, combined with great operating synergies. And we even said in our opening comments, we feel great about the progress we've made. And in some cases, we're tracking a bit ahead.

Chip Zint

Yes, Kartik, this is Chip. Just to clarify, the combined payments and data growth was 8% with no impact from M&A. The stand-alone merchant without Celero grew 4% roughly, solidly in line with that mid-single-digit level we've been talking about. .

Kartik Mehta

Yes. Thanks, Chip. I misspoke, sorry about that. No, that makes sense. I'm assuming with Celero, you'll be able to accelerate as you combine those businesses and get efficiencies, you'll be able to accelerate that 4% growth down the road.

Barry McCarthy

That is the thesis, and it's exactly what we said when we made the acquisition and really pleased with the progress and believe even more strongly today than we did when we made the announcement.

Kartik Mehta

And Chip, just on the B2B business. Obviously, the margins have come in, probably ahead of expectations, and that business is doing well. And I'm wondering, as you look at that business, how much of that margin improvement do you think is structural? How much of it do you think is just favorable business mix. I'm just trying to get a sense of is that business over the next couple of years, what the real opportunity there is from a margin standpoint since it's performed so well in 2026.

Chip Zint

Yes. Well, I appreciate the compliment there. We're very proud of what that business has done. If you look back the last few years, we called out that improving margins, improving efficiency and the way we operate that business was 1 of our key goals. And if you actually recall, just about 2 years ago, that was a business that was profitable and about the high teens, around 19%. And we said there was an opportunity to move it up multiple hundreds of basis points over the horizon towards a mid-20s profile. And if you look at what we've done throughout last year and the first half of this year, you've seen us steadily improve that margin rate on the back of operating efficiency, deploying AI in the operations and obviously just being great executors of the business. .

Specific to this quarter, we called out some opportunistic wins. And that was a function of some bank M&A in the market. We've said before that, that happens from time to time. When banks merge, we can -- it could be a net positive to us. And so specific to this quarter, bank M&A facilitated a bit of a onetime higher-margin deal that accelerated that mix, popped it up above our long-term level for a brief period of time, but we reiterated that we still continue to see this business normalizing around those mid-20s. And I think over the multiyear horizon, you should think of that as a good place to be. We'll talk more about this trajectory at Investor Day, but we're proud of the progress we've made there, but continue to believe mid-20s is the right profile for the business, and that's the expectations we're pointing you towards for the fourth quarter.

Operator

And the next question will come from Charlie Strauzer with CJS Securities.

Charles Strauzer

Just a question, I think, to start with Chip. If you could, maybe just continue the margin expansion discussion here and how when you look at the other segments, what are kind of the drivers of the margin expansion kind of behind the seats there, you've got more room to work on all of those segments is that kind of a good way to think about it?

Chip Zint

I actually think if you step back and look at how we've been guiding each of the segments throughout the year where we thought they'd be, they're all performing relatively in line with expectations. So we talked about the Merchants segment being in the mid-20s with 200 to 300 basis points of margin expansion across the year. Obviously, on a year-to-date basis, that number is around 270, isolated in quarter it was 300. That's starting to show you some of that accretion factor from the Celero acquisition. Obviously, as we integrate the business, we unlock synergies, we continue to scale. We would expect Merchant to continue to be able to have room to expand margins moving from the mid-20s and beyond, but we continue to like the mid-20s isolated for this period.

I just talked about B2B very similarly. We're targeting mid-20s. We've made a lot of progress over the last few years, a bit of a pop an anomaly this quarter, but we expect to normalize and be able to maintain that. The Data business, you'll recall from a year ago, we talked about these rebates that we would have to lap this year and how that would pull down the margin rate from last year to this year, but we would expect to be in the low to mid-20s level for Data, and you've seen us do that relatively consistently from the fourth quarter of last year through now. We're very, very close to our run rate year-to-date. Margin profile continue to feel like that's the sweet spot staying around that low to mid-20s level.

And then lastly, Print, our goal is to hold Print in the mid-30s. You've seen that here with roughly right around 35% margins for the quarter, very nice for the year-to-date period. So I think all 4 of the segments are operating really well relative to our guidance expectations. Of course, we're going to continue to operate each efficiently, deploy AI and look for room to move on all of them, but we feel great about where they are, and they're each performing in line with our expectations as we came into the year and obviously, the way we're guiding you for this year on a full year basis as well.

Charles Strauzer

Great. And Barry, if you could -- I know you only had Celero for a couple of months now, but maybe share a little bit more color as to how the integration is progressing behind the scenes.

Barry McCarthy

Really appreciate the question, Charlie. We're really proud of the progress. And as I said earlier, in some cases, ahead of our own expectations. So we named Kevin Jones as the leader of the combined business. And Kevin has been leading a very thoughtful and thorough analysis of the organization and he has seated his leadership team and cascaded that through the rest of the organization and did that on a very appropriate but fast-paced time line. We had a very good fortune of having great teams on both sides. And we call it KJ identified who we thought would make the best and by picking players from both teams and putting them together into 1 unit.

And so the senior leadership team is so roughly even between this Celero team and the original Deluxe team. And we really do believe we have a team that can deliver accelerated growth over time. The team has already met for off-site strategy. They've already been executing on the synergies and have booked a number of them that will be -- of course, we will be seeing in the periods ahead but very, very proud of how the team has come together, the pace at which they're attacking the opportunities, how they're building pipeline together launching new product and more you'll be hearing more in the coming weeks and months about that. And of course, we'll spend a lot more time talking about it when we're together in New York for Investor Day.

Charles Strauzer

Great. And then 1 last 1 for me, if you wouldn't mind. Looking at CapEx, remind us where the main targets there for the capital and the deployment of the capital...

Chip Zint

Yes. We continue to -- as part of our capital allocation discipline, we continue to invest in product opportunities that can unlock and grow organic growth. And so we're investing in our Merchant business. We're accelerating the investment there as part of the integration to bring the 2 platforms together and obviously try to attack that higher growth, as Kartik was asking about. We continue to invest in our data business, our B2B business, all areas of the business that have growth opportunities, while continuing to also invest equally and opportunities to drive efficiency or take costs out of the business. So we're balancing all of those things with a little bit more of a tilt towards growth-related investment.

And obviously, that that's a disclosure. That's a number that's fully in line with our ongoing free cash flow guide range of $200 million.

Operator

And the next question will come from Gary Prestopino with Barrington Research.

Gary Prestopino

Barry, to the extent you can say or talk about this prior to your Investor Day, what are the attributes of Kevin Jones that made him so successful with Celero and then he's going to have free rein to apply those attributes to build the business overall?

Barry McCarthy

Absolutely. And I'm happy to tell you about KJ today, and I know he'll spend a few minutes introducing himself and his background when we were all together for Investor Day. But KJ has a great background. He started at Chase Paymentech, who's obviously 1 of the leaders in the merchant industry. He went on and was actually part of the management team at First American, which is the business that we acquired and is our foundation for our Merchant business. And he went on from there to build 2 successful startups that had successful exits. So at its very core, he's not only a competent general manager, he absolutely has a commercial event and a focus on sales and revenue growth that is going to be a particularly important set of skills as he grows the business here.

He's also, I think, a great people leader. And we've seen that already as he's put together a great team and brought them together as 1 team already delivering on the goals and expectation and many of the presumptions and plans that were part of the original business case for the acquisition. So I will stop there and let him save some room for him to tell you more about himself when you see him in December, but really confident about him in this role and what he's going to be able to do to help us succeed.

Operator

And the next question will come from Marc Riddick with Sidoti & Company.

Marc Riddick

So I was going to ask a question about Kevin, but I guess I won't now because I think you did a pretty good job of that. So I really appreciate that. But maybe you could talk a little bit on the margin side of things, certainly, margins continuing to improve year-over-year and most of the segments? And maybe as well as corporate being down a bit. Maybe you could talk a little bit on the Print side of margin. I was wondering how much room there was there as far as continuing to prioritize trying to sort of eliminating or issuing some of the lower-margin projects out there, how much room you might have?

And it seems as though you're at a pretty good level there on the Print side, but maybe you could talk a little bit about what room and leverage you continue to have there. As well as does it -- is there anything that remains in the space that may or may not be a strategic fit going forward and the like? Or I don't know if I'm getting into an area that steal some thunder from next month, which I don't want to do. But maybe you could talk a little bit about that.

Barry McCarthy

Yes. Thanks, Marc. We got it. So first of all, I'm just going to reiterate how much we like the 4 segments we have. And just to reiterate the strategy that we deploy with those 4 segments, we leverage the cash flow, the distribution, the brand equity and the relationships from our Print business, our legacy cash flowing check and Print business to invest and grow the Payments and Data business. And we like that strategy because it's very clear, it's very evident in what you've seen here. It naturally unlocks this organic mix shift that's occurring. And that mix shift is a leading indicator to revenue growth, which is ultimately what we're all playing for here, right?

So as we rotate the portfolio over that allows us to sustain and grow faster. And obviously, as we do that, we have built in operating leverage, where as you noted, margins can expand. We can grow margin faster than revenue. And obviously, that all leads to improved profitability, improved EBITDA, growth of free cash flow, improved free cash flow conversion. It all leads to the debt paydown and the ability to obviously pay down the debt and rotate more of that value to the equity of the company. And that's the state of strategy. That's what's working. So if you take all the pieces you laid out there, all of those things are how we've set this company up to go forward, right? So the investments we've made around AI or efficiency are going to help us continue to expand margins. We're going to continue to look for opportunities. to expand the margin rate.

I think the Print segment is a great example of an area we're doing that and can directly answer your question. We've been saying for a while that we're going to prioritize the higher-margin in-sourced products that we have and focus lesser on low margin or chasing top line just for the sake of getting revenue and to hurt the margin rate. You've seen us do that very well. The divestiture we did earlier in the year helped support that. And so that's 1 of the reasons why you've seen the overall Print margins expand this year, because deploying that strategy both within what we still have and exiting what we did earlier this year, it leads directly into that strategy.

So when you pull it all together, we like the 4 segments. We'll continue to be opportunistic. There isn't a lot left in the portfolio anymore to really focus on. But if there is, it's going to have to fit and check all 3 boxes and strategically align to the goals we're doing. And if the right opportunity comes along for something that's less, of course, we would explore that. But we feel good about the progress of what we're doing right now. And we think we have a great forward-looking strategy story to tell everybody in December at Investor Day.

Marc Riddick

Great. And then last 1 for me, maybe to talk a little bit about what you're seeing from a demand perspective and maybe client industry vertical differentiation or if there have been any shifts or changes that you've seen over the last 3 to 6 months that are worth calling out?

Barry McCarthy

So Marc, I think we've seen a continuation of the economic trends that have been apparent for some period of time. And we don't see any significant change there. Consumer under some stress is not news. And we don't see a shift in demand. So maybe we're in some period of a more new normal perhaps. But there really is no new news there that is driving changes in aggregate demand. That is no change really in the trajectory that we've seen over previous periods.

Operator

And that does conclude the question-and-answer session. I'll now turn the conference back over to Brian Anderson.

Brian Anderson

Thanks, Justin. Before we conclude, as both Barry and Chip noted during their comments, Deluxe will be hosting a live Investor Day event on Wednesday, December 2, at the Four Seasons Hotel, New York beginning at 9:00 a.m. Eastern Time. Those interested in attending can RSVP or inquire further via the Deluxe Investor Relations inbox as listed on the current slide. This event will also be available virtually via live webcast, for which additional registration information and links will be posted to the Deluxe Investor Relations website over the coming weeks. .

Thank you again for joining us today. We look forward to seeing many of you in New York and speaking with you all again as we share our fourth quarter and full year 2026 results early next year.

Operator

Thank you. And that does conclude today's conference. We do thank you for your participation. Have an excellent day.