CPI Q2 2026 Earnings: Secure Card Growth Lifts Revenue 15%

CPI Card Group (Nasdaq: PMTS) reported Q2 2026 revenue of $149.2 million, up 15% year over year, while diluted EPS was $0.17 for the quarter ended June 30, 2026. Net income rose 294% to $2.0 million and adjusted EBITDA grew 7% to $24.1 million, helped by Secure Card Solutions and more than $3 million of tariff refunds, partly offset by uneven Prepaid Solutions demand.

Core Earnings Data

Revenue increased across all three reported segments, with Secure Card Solutions providing the main operating contribution. Gross profit grew faster than revenue, supported by higher sales and tariff refunds, although $2.8 million of integration costs—primarily related to Arroweye—affected GAAP net income.

The following figures cover Q2 2026 rather than the first half of the year.

Gross margin is calculated approximately from reported revenue and gross profit. Adjusted EBITDA is a non-GAAP measure.

Business and Segment Performance

Secure Card Solutions was the principal growth driver, while Prepaid Solutions’ reported increase was influenced by an accounting change. Integrated Paytech continued to grow more slowly but maintained the highest disclosed segment gross margin.

Secure Card Solutions gross profit increased 29%, and its gross margin expanded 250 basis points because of higher revenue and tariff refunds. Prepaid gross profit rose 17%, with gross margin holding above 28%.

CPI also expanded its instant-issuance business through the acquisition of TRISM. Management said the transaction effectively doubled the company’s addressable U.S. instant-issuance market and increased the number of financial institutions served to more than 3,000 from approximately 2,500. Arroweye, meanwhile, was described as performing ahead of CPI’s original investment case and producing revenue and cost synergies.

Profitability, Cash Flow, and Balance Sheet

CPI’s Q2 adjusted EBITDA margin was approximately 16.2%, based on reported revenue and adjusted EBITDA. Adjusted EBITDA increased more slowly than revenue as uneven demand in the higher-margin Prepaid business offset part of the benefit from Secure Card Solutions and tariff refunds.

Cash-flow figures disclosed in the release cover the first six months of 2026, not Q2 alone. First-half operating cash flow reached $42.1 million, up from $9.9 million a year earlier, while free cash flow increased to a record $36.1 million from $0.8 million. CPI attributed the improvement to operating performance, working-capital management, and lower capital spending.

At June 30, CPI held $21.4 million of cash and cash equivalents and had $265.0 million of 10% Senior Secured Notes due in 2029. Net leverage declined to 2.7 times from 3.6 times a year earlier and 3.1 times at year-end. After the quarter, CPI redeemed $26.5 million, or 10%, of the notes on July 15.

Higher Revenue Guidance Does Not Lift EBITDA Outlook

CPI raised its revenue and free-cash-flow outlook but left adjusted EBITDA growth guidance unchanged. Management expects stronger Secure Card Solutions performance and tariff refunds to be largely offset by continued investment in Integrated Paytech and uneven demand in the higher-margin Prepaid segment.

This divergence indicates that the additional expected revenue is not forecast to translate proportionally into adjusted earnings. Segment mix, the level of Prepaid demand, and spending on Integrated Paytech will therefore be important measures of earnings conversion during the rest of 2026.

2026 Guidance

CPI now expects consolidated revenue to grow at a high-single-digit to low-double-digit rate and free cash flow to reach $45 million to $50 million. The company also raised Integrated Paytech’s revenue growth target following the TRISM acquisition while reaffirming its adjusted EBITDA and leverage targets.

Adjusted EBITDA and free cash flow are non-GAAP measures as defined by CPI.

Recent Insider Transactions

The provided insider dataset shows 72,366 shares purchased across 44 transactions and 4,870 shares sold in one transaction during the latest six-month period, resulting in net purchases of 67,496 shares. Among the records with explicit trade terms, the following two transactions disclosed both a direction and value.

These transactions are presented as reported and do not by themselves establish insiders’ views about CPI’s outlook.

Risks Investors Should Watch

• Uneven Prepaid demand: Prepaid Solutions carries a gross margin above 28%, and management cited uneven demand in this higher-margin segment as an offset to stronger Secure Card performance.
• Tariff-refund contribution: Q2 adjusted EBITDA and gross profit benefited from more than $3 million of tariff refunds. Investors will need to distinguish this benefit from ongoing operating improvements.
• Acquisition and integration costs: CPI recorded $2.8 million of Q2 integration costs, mainly associated with Arroweye. The company is also integrating TRISM while continuing to invest in Integrated Paytech.
• Debt and interest expense: CPI reduced net leverage and redeemed part of its debt after quarter-end, but it still reported $265.0 million of 10% Senior Secured Notes at June 30.

Summary

CPI’s Q2 2026 growth was led by Secure Card Solutions, with contactless cards, personalization services, Arroweye, and tariff refunds supporting revenue and gross profit. First-half cash generation and leverage improved materially, allowing a post-quarter debt redemption. The central issue for the remainder of 2026 is whether Secure Card and Integrated Paytech growth can outweigh continued Prepaid volatility and investment spending, particularly because CPI raised its revenue outlook without increasing adjusted EBITDA guidance.