Pitney Bowes Raises 2026 Cash Flow Outlook After Strong Q3

Pitney Bowes (NYSE: PBI) raised its full-year adjusted free cash flow outlook and the low end of its revenue guidance after third-quarter cash generation more than doubled, even as quarterly revenue declined 1%. Profitability also increased, supported by stronger results at SendTech Solutions and lower operating expenses.

For 2026, the company now expects adjusted free cash flow of $380 million to $420 million, compared with its previous range of $360 million to $410 million. It raised the bottom of its revenue range to $1.83 billion from $1.80 billion while retaining the $1.86 billion upper end.

Pitney Bowes also narrowed its adjusted EBIT forecast to $450 million to $470 million from $445 million to $475 million. Adjusted earnings per share are now expected to be $1.58 to $1.67, compared with the prior range of $1.55 to $1.70. The company did not provide GAAP reconciliations for the forward-looking non-GAAP measures because the necessary items were not available without unreasonable effort.

Cash flow rises as earnings improve

Revenue for the quarter ended September 30 fell to $456.2 million from $459.7 million a year earlier. GAAP net income increased 1% to $52.7 million, while diluted GAAP EPS rose to $0.37 from $0.30.

Adjusted EPS increased 35% to $0.42, and adjusted EBIT rose 6% to $113.9 million. The adjusted measures exclude items including restructuring charges, certain debt-related gains and losses, transaction and strategic review costs, and pension expense associated with U.S. and Canadian plans the company has taken steps to terminate.

Cash from operating activities climbed to $151.1 million from $66.8 million. Adjusted free cash flow rose to $147.1 million from $60.4 million after accounting for capital expenditures and restructuring payments.

Management said year-to-date adjusted free cash flow benefited from increased prepayments from new customers following the exit of a significant mail-sortation competitor. That contribution means some of the cash-flow strength reflected customer funding timing rather than only operating earnings growth.

SendTech profitability offsets lower revenue

SendTech Solutions revenue declined 2% to $305.3 million, reflecting anticipated reductions in the mailing installed base at this stage of the cycle. Higher equipment sales partly offset the decline.

Despite lower revenue, the segment’s adjusted EBIT increased 14% to $115.0 million, while adjusted EBITDA advanced 11% to $124.2 million. Gross profit was unchanged year over year as favorable product mix and lower tariff costs offset the revenue decline. Operating expenses fell by $13 million due to cost reductions.

SendTech’s results also included a non-recurring $3 million benefit allocated from corporate expenses because year-to-date medical claims were lower than anticipated.

Presort Services revenue increased 1% to $150.9 million as new clients contributed additional volume. The business sorted 3.4 billion pieces of mail during the quarter, up 4% from a year earlier.

Higher volume did not translate into improved segment profit. Presort adjusted EBIT declined 2% to $31.9 million, and adjusted EBITDA fell 2% to $40.9 million. Pitney Bowes attributed the decreases to lower revenue per piece and higher transportation costs. Fuel prices and freight-cost inflation lifted transportation expense by $6 million year over year.

Presort’s results included a non-recurring $7 million corporate-expense allocation benefit related to lower-than-expected year-to-date medical claims.

Debt reduction and shareholder returns

Pitney Bowes ended the quarter with $1.92 billion of debt principal outstanding, down $148 million during the quarter and $108 million since the end of 2025. The company completed a tender offer for notes due in 2037 and 2043, reducing debt by $46 million at a discount to par. It also repriced its $585 million term loan due in 2032, lowering the interest margin by 75 basis points.

The company repurchased about 1 million shares for $17 million during the quarter at an average price of $16.84. From quarter-end through October 23, it bought another approximately 600,000 shares for $11 million. Pitney Bowes also declared a quarterly dividend of $0.10 per share, payable December 8 to shareholders of record on November 16.

The company identified several uncertainties that could cause results to differ from its outlook. These include changes in postal regulations and postal operators’ financial health, accelerated declines in physical-mail or shipping volumes, the loss of major clients, changes in tariffs and trade rules, inflation, higher interest rates, economic weakness, labor and transportation constraints, and a prolonged U.S. government shutdown.