CPI Card Group Eyes Sales Growth Following Acquisition and Expanded Initiatives.

CPI Card Group is targeting low double-digit to mid-teens sales growth after acquiring Arroweye and expanding its market initiatives. CEO John D. Lowe stated that the company's strategies and investments are yielding benefits, with customers excited about its solutions. The business is growing and gaining market share, driven by the Arroweye acquisition.

CPI Card Group reported mixed results for the second quarter of 2025, with revenue increasing by 9.2% to $129.8 million but earnings per share (EPS) significantly missing analyst expectations. The company's net income fell to $0.5 million from $6.0 million in the same period last year, primarily due to production costs, integration expenses, and higher tariffs [1].

Despite the earnings miss, CPI Card Group raised its full-year net sales outlook to low double-digit to mid-teens growth, reflecting the company's recent acquisition of Arroweye. The acquisition, completed in early May, has exceeded expectations, generating $10 million in revenue within the first two months [3]. The company maintains its adjusted EBITDA growth outlook of mid to high single digits and anticipates margin improvements by the fourth quarter.

The company's stock price reacted sharply to the earnings miss, falling by 30.99% in pre-market trading to $13.21. The stock is down 57% this year and touched a new 52-week low of $12.52 earlier in the session [2]. The market's reaction reflects investor concerns over the earnings miss and the company's future profitability.

CPI Card Group's financial health remains solid, with a strong current ratio of 2.95 and an Altman Z-Score of 3.57, indicating low bankruptcy risk. The company is expanding its product offerings, notably in the instant issuance and prepaid card markets, and has recently completed the acquisition of Arroweye for $45.6 million [3].

References:
[1] https://www.ainvest.com/news/cpi-card-group-q2-revenue-9-earnings-sharply-2508/
[2] https://www.marketwatch.com/story/cpi-card-group-shares-slump-after-lower-than-expected-2q-profit-revenue-05f8f001
[3] https://www.investing.com/news/transcripts/earnings-call-transcript-cpi-card-group-q2-2025-misses-earnings-forecast-93CH-4181103