Deluxe Corporation's 2025 Q2 Earnings Call: Unpacking Contradictions in Strategy, Growth, and Cash Flow

Merchant services leadership and strategy, data solutions segment growth drivers, merchant business efficiency and growth, data solutions segment growth, and free cash flow guidance are the key contradictions discussed in Deluxe Corporation's latest 2025Q2 earnings call



Merchant Services Revenue and Margin Growth:
- Deluxe's Merchant Services business grew second quarter revenue by 2.9% year-over-year to $101.4 million.
- Adjusted EBITDA margins expanded by 190 basis points to finish at 21.4%.
- The growth was driven by new merchant and channel partner additions, along with ongoing cost efficiencies and pricing actions.

Data Solutions Segment Performance:
- The Data Solutions segment achieved 18.1% revenue growth in the second quarter, with revenues reaching $67.8 million.
- Adjusted EBITDA margins expanded by 260 basis points to 30.1%.
- This strong performance was due to a favorable mix of demand deposit generation campaign activity and operating efficiencies.

B2B Payments Revenue and Margin Expansion:
- B2B payments delivered 1.1% revenue growth sequentially, with adjusted EBITDA margins of 22%.
- The segment reported an 11.4% increase in adjusted EBITDA versus the prior year period.
- This was attributed to a focus on driving efficiencies across lockbox operations and optimizing segment SG&A.

Print Segment Revenue and Margin Trends:
- The Print segment experienced a 9% decline in revenue, with total revenue of $281.1 million.
- Despite the decline, adjusted EBITDA margins rose by 180 basis points to 32.2%.
- The decline was primarily due to the low-margin branded promo portion, while the stronger margin check segment held steady.