DELUXE CORP - Quarter Report: 2024 September (Form 10-Q)

$()$ $ Net income attributable to non-controlling interest()()()()Net income (loss) attributable to Deluxe () Income allocated to participating securities()()()()Income (loss) attributable to Deluxe available to common shareholders$ $()$ $ Weighted-average shares outstanding Earnings (loss) per share – basic$ $()$ $ Earnings (loss) per share – diluted:Net income (loss)$ $()$ $ Net income attributable to non-controlling interest()()()()Net income (loss) attributable to Deluxe () Income allocated to participating securities()()()()

Re-measurement of share-based awards classified as liabilities

() () Income (loss) attributable to Deluxe available to common shareholders$ $()$ $ Weighted-average shares outstanding Dilutive impact of potential common shares

Weighted-average shares and potential common shares outstanding

Earnings (loss) per share – diluted$ $()$ $ Antidilutive potential common shares excluded from calculation


DELUXE CORPORATION CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts)

$ $ $ Other incomeNet actuarial loss()()()()Other incomeTotal amortization () ()Other incomeTax (expense) benefit() () Income tax (provision) benefitAmortization of postretirement benefit plan items, net of tax()()()()Net income (loss)

Realized gain on cash flow hedges

Interest expense

Tax expense

()()()()Income tax (provision) benefit

Realized gain on cash flow hedges, net of tax

Net income (loss)

Currency translation adjustment(1)

()Gain (loss) on sale of businesses and long-lived assetsTotal reclassifications, net of tax$ $ $ $

(1)

)$()$()$()

Other comprehensive loss before reclassifications

()()()

Amounts reclassified from accumulated other comprehensive loss

() ()

Net current-period other comprehensive income (loss)

()()()

Balance, September 30, 2024

$()$()$()$()

(1).


DELUXE CORPORATION CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts)

)$()$ $()$()

Other comprehensive (loss) income before reclassifications

()

Amounts reclassified from accumulated other comprehensive loss

() ()

Net current-period other comprehensive income (loss)

()

Balance, September 30, 2023

$()$()$ $()$()

(1).

(2).

during the quarter ended September 30, 2024 and $ during the nine months ended September 30, 2024, and we received related cash proceeds of $ during the nine months ended September 30, 2024. The income recognized is included in gain (loss) on sale of businesses and long-lived assets on the consolidated statements of comprehensive income (loss). Recognition of the remaining income will be based on actual customer conversion and retention activity, which we expect to be completed during the fourth quarter of 2024. These businesses generated annual revenue of approximately $ during 2023. During the quarter ended September 30, 2024, we recognized a related pretax goodwill impairment charge of $, as we determined that the remaining cash flows expected to be generated by these businesses no longer supported the carrying value of the related reporting unit as of September 30, 2024. Subsequent to the impairment charge, the remaining goodwill balance for this reporting unit was $. In conjunction with our phased transition out of these businesses, we expect that this goodwill will be fully impaired during the fourth quarter of 2024. During the nine months ended September 30, 2024, we also recognized a gain of $ on the sale of a small business distributor customer list.

In June 2023, we completed the sale of our North American web hosting and logo design businesses for net cash proceeds of $. During the quarter ended September 30, 2023, we recorded an out-of-period correcting adjustment that decreased the gain recognized on this sale by $. This adjustment was not material to the period or any other historical interim or annual period. During the nine months ended September 30, 2023, we recognized a pretax gain of $ on this sale. These businesses generated revenue of approximately $ during 2023, through the sale date. Further information regarding this sale can be found under the caption "Note 6: Acquisition and Divestitures" in the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K.


DELUXE CORPORATION CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts)

%June 2026Other non-current liabilities$()$()March 2023
interest rate swap: %March 2026Other non-current liabilities and other non-current assets() September 2022 interest rate swap: %September 2025Accrued liabilities and other non-current assets()

% to %, depending on our consolidated total leverage ratio, is paid on amounts outstanding under our credit facility (Note 12).

Changes in the fair values of the interest rate swaps are recorded in accumulated other comprehensive loss on the consolidated balance sheets and are subsequently reclassified to interest expense as interest payments are made on the variable-rate debt. The fair values of the derivatives are calculated based on the applicable reference rate curve on the date of measurement. The cash flow hedges were fully effective as of September 30, 2024 and December 31, 2023, and their impact on consolidated net income and the consolidated statements of cash flows was not material. We also expect that the amount that will be reclassified to interest expense during the next 12 months will not be material.


DELUXE CORPORATION CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts)

goodwill impairment charges were recorded as a result of our 2024 annual impairment analysis.

As of September 30, 2024, we also completed a quantitative analysis of the goodwill related to our U.S. and Canadian payroll and human resources services business, which we are currently in the process of exiting. This analysis resulted in a pretax goodwill impairment charge of $ during the quarter ended September 30, 2024. Further information can be found in Note 6.

Recurring fair value measurements – Cash and cash equivalents included available-for-sale debt securities at December 31, 2023 (Note 3), which consisted of a domestic money market fund. The cost of the fund, which was traded in an active market, approximated its fair value because of the short-term nature of the underlying investments. The fair value of derivative instruments (Note 7) is calculated based on the applicable reference rate curve on the date of measurement.


DELUXE CORPORATION CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts)

)$()$— $()$— Amortized cost:CashCash and cash equivalents — — CashFunds held for customers — — CashOther non-current assets — —

Loans and notes receivable from distributors

Other current assets and other non-current assets — — Long-term debtCurrent portion of long-term debt and long-term debt — —


DELUXE CORPORATION CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts)

$ $ $— $— Derivative assets (Note 7)Other non-current assets — — Derivative liability (Note 7)Other non-current liabilities()()— ()— Amortized cost:CashCash and cash equivalents — —

Cash

Funds held for customers — —

Cash

Other non-current assets — —

Loans and notes receivable from distributors

Other current assets and other non-current assets — —

Long-term debt

Current portion of long-term debt and long-term debt — —

during the quarter ended September 30, 2024 and $ during the quarter ended September 30, 2023. For the nine months ended September 30, 2024 and September 30, 2023, the associated expense was approximately $ and $, respectively. To date, we have incurred expense of approximately $, and we anticipate that we will incur additional North Star restructuring and integration expense of approximately $ through 2025.


DELUXE CORPORATION CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts)

$ $ $ Operating expenses Restructuring and integration expense$ $ $ $

Restructuring and integration expense for each period was comprised of the following:


	Quarter Ended September 30,		Nine Months Ended September 30,
(in thousands)	2024	2023	2024	2023
External consulting and other costs	$	$	$	$
Employee severance benefits
Internal labor
Other
Restructuring and integration expense	$	$	$	$

Our restructuring and integration accruals are included in accrued liabilities on the consolidated balance sheets and represent expected cash payments required to satisfy the remaining severance obligations to those employees already terminated and those expected to be terminated under our various initiatives. The majority of the employee reductions, as well as the related severance payments, are expected to be completed by mid-2025.

Charges Reversals()Payments()

Balance, September 30, 2024

The charges and reversals presented in the rollforward of our restructuring and integration accruals do not include items charged directly to expense as incurred, as those items are not reflected in accrued liabilities on the consolidated balance sheets.

% for the quarter ended September 30, 2024 and % for the nine months ended September 30, 2024, compared to an effective income tax rate of % for the year ended December 31, 2023. While there was a larger tax rate benefit from business exit activity in 2023 than in 2024, the 2024 tax rate benefited from lower tax impacts for share-based compensation, foreign operations and tax return to provision adjustments. For comparison, the reconciliation of our effective income tax rate for 2023 to the U.S. federal statutory tax rate can be found under the caption "Note 10: Income Tax Provision" in the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K.

Our effective income tax rate for the quarter ended September 30, 2023 was %. This tax rate was driven by the pretax loss for the period, the impact of discrete items related to our business exit activity, and an increase in our state effective income tax rate during the quarter.


DELUXE CORPORATION CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts)

%. This tax rate was driven by the lower pretax income for the period, combined with tax expense related to share-based compensation and our foreign operations, including the repatriation of foreign earnings.

$ $ $ Expected return on plan assets()()()()Amortization of prior service credit()()()()Amortization of net actuarial losses Net periodic benefit income$()$()$()$()

$ Senior, unsecured notes Amounts drawn on senior, secured revolving credit facility Securitization obligations Total principal amount Less: unamortized discount and debt issuance costs()()Total debt, net of discount and debt issuance costs Less: current portion of long-term debt, net of debt issuance costs()()Long-term debt$ $

2026 2027 2028 2029 Total principal amount$


DELUXE CORPORATION CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts)

and a $ term loan facility. The revolving credit facility includes a $ swingline sub-facility and a $ letter of credit sub-facility. Loans under the revolving credit facility may be borrowed, repaid and re-borrowed until June 1, 2026, at which time all amounts borrowed must be repaid. The term loan facility is required to be repaid in equal quarterly installments of $ through June 30, 2025 and $ from September 30, 2025 through March 31, 2026. The remaining balance is due on June 1, 2026. The term loan facility also includes mandatory prepayment requirements related to asset sales, new debt (other than permitted debt) and excess cash flow, subject to certain limitations. No premium or penalty is payable in connection with any mandatory or voluntary prepayment of the term loan facility.

Interest is payable on the credit facility at a fluctuating rate of interest determined by reference to the Secured Overnight Financing Rate ("SOFR") plus an applicable margin ranging from % to %, depending on our consolidated total leverage ratio, as defined in the credit agreement, and a commitment fee is payable on the unused portion of the revolving credit facility. Amounts outstanding under the credit facility had a weighted-average interest rate of % as of September 30, 2024 and % as of December 31, 2023, including the impact of interest rate swaps that effectively convert a portion of our variable-rate debt to fixed-rate debt. Further information regarding the interest rate swaps can be found in Note 7.

Borrowings under the credit facility are collateralized by substantially all of the present and future tangible and intangible personal property held by us and our subsidiaries that have guaranteed our obligations under the credit facility, subject to certain exceptions. The credit agreement contains customary covenants regarding limits on levels of indebtedness, liens, mergers, certain asset dispositions, changes in business, advances, investments, loans and restricted payments. The covenants are subject to a number of limitations and exceptions set forth in the credit agreement.

The credit agreement also includes requirements regarding our consolidated total leverage ratio and our consolidated secured leverage ratio, as defined in the credit agreement. During each remaining quarterly period, the consolidated total leverage ratio may not equal or exceed to 1.00 and the consolidated secured leverage ratio may not equal or exceed to 1.00. In addition, we must maintain a minimum interest coverage ratio of at least to 1.00 throughout the remaining term of the credit facility. Failure to meet any of the above requirements would result in an event of default that would allow lenders to declare amounts outstanding immediately due and payable and would allow the lenders to enforce their interests against collateral pledged if we are unable to settle the amounts outstanding. We were in compliance with all debt covenants as of September 30, 2024.

The credit agreement contains customary representations and warranties and, as a condition to borrowing, requires that all such representations and warranties be true and correct in all material respects on the date of each borrowing, including representations as to no material adverse change in our business, assets, operations or financial condition. If our consolidated total leverage ratio exceeds to 1.00, the aggregate annual amount of permitted dividends and share repurchases in connection with incentive-based equity and compensation is limited to $.

Amounts drawn on revolving credit facility()

Outstanding letters of credit(1)

()

Net available for borrowing as of September 30, 2024

(1)

Senior, unsecured notes – In June 2021, we issued $ of % senior unsecured notes that mature in June 2029. The notes were issued via a private placement under Rule 144A of the Securities Act of 1933. Proceeds from the offering, net of discount and offering costs, were $, resulting in an effective interest rate of %. The net proceeds from the notes were used to fund the acquisition of First American Payment Systems, L.P. in June 2021. Interest payments are due each June and December. During 2022, we settled $ of these notes via open market purchases.

The indenture governing the notes contains covenants that limit our ability and the ability of our restricted subsidiaries to, among other things, incur additional indebtedness and liens, issue redeemable stock and preferred stock, pay dividends and distributions, make loans and investments, and consolidate or merge or sell all or substantially all of our assets.

Securitization facility – In March 2024, Deluxe Receivables LLC, a wholly-owned subsidiary, entered into a receivables financing agreement (the “Securitization Facility”) with a group of financial institutions. The agreement terminates in March 2027, unless extended in accordance with its terms. The maximum amount available under the Securitization Facility is $,


DELUXE CORPORATION CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts)

was outstanding under the facility at an interest rate of %. We utilized the proceeds from these borrowings to prepay amounts due under our secured term loan facility.

The Securitization Facility is accounted for as a collateralized financing activity, rather than the sale of assets. As such, the subsidiary is consolidated, and the receivable balances pledged as collateral are presented as accounts receivable on the consolidated balance sheet, and the borrowings are presented as long-term debt. Cash receipts related to the underlying receivables are reflected as operating cash flows and borrowings and repayments under the collateralized loans are reflected as financing cash flows within the consolidated statement of cash flows.

as of September 30, 2024 and $ as of December 31, 2023. These accruals are included in accrued liabilities and other non-current liabilities on the consolidated balance sheets. Our workers' compensation liability is recorded at present value. The difference between the discounted and undiscounted liability was not material as of September 30, 2024 or December 31, 2023.

Our self-insurance liabilities are estimated, in part, by considering historical claims experience, demographic factors and other actuarial assumptions. The estimated accruals for these liabilities could be significantly affected if future events and claims differ from these assumptions and historical trends.

Litigation – Recorded liabilities for legal matters, as well as related charges recorded in each period, were not material to our financial position, results of operations or cash flows during the periods presented, and we do not believe that any of the currently identified claims or litigation will materially affect our financial position, results of operations or cash flows, upon resolution. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, it may cause a material adverse impact on our financial position, results of operations or cash flows in the period in which the ruling occurs or in future periods.

of our common stock. This authorization has no expiration date. shares were repurchased under this authorization during the nine months ended September 30, 2024 or September 30, 2023, and $ remained available for repurchase as of September 30, 2024.


DELUXE CORPORATION CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts)

single customer accounted for more than % of consolidated revenue during the nine months ended September 30, 2024 and 2023.

Our chief operating decision maker ("CODM") is our Chief Executive Officer. He reviews EBITDA on an adjusted basis for each segment when deciding how to allocate resources and to assess segment operating performance. Adjusted EBITDA for each segment excludes depreciation and amortization expense, interest expense, income tax expense and certain other amounts, which may include, from time to time: asset impairment charges; restructuring and integration expense; share-based compensation expense; acquisition transaction costs; certain legal-related expenses outside of the normal course of business; and gains or losses on sales of businesses and long-lived assets. The CODM does not review segment asset information when making investment or operating decisions regarding our reportable business segments.


DELUXE CORPORATION CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts)

$ $ $ Adjusted EBITDA B2B Payments:Revenue Adjusted EBITDA Data Solutions:Revenue Adjusted EBITDA Print:Revenue Adjusted EBITDA Total reportable segments:Revenue$ $ $ $ Adjusted EBITDA

All other:(1)

Revenue Adjusted EBITDA Total:Revenue$ $ $ $ Adjusted EBITDA

(1)

$ $ $ Corporate operations()()()()Depreciation and amortization expense()()()()Interest expense()()()()Net income attributable to non-controlling interest Asset impairment charge() () Restructuring and integration expense()()()()Share-based compensation expense()()()()Certain legal-related benefit (expense) () ()Gain (loss) on sale of businesses and long-lived assets () Income (loss) before income taxes$ $()$ $


DELUXE CORPORATION CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts)

$— $ Merchant services — — — — Promotional solutions— — — — Forms and other business products— — — —

Treasury management solutions

— — — — Data-driven marketing— — — — Other— — Total revenue$ $ $ $ $ $

Quarter Ended September 30, 2023

(in thousands)

Merchant Services

B2B
Payments

Data
Solutions

All
other

Consolidated

Checks

—

Merchant services

—

Promotional solutions

—

Forms and other business products

—

Treasury management solutions

—

Data-driven marketing

—

Other

—

Total revenue

Nine Months Ended September 30, 2024

(in thousands)

Merchant Services

B2B
Payments

Data
Solutions

All
Other

Consolidated

Checks

—

Merchant services

—

Promotional solutions

—

Forms and other business products

—

Treasury management solutions

—

Data-driven marketing

—

Other

—

Total revenue


DELUXE CORPORATION CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts)

$— $ Merchant services — — — — Promotional solutions— — — Forms and other business products— — — — Treasury management solutions— — — — Data-driven marketing— — — — Other— — Total revenue$ $ $ $ $ $


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") includes the following sections:

•Executive Overview that discusses what we do, our operating results at a high level and our financial outlook for the year;

•Consolidated Results of Operations, Restructuring and Integration Expense, and Segment Results that includes a more detailed discussion of our revenue and expenses;

•Cash Flows and Liquidity and Capital Resources that discusses key aspects of our cash flows, financial commitments, capital structure and financial position; and

•Critical Accounting Estimates that discusses the estimates that involve a significant level of uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations.

Please note that this MD&A discussion contains forward-looking statements that involve risks and uncertainties, including, but not limited to, our 2024 outlook, market impacts, and expectations regarding our strategy and performance. Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Form 10-K") outlines known material risks and important information to consider when evaluating our forward-looking statements and is incorporated into this Item 2 of this report on Form 10-Q as if fully stated herein. The Private Securities Litigation Reform Act of 1995 (the "Reform Act") provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information. When we use the words or phrases “should result,” “believe,” “intend,” “plan,” “are expected to,” “targeted,” “will continue,” “will approximate,” “is anticipated,” “estimate,” “project,” “outlook,” "forecast" or similar expressions in this Quarterly Report on Form 10-Q, in future filings with the Securities and Exchange Commission, in our press releases, investor presentations and in oral statements made by our representatives, they indicate forward-looking statements within the meaning of the Reform Act.

This MD&A includes financial information prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"). In addition, we discuss free cash flow, net debt, liquidity, adjusted diluted earnings per share ("EPS"), consolidated adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") and consolidated adjusted EBITDA margin, all of which are non-GAAP financial measures. We believe that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide useful information to assist investors in analyzing our current period operating performance and in assessing our future operating performance. For this reason, our internal management reporting also includes these financial measures, which should be considered in addition to, and not as superior to or as a substitute for, GAAP financial measures. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Our non-GAAP financial measures may not be comparable to similarly titled measures used by other companies and therefore, may not result in useful comparisons. The reconciliation of our non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in Consolidated Results of Operations.


EXECUTIVE OVERVIEW

We help businesses deepen customer relationships through trusted, technology-enabled solutions that help businesses pay and get paid, accelerate growth and operate more efficiently. Our solutions include merchant services, marketing services and data analytics, treasury management solutions, and promotional products, as well as customized checks and business forms. We support millions of small businesses, thousands of financial institutions and hundreds of the world’s largest consumer brands. Our reach, scale and distribution channels position us to be a trusted business partner for our customers.

Our Strategy

A detailed discussion of our strategy can be found in Part I, Item 1 of the 2023 Form 10-K. Having substantially completed our infrastructure modernization initiatives, we have shifted our focus to growth investments, primarily in our payments and data businesses, so that we can continue to drive scale, with the goal of growing profits faster than revenue. Our operations continue to benefit from our disciplined pricing actions and overall cost management. During the third quarter of 2023, we announced our North Star program, the goal of which is to further drive shareholder value by (1) expanding our EBITDA growth trajectory, (2) driving increased cash flow, (3) paying down debt, and (4) improving our leverage ratio. We have started to see the benefits of our North Star initiatives, with both adjusted EBITDA and adjusted EBITDA margin for the first nine months of the year improving over 2023, excluding the impact of business exits. In addition, free cash flow increased $30 million for the first nine months of 2024, as compared to the first nine months of 2023, and net debt as of September 30, 2024 decreased $31 million from the prior year end. Further information can be found in Restructuring and Integration Expense.

Realignment – Effective January 1, 2024, we realigned our organizational structure to better reflect our portfolio mix and offerings, and we updated our reportable segments to correspond with these changes. We did not operate under the new segment structure during 2023. Information regarding our realigned reportable segments for the third quarter and first nine months of 2024 and 2023 can be found under the caption "Note 15: Business Segment Information" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part 1, Item 1 of this report.

Business exits – In June 2023, we completed the sale of our North American web hosting and logo design businesses. These businesses generated annual revenue of approximately $28 million during 2023, through the sale date. In September and December of 2023, we executed agreements allowing for the conversion of our U.S. and Canadian payroll and human resources services customers to other service providers. These businesses generated annual revenue of approximately $27 million during 2023. Further information regarding these business exits can be found under the caption "Note 6: Divestitures" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part 1, Item 1 of this report and under the caption "Note 6: Acquisition and Divestitures" in the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K. We believe that these business exits allow us to focus our resources on the key growth areas of payments and data, while allowing us to optimize our operations.

2024 Financial Results

2024 earnings vs. 2023 – Multiple factors drove the increase in net income for the first nine months of 2024, as compared to the first nine months of 2023, including:

•price increases in response to the inflationary environment, primarily in the Print and Merchant Services segments;

•a $34 million decrease in restructuring and integration expense;

•the benefit of actions taken to optimize our cost structure, including workforce adjustments, marketing refinement and real estate rationalization;

•an increase of $12 million in gains on the sale of businesses and long-lived assets: and

•revenue growth in the Data Solutions and Merchant Services segments.

Partially offsetting these increases in net income were the following factors:

•the continuing secular decline in checks, business forms and some business accessories;

•the elimination of the earnings generated by exited businesses, as well as a related $7 million pretax goodwill impairment charge;

•inflationary pressures on hourly wages, materials and delivery; and

•an increase in bad debt expense of $7 million, primarily related to certain specific accounts receivable reserve adjustments in the Print segment.

Diluted EPS of $0.90 for the first nine months of 2024, as compared to $0.25 for the first nine months of 2023, reflects the increase in net income as described in the preceding paragraphs, partially offset by higher shares outstanding in 2024. Adjusted diluted EPS for the first nine months of 2024 was $2.46 compared to $2.53 for the first nine months of 2023, and excludes the impact of non-cash items or items that we believe are not indicative of our current period operating performance. The decrease in adjusted diluted EPS was driven by the continuing secular decline in checks, business forms and some business accessories, as well as the impact of business exits, which we estimate reduced adjusted diluted EPS by approximately $0.24 year over year, inflationary pressures on our cost structure, and increased bad debt expense. These decreases in adjusted diluted EPS were partially offset by price increases in response to the inflationary environment, the benefit of various cost optimization actions across functional areas, and revenue growth in the Data Solutions and Merchant Services segments. A reconciliation of diluted EPS to adjusted diluted EPS can be found in Consolidated Results of Operations.

Cash flows and liquidity – Net cash provided by operating activities increased $19 million for the first nine months of 2024, as compared to the first nine months of 2023, driven, in large part, by our pricing and cost management initiatives and a reduction in restructuring costs in 2024. In addition, payments for cloud computing implementation costs decreased $6 million related to costs incurred in 2023 for the implementation of our enterprise resource planning ("ERP") system, and performance-based compensation payments decreased $5 million compared to the prior year. Partially offsetting these increases in operating cash flow was the continuing secular decline in checks, business forms and some business accessories, as well as the impact of our business exits and inflationary pressures on our cost structure. In addition, payments for income taxes increased $4 million related primarily to foreign tax payments. Free cash flow increased $30 million for the first nine months of 2024, as compared to the first nine months of 2023. Total debt was $1.53 billion and net debt was $1.49 billion as of September 30, 2024. We held cash and cash equivalents of $41 million as of September 30, 2024, and liquidity was $325 million. Our capital allocation priorities are to reduce our debt and net leverage, deliver high return internal investments and pay our dividend. We continue to responsibly invest the free cash flow generated by our Print business into our growth businesses. A reconciliation of free cash flow, net debt and liquidity to the comparable GAAP financial measures can be found in Consolidated Results of Operations.

Recent market conditions – We continually monitor the interest rate environment and its impact on our outstanding debt. As of September 30, 2024, we held interest rate swaps that effectively convert $723 million of our variable-rate debt to a fixed rate. As a result, 78% of our debt had a weighted-average fixed rate of 7.0% as of September 30, 2024, which partially insulates us from future interest rate increases.

We continue to monitor inflationary pressures on our labor, delivery and material costs. In response to the inflationary environment, we implemented targeted price increases, primarily in our Print and Merchant Services segments. Despite the price changes, we continue to experience healthy revenue volumes, demonstrating the strength of our business and continued demand for our products. We have, at times, experienced some supply disruptions impacting certain printed products in our Print segment. We continuously monitor our supply chain to avoid delays or disruptions. We have also experienced labor supply issues in portions of our business. It remains difficult to estimate the severity and duration of inflation or supply chain and labor issues on our business, financial position or results of operations.

We also monitor trends in small business sentiment and consumer discretionary spending. We review many data sources, including information from the credit card brands, the Federal Reserve and other economic forecast providers, as well as our own proprietary data. These trends impact multiple areas of our portfolio, most notably our Merchant Services and Print segments. Our year-to-date performance reflected the generally stable economic environment. While consumers remain under pressure in some areas, we believe downward trends in discretionary consumer spending have largely stabilized. At the same time, we have seen demand soften for some of our discretionary promotional products in the Print segment. These data points are reflected in our 2024 revenue outlook.

Outlook for 2024

We expect that revenue for 2024 will be between $2.12 billion and $2.14 billion, compared to 2023 revenue of $2.19 billion, which included revenue of approximately $56 million from our business exits. We expect that adjusted EBITDA for the full year will be between $405 million and $415 million, compared to $417 million for 2023, which included adjusted EBITDA of approximately $26 million from our business exits. We expect that adjusted diluted EPS for 2024 will be between $3.20 and $3.35, compared to $3.32 for 2023, which included approximately $0.30 from our business exits, and we expect that free cash flow for the full year will be between $90 million and $100 million, compared to $98 million for 2023. Our outlook ranges exclude the payroll and human resources services business that we are currently in the process of exiting. These estimates are subject to, among other things, prevailing macroeconomic conditions, global unrest, labor supply issues, inflation and the impact of business exits. Information regarding our outlook information can be found in Reconciliation of Non-GAAP Financial Measures within the Consolidated Results of Operations section.

As of September 30, 2024, we held cash and cash equivalents of $41 million and $283 million was available for borrowing under our revolving credit facility. We anticipate that capital expenditures will be approximately $100 million for the full year, as compared to $101 million for 2023, as we continue with important innovation investments and building scale across our product categories. We also expect that we will continue to pay our regular quarterly dividend. However, dividends are approved by our board of directors each quarter and thus, are subject to change. We anticipate that net cash generated by operations, along with cash and cash equivalents on hand and availability under our credit facility, will be sufficient to support our operations, including our contractual obligations and debt service requirements, for the next 12 months, as well as our long-term capital requirements. We were in compliance with our debt covenants as of September 30, 2024, and we anticipate that we will remain in compliance with our debt covenants throughout the next 12 months.


CONSOLIDATED RESULTS OF OPERATIONS

Consolidated Revenue


	Quarter Ended September 30,					Nine Months Ended September 30,
(in thousands)	2024		2023		Change	2024		2023		Change
Total revenue	$	528,444	$	537,844	(1.7%)	$	1,601,215	$	1,654,896	(3.2%)

The decreases in total revenue for the third quarter and first nine months of 2024, as compared to the same periods in 2023, were driven, in part, by the business exits discussed in Executive Overview, which resulted in a decrease in revenue of approximately $6 million for the third quarter of 2024 and $39 million for the first nine months of 2024. Also contributing to the decrease in revenue was the continuing secular decline in order volumes for checks, business forms and some business accessories, as well as a decrease in treasury management revenue due to reduced lockbox processing volumes and the transition from our dependency on one-time, non-recurring revenue to a recurring revenue model. Partially offsetting these decreases in revenue were price increases in response to the inflationary environment, primarily in the Print and Merchant Services segments, as well as revenue growth in the Merchant Services segment driven by both volume and new customers. In addition, for the first nine months of 2024, strong demand for our data-driven marketing services drove a $10 million increase in revenue.

We do not manage our business based on product versus service revenue. Instead, we analyze our revenue based on the product and service offerings shown under the caption "Note 15: Business Segment Information" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part I, Item 1 of this report.

Our revenue mix by business segment was as follows:


	Quarter Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Merchant Services	17.7	%	16.4	%	18.0	%	16.2	%
B2B Payments	14.2	%	13.8	%	13.4	%	13.7	%
Data Solutions	11.5	%	11.9	%	11.1	%	10.1	%
Print	56.3	%	56.6	%	56.8	%	57.0	%
All other	0.3	%	1.3	%	0.7	%	3.0	%
Total revenue	100.0	%	100.0	%	100.0	%	100.0	%

Consolidated Cost of Revenue


	Quarter Ended September 30,							Nine Months Ended September 30,
(in thousands)	2024			2023			Change	2024			2023			Change
Total cost of revenue	$	246,577		$	255,127		(3.4%)	$	747,020		$	775,737		(3.7%)
Total cost of revenue as a percentage of total revenue	46.7		%	47.4		%	(0.7) pts.	46.7		%	46.9		%	(0.2) pts.

Cost of revenue consists primarily of raw materials used to manufacture our products, shipping and handling costs, third-party costs for outsourced products and services, payroll and related expenses, information technology costs, depreciation and amortization of assets used in the production process and in support of digital service offerings, and related overhead.

The decreases in total cost of revenue for the third quarter and first nine months of 2024, as compared to the same periods in 2023, were driven by reduced revenue volume from the continuing secular decline in checks, business forms and some business accessories, as well as the benefit of our various cost optimization initiatives and the decrease in treasury management revenue. In addition, restructuring and integration expense included in cost of revenue decreased $6 million for the third quarter of 2024 and $10 million for the first nine months of 2024, and total cost of revenue decreased approximately $2 million for the third quarter of 2024 and $15 million for the first nine months of 2024 due to the business exits discussed under Executive Overview. Partially offsetting these decreases in cost of revenue was the revenue growth in Merchant Services and inflationary pressure on hourly wages, materials and delivery. In addition, for the first nine months of 2024, strong demand for our data-driven marketing services drove an increase in cost of revenue, and we recorded additional amortization expense of $3 million related to the acceleration of amortization on the assets of our payroll and human resources services business, which we are currently in the process of exiting.

Total cost of revenue as a percentage of total revenue for the third quarter and first nine months of 2024 decreased as compared to the same periods in 2023, as the benefits of our pricing and cost optimization actions, the lower restructuring and integration expense and changes in campaign timing and client mix in Data Solutions more than offset the inflationary impacts and the accelerated amortization expense associated with our business exits.

Consolidated Selling, General & Administrative ("SG&A") Expense


	Quarter Ended September 30,							Nine Months Ended September 30,
(in thousands)	2024			2023			Change	2024			2023			Change
SG&A expense	$	227,764		$	233,891		(2.6%)	$	695,677		$	726,880		(4.3%)
SG&A expense as a percentage of total revenue	43.1		%	43.5		%	(0.4) pts.	43.4		%	43.9		%	(0.5) pts.

The decreases in SG&A expense for the third quarter and first nine months of 2024, as compared to the same periods in 2023, were driven, in large part, by our various cost management actions, including workforce adjustments, marketing optimization and real estate rationalization, as well as a decrease related to the business exits discussed under Executive Overview of approximately $1 million for the third quarter of 2024 and $10 million for the first nine months of 2024. For the first nine months of 2024, these decreases in SG&A expense were partially offset by a $7 million increase in bad debt expense, primarily related to certain specific accounts receivable reserve adjustments in the Print segment.

Restructuring and Integration Expense


	Quarter Ended September 30,						Nine Months Ended September 30,
(in thousands)	2024		2023		Change		2024		2023		Change
Restructuring and integration expense	$	11,031	$	22,935	$	(11,904)	$	35,899	$	60,067	$	(24,168)

We continue to pursue several initiatives designed to focus our business behind our growth strategy and to increase our efficiency. The amount of restructuring and integration expense is expected to vary from period to period as we execute these initiatives. Further information regarding these costs can be found in Restructuring and Integration Expense in this MD&A discussion.

Asset Impairment Charge


	Quarter Ended September 30,						Nine Months Ended September 30,
(in thousands)	2024		2023		Change		2024		2023		Change
Asset impairment charge	$	6,700	$	—	$	6,700	$	6,700	$	—	$	6,700

During the quarter ended September 30, 2024, we recorded a goodwill impairment charge related to the exit from our U.S. and Canadian payroll and human resources services business. Further information can be found under the caption "Note 6: Divestitures" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part 1, Item 1 of this report.

Gain (Loss) on Sale of Businesses and Long-Lived Assets


	Quarter Ended September 30,						Nine Months Ended September 30,
(in thousands)	2024		2023		Change		2024		2023		Change
Gain (loss) on sale of businesses and long-lived assets	$	5,208	$	(4,324)	$	9,532	$	29,190	$	17,618	$	11,572

As discussed in Executive Overview, we are currently in the process of exiting our payroll and human resources services business, and we recognized income of $5 million during the third quarter of 2024 and $28 million during the first nine months of 2024 related to customer conversion agreements executed in 2023. In June 2023, we completed the sale of our North American web hosting and logo design businesses. Further information regarding these business exits can be found under the caption "Note 6: Divestitures" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part 1, Item 1 of this report.

Interest Expense


	Quarter Ended September 30,							Nine Months Ended September 30,
(in thousands)	2024			2023			Change	2024			2023			Change
Interest expense	$	29,905		$	32,034		(6.6%)	$	90,910		$	93,982		(3.3%)
Weighted-average debt outstanding	1,572,201			1,682,442			(6.6%)	1,588,327			1,691,137			(6.1%)
Weighted-average interest rate	7.1		%	7.1		%	—	7.1		%	7.0		%	0.1 pts.

The decreases in interest expense for the third quarter and first nine months of 2024, as compared to the same periods in 2023, were primarily due to the decrease in average debt outstanding. For the first nine months of 2024, this decrease was partially offset by the impact of higher interest rates. Based on the amount of variable-rate debt outstanding as of September 30, 2024, a one percentage point change in the weighted-average interest rate would result in a change in interest expense of approximately $1 million for the remainder of 2024.

Income Tax Provision (Benefit)


	Quarter Ended September 30,							Nine Months Ended September 30,
(in thousands)	2024			2023			Change	2024			2023			Change
Income tax provision (benefit)	$	4,540		$	(1,194)		480.2%	$	20,463		$	9,186		122.8%
Effective income tax rate	33.6		%	13.0		%	20.6 pts.	33.7		%	45.0		%	(11.3) pts.

The change in our effective income tax rate for the third quarter of 2024, as compared to the third quarter of 2023, was driven primarily by the pretax loss for the third quarter of 2023, as well as discrete items related to our business exit activity in each period.

The effective income tax rate decreased for the first nine months of 2024, as compared to the first nine months of 2023, as the higher tax rate benefit from business exit activity in 2023 was more than offset by lower tax rate impacts in 2024 from share-based compensation and the repatriation of foreign earnings.

Net Income (Loss) / Diluted Earnings (Loss) Per Share


	Quarter Ended September 30,					Nine Months Ended September 30,
(in thousands, except per share amounts)	2024		2023		Change	2024		2023		Change
Net income (loss)	$	8,969	$	(7,957)	212.7%	$	40,296	$	11,224	259.0%
Diluted earnings (loss) per share	0.20		(0.18)		211.1%	0.90		0.25		260.0%
Adjusted diluted EPS(1)	0.84		0.79		6.3%	2.46		2.53		(2.8%)

(1) Information regarding the calculation of adjusted diluted EPS can be found in the following section entitled Reconciliation of Non-GAAP Financial Measures.

Multiple factors drove the increase in net income for the third quarter of 2024, as compared to the third quarter of 2023, including:

•pricing and cost optimization actions;

•an $18 million reduction in restructuring and integration expense;

•an increase of $10 million in gains on the sale of businesses and long-lived assets:

•revenue growth in Merchant Services; and

•a $2 million reduction in interest expense.

Partially offsetting these increases in net income were the following factors:

•the continuing secular decline in checks, business forms and some business accessories;

•the elimination of the earnings generated by exited businesses, as well as a related $7 million pretax goodwill impairment charge; and

•inflationary pressures on hourly wages, materials and delivery.

Diluted EPS of $0.20 for the third quarter of 2024, as compared to a loss of $0.18 for the third quarter of 2023, reflects the increase in net income as described in the preceding paragraphs, partially offset by higher shares outstanding in 2024. The increase in adjusted diluted EPS for the third quarter of 2024, as compared to the third quarter of 2023, was driven by our pricing and cost optimization actions, revenue growth in Merchant Services and lower interest expense. Partially offsetting these increases in adjusted diluted EPS was the continuing secular decline in checks, business forms and some business accessories, as well as the impact of business exits and inflationary pressures on our cost structure.

The increases in net income and diluted EPS and the decrease in adjusted diluted EPS for the first nine months of 2024, as compared to the first nine months of 2023, were driven by the factors outlined in Executive Overview - 2024 earnings vs. 2023.

Adjusted EBITDA


	Quarter Ended September 30,							Nine Months Ended September 30,
(in thousands)	2024			2023			Change	2024			2023			Change
Adjusted EBITDA(1)	$	104,902		$	101,890		3.0%	$	308,745		$	310,698		(0.6%)
Adjusted EBITDA as a percentage of total revenue (adjusted EBITDA margin)(1)	19.9		%	18.9		%	1.0 pts.	19.3		%	18.8		%	0.5 pts.

(1) Information regarding the calculation of adjusted EBITDA and adjusted EBITDA margin can be found in the following section entitled Reconciliation of Non-GAAP Financial Measures.

The increase in adjusted EBITDA for the third quarter of 2024, as compared to the third quarter of 2023, was due to the benefits of our pricing and cost optimization actions and revenue growth in Merchant Services. Partially offsetting these increases in adjusted EBITDA was the continuing secular decline in checks, business forms and some business accessories; a $4 million decline driven by the business exits discussed under Executive Overview; and inflationary pressures on hourly wages, materials and delivery.

The decrease in adjusted EBITDA for the first nine months of 2024, as compared to the first nine months of 2023, was driven by the continuing secular decline in checks, business forms and some business accessories; a $16 million decline driven by the business exits discussed under Executive Overview; inflationary pressures on hourly wages, materials and delivery; and an increase in bad debt expense of $7 million, primarily related to certain specific accounts receivable reserve adjustments in the Print segment. Partially offsetting these decreases in adjusted EBITDA were the benefits of our pricing and cost optimization actions and revenue growth in Data Solutions and Merchant Services.

Adjusted EBITDA margin increased for the third quarter and first nine months of 2024, as compared to the same periods in 2023, as pricing and cost optimization actions more than offset the inflationary pressures. For the first nine months of 2024, adjusted EBITDA margin was also negatively impacted by the increase in bad debt expense.

Reconciliation of Non-GAAP Financial Measures

Free cash flow – We define free cash flow as net cash provided by operating activities less purchases of capital assets. We believe that free cash flow is an important indicator of cash available for debt service and for shareholders, after making

capital investments to maintain or expand our asset base. A limitation of using the free cash flow measure is that not all of our free cash flow is available for discretionary spending, as we may have mandatory debt payments and other cash requirements that must be deducted from our available cash. We believe that the measure of free cash flow provides an additional metric to compare cash generated by operations on a consistent basis and to provide insight into the cash flow available to fund items such as dividends, mandatory and discretionary debt reduction, acquisitions or other strategic investments, and share repurchases.

Net cash provided by operating activities reconciles to free cash flow as follows:


	Nine Months Ended September 30,
(in thousands)	2024		2023
Net cash provided by operating activities	$	134,122	$	114,906
Purchases of capital assets	(69,777)		(80,809)
Free cash flow	$	64,345	$	34,097

Net debt – Management believes that net debt is an important measure to monitor leverage and to evaluate the balance sheet. In calculating net debt, cash and cash equivalents are subtracted from total debt because they could be used to reduce our debt obligations. A limitation associated with using net debt is that it subtracts cash and cash equivalents, and therefore, may imply that management intends to use cash and cash equivalents to reduce outstanding debt. In addition, net debt suggests that our debt obligations are less than the most comparable GAAP measure indicates.

Total debt reconciles to net debt as follows:


(in thousands)	September 30, 2024		December 31, 2023
Total debt	$	1,531,527	$	1,592,851
Cash and cash equivalents	(41,307)		(71,962)
Net debt	$	1,490,220	$	1,520,889

Liquidity – We define liquidity as cash and cash equivalents plus the amount available for borrowing under our revolving credit facility. We consider liquidity to be an important metric for demonstrating the amount of cash that is available or that could be available on short notice. This financial measure is not a substitute for GAAP liquidity measures. Instead, we believe that this measurement enhances investors' understanding of the funds that are currently available.

Liquidity was as follows:


(in thousands)	September 30, 2024		December 31, 2023
Cash and cash equivalents	$	41,307	$	71,962
Amount available for borrowing under revolving credit facility	283,327		240,514
Liquidity	$	324,634	$	312,476

Adjusted diluted EPS – By excluding the impact of non-cash items or items that we believe are not indicative of current period operating performance, we believe that adjusted diluted EPS provides useful comparable information to assist in analyzing our current period operating performance and in assessing our future operating performance. As such, adjusted diluted EPS is one of the key financial performance metrics we use to assess the operating results and performance of the business and to identify strategies to improve performance. It is reasonable to expect that one or more of the excluded items will occur in future periods, but the amounts recognized may vary significantly.

Diluted EPS reconciles to adjusted diluted EPS as follows:


	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2024		2023		2024		2023
Net income (loss)	$	8,969	$	(7,957)	$	40,296	$	11,224
Net income attributable to non-controlling interest	(38)		(26)		(103)		(80)
Net income (loss) attributable to Deluxe	8,931		(7,983)		40,193		11,144
Acquisition amortization	13,475		16,514		42,251		58,811
Accelerated amortization	6,851		—		16,740		—
Restructuring and integration expense	11,265		29,364		37,031		70,935
Share-based compensation expense	4,842		4,539		14,972		15,889

Certain legal-related (benefit) expense	(350)		1,949		(50)		2,195
Asset impairment charge	6,700		—		6,700		—
(Gain) loss on sale of businesses and long-lived assets	(5,208)		4,324		(29,190)		(17,618)
Adjustments, pretax	37,575		56,690		88,454		130,212
Income tax provision impact of pretax adjustments(1)	(9,001)		(13,773)		(18,845)		(30,669)
Adjustments, net of tax	28,574		42,917		69,609		99,543
Adjusted net income attributable to Deluxe	37,505		34,934		109,802		110,687
Income allocated to participating securities	(8)		—		(8)		—
Re-measurement of share-based awards classified as liabilities	(8)		—		(47)		(20)
Adjusted income attributable to Deluxe available to common shareholders	$	37,489	$	34,934	$	109,747	$	110,667

Weighted average shares and potential common shares outstanding	44,806		43,663		44,656		43,771
Adjustment(2)	—		378		11		50
Adjusted weighted average shares and potential common shares outstanding	44,806		44,041		44,667		43,821

GAAP diluted EPS	$	0.20	$	(0.18)	$	0.90	$	0.25
Adjustments, net of tax	0.64		0.97		1.56		2.28
Adjusted diluted EPS	$	0.84	$	0.79	$	2.46	$	2.53

(1) The tax effect of the pretax adjustments considers the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). Generally, this results in a tax impact that approximates the U.S. effective tax rate for each adjustment. However, the tax impact of certain adjustments, such as share-based compensation expense, depends on whether the amounts are deductible in the respective tax jurisdictions and the applicable effective tax rate(s) in those jurisdictions.

(2) The total of weighted-average shares and potential common shares outstanding used in the calculation of adjusted diluted EPS differs from the GAAP calculation due to differences in the amount of dilutive securities in each calculation.

Adjusted EBITDA and adjusted EBITDA margin – We believe that adjusted EBITDA and adjusted EBITDA margin are useful in evaluating our operating performance, as they eliminate the effect of interest expense, income taxes, the accounting effects of capital investments (i.e., depreciation and amortization) and certain items, as presented below, that may vary for reasons unrelated to current period operating performance. In addition, management utilizes these measures to assess the operating results and performance of the business, to perform analytical comparisons and to identify strategies to improve performance. We also believe that an increasing adjusted EBITDA and adjusted EBITDA margin depict an increase in the value of the company. We do not consider adjusted EBITDA to be a measure of cash flow, as it does not consider certain cash requirements such as interest, income taxes, debt service payments or capital investments.

Net income (loss) reconciles to adjusted EBITDA and adjusted EBITDA margin as follows:


	Quarter Ended September 30,						Nine Months Ended September 30,
(in thousands)	2024			2023			2024			2023
Net income (loss)	$	8,969		$	(7,957)		$	40,296		$	11,224
Net income attributable to non-controlling interest	(38)			(26)			(103)			(80)
Depreciation and amortization expense	44,277			38,857			127,716			124,985
Interest expense	29,905			32,034			90,910			93,982
Income tax provision (benefit)	4,540			(1,194)			20,463			9,186
Restructuring and integration expense	11,265			29,364			37,031			70,935
Share-based compensation expense	4,842			4,539			14,972			15,889

Certain legal-related (benefit) expense	(350)			1,949			(50)			2,195
Asset impairment charge	6,700			—			6,700			—
(Gain) loss on sale of businesses and long-lived assets	(5,208)			4,324			(29,190)			(17,618)
Adjusted EBITDA	$	104,902		$	101,890		$	308,745		$	310,698
Adjusted EBITDA margin	19.9		%	18.9		%	19.3		%	18.8		%

2024 outlook – Our outlook information for 2024 excludes the operations of the payroll and human resources services business that we are currently in the process of exiting. Because the revenue from this business will gradually decrease as customers elect to convert to other service providers, we are unable to estimate the results of operations for this business for 2024. In addition, we do not reconcile our adjusted EBITDA, adjusted diluted EPS or free cash flow outlook to the directly comparable GAAP financial measures because we do not provide outlook guidance for the reconciling items between net income, adjusted net income and adjusted EBITDA, and certain of these reconciling items impact cash flows from operating activities. Because of the substantial uncertainty and variability surrounding certain of the forward-looking reconciling items, including asset impairment charges, restructuring and integration expense, gains and losses on sales of businesses and long-lived assets, and certain legal-related expenses, a reconciliation of the non-GAAP financial measure outlook guidance to the corresponding GAAP measure is not available without unreasonable effort. The probable significance of certain of these reconciling items is high and, based on historical experience, could be material.

Reconciliations to the comparable GAAP financial measures for adjusted EBITDA, adjusted diluted EPS and free cash flow for the year ended December 31, 2023 can be found in the MD&A section of the 2023 Form 10-K, under the caption entitled Reconciliation of Non-GAAP Financial Measures within the Consolidated Results of Operations section.


RESTRUCTURING AND INTEGRATION EXPENSE

Restructuring and integration expense consists of costs related to initiatives to drive earnings and cash flow growth and also includes costs related to the consolidation and migration of certain applications and processes. These costs consist primarily of consulting, project management services and internal labor, as well as other costs associated with our initiatives, such as costs related to facility closures and consolidations. In addition, we have recorded employee severance costs across functional areas.

We are currently pursuing several initiatives designed to support our growth strategy and to increase our efficiency, including several initiatives that we collectively refer to as our North Star program. The goal of these initiatives is to further drive shareholder value by (1) expanding our EBITDA growth trajectory, (2) increasing cash flow, (3) paying down debt, and (4) improving our leverage ratio. The various initiatives include a balanced mix of structural cost reductions focused on organizational structure, processes and operational improvements, in addition to workstreams to drive revenue growth. As part of these initiatives, we have already combined like-for-like capabilities, reduced management layers and consolidated core operations to run more efficiently and to create the ability to invest in high impact talent to accelerate our growth businesses of payments and data. We have made meaningful progress on all of the remaining North Star initiatives, and we expect we will continue to see the benefits in our results of operations for the remainder of the year and throughout 2025. For example, during the second quarter of 2024, we began the consolidation into one unified brand of all six brands acquired in 2021 as part of the First American acquisition. We expect that this will improve our marketing effectiveness and lower our costs over time. We have also made significant progress in reducing our corporate expenses, which decreased 12% for the first nine months of 2024, as compared to the first nine months of 2023. Further information regarding our restructuring and integration expense, including

expenses related to our North Star program, can be found under the caption "Note 9: Restructuring and Integration Expense" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part I, Item 1 of this report.

We expect that the benefits of the various North Star initiatives will continue to ramp up over the coming quarters. The overall program targets a $100 million run-rate improvement in free cash flow and an $80 million run-rate improvement in adjusted EBITDA by 2026. Through September 30, 2024, we have incurred related restructuring and integration expense of approximately $80 million, and we anticipate that we will incur additional North Star restructuring and integration expense of approximately $30 million through 2025. These charges will include professional services fees, employee severance and other restructuring-related charges.

The majority of the employee reductions included in our restructuring and integration accruals as of September 30, 2024, as well as the related severance payments, are expected to be completed by mid-2025. As a result of these employee reductions, including those related to our North Star program, we expect to realize annual cost savings of approximately $10 million in cost of sales and $25 million in SG&A expense in 2024, in comparison to our 2023 results of operations. In addition, we anticipate cost savings from facility closures of approximately $3 million in 2024, in comparison to our 2023 results of operations. Note that these savings may be offset by increased labor and other costs, including inflationary impacts and investments in the business.


SEGMENT RESULTS

Effective January 1, 2024, we realigned our organizational structure to better reflect our portfolio mix and offerings, and we updated our reportable segments to correspond with these changes. We did not operate under the new segment structure during 2023. Information regarding our realigned reportable segments can be found under the caption "Note 15: Business Segment Information" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part 1, Item 1 of this report, where information regarding revenue from our various product and service offerings can also be found.

Merchant Services

Results for our Merchant Services segment were as follows:


	Quarter Ended September 30,							Nine Months Ended September 30,
(in thousands)	2024			2023			Change	2024			2023			Change
Total revenue	$	93,531		$	87,984		6.3%	$	288,536		$	268,556		7.4%
Adjusted EBITDA	17,752			17,393			2.1%	58,377			53,120			9.9%
Adjusted EBITDA margin	19.0		%	19.8		%	(0.8 pts.)	20.2		%	19.8		%	0.4 pts.

The increases in total revenue for the third quarter and first nine months of 2024, as compared to the same periods in 2023, were driven by customer wins spanning our market channels, including our bank partner relationships and increasing penetration with integrated software vendors, or ISVs. In addition, revenue also benefited from favorable volume, most notably in our government channel, as well as pricing actions in the second quarter of 2024 in response to the inflationary environment. For the full year, we continue to anticipate mid to high single-digit revenue growth, even though the year-over-year comparison in the fourth quarter of 2024 will be negatively impacted by a large customer conversion that we completed in the fourth quarter of 2023.

The increases in adjusted EBITDA for the third quarter and first nine months of 2024, as compared to the same periods in 2023, were driven primarily by the revenue growth and price increases. Adjusted EBITDA margin decreased for the third quarter of 2024, as compared to the third quarter of 2023, driven by year-over-year changes in customer and market channel mix, partially offset by the pricing actions. Adjusted EBITDA margin increased for the first nine months of 2024, as compared to the first nine months of 2023, driven by the scalability of this business and the pricing actions. For the full year, we expect adjusted EBITDA margin to remain in the low 20% range.

B2B Payments

Results for our B2B Payments segment were as follows:


	Quarter Ended September 30,							Nine Months Ended September 30,
(in thousands)	2024			2023			Change	2024			2023			Change
Total revenue	$	75,140		$	74,581		0.7%	$	214,788		$	226,118		(5.0%)
Adjusted EBITDA	15,264			16,074			(5.0%)	42,537			44,741			(4.9%)
Adjusted EBITDA margin	20.3		%	21.6		%	(1.3) pts.	19.8		%	19.8		%	—

Total revenue increased slightly for the third quarter of 2024, as compared to the third quarter of 2023, driven primarily by the implementation of new remittance processing customers and the benefit of a modest price increase implemented in response to the inflationary environment. Partially offsetting these increases in revenue were non-recurring hardware and other sales during 2023. We are in the midst of a transition from our dependency on one-time, non-recurring revenue to a recurring revenue model. As such, we are deliberately reducing focus on selling lower-margin products such as check imaging devices and one-time software licenses.

Total revenue decreased for the first nine months of 2024, as compared to the first nine months of 2023, driven primarily by reduced lockbox processing volumes and the reduction in non-recurring revenue streams. We currently have a number of new remittance processing customers in the implementation phase. Partially offsetting these decreases in revenue was the benefit of a modest price increase implemented in response to the inflationary environment and new client implementations in the third quarter of 2024. For the full year, we anticipate that revenue will decline in the low single-digit percentage range as we continue to transition to recurring revenue.

Adjusted EBITDA decreased for the third quarter of 2024, as compared to the third quarter of 2023, driven by impacts from the initial onboarding of new remittance processing customers during the quarter and the non-recurring business in 2023. These reductions in adjusted EBITDA were partially offset by the modest price increase. Adjusted EBITDA decreased for the first nine months of 2024, as compared to the first nine months of 2023, driven primarily by the revenue decline for the period, inflationary pressures on labor costs and costs related to the initial onboarding of new remittance processing customers during the third quarter of 2024. Partially offsetting these decreases in adjusted EBITDA was the benefit of cost optimization initiatives, including the consolidation of our lockbox processing operations, as well as the modest price increase. We expect that adjusted EBITDA margins for this business will be in the low to mid-20% range as we complete the on-boarding of new customers over the next several quarters and our cost structure stabilizes.

Data Solutions

Results for our Data Solutions segment were as follows:


	Quarter Ended September 30,							Nine Months Ended September 30,
(in thousands)	2024			2023			Change	2024			2023			Change
Total revenue	$	61,065		$	64,080		(4.7%)	$	178,169		$	167,735		6.2%
Adjusted EBITDA	17,485			15,317			14.2%	48,150			38,956			23.6%
Adjusted EBITDA margin	28.6		%	23.9		%	4.7 pts.	27.0		%	23.2		%	3.8 pts.

The decrease in total revenue for the third quarter of 2024, as compared to the third quarter of 2023, was driven primarily by data-driven marketing campaign timing dynamics during each period. This business experiences some quarter-to-quarter volatility driven by the timing of our customers' marketing campaigns.

The increase in total revenue for the first nine months of 2024, as compared to the first nine months of 2023, was driven primarily by strong demand for customer acquisition marketing activities across both our base of core financial institution partners, as well as our growing portfolio of other clients. New campaign activity remains strong, and we anticipate that our mid- to high single-digit longer term growth outlook remains appropriate from a full year perspective.

Adjusted EBITDA for the third quarter and first nine months of 2024 increased compared to the same periods in 2023, driven primarily by changes in campaign timing and client mix and our cost optimization actions. For the first nine months of 2024, adjusted EBITDA also benefited from the increase in data-driven marketing volume. Adjusted EBITDA margin increased for the third quarter and first nine months of 2024, as compared to the same periods in 2023, driven primarily by changes in client mix and cost optimization actions. We anticipate that adjusted EBITDA margin will continue to be in the low to mid-20% range going forward.

Results for our Print segment were as follows:


	Quarter Ended September 30,							Nine Months Ended September 30,
(in thousands)	2024			2023			Change	2024			2023			Change
Total revenue	$	297,313		$	304,282		(2.3%)	$	909,393		$	942,839		(3.5%)
Adjusted EBITDA	97,407			98,044			(0.6%)	282,226			298,015			(5.3%)
Adjusted EBITDA margin	32.8		%	32.2		%	0.6 pts.	31.0		%	31.6		%	(0.6) pts.

The decreases in total revenue for the third quarter and first nine months of 2024, as compared to the same periods in 2023, were driven primarily by the continuing secular decline in order volumes for checks, business forms and some business accessories, as well as some demand softness for our promotional products. These decreases in revenue were partially offset by pricing actions in response to the inflationary environment. For the full year, we expect that the percentage revenue decline will be in the low to mid-single digits.

The decreases in adjusted EBITDA for the third quarter and first nine months of 2024, as compared to the same periods in 2023, were driven by the secular decline in order volumes, reduced volume for our promotional products, and inflationary pressures on delivery and materials. In addition, for the nine month period, adjusted EBITDA was impacted by increased bad debt expense, primarily related to certain specific accounts receivable reserve adjustments. These decreases in adjusted EBITDA were partially offset by pricing actions in response to the inflationary environment, as well as the benefit of various cost optimization initiatives. We remain focused on operating expense discipline and overall efficiency in this segment.

Adjusted EBITDA margin increased for the third quarter of 2024, as compared to the third quarter of 2023, driven by the pricing actions and the benefit of our cost optimization strategies as we continue to drive supply chain efficiency and capacity utilization, while leveraging our print-on-demand investments. Adjusted EBITDA margin decreased for the first nine months of 2024, as compared to the first nine months of 2023, as the impact of inflationary cost pressures, the lower order volumes and the increased bad debt expense more than offset the benefit of pricing and cost optimization actions. For the full year, we continue to expect adjusted EBITDA margin in the low 30% range.


CASH FLOWS AND LIQUIDITY

As of September 30, 2024, we held cash and cash equivalents of $41 million and restricted cash and restricted cash equivalents included in funds held for customers and other non-current assets of $44 million. The following table shows our cash flow activity for the nine months ended September 30, 2024 and 2023 and should be read in conjunction with the consolidated statements of cash flows appearing in Part I, Item 1 of this report.


	Nine Months Ended September 30,
(in thousands)	2024		2023		Change
Net cash provided by operating activities	$	134,122	$	114,906	$	19,216
Net cash used by investing activities	(51,323)		(50,735)		(588)
Net cash used by financing activities	(452,081)		(213,590)		(238,491)
Effect of exchange rate change on cash, cash equivalents, restricted cash and restricted cash equivalents	(3,156)		993		(4,149)
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents	$	(372,438)	$	(148,426)	$	(224,012)
Free cash flow(1)	$	64,345	$	34,097	$	30,248

(1) See Reconciliation of Non-GAAP Financial Measures within the Consolidated Results of Operations section, which defines and illustrates how we calculate free cash flow.

Net cash provided by operating activities increased $19 million for the first nine months of 2024, as compared to the first nine months of 2023, driven, in large part, by our pricing and cost management initiatives and a reduction in restructuring costs in 2024. In addition, payments for cloud computing implementation costs decreased $6 million related to costs incurred in 2023 for the implementation of our ERP system, and performance-based compensation payments decreased $5 million compared to the prior year. Partially offsetting these increases in operating cash flow was the continuing secular decline in checks, business forms and some business accessories, as well as the impact of our business exits and inflationary pressures on our cost structure. In addition, payments for income taxes increased $4 million related primarily to foreign tax payments.

Included in net cash provided by operating activities were the following operating cash outflows:


	Nine Months Ended September 30,
(in thousands)	2024		2023		Change
Interest payments	$	82,778	$	80,707	$	2,071
Performance-based compensation payments(1)	39,045		44,316		(5,271)
Income tax payments	35,599		31,261		4,338
Prepaid product discount payments	22,945		21,798		1,147
Severance payments	9,212		11,448		(2,236)
Payments for cloud computing arrangement implementation costs	475		6,944		(6,469)

(1) Amounts reflect compensation based on total company and segment performance.

Net cash used by investing activities for the first nine months of 2024 was $1 million higher than the first nine months of 2023, driven by lower proceeds from business exit activities in 2024, partially offset by an $11 million decrease in capital expenditures in 2024 and payments of $10 million in 2023 related to a joint venture focused on launching and marketing a business payment distribution technology platform.

Net cash used by financing activities for the first nine months of 2024 was $238 million higher than the first nine months of 2023, driven primarily by the net change in customer fund obligations in each period. In the first quarter of each year, we see a significant decrease in customer fund obligations driven by the seasonal nature of a portion of our Merchant Services segment. Property tax payments are collected in December and are paid on behalf of customers the following year. In addition, our customer fund obligations decreased due to our exit from the payroll business, as discussed under Executive Overview. Also contributing to the increase in net cash used by financing activities were higher payments on long-term debt during 2024, driven by the favorable operating cash flow and the use of cash on hand at December 31, 2023.

Significant investing and financing cash transactions for each period were as follows:


	Nine Months Ended September 30,
(in thousands)	2024		2023		Change
Net change in customer funds obligations	$	(338,955)	$	(150,936)	$	(188,019)
Purchases of capital assets	(69,777)		(80,809)		11,032
Net change in debt	(64,511)		(14,532)		(49,979)
Cash dividends paid to shareholders	(40,826)		(40,140)		(686)
Proceeds from sale of businesses and long-lived assets	18,321		39,872		(21,551)

In assessing our cash needs, we must consider our debt service requirements, lease obligations, other contractual commitments and contingent liabilities. Information regarding the maturities of our long-term debt and our contingent liabilities can be found under the captions “Note 12: Debt” and "Note 13: Other Commitments and Contingencies," both of which appear in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part I, Item 1 of this report. Information regarding our lease obligations can be found under the caption "Note 14: Leases" in the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K, and information regarding our contractual obligations can be found in the MD&A section of the 2023 Form 10-K, under the section entitled Cash Flows and Liquidity.

As of September 30, 2024, $283 million was available for borrowing under our revolving credit facility. We anticipate that net cash generated by operations, along with cash and cash equivalents on hand and availability under our credit facility, will be sufficient to support our operations, including our contractual obligations and debt service requirements, for the next 12 months, as well as our long-term capital requirements. We anticipate that we will continue to pay our regular quarterly dividend. However, dividends are approved by our board of directors each quarter and thus, are subject to change.


CAPITAL RESOURCES

The principal amount of our debt obligations was $1.54 billion as of September 30, 2024 and $1.60 billion as of December 31, 2023. Further information concerning our outstanding debt, including our debt service obligations, can be found under the caption “Note 12: Debt” in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part I, Item 1 of this report.

Our capital structure for each period was as follows:


	September 30, 2024				December 31, 2023
(in thousands)	Amount		Weighted- average interest rate		Amount		Weighted- average interest rate		Change
Fixed interest rate(1)	$	1,197,933	7.0	%	$	1,246,659	7.0	%	$	(48,726)
Floating interest rate	342,406		7.2	%	357,528		7.9	%	(15,122)
Debt principal	1,540,339		7.0	%	1,604,187		7.2	%	(63,848)
Shareholders’ equity	612,685				604,616				8,069
Total capital	$	2,153,024			$	2,208,803			$	(55,779)

(1) The fixed interest rate amount includes the amount of our variable-rate debt that is subject to interest rate swap agreements. The related interest rate includes the fixed rate under the swaps plus the credit facility spread due on all amounts outstanding under our credit facility.

In March 2024, we entered into an accounts receivable financing facility with a capacity of up to $80 million. As of September 30, 2024, $66 million was outstanding under the facility. We utilized the proceeds from these borrowings to prepay amounts due under our secured term loan facility. As such, we have no remaining payments due under the term loan facility in 2024. We were in compliance with our debt covenants as of September 30, 2024, and we anticipate that we will remain in compliance with our debt covenants throughout the next 12 months.

In October 2018, our board of directors authorized the repurchase of up to $500 million of our common stock. This authorization has no expiration date. We have not repurchased any shares under this authorization since the first quarter of 2020. As of September 30, 2024, $287 million remained available for repurchase under this authorization. Information regarding changes in shareholders' equity can be found in the consolidated statements of shareholders' equity appearing in Part I, Item 1 of this report.


CRITICAL ACCOUNTING ESTIMATES

A description of our critical accounting estimates was provided in the MD&A section of the 2023 Form 10-K. There were no changes in the determination of these estimates during the first nine months of 2024. Information regarding the goodwill impairment analyses completed during the third quarter of 2024 can be found under the caption "Note 8: Fair Value Measurements" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part I, Item 1 of this report.

New accounting pronouncements – Information regarding new accounting pronouncements yet to be adopted can be found under the caption “Note 2: New Accounting Pronouncements” in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part I, Item 1 of this report.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk – We are exposed to changes in interest rates primarily as a result of the borrowing activities used to support our capital structure, maintain liquidity and fund business operations and investments. We do not enter into financial instruments for speculative or trading purposes. The nature and amount of debt outstanding can be expected to vary as a result of future business requirements, market conditions and other factors.

Interest is payable on amounts outstanding under our credit facility and under our accounts receivable financing arrangement at fluctuating rates of interest determined by reference to SOFR plus an applicable margin, as defined in the credit agreements. We also had $475 million of 8.0% senior, unsecured notes outstanding as of September 30, 2024. Including the related discount and debt issuance costs, the effective interest rate on these notes is 8.3%. Information regarding the maturities of our long-term debt can be found under the caption "Note 12: Debt" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part I, Item 1 of this report.

As of September 30, 2024, our total debt outstanding was as follows:


(in thousands)	Carrying amount(1)		Fair value(2)		Interest rate(3)
Senior, secured term loan facility	$	787,563	$	790,563	6.6	%
Senior, unsecured notes	469,188		450,556		8.0	%
Amounts drawn on revolving credit facility	209,000		209,000		6.6	%
Securitization obligations	65,776		65,776		6.6	%
Total debt	$	1,531,527	$	1,515,895	7.0	%

(1) The carrying amount has been reduced by unamortized discount and debt issuance costs of $9 million.

(2) For the amounts outstanding under our credit facility agreement and our securitization obligations, fair value approximates carrying value because the interest rates are variable and reflect current market rates. The fair value of the senior, unsecured notes is based on quoted prices in active markets for the identical liability when traded as an asset.

(3) The interest rate presented for total debt includes the impact of the interest rate swaps discussed below.

As part of our interest rate risk management strategy, we entered into interest rate swaps, which we designated as cash flow hedges, to mitigate variability in interest payments on a portion of our variable-rate debt. As of September 30, 2024, the interest rate swaps effectively converted $723 million of variable-rate debt to a fixed rate. Further information regarding the interest rate swaps can be found under the caption "Note 7: Derivative Financial Instruments" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part I, Item 1 of this report. Changes in the fair values of the interest rate swaps are recorded in accumulated other comprehensive loss on the consolidated balance sheets and are subsequently reclassified to interest expense as interest payments are made on the variable-rate debt.

Based on the amount of variable-rate debt outstanding as of September 30, 2024, a one percentage point change in the weighted-average interest rate would result in a change in interest expense of approximately $1 million for the reminder of 2024.

Foreign currency exchange rate risk – We are exposed to changes in foreign currency exchange rates. Investments in, and loans and advances to, foreign subsidiaries and branches, as well as the operations of these businesses, are denominated in foreign currencies, primarily Canadian dollars. The effect of exchange rate changes is expected to have a minimal impact on our earnings and cash flows, as our foreign operations represent a relatively small portion of our business. We have not entered into hedges against changes in foreign currency exchange rates.


ITEM 4. CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures – As of the end of the period covered by this report, September 30, 2024 (the "Evaluation Date"), we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")). Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in

applicable rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

(b) Internal Control Over Financial Reporting – There were no material changes in our internal control over financial reporting identified in connection with our evaluation during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

We record accruals with respect to identified claims or lawsuits when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Claims and lawsuits are reviewed quarterly and provisions are taken or adjusted to reflect the status of a particular matter. We believe the recorded reserves in our consolidated financial statements are adequate in light of the probable and estimable outcomes. As of September 30, 2024, recorded liabilities were not material to our financial position, results of operations or cash flows, and we do not believe that any of the currently identified claims or litigation will materially affect our financial position, results of operations or cash flows upon resolution. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, it may cause a material adverse impact on our financial position, results of operations or cash flows in the period in which the ruling occurs or in future periods.


ITEM 1A. RISK FACTORS

Our risk factors are outlined in Part I, Item 1A of the 2023 Form 10-K. There have been no significant changes in these risk factors since we filed the 2023 Form 10-K.


ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In October 2018, our board of directors authorized the repurchase of up to $500 million of our common stock. This authorization has no expiration date. No shares were repurchased under this authorization during the third quarter of 2024 and $287 million remained available for repurchase as of September 30, 2024.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.


ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.


ITEM 5. OTHER INFORMATION

During the three months ended September 30, 2024, of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended), adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933).


ITEM 6. EXHIBITS


Exhibit Number						Description
31.1						CEO Certification of Periodic Report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2						CFO Certification of Periodic Report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1						CEO and CFO Certification of Periodic Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished)
101.INS						XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						XBRL Taxonomy Extension Label Linkbase Document
101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover page interactive data file (formatted as Inline XBRL and contained in Exhibit 101)


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			DELUXE CORPORATION (Registrant)

Date: November 7, 2024			/s/ Barry C. McCarthy
			Barry C. McCarthy President and Chief Executive Officer (Principal Executive Officer)

Date: November 7, 2024			/s/ William C. Zint
			William C. Zint Senior Vice President, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

DELUXE CORP - Quarter Report: 2024 September (Form 10-Q)

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