CPI CARD GROUP INC (NASDAQ:PMTS) Misses Q2 2025 Revenue and EPS Estimates, Shares Drop 5.4% in Pre-Market Trading

CPI CARD GROUP INC (NASDAQ:PMTS) reported its second-quarter 2025 results, missing analyst estimates on both revenue and earnings per share (EPS). The company posted revenue of $129.8 million, falling short of the expected $135.6 million, while diluted EPS came in at $0.04, significantly below the consensus estimate of $0.51.

Key Financial Highlights vs. Estimates

• Revenue: $129.8M (actual) vs. $135.6M (estimated) – a 4.3% miss.
• EPS: $0.04 (actual) vs. $0.51 (estimated) – a 92% miss.
• Adjusted EBITDA: Increased 3% year-over-year to $22.5M, in line with the company’s unchanged outlook.

The market reacted negatively, with shares declining 5.4% in pre-market trading, reflecting investor disappointment over the earnings shortfall. Over the past month, the stock has already declined 19%, suggesting broader concerns about margins and growth.

Press Release Takeaways

1. Revenue Growth but Accounting Impact

   • Net sales rose 9% YoY to $129.8M (15% excluding a one-time accounting change related to revenue recognition timing).
   • The Debit and Credit segment grew 16%, driven by the acquisition of Arroweye and strong demand for contactless and metal cards.
   • The Prepaid Debit segment declined 19% (but grew 4% excluding the accounting adjustment).

2. Profitability Pressures

   • Net income plunged 91% YoY to $0.5M, weighed down by acquisition costs, restructuring charges, and higher interest expenses.
   • Gross margin contracted to 30.9% (from 35.7% in Q2 2024) due to tariff impacts and unfavorable sales mix.

3. Updated 2025 Outlook

   • The company raised its full-year net sales growth outlook to low double-digit to mid-teens (from mid-to-high single digits), reflecting the Arroweye acquisition.
   • Adjusted EBITDA growth remains projected at mid-to-high single digits, with tariff costs offsetting acquisition benefits.

Market Sentiment & Forward Estimates

Analysts expect Q3 2025 revenue of $144.7M and full-year sales of $550.8M. CPI’s updated guidance suggests confidence in top-line growth, but margin pressures and integration risks remain key concerns.

For a deeper dive into earnings estimates and historical performance, view the full earnings details here.

Disclaimer: This article is not investment advice. Investors should conduct their own research before making decisions.