CIMPRESS plc 10-Q

Item 1. Financial Statements CIMPRESS PLC CONSOLIDATED BALANCE SHEETS (unaudited in thousands, except share and per share data) September 30, 2024 June 30, 2024 Assets Current assets: Cash and cash equivalents $ 152,951 $ 203,775 Marketable securities — 4,500 Accounts receivable, net of allowances of $7,307 and $7,219, respectively 73,757 64,576 Inventory 110,452 97,016 Prepaid expenses and other current assets 90,696 88,112 Total current assets 427,856 457,979 Property, plant and equipment, net 274,379 265,177 Operating lease assets, net 81,401 78,681 Software and website development costs, net 97,317 92,212 Deferred tax assets 97,003 95,059 Goodwill 804,806 787,138 Intangible assets, net 72,071 76,560 Other assets 29,105 39,351 Total assets $ 1,883,938 $ 1,892,157 Liabilities, noncontrolling interests and shareholders’ deficit Current liabilities: Accounts payable $ 297,859 $ 326,656 Accrued expenses 266,677 245,931 Deferred revenue 51,919 46,118 Short-term debt 10,532 12,488 Operating lease liabilities, current 20,276 19,634 Other current liabilities 22,801 13,136 Total current liabilities 670,064 663,963 Deferred tax liabilities 23,645 24,701 Long-term debt 1,585,650 1,591,807 Operating lease liabilities, non-current 65,377 61,895 Other liabilities 85,498 76,305 Total liabilities 2,430,234 2,418,671 Commitments and contingencies (Note 12) Redeemable noncontrolling interests (Note 10) 23,962 22,998 Shareholders’ deficit: Preferred shares, nominal value €0.01 per share, 100,000,000 shares authorized; none issued and outstanding — — Ordinary shares, nominal value €0.01 per share, 100,000,000 shares authorized; 43,231,566 and 43,051,269 shares issued, respectively; 25,260,319 and 25,080,022 shares outstanding, respectively 606 604 Treasury shares, at cost, 17,971,247 shares for both periods presented ( 1,363,550 ) ( 1,363,550 ) Additional paid-in capital 573,192 570,283 Retained earnings 250,923 272,881 Accumulated other comprehensive loss ( 32,160 ) ( 30,364 ) Total shareholders’ deficit attributable to Cimpress plc ( 570,989 ) ( 550,146 ) Noncontrolling interests (Note 10) 731 634 Total shareholders' deficit ( 570,258 ) ( 549,512 ) Total liabilities, noncontrolling interests and shareholders’ deficit $ 1,883,938 $ 1,892,157 See accompanying notes. 1 CIMPRESS PLC CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited in thousands, except share and per share data) Three Months Ended September 30, 2024 2023 Revenue $ 804,969 $ 757,294 Cost of revenue (1) 422,736 398,783 Technology and development expense (1) 81,861 74,330 Marketing and selling expense (1) 203,847 192,188 General and administrative expense (1) 51,932 48,341 Amortization of acquired intangible assets 5,155 9,886 Restructuring expense 99 ( 334 ) Income from operations 39,339 34,100 Other (expense) income, net ( 11,492 ) 6,419 Interest expense, net ( 31,415 ) ( 29,200 ) Gain on early extinguishment of debt 179 1,372 (Loss) income before income taxes ( 3,389 ) 12,691 Income tax expense 8,995 8,122 Net (loss) income ( 12,384 ) 4,569 Add: Net (income) attributable to noncontrolling interests ( 165 ) ( 15 ) Net (loss) income attributable to Cimpress plc $ ( 12,549 ) $ 4,554 Basic net (loss) income per share attributable to Cimpress plc $ ( 0.50 ) $ 0.17 Diluted net (loss) income per share attributable to Cimpress plc $ ( 0.50 ) $ 0.17 Weighted average shares outstanding — basic 25,167,845 26,468,769 Weighted average shares outstanding — diluted 25,167,845 27,079,455 ____________________________________________ (1) Share-based compensation expense is allocated as follows: Three Months Ended September 30, 2024 2023 Cost of revenue $ 223 $ 167 Technology and development expense 5,096 4,209 Marketing and selling expense 1,715 2,218 General and administrative expense 8,599 5,859 See accompanying notes. 2 CIMPRESS PLC CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (unaudited in thousands) Three Months Ended September 30, 2024 2023 Net (loss) income $ ( 12,384 ) $ 4,569 Other comprehensive (loss) income, net of tax: Foreign currency translation gains (losses), net of hedges 6,712 ( 3,787 ) Net unrealized (losses) gains on derivative instruments designated and qualifying as cash flow hedges ( 8,399 ) 7,679 Amounts reclassified from accumulated other comprehensive loss to net (loss) income for derivative instruments 284 ( 3,548 ) Comprehensive (loss) income ( 13,787 ) 4,913 Add: Comprehensive (income) loss attributable to noncontrolling interests ( 558 ) 79 Total comprehensive (loss) income attributable to Cimpress plc $ ( 14,345 ) $ 4,992 See accompanying notes. 3 CIMPRESS PLC CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT (unaudited in thousands) Ordinary Shares Treasury Shares Number of Shares Issued Amount Number of Shares Issued Amount Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Shareholders’ Deficit Balance at June 30, 2023 44,316 $ 615 ( 17,971 ) $ ( 1,363,550 ) $ 539,454 $ 235,396 $ ( 35,060 ) $ ( 623,145 ) Issuance of ordinary shares due to share option exercises, net of shares withheld for taxes 2 — — — 82 — — 82 Share-based awards vested, net of shares withheld for taxes 236 — — — ( 8,403 ) — — ( 8,403 ) Share-based compensation expense — — — — 12,621 — — 12,621 Net income attributable to Cimpress plc — — — — — 4,554 — 4,554 Redeemable noncontrolling interest accretion to redemption value — — — — — ( 330 ) — ( 330 ) Net unrealized gain on derivative instruments designated and qualifying as cash flow hedges — — — — — — 4,131 4,131 Foreign currency translation, net of hedges — — — — — — ( 3,693 ) ( 3,693 ) Balance at September 30, 2023 44,554 $ 615 ( 17,971 ) $ ( 1,363,550 ) $ 543,754 $ 239,620 $ ( 34,622 ) $ ( 614,183 ) Balance at June 30, 2024 43,051 $ 604 ( 17,971 ) $ ( 1,363,550 ) $ 570,283 $ 272,881 $ ( 30,364 ) $ ( 550,146 ) Issuance of ordinary shares due to share option exercises, net of shares withheld for taxes 22 — — — 1,000 — — 1,000 Purchase and cancellation of ordinary shares ( 123 ) ( 1 ) — — ( 1,713 ) ( 8,906 ) — ( 10,620 ) Share-based awards vested, net of shares withheld for taxes 282 3 — — ( 12,951 ) — — ( 12,948 ) Share-based compensation expense — — — — 16,573 — — 16,573 Net loss attributable to Cimpress plc — — — — — ( 12,549 ) — ( 12,549 ) Redeemable noncontrolling interest accretion to redemption value — — — — — ( 503 ) — ( 503 ) Net unrealized loss on derivative instruments designated and qualifying as cash flow hedges — — — — — — ( 8,115 ) ( 8,115 ) Foreign currency translation, net of hedges — — — — — — 6,319 6,319 Balance at September 30, 2024 43,232 $ 606 ( 17,971 ) $ ( 1,363,550 ) $ 573,192 $ 250,923 $ ( 32,160 ) $ ( 570,989 ) See accompanying notes. 4 CIMPRESS PLC CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited in thousands) Three Months Ended September 30, 2024 2023 Operating activities Net (loss) income $ ( 12,384 ) $ 4,569 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 35,546 39,942 Share-based compensation expense 15,633 12,453 Deferred taxes 2,951 ( 1,118 ) Gain on early extinguishment of debt ( 260 ) ( 1,372 ) Unrealized loss (gain) on derivatives not designated as hedging instruments included in net (loss) income 18,337 ( 6,261 ) Effect of exchange rate changes on monetary assets and liabilities denominated in non-functional currency ( 10,370 ) 1,885 Other non-cash items 1,328 ( 1,229 ) Changes in operating assets and liabilities, net of effects of businesses acquired: Accounts receivable ( 7,775 ) ( 2,209 ) Inventory ( 10,309 ) ( 401 ) Prepaid expenses and other assets ( 3,430 ) 4,214 Accounts payable ( 36,946 ) ( 22,209 ) Accrued expenses and other liabilities 12,063 13,990 Net cash provided by operating activities 4,384 42,254 Investing activities Purchases of property, plant and equipment ( 17,001 ) ( 22,565 ) Capitalization of software and website development costs ( 14,571 ) ( 14,397 ) Proceeds from the sale of assets 1,570 5,636 Proceeds from maturity of held-to-maturity investments 4,500 20,500 Net cash used in investing activities ( 25,502 ) ( 10,826 ) Financing activities Proceeds from issuance of 7.375% Senior Notes due 2032 525,000 — Payments for early redemption or purchase of 7.0% Senior Notes due 2026 ( 522,135 ) ( 19,815 ) Proceeds from borrowings of debt — 173 Payments of debt ( 4,497 ) ( 3,784 ) Payments of debt issuance costs ( 8,445 ) — Payments of withholding taxes in connection with equity awards ( 12,948 ) ( 8,404 ) Payments of finance lease obligations ( 1,950 ) ( 2,768 ) Purchase of ordinary shares ( 10,620 ) — Proceeds from issuance of ordinary shares 1,000 82 Distributions to noncontrolling interests ( 821 ) ( 549 ) Net cash used in financing activities ( 35,416 ) ( 35,065 ) Effect of exchange rate changes on cash 5,710 ( 1,477 ) Net decrease in cash and cash equivalents ( 50,824 ) ( 5,114 ) Cash and cash equivalents at beginning of period 203,775 130,313 Cash and cash equivalents at end of period $ 152,951 $ 125,199 See accompanying notes. 5 CIMPRESS PLC CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (unaudited in thousands) Three Months Ended September 30, 2024 2023 Supplemental disclosures of cash flow information Cash paid for interest $ 35,248 $ 24,239 Cash received for interest 3,712 3,349 Cash (received) paid for income taxes ( 1,829 ) 15,794 Non-cash investing and financing activities Property and equipment acquired under finance leases 339 386 Amounts accrued related to property, plant and equipment 10,909 6,403 Amounts accrued related to capitalized software development costs 356 205 See accompanying notes. 6 CIMPRESS PLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited in thousands, except share and per share data) 1. Description of the Business Cimpress is a strategically focused collection of businesses that specialize in print mass customization, through which we deliver large volumes of individually small-sized customized orders of printed materials and related products. Our products and services include a broad range of marketing materials, business cards, signage, promotional products, logo apparel, packaging, books and magazines, wall decor, photo merchandise, invitations and announcements, design and digital marketing services, and other categories. Mass customization is a core element of the business model of each Cimpress business and is a competitive strategy which seeks to produce goods and services to meet individual customer needs with near mass production efficiency. 2. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of Cimpress plc, its wholly owned subsidiaries, entities in which we maintain a controlling financial interest, and those entities in which we have a variable interest and are the primary beneficiary. Intercompany balances and transactions have been eliminated. Investments in entities in which we cannot exercise significant influence, and for which the related equity securities do not have a readily determinable fair value, are included in other assets on the consolidated balance sheets; otherwise the investments are recognized by applying equity method accounting. Our equity method investments are included in other assets on the consolidated balance sheets. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We believe our most significant estimates are associated with the ongoing evaluation of the recoverability of our long-lived assets and goodwill, estimated useful lives of assets, share-based compensation, and income taxes and related valuation allowances, among others. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results could differ from those estimates. Ordinary Shares During the three months ended September 30, 2024, we repurchased 123,325 of our ordinary shares on the open market for $ 10,620 . The repurchased shares were immediately retired after repurchase and therefore have been classified as authorized and unissued shares as of September 30, 2024. Other (Expense) Income, Net The following table summarizes the components of other (expense) income, net. Three Months Ended September 30, 2024 2023 (Losses) gains on derivatives not designated as hedging instruments (1) $ ( 20,569 ) $ 8,312 Currency-related gains (losses), net (2) 8,667 ( 2,699 ) Other gains 410 806 Total other (expense) income, net $ ( 11,492 ) $ 6,419 _____________________ (1) Includes realized and unrealized gains and losses on derivative currency forward and option contracts not designated as hedging instruments. For contracts not designated as hedging instruments, we realized (losses) gains of $( 2,232 ) and $ 2,050 for the three months ended September 30, 2024 and 2023, respectively. Refer to Note 4 for additional details relating to our derivative contracts. (2) Currency-related gains (losses), net primarily relates to significant non-functional currency intercompany financing relationships that we may change at times and are subject to currency exchange rate volatility. In addition, during the three months ended September 30, 2023, we recognized gains of $ 1,936 on a cross-currency swap designated as a cash flow hedge which hedges the remeasurement of an intercompany loan. We did not hold any cross-currency swap contracts that were designated as cash flow hedges during the current quarter. Refer to Note 4 for additional details regarding our cash flow hedges. 7 Net (Loss) Income Per Share Attributable to Cimpress plc Basic net (loss) income per share attributable to Cimpress plc is computed by dividing net (loss) income attributable to Cimpress plc by the weighted-average number of ordinary shares outstanding for the respective period. Diluted net (loss) income per share attributable to Cimpress plc gives effect to all potentially dilutive securities, including share options, restricted share units (“RSUs”), performance share units ("PSUs"), and warrants, if the effect of the securities is dilutive using the treasury stock method. Awards with performance or market conditions are included using the treasury stock method only if the conditions would have been met as of the end of the reporting period and their effect is dilutive. The following table sets forth the reconciliation of the weighted-average number of ordinary shares. Three Months Ended September 30, 2024 2023 Weighted average shares outstanding, basic 25,167,845 26,468,769 Weighted average shares issuable upon exercise/vesting of outstanding share options/PSUs/RSUs/warrants (1)(2) — 610,686 Shares used in computing diluted net (loss) income per share attributable to Cimpress plc 25,167,845 27,079,455 Weighted average anti-dilutive shares excluded from diluted net (loss) income per share attributable to Cimpress plc (1) 1,224,628 187,649 __________________ (1) In the periods in which a net loss is recognized, the impact of share options, PSUs, RSUs and warrants is excluded from shares used in computed diluted net loss per share as it is anti-dilutive. (2) On May 1, 2020, we entered into a financing arrangement which included 7-year warrants to purchase 1,055,377 of our ordinary shares with a strike price of $ 60 that have a potentially dilutive impact on our weighted average shares outstanding. For the three months ended September 30, 2024, the average market price of our ordinary shares was higher than the strike price of the warrants and the weighted average anti-dilutive effect of the warrants (anti-dilutive due to our net loss position) was 341,158 . For the three months ended September 30, 2023, the average market price of our ordinary shares was higher than the strike price of the warrants, and the weighted average dilutive effect of the warrants was 98,319 . Recently Issued or Adopted Accounting Pronouncements Accounting Standards to be Adopted In December 2023, the FASB issued Accounting Standards Update No. 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" (ASU 2023-09), which provides authoritative guidance about expanded annual disclosure requirements for the income tax rate reconciliation and income taxes paid by jurisdiction. The expanded disclosure requirements will be effective starting with our annual report for the fiscal year ending June 30, 2026. Early adoption is permitted, but we do not intend to early adopt this standard. In November 2023, the FASB issued Accounting Standards Update No. 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" (ASU 2023-07), which requires enhanced disclosures about significant segment expenses and introduces a reconciliation between segment revenue and segment profitability metrics. The expanded disclosure requirements will be effective starting with our annual report for the fiscal year ending June 30, 2025, as well as each interim period thereafter. Early adoption is permitted, but we do not intend to early adopt this standard. 3. Fair Value Measurements We use a three-level valuation hierarchy for measuring fair value and include detailed financial statement disclosures about fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: • Level 1: Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2: Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. 8 • Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following tables summarize our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. September 30, 2024 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Interest rate swap contracts $ 10,142 $ — $ 10,142 $ — Currency forward contracts 17 — 17 — Total assets recorded at fair value $ 10,159 $ — $ 10,159 $ — Liabilities Cross-currency swap contracts $ ( 8,535 ) $ — $ ( 8,535 ) $ — Currency forward contracts ( 12,708 ) — ( 12,708 ) — Currency option contracts ( 4,904 ) — ( 4,904 ) — Total liabilities recorded at fair value $ ( 26,147 ) $ — $ ( 26,147 ) $ — June 30, 2024 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Interest rate swap contracts $ 18,830 $ — $ 18,830 $ — Cross-currency swap contracts 1,043 — 1,043 — Currency forward contracts 3,642 — 3,642 — Currency option contracts 137 — 137 — Total assets recorded at fair value $ 23,652 $ — $ 23,652 $ — Liabilities Currency forward contracts $ ( 856 ) $ — $ ( 856 ) $ — Currency option contracts ( 2,180 ) — ( 2,180 ) — Total liabilities recorded at fair value $ ( 3,036 ) $ — $ ( 3,036 ) $ — During the three months ended September 30, 2024 and year ended June 30, 2024, there were no significant transfers in or out of Level 1, Level 2, and Level 3 classifications. The valuations of the derivatives intended to mitigate our interest rate and currency risks are determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each instrument. This analysis utilizes observable market-based inputs, including interest rate curves, interest rate volatility, or spot and forward exchange rates, and reflects the contractual terms of these instruments, including the period to maturity. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparties' nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements. Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to appropriately reflect both our own nonperformance risk and the 9 respective counterparties' nonperformance risk in the fair value measurement. However, as of September 30, 2024, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 in the fair value hierarchy. Our held-to-maturity marketable securities are recognized at an amortized cost. As of September 30, 2024, we had no held-to-maturity securities. The following is a summary of the net carrying amount, unrealized losses, and fair value of held-to-maturity securities by type and contractual maturity as of June 30, 2024. The fair value was determined using quoted prices for identical assets in active markets, which fall into Level 1 under the fair value hierarchy. We did not record an allowance for credit losses and impairments for these marketable securities during the three months ended September 30, 2024 and 2023. June 30, 2024 Amortized cost Unrealized losses Fair value Due within one year or less: Corporate debt securities $ 1,500 $ ( 1 ) $ 1,499 U.S. government securities 3,000 ( 4 ) 2,996 Total held-to-maturity securities $ 4,500 $ ( 5 ) $ 4,495 As of September 30, 2024 and June 30, 2024, the carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable, and other current liabilities approximated their estimated fair values. As of September 30, 2024 and June 30, 2024, the carrying value of our debt, excluding debt issuance costs and debt premiums and discounts, was $ 1,617,457 and $ 1,616,607 , respectively, and the fair value was $ 1,628,102 and $ 1,617,364 , respectively. Our debt at September 30, 2024 includes variable-rate debt instruments indexed to Term SOFR and Euribor that reset periodically, as well as fixed-rate debt instruments. The estimated fair value of our debt was determined using available market information based on recent trades or activity of debt instruments with substantially similar risks, terms and maturities, which fall within Level 2 under the fair value hierarchy. The estimated fair value of assets and liabilities disclosed above may not be representative of actual values that could have been or will be realized in the future. 4. Derivative Financial Instruments We use derivative financial instruments, such as interest rate swap contracts, cross-currency swap contracts, and currency forward and option contracts, to manage interest rate and foreign currency exposures. Derivatives are recorded in the consolidated balance sheets at fair value. If a derivative is designated as a cash flow hedge or net investment hedge, then the change in the fair value of the derivative is recorded in accumulated other comprehensive loss and subsequently reclassified into earnings in the period the hedged forecasted transaction affects earnings. We have designated one intercompany loan as a net investment hedge, and any unrealized currency gains and losses on the loan are recorded in accumulated other comprehensive loss. Additionally, any ineffectiveness associated with an effective and designated hedge is recognized within accumulated other comprehensive loss. The change in the fair value of derivatives not designated as hedges is recognized directly in earnings as a component of other (expense) income, net. Hedges of Interest Rate Risk We enter into interest rate swap contracts to manage variability in the amount of our known or expected cash payments related to a portion of our debt. Our objective in using interest rate swaps is to add stability to interest expense and manage our exposure to interest rate movements. We designate our interest rate swaps as cash flow hedges. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the contract agreements without exchange of the underlying notional amount. Realized gains or losses from interest rate swaps are recorded in earnings as a component of interest expense, net. Amounts reported in accumulated other comprehensive loss related to interest rate swap contracts will be reclassified to interest expense, net as interest payments are accrued or made on our variable-rate debt. 10 As of September 30, 2024, we estimate that $ 1,935 of income will be reclassified from accumulated other comprehensive loss to interest expense, net during the twelve months ending September 30, 2025. As of September 30, 2024, we had ten effective outstanding interest rate swap contracts that were indexed to Term or Daily SOFR. Our interest rate swap contracts have varying start and maturity dates through April 2028. Interest rate swap contracts outstanding: Notional Amounts Contracts accruing interest as of September 30, 2024 (1) $ 215,000 Contracts with a future start date 430,000 Total $ 645,000 ________________________ (1) Based on contracts outstanding as of September 30, 2024, the notional value of our contracted interest rate swaps accruing interest will fluctuate between $215,000 and $380,000 through April 2028 based on layered start dates and maturities. Hedges of Currency Risk Cross-Currency Swap Contracts We execute cross-currency swap contracts designated as net investment hedges. Cross-currency swaps involve an initial receipt of the notional amount in the hedged currency in exchange for our reporting currency based on a contracted exchange rate. Subsequently, we receive fixed rate payments in our reporting currency in exchange for fixed rate payments in the hedged currency over the life of the contract. At maturity, the final exchange involves the receipt of our reporting currency in exchange for the notional amount in the hedged currency. Cross-currency swap contracts designated as net investment hedges are executed to mitigate our currency exposure of net investments in subsidiaries that have reporting currencies other than the U.S. dollar. As of September 30, 2024, we had one outstanding cross-currency swap contract designated as a net investment hedge with a total notional amount of $ 264,851 , maturing during June 2028. We entered into the cross-currency swap contract to hedge the risk of changes in the U.S. dollar equivalent value of a portion of our net investment in a consolidated subsidiary that has the Euro as its functional currency. Amounts reported in accumulated other comprehensive loss are recognized as a component of our cumulative translation adjustment. Other Currency Hedges We execute currency forward and option contracts in order to mitigate our exposure to fluctuations in various currencies against our reporting currency, the U.S. dollar. These contracts or intercompany loans may be designated as hedges to mitigate the risk of changes in the U.S. dollar equivalent value of a portion of our net investment in consolidated subsidiaries that have the Euro as their functional currency. The impact of net investment hedges is recognized in accumulated other comprehensive loss as a component of translation adjustments, net of hedges, and would only be reclassified to earnings if the hedged subsidiaries were no longer consolidated entities. As of September 30, 2024, we have one intercompany loan designated as a net investment hedge with a total notional amount of $ 51,569 that matures in May 2028. We have elected to not apply hedge accounting for all other currency forward and option contracts. During the three months ended September 30, 2024 and 2023, we experienced volatility within other (expense) income, net, in our consolidated statements of operations from unrealized gains and losses on the mark-to-market of outstanding currency forward and option contracts. We expect this volatility to continue in future periods for contracts for which we do not apply hedge accounting. Additionally, since our hedging objectives may be targeted at non-GAAP financial metrics that exclude non-cash items such as depreciation and amortization, we may experience volatility in our GAAP results as a result of our currency hedging program. In most cases, we enter into these currency derivative contracts, for which we do not apply hedge accounting, in order to address the risk for certain currencies where we have a net exposure to adjusted EBITDA, a non-GAAP financial metric. Adjusted EBITDA exposures are our focus for the majority of our mark-to-market currency forward and option contracts because a similar metric is referenced within the debt covenants of our amended and restated senior secured credit agreement (refer to Note 8 for additional information about this agreement). Our most significant net currency exposures by volume are the Euro and the British Pound (GBP). Our adjusted EBITDA hedging approach results in addressing nearly all of our forecasted Euro and GBP net exposures for the upcoming twelve months, with a declining hedged percentage out to twenty-four months. For certain other 11 currencies with a smaller net impact, we hedge nearly all of our forecasted net exposures for the upcoming six months, with a declining hedge percentage out to fifteen months. As of September 30, 2024, we had the following outstanding currency derivative contracts that were not designated for hedge accounting and were primarily used to hedge fluctuations in the U.S. dollar value of forecasted transactions or balances denominated in Australian Dollar, Canadian Dollar, Czech Koruna, Danish Krone, Euro, GBP, Indian Rupee, Mexican Peso, New Zealand Dollar, Norwegian Krone, Philippine Peso, Swiss Franc and Swedish Krona: Notional Amount Effective Date Maturity Date Number of Instruments Index $ 806,847 December 2022 through September 2024 Various dates through September 2026 655 Various Financial Instrument Presentation The table below presents the fair value of our derivative financial instruments as well as their classification on the balance sheet as of September 30, 2024 and June 30, 2024. Our derivative asset and liability balances fluctuate with interest rate and currency exchange rate volatility. September 30, 2024 Asset Derivatives Liability Derivatives Balance Sheet line item Gross amounts of recognized assets Gross amount offset in Consolidated Balance Sheet Net amount Balance Sheet line item Gross amounts of recognized liabilities Gross amount offset in Consolidated Balance Sheet Net amount Derivatives designated as hedging instruments Derivatives in cash flow hedging relationships Interest rate swaps Other current assets / other assets $ 10,529 $ ( 387 ) $ 10,142 Other current liabilities / other liabilities $ — $ — $ — Derivatives in net investment hedging relationships Cross-currency swaps Other assets — — — Other liabilities ( 8,535 ) — ( 8,535 ) Total derivatives designated as hedging instruments $ 10,529 $ ( 387 ) $ 10,142 $ ( 8,535 ) $ — $ ( 8,535 ) Derivatives not designated as hedging instruments Currency forward contracts Other current assets / other assets $ 17 $ — $ 17 Other current liabilities / other liabilities $ ( 13,375 ) $ 667 $ ( 12,708 ) Currency option contracts Other current assets / other assets — — — Other current liabilities / other liabilities ( 4,904 ) — ( 4,904 ) Total derivatives not designated as hedging instruments $ 17 $ — $ 17 $ ( 18,279 ) $ 667 $ ( 17,612 ) 12 June 30, 2024 Asset Derivatives Liability Derivatives Balance Sheet line item Gross amounts of recognized assets Gross amount offset in Consolidated Balance Sheet Net amount Balance Sheet line item Gross amounts of recognized liabilities Gross amount offset in Consolidated Balance Sheet Net amount Derivatives designated as hedging instruments Derivatives in cash flow hedging relationships Interest rate swaps Other assets $ 18,830 $ — $ 18,830 Other liabilities $ — $ — $ — Derivatives in net investment hedging relationships Cross-currency swaps Other assets 1,043 — 1,043 Other liabilities — — — Total derivatives designated as hedging instruments $ 19,873 $ — $ 19,873 $ — $ — $ — Derivatives not designated as hedging instruments Currency forward contracts Other current assets / other assets $ 5,549 $ ( 1,907 ) $ 3,642 Other current liabilities / other liabilities $ ( 1,084 ) $ 228 $ ( 856 ) Currency option contracts Other current assets / other assets 212 ( 75 ) 137 Other current liabilities / other liabilities ( 2,351 ) 171 ( 2,180 ) Total derivatives not designated as hedging instruments $ 5,761 $ ( 1,982 ) $ 3,779 $ ( 3,435 ) $ 399 $ ( 3,036 ) The following table presents the effect of our derivative financial instruments designated as hedging instruments and their classification within comprehensive loss, net of tax, for the three months ended September 30, 2024 and 2023. Three Months Ended September 30, 2024 2023 Derivatives in cash flow hedging relationships Interest rate swaps $ ( 8,399 ) $ 6,131 Cross-currency swaps — 1,548 Derivatives in net investment hedging relationships Intercompany loan ( 2,129 ) 5,775 Currency forward contracts — ( 1,080 ) Total $ ( 10,528 ) $ 12,374 13 The following table presents reclassifications out of accumulated other comprehensive loss for the three months ended September 30, 2024 and 2023. Amount of Net Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income Affected line item in the Statement of Operations Three Months Ended September 30, 2024 2023 Derivatives in cash flow hedging relationships Interest rate swaps $ 321 $ ( 2,223 ) Interest expense, net Cross-currency swaps — ( 1,936 ) Other (expense) income, net Total before income tax 321 ( 4,159 ) (Loss) income before income taxes Income tax ( 37 ) 611 Income tax expense Total $ 284 $ ( 3,548 ) The following table presents the adjustment to fair value recorded within the consolidated statements of operations for the three months ended September 30, 2024 and 2023 for derivative instruments for which we did not elect hedge accounting. Amount of Gain (Loss) Recognized in Net Income (Loss) Affected line item in the Statement of Operations Three Months Ended September 30, 2024 2023 Currency contracts $ ( 20,569 ) $ 8,312 Other (expense) income, net Total $ ( 20,569 ) $ 8,312 5. Accumulated Other Comprehensive Loss The following table presents a roll forward of amounts recognized in accumulated other comprehensive loss by component, net of tax of $ 251 for the three months ended September 30, 2024 : Gains on cash flow hedges (1) Gains (losses) on pension benefit obligation Translation adjustments, net of hedges (2) Total Balance as of June 30, 2024 $ 10,789 $ ( 706 ) $ ( 40,447 ) $ ( 30,364 ) Other comprehensive (loss) income before reclassifications ( 8,399 ) — 6,319 ( 2,080 ) Amounts reclassified from accumulated other comprehensive loss to net (loss) income 284 — — 284 Net current period other comprehensive (loss) income ( 8,115 ) — 6,319 ( 1,796 ) Balance as of September 30, 2024 $ 2,674 $ ( 706 ) $ ( 34,128 ) $ ( 32,160 ) ________________________ (1) Gains on cash flow hedges include our interest rate swap contracts designated in cash flow hedging relationships. (2) As of September 30, 2024 and June 30, 2024, the translation adjustment is inclusive of both the realized and unrealized effects of our net investment hedges. Gains on currency forward and swap contracts designated as net investment hedges, net of tax, of $ 8,751 and $ 15,042 have been included in accumulated other comprehensive loss as of September 30, 2024 and June 30, 2024. Intercompany loan hedge gains, net of tax, of $ 39,415 and $ 48,270 have been included in accumulated other comprehensive loss as of September 30, 2024 and June 30, 2024, respectively. 14 6. Goodwill The carrying amount of goodwill by reportable segment as of September 30, 2024 and June 30, 2024 was as follows: Vista PrintBrothers The Print Group All Other Businesses Total Balance as of June 30, 2024 $ 295,285 $ 149,244 $ 147,688 $ 194,921 $ 787,138 Effect of currency translation adjustments (1) 4,891 6,515 6,262 — 17,668 Balance as of September 30, 2024 $ 300,176 $ 155,759 $ 153,950 $ 194,921 $ 804,806 ________________________ (1) Related to goodwill held by subsidiaries whose functional currency is not the U.S. dollar. 7. Other Balance Sheet Components Accrued expenses included the following: September 30, 2024 June 30, 2024 Compensation costs $ 79,842 $ 80,844 Income and indirect taxes 52,714 46,499 Advertising costs 27,354 23,524 Third-party manufacturing and digital content costs 18,665 17,608 Shipping costs 12,739 10,088 Variable compensation incentives 7,018 9,263 Sales returns 6,159 5,181 Professional fees 4,167 2,596 Interest payable 1,371 3,658 Other 56,648 46,670 Total accrued expenses $ 266,677 $ 245,931 Other current liabilities included the following: September 30, 2024 June 30, 2024 Short-term derivative liabilities (1) $ 13,031 $ 4,833 Current portion of finance lease obligations 8,241 8,323 Other 1,529 ( 20 ) Total other current liabilities $ 22,801 $ 13,136 Other liabilities included the following: September 30, 2024 June 30, 2024 Long-term finance lease obligations $ 27,049 $ 28,037 Long-term compensation incentives 13,828 17,127 Long-term derivative liabilities (1) 14,170 584 Mandatorily redeemable noncontrolling interest 9,971 9,608 Other 20,480 20,949 Total other liabilities $ 85,498 $ 76,305 ________________________ (1) The increase in derivative liabilities is due to fluctuations in currency exchange rates. Refer to Note 4 for additional details regarding our derivative instruments. 15 8. Debt September 30, 2024 June 30, 2024 7.375% Senior Notes due 2032 (1) $ 525,000 $ — 7.0% Senior Notes due 2026 (1) — 522,135 Senior secured credit facility 1,083,880 1,084,627 Other 8,577 9,845 Debt issuance costs and discounts, net of debt premiums (2) ( 21,275 ) ( 12,312 ) Total debt outstanding, net 1,596,182 1,604,295 Less: short-term debt (3) 10,532 12,488 Long-term debt $ 1,585,650 $ 1,591,807 _____________________ (1) On September 26, 2024, we completed a private placement of $ 525,000 in aggregate principal amount of 7.375% Senior Notes due 2032. We used the net proceeds of this offering plus cash on hand to redeem the $ 522,135 of our 7.0% Senior Notes due 2026 and pay the associated interest and financing fees. (2) During the three months ended September 30, 2024, we capitalized $ 9,682 in debt issuance costs, which related to the private placement of our 7.375% Senior Notes due 2032, as well as the amendment to our senior secured credit facility. We wrote-off $ 2,187 of unamortized costs, which was offset by the write-off of $ 2,525 of debt premium related to the redemption of our 7.0% Senior Notes due 2026. Refer to the description below for additional details. (3) Balances as of September 30, 2024 and June 30, 2024 are inclusive of short-term debt issuance costs, debt premiums and discounts of $ 4,507 and $ 3,492 , respectively. Our various debt arrangements described below contain customary representations, warranties, and events of default. As of September 30, 2024, we were in compliance with all covenants in our debt contracts, including those under our amended and restated senior secured credit agreement dated as of May 17, 2021 (as further amended from time to time, the "Restated Credit Agreement") and the indenture governing our 2032 Notes. Senior Secured Credit Facility On September 26, 2024, we entered into an amendment to our Restated Credit Agreement to extend the maturity date of our senior secured revolving credit facility to September 26, 2029 (subject to a springing maturity to the date that is 91 days prior to the maturity date of the term loan facility if the term loan facility has not been extended, repaid or refinanced on or prior to such date) and reduced the related credit spread and commitment fee on unused balances. Our Restated Credit Agreement consists of the following as of September 30, 2024: • a $ 1,032,311 USD Tranche that bears interest at Term SOFR (with a Term SOFR rate floor of 0.50 %) plus 3.00 %, • a € 46,172 (U.S. dollar equivalent of $ 51,569 ) Euro Tranche that currently bears interest at EURIBOR (with a EURIBOR floor of 0 %) plus 3.50 %, and • a $ 250,000 senior secured revolving credit facility with a maturity date of September 26, 2029 (the “Revolving Credit Facility”), with no outstanding borrowings for any periods presented. ◦ Borrowings under the Revolving Credit Facility bear interest at Term SOFR (with a Term SOFR rate floor of 0 %) plus 2.25 % to 3.00 % depending on the Company’s First Lien Leverage Ratio, a net leverage calculation, as defined in the Restated Credit Agreement. The Restated Credit Agreement contains covenants that restrict or limit certain activities and transactions by Cimpress and our subsidiaries, including, but not limited to, the incurrence of additional indebtedness and liens; certain fundamental organizational changes; asset sales; certain intercompany activities; and certain investments and restricted payments, including purchases of Cimpress plc’s ordinary shares and payment of dividends. In addition, if any loans made under the Revolving Credit Facility are outstanding on the last day of any fiscal quarter, then we are subject to a financial maintenance covenant that the First Lien Leverage Ratio calculated as of the last day of such quarter does not exceed 3.25 to 1.00 . As of September 30, 2024, the weighted-average interest rate on outstanding borrowings under the Restated Credit Agreement was 7.37 %, inclusive of interest rate swap rates. We are also required to pay a commitment fee for our Revolving Credit Facility on unused balances of 0.30 % to 0.45 % depending on our First 16 Lien Leverage Ratio. We have pledged the assets and/or share capital of a number of our subsidiaries as collateral under our Restated Credit Agreement. Senior Notes On September 26, 2024, we completed a private placement of $ 525,000 in aggregate principal amount of 7.375% senior unsecured notes due 2032 (the "2032 Notes"). We issued the 2032 Notes pursuant to a senior notes indenture dated as of September 26, 2024, among Cimpress plc, our subsidiary guarantors, and U.S Bank Trust Company, as trustee (the "Indenture"). We used the net proceeds from the 2032 Notes, together with cash on hand, to redeem all of the outstanding 7.0% senior unsecured notes due 2026 (the "2026 Notes") at a redemption price equal to par of the principal amount, to pay all accrued unpaid interest thereon, and to pay all fees and expenses related to the redemption and offering. As a result of the redemption, we incurred a gain on the extinguishment of debt of $ 338 which included the write-off of the associated unamortized debt premium of $ 2,525 which was partially offset by the write-off of unamortized debt issuance costs of $ 2,187 . The 2032 Notes bear interest at a rate of 7.375% per annum and mature on September 15, 2032. Interest on the 2032 Notes is payable semi-annually on March 15 and September 15 of each year, commencing on March 15, 2025, to the holders of record of the 2032 Notes at the close of business on March 1 or September 1, respectively, preceding such interest payment date. The 2032 Notes are senior unsecured obligations and rank equally in right of payment to all our existing and future senior unsecured debt and senior in right of payment to all of our existing and future subordinated debt. The 2032 Notes are effectively subordinated to any of our existing and future secured debt to the extent of the value of the assets securing such debt. Subject to certain exceptions, each of our existing and future subsidiaries that is a borrower under or guarantees our senior secured credit facilities guarantees the 2032 Notes. The Indenture under which the 2032 Notes are issued contains various covenants, including covenants that, subject to certain exceptions, limit our restricted subsidiaries’ ability to: incur and/or guarantee additional debt; pay dividends, repurchase shares or make certain other restricted payments; enter into agreements limiting dividends and certain other restricted payments; prepay, redeem or repurchase subordinated debt; grant liens on assets; merge, consolidate or transfer or dispose of substantially all of our consolidated assets; sell, transfer or otherwise dispose of property and assets; and engage in transactions with affiliates. At any time prior to September 15, 2027, we may redeem some or all of the 2032 Notes at a redemption price equal to 100% of the principal amount redeemed, plus a make-whole amount as set forth in the Indenture, plus, in each case, accrued and unpaid interest and Additional Amounts (as defined in the Indenture), if any, to, but not including, the redemption date. In addition, at any time prior to September 15, 2027, Cimpress may on any one or more occasions redeem up to 40% of the original aggregate principal amount of the Notes with the net proceeds of certain equity offerings by Cimpress at a redemption price equal to 107.375% of the principal amount thereof, plus accrued and unpaid interest and Additional Amounts, if any (which accrued and unpaid interest and Additional Amounts need not be funded with such proceeds), to, but not including, the redemption date. At any time on or after September 15, 2027, Cimpress may redeem some or all of the Notes at the redemption prices specified in the Indenture, plus accrued and unpaid interest and Additional Amounts, if any, to, but not including, the redemption date. Other Debt Other debt consists primarily of term loans acquired through our various acquisitions or used to fund certain capital investments. As of September 30, 2024 and June 30, 2024, we had $ 8,577 and $ 9,845 , respectively, outstanding for those obligations that are payable through September 2027. 9. Income Taxes Our income tax expense was $ 8,995 and $ 8,122 for the three months ended September 30, 2024 and 2023, respectively. Income tax expense increased versus the prior comparative period due to various immaterial discrete items in both periods and an increased full-year forecasted effective tax rate. Excluding the effect of discrete tax adjustments, our estimated annual effective tax rate is higher for fiscal year 2025 than for fiscal year 2024 primarily due to increased forecasted full-year profits. O ur effective tax rate continues to be negatively impacted by losses in certain jurisdictions where we are unable to recognize a tax benefit in the current period. These losses with no tax benefit were excluded in calculating income tax expense for the three months ended 17 September 30, 2024 and 2023, respectively, in accordance with U.S. GAAP. We continuously analyze our valuation allowance positions and the weight of objective and verifiable evidence of actual results against the more subjective evidence of anticipated future income. As of September 30, 2024 we had unrecognized tax benefits of $ 16,272 , including accrued interest and penalties of $ 2,281 . We recognize interest and, if applicable, penalties related to unrecognized tax benefits in the provision for income taxes. If recognized, $ 7,083 of unrecognized tax benefits would reduce our tax expense. It is reasonably possible that a reduction in unrecognized tax benefits may occur within the next twelve months in the range of $ 7,000 to $ 7,500 related to the lapse of applicable statutes of limitations or settlement. We believe we have appropriately provided for all tax uncertainties. We conduct business in a number of tax jurisdictions and, as such, are required to file income tax returns in multiple jurisdictions globally. The years 2014 through 2024 remain open for examination by the U.S. Internal Revenue Service and the years 2015 through 2024 remain open for examination in the various states and non-U.S. tax jurisdictions in which we file tax returns. We believe that our income tax reserves are adequately maintained taking into consideration both the technical merits of our tax return positions and ongoing developments in our income tax audits. However, the final determination of our tax return positions, if audited, is uncertain, and there is a possibility that final resolution of these matters could have a material impact on our results of operations or cash flows. 10. Noncontrolling Interests Redeemable Noncontrolling Interests For some of our subsidiaries, we own a controlling equity stake, and a third party or key members of the business management team own a minority portion of the equity. These noncontrolling interests span multiple businesses and reportable segments. The following table presents the reconciliation of changes in our noncontrolling interests: Redeemable Noncontrolling Interest Noncontrolling Interest Balance as of June 30, 2024 $ 22,998 $ 634 Accretion to redemption value recognized in retained earnings (1) 503 — Net income attributable to noncontrolling interests 96 69 Foreign currency translation 365 28 Balance as of September 30, 2024 $ 23,962 $ 731 _________________ (1) Accretion of redeemable noncontrolling interests to redemption value recognized in retained earnings is the result of changes in the estimated redemption amount to the extent increases do not exceed the estimated fair value. Any change in the estimated redemption amount which exceeds the estimated fair value is recognized within net income attributable to noncontrolling interests. 11. Segment Information Our operating segments are based upon the manner in which our operations are managed and the availability of separate financial information reported internally to the Chief Executive Officer, who is our Chief Operating Decision Maker (“CODM”), for purposes of making decisions about how to allocate resources and assess performance. As of September 30, 2024, we have numerous operating segments under our management reporting structure which are reported in the following five reportable segments: • Vista - Consists of the operations of our VistaPrint branded websites in North America, Western Europe, Australia, New Zealand, India, and Singapore. This business also includes our 99designs by Vista business, which provides graphic design services, VistaCreate for do-it-yourself (DIY) design, our Vista x Wix partnership for small business websites, and our Vista Corporate Solutions business, which serves medium-sized businesses and large corporations. • PrintBrothers - Includes the results of druck.at, Printdeal, and WIRmachenDRUCK, a group of Upload & Print businesses that serve graphic professionals throughout Europe, primarily in Austria, Belgium, Germany, the Netherlands, and Switzerland. 18 • The Print Group - Includes the results of Easyflyer, Exaprint, Packstyle, Pixartprinting, and Tradeprint, a group of Upload & Print businesses that serve graphic professionals throughout Europe, primarily in France, Italy, Spain, and the United Kingdom. • National Pen - Serves small businesses across geographies including North America, Europe, and Australia. The pens.com branded business sells through their ecommerce site and is supported by digital marketing methods as well as direct mail and telesales. National Pen focuses on customized writing instruments and promotional products, apparel, and gifts for small- and medium-sized businesses. • All Other Businesses - Includes two businesses grouped together based on materiality. ◦ BuildASign is a provider of canvas-print wall décor, business signage and other large-format printed products. ◦ Printi, a smaller business that is an online printing leader in Brazil. For purposes of measuring and reporting our segment financial performance, we implemented changes to the methodology used for inter-segment transactions during the first quarter of fiscal 2025. These transactions occur when one Cimpress business chooses to buy from or sell to another Cimpress business. Under the new approach, a merchant business (the buyer) is cross charged the actual cost of fulfillment that includes product (e.g., labor, materials and overhead allocation) and shipping costs. A fulfiller business (the seller) receives inter-segment revenue that includes the product costs plus a markup, as well as the shipping costs. The fulfiller profit is included in the fulfiller’s segment results, but eliminated from consolidated reporting through an inter-segment EBITDA elimination . The new approach allows our merchant businesses to access the ultimate Cimpress cost of fulfillment for a given product and therefore that ultimate Cimpress cost can be used to determine pricing, advertising spend, and other operational decisions. Prior to this change, inter-segment transactions were based on marked-up pricing that resulted in the merchant business recognizing inter-segment cost of goods sold that was equal to inter-segment revenue that were recognized by the fulfiller business, as such there was no inter-segment EBITDA elimination under our prior method. We have recast all prior periods presented for segment revenue and segment EBITDA to ensure comparability with the current fiscal year. These changes in methodology have no impact on our consolidated financial results. Central and corporate costs consist primarily of the team of software engineers that is building our mass customization platform; shared service organizations such as global procurement; technology services such as hosting and security; administrative costs of our Cimpress India offices where numerous Cimpress businesses have dedicated business-specific team members; and corporate functions including our Board of Directors, CEO, and the team members necessary for managing corporate activities, such as treasury, tax, capital allocation, financial consolidation, internal audit and legal. These costs also include certain unallocated share-based compensation costs. The expense value of our PSU awards is based on fair value and is required to be expensed on an accelerated basis. In order to ensure comparability in measuring our businesses' results, we allocate the straight-line portion of the fixed grant value to our businesses. Any expense in excess of this amount as a result of the fair value measurement of the PSUs and the accelerated expense profile of the awards is recognized within central and corporate costs. Our definition of segment EBITDA is GAAP operating income excluding certain items, such as depreciation and amortization, expense recognized for contingent earn-out related charges including the changes in fair value of contingent consideration and compensation expense related to cash-based earn-out mechanisms dependent upon continued employment, share-based compensation related to investment consideration, certain impairment expense, and restructuring charges. We include insurance proceeds that are not recognized within operating income. We do not allocate non-operating income, including realized gains and losses on currency hedges, to our segment results. Our balance sheet information is not presented to the CODM on an allocated basis, and therefore we do not present asset information by segment. We do present other segment information to the CODM, which includes purchases of property, plant and equipment and capitalization of software and website development costs, and therefore include that information in the tables below. 19 Revenue by segment is based on the business-specific websites or sales channel through which the customer’s order was transacted. The following tables set forth revenue by reportable segment, as well as disaggregation of revenue by major geographic region and reportable segment. Three Months Ended September 30, 2024 2023 (1) Revenue: Vista $ 429,494 $ 396,850 PrintBrothers 160,415 152,573 The Print Group 84,072 79,437 National Pen 93,404 86,796 All Other Businesses 57,143 51,425 Total segment revenue 824,528 767,081 Inter-segment eliminations (2) ( 19,559 ) ( 9,787 ) Total consolidated revenue $ 804,969 $ 757,294 _____________________ (1) The prior period segment results have been adjusted to ensure comparability with the new methodology used for inter-segment transactions. Refer to the discussion above for further details. (2) Refer to the "Revenue by Geographic Region" tables below for detail of the inter-segment revenue within each respective segment. Three Months Ended September 30, 2024 Vista PrintBrothers The Print Group National Pen All Other Total Revenue by Geographic Region: North America $ 309,175 $ — $ — $ 52,287 $ 43,368 $ 404,830 Europe 95,657 159,368 80,907 32,007 — 367,939 Other 23,759 — — 1,442 6,999 32,200 Inter-segment 903 1,047 3,165 7,668 6,776 19,559 Total segment revenue 429,494 160,415 84,072 93,404 57,143 824,528 Less: inter-segment elimination ( 903 ) ( 1,047 ) ( 3,165 ) ( 7,668 ) ( 6,776 ) ( 19,559 ) Total external revenue $ 428,591 $ 159,368 $ 80,907 $ 85,736 $ 50,367 $ 804,969 Three Months Ended September 30, 2023 Vista PrintBrothers The Print Group National Pen All Other Total Revenue by Geographic Region: North America $ 289,055 $ — $ — $ 52,735 $ 42,214 $ 384,004 Europe 85,407 151,542 77,802 27,737 — 342,488 Other 21,890 — — 1,377 7,535 30,802 Inter-segment (1) 498 1,031 1,635 4,947 1,676 9,787 Total segment revenue (1) 396,850 152,573 79,437 86,796 51,425 767,081 Less: inter-segment elimination (1) ( 498 ) ( 1,031 ) ( 1,635 ) ( 4,947 ) ( 1,676 ) ( 9,787 ) Total external revenue $ 396,352 $ 151,542 $ 77,802 $ 81,849 $ 49,749 $ 757,294 _____________________ (1) The prior period segment results have been adjusted to ensure comparability with the new methodology used for inter-segment transactions. Refer to the discussion above for further details. 20 The following table includes segment EBITDA by reportable segment, total income from operations and total (loss) income before income taxes: Three Months Ended September 30, 2024 2023 (1) Segment EBITDA: Vista $ 76,847 $ 78,578 PrintBrothers 20,156 20,210 The Print Group 17,902 12,507 National Pen ( 4,758 ) ( 8,762 ) All Other Businesses 6,735 6,018 Inter-segment elimination ( 5,500 ) ( 2,538 ) Total segment EBITDA 111,382 106,013 Central and corporate costs ( 37,012 ) ( 31,780 ) Depreciation and amortization ( 35,546 ) ( 39,942 ) Restructuring-related charges ( 99 ) 334 Certain impairments and other adjustments 614 ( 525 ) Total income from operations 39,339 34,100 Other (expense) income, net ( 11,492 ) 6,419 Interest expense, net ( 31,415 ) ( 29,200 ) Gain on early extinguishment of debt 179 1,372 (Loss) income before income taxes $ ( 3,389 ) $ 12,691 _____________________ (1) The prior period segment results have been adjusted to ensure comparability with the new methodology used for inter-segment transactions. Refer to the discussion above for further details. Three Months Ended September 30, 2024 2023 Depreciation and amortization: Vista $ 13,055 $ 14,875 PrintBrothers 3,475 3,889 The Print Group 5,211 5,822 National Pen 3,246 5,188 All Other Businesses 4,647 4,547 Central and corporate costs 5,912 5,621 Total depreciation and amortization $ 35,546 $ 39,942 Three Months Ended September 30, 2024 2023 Purchases of property, plant and equipment: Vista $ 7,526 $ 3,611 PrintBrothers 1,367 5,152 The Print Group 3,767 8,496 National Pen 1,363 2,669 All Other Businesses 2,511 2,235 Central and corporate costs 467 402 Total purchases of property, plant and equipment $ 17,001 $ 22,565 21 Three Months Ended September 30, 2024 2023 Capitalization of software and website development costs: Vista $ 6,057 $ 6,640 PrintBrothers 602 457 The Print Group 949 694 National Pen 1,100 805 All Other Businesses 1,499 1,187 Central and corporate costs 4,364 4,614 Total capitalization of software and website development costs $ 14,571 $ 14,397 The following table sets forth long-lived assets by geographic area: September 30, 2024 June 30, 2024 Long-lived assets (1): United States $ 72,106 $ 77,095 Switzerland 70,876 67,201 Netherlands 57,773 60,974 Canada 57,455 54,848 Italy 39,042 37,380 Germany 32,088 31,656 France 28,062 28,002 Australia 22,710 22,131 Jamaica 3,639 3,782 Other 96,252 90,380 Total $ 480,003 $ 473,449 ___________________ (1) Excludes goodwill of $ 804,806 and $ 787,138 , intangible assets, net of $ 72,071 and $ 76,560 , deferred tax assets of $ 97,003 and $ 95,059 , and equity method investments of $ 2,128 and $ 1,904 as of September 30, 2024 and June 30, 2024, respectively. 12. Commitments and Contingencies Supply Chain Finance Program We facilitate a voluntary supply chain finance program through a financial intermediary, which provides certain suppliers the option to be paid by the financial intermediary earlier than the due date of the applicable invoice. The decision to sell receivables due from us is at the sole discretion of both the suppliers and the financial institution. Our responsibility is limited to making payment on the terms originally negotiated with each supplier, regardless of whether a supplier participates in the program. We are not a party to the agreements between the participating financial institution and the suppliers in connection with the program, we do not receive financial incentives from the suppliers or the financial institution, nor do we reimburse suppliers for any costs they incur for participating in the program. There are no assets pledged as security or other forms of guarantees provided for the committed payment to the financial institution. All unpaid obligations to our supply chain finance provider are included in accounts payable in the consolidated balance sheets, and payments we make under the program are reflected as a reduction to net cash provided by operating activities in the consolidated statements of cash flows. The outstanding obligations with our supply chain finance provider that are included in accounts payable in our consolidated balance sheets as of September 30, 2024 and June 30, 2024 were $ 62,389 and $ 62,848 , respectively. Purchase Obligations At September 30, 2024, we had unrecorded commitments under contract of $ 231,826 , including inventory, third-party fulfillment and digital service purchase commitments of $ 94,562 ; third-party cloud services of $ 46,075 ; software of $ 35,758 ; production-related temporary labor of $10,278; insurance costs of $9,595; production and computer equipment purchases of $ 9,404 ; professional and consulting fees of $ 6,988 ; advertising of $ 2,025 ; and other unrecorded purchase commitments of $ 17,140 . 22 Legal Proceedings We are not currently party to any material legal proceedings. Although we cannot predict with certainty the results of litigation and claims to which we may be subject from time to time, we do not expect the resolution of any of our current matters to have a material adverse impact on our consolidated results of operations, cash flows or financial position. For all legal matters, at each reporting period, we evaluate whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. We expense the costs relating to our legal proceedings as those costs are incurred. 23