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Item 2. Management’s Discussion and Analysis

2025-05-02 compared with 2025-01-31 · 196 added, 150 removed, 308 unchanged (53% of the section changed)

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This Report contains forward-looking statements that involve risks and uncertainties.

The statements contained in this Report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including but not limited to our statements about the anticipated growth and development of our businesses and financial results, the impact of interest rate and currency fluctuations, sources of liquidity to fund future operations, future payment terms with suppliers, the timing of adoption of certain accounting standards, legal proceedings, our ability to prevail in our appeal of an adverse land duty tax assessment, indefinitely reinvested earnings, unrecognized tax benefits, our effective tax rate, and sufficiency of our tax reserves.

tariffs (including potential changes in related trade policies and potential mitigation actions and related estimates, cost impacts, pricing changes and changes in customer demand), sources of liquidity to fund future operations, future payment terms with suppliers, the timing of adoption of certain accounting standards, legal proceedings, our ability to prevail in our appeal of an adverse land duty tax assessment, indefinitely reinvested earnings, unrecognized tax benefits, our effective tax rate, and sufficiency of our tax reserves.

Without limiting the foregoing, the words “may,” “should,” “could,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” "assume," “designed,” “potential,” "possible," “continue,” “target,” “seek,” "likely," "will" and similar expressions are intended to identify forward-looking statements.

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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.

We discuss mass customization further in the Business section of this Report.

As of December 31, 2024, we have numerous operating segments under our management reporting structure that are reported in the following five reportable segments:

As of March 31, 2025, we have numerous operating segments under our management reporting structure that are reported in the following five reportable segments:

Vista, PrintBrothers, The Print Group, National Pen, and All Other Businesses.

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Refer to Note 11 in our accompanying consolidated financial statements for additional details.

tariff and trade environment has been dynamic in recent months.

Cimpress businesses operate in the U.S., and we have fulfillment operations for U.S.

customers in multiple locations in the U.S., Canada and Mexico.

Cimpress has multiple exemptions and exclusions that currently shield us from paying tariffs on many of the

products we fulfill for U.S.

customers in Canada and Mexico.

Currently the primary impact of tariffs on Cimpress is from raw materials sourcing, particularly from China, as well as the potential for increased supplier costs connected to reciprocal tariffs on other countries.

This is due to the combination of reciprocal tariffs announced by the U.S.

administration on April 2, 2025 (and subsequent changes), and the announcement that the de minimis exemption is being eliminated for shipments of Chinese-sourced goods starting on May 2, 2025.

We have been working to mitigate the impact of tariffs on Cimpress and our U.S.

We have identified alternate, lower-tariff sources of raw materials where possible, though we do expect higher input costs in some cases.

In particular, we expect the promotional products, apparel and gifts (PPAG) industry at large will face increased input costs from these increased tariffs on Chinese goods.

There are some PPAG products we sell, particularly drinkware and other hard goods, that exclusively or nearly exclusively originate from China, while other PPAG products like apparel have more diverse countries of origin.

We are taking action in our supply chain to significantly reduce our exposure to PPAG sourcing where China is the country of origin.

These changes will take several months to be fully implemented and, therefore, in the near term we expect to incur additional costs.

We currently estimate that, after these supply chain changes, the annual value of PPAG sourcing with a country of origin China that would still be subject to the tariffs on imports from China will be less than $20 million, excluding any impact of third-party fulfillment.

We expect to raise prices to at least partially offset these tariff costs and have already implemented pricing changes on some impacted products.

For these products where price increases are being used, it is not possible to forecast what impact this may have on customer demand.

Financial Summary

The primary financial metric by which we set quarterly and annual budgets both for individual businesses and Cimpress wide is our adjusted free cash flow before net cash interest payments;

however, in evaluating the financial condition and operating performance of our business, management considers a number of metrics including revenue growth, constant-currency revenue growth, organic constant-currency revenue growth (which excludes the impact of acquisitions/divestitures), operating income, adjusted EBITDA, cash flow from operations,

and adjusted free cash flow.

Reconciliations of our non-GAAP financial measures are included within the "Consolidated Results of Operations" and "Additional Non-GAAP Financial Measures" sections of Management's Discussion and Analysis.

A summary of these key financial metrics for the three and six months ended December 31, 2024 as compared to the three and six months ended December 31, 2023 follows:

Second Quarter Fiscal Year 2025

A summary of these key financial metrics for the three and nine months ended March 31, 2025 as compared to the three and nine months ended March 31, 2024 follows:

Third Quarter Fiscal Year 2025

• Revenue increased by 1% to $789.5 million.

• Organic constant-currency revenue growth (a non-GAAP financial measure) was 3%.

• Operating income decreased by $26.7 million to $80.9 million.

• Operating income increased by $1.3 million to $40.5 million.

• Net loss increased by $2.8 million to $8.0 million.

• Adjusted EBITDA (a non-GAAP financial measure) decreased by $3.5 million to $90.7 million.

• Diluted net income per share attributable to Cimpress plc increased to $2.36 from $2.14 in the prior year period.

• Diluted net loss per share attributable to Cimpress plc increased by $0.18 to $0.33.

Year to Date Fiscal Year 2025

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• Operating income decreased by $20.2 million to $160.8 million.

• Net income decreased by $18.4 million to $41.2 million.

• Adjusted EBITDA (a non-GAAP financial measure) decreased by $38.6 million to $310.7 million.

• Diluted net income per share attributable to Cimpress plc decreased to $1.86 from $2.31 in the prior year period.

• Diluted loss per share attributable to Cimpress plc decreased by $0.60 to $1.56.

• Cash provided by operating activities decreased by $35.0 million to $190.6 million.

• Adjusted free cash flow (a non-GAAP financial measure) decreased by $67.1 million to $77.2 million.

For the three and six months ended December 31, 2024, the increase in reported revenue was primarily driven by external revenue growth in our Vista, PrintBrothers and The Print Group reportable segments.

Revenue growth was led by strong revenue performance in more complex products in our Vista business, which includes product categories like promotional products, apparel, signage, and packaging and labels.

Revenue growth was dampened by lower revenue in the U.S.

for business cards, as well as lower revenue during the seasonally important second quarter for consumer-focused products, such as holiday cards at Vista and canvas prints in our BuildASign business.

In addition, the shortened holiday buying season compared to last year and postal strikes in Canada during the holiday peak that kept customers from buying holiday cards given the uncertainty of deliverability also negatively impacted revenue growth.

The decrease to operating income during the three and six months ended December 31, 2024 was driven by the non-recurrence of $12 million of items that benefited the prior year periods, as well as the impact of a $2.9 million charge that we recognized in the second quarter of the current fiscal year for a land duty tax in Australia related to our 2019 redomiciliation to Ireland that we are appealing.

In addition, the impact of the Canadian postal strikes and shortened holiday buying season as described above also reduced profits as compared to the prior year periods.

The strong revenue growth in more complex products was not enough to overcome the shortfall from higher gross margin products, as well as increased advertising spend and operating expenses.

These items were offset in part by $4.1 million and $8.8 million, respectively, of lower amortization of acquired intangible assets due to the runoff of fully amortized assets across several of our previously acquired businesses.

Adjusted EBITDA decreased during the three and six months ended December 31, 2024, primarily driven by the decrease in operating income described above, as well as negative year-over-year currency impacts of $0.7 million and $2.1 million, respectively, net of realized hedging gains and losses for certain derivatives intended to hedge adjusted EBITDA.

Adjusted EBITDA excludes depreciation and amortization, restructuring charges, share-based compensation expense, earn-out related charges, certain impairments and other charges, gains or losses on the purchase or sale of subsidiaries and the disposal of assets, and includes proceeds from insurance not already included in operating income as well as the realized gains or losses on our currency derivatives intended to hedge adjusted EBITDA.

Diluted net income per share attributable to Cimpress plc increased for the three months ended December 31, 2024, due to higher unrealized gains on derivative contracts that are not designated hedges, which was partially offset by the operating income decrease described above.

Alternatively, diluted net income per share attributable to Cimpress plc decreased for the six months ended December 31, 2024, due to the operating income decrease described above.

The operating income decrease was offset in part by higher unrealized gains on derivative contracts that are not designated hedges.

During the six months ended December 31, 2024 , cash from operations decreased $36.3 million year over year, primarily driven by the lower operating income as described above, as well as less favorable inflows from changes in net working capital year-over-year.

The cash from operations decrease was partially offset by lower cash interest payments of $12.1 million, primarily due to a change in timing of interest payments on our recently refinanced senior notes.

Adjusted free cash flow decreased by $53.0 million for the six months ended December 31, 2024, due to the operating cash flow decrease described above, as well as a $9.5 million increase in capitalized expenditures, primarily due to planned investments in new production equipment.

Proceeds from sale of assets decreased by $4.3 million, primarily driven by the sale of our previously owned manufacturing facility in Japan in the prior year period.

For the three and nine months ended March 31, 2025, the increase in reported revenue was primarily driven by external revenue growth in our Vista and PrintBrothers reportable segments.

Revenue growth was led by strong revenue performance in Vista product categories like PPAG, signage, and packaging and labels, as well as continued order volume growth in our PrintBrothers reportable segment.

Revenue growth was dampened by lower revenue for certain products in the U.S., mainly from weaker demand for business cards in our Vista business and home decor products in our BuildASign business, as well as lower revenue in the direct mail channel of our National Pen business particularly in North America.

During the current-year periods, currency exchange fluctuations had a negative year-over-year effect on revenue.

The increase to operating income of $1.3 million during the three months ended March 31, 2025 was driven by a reduction in share-based compensation expense of $5.7 million, due to expense volatility from changes in estimated attainment of the related performance condition of our 2025 PSU grants, as well as lower amortization of acquired intangible assets of $2.4 million due to the runoff of fully amortized assets across several of our previously acquired businesses.

These items were offset in part by a $2.6 million impairment charge for our planned sale of a facility in our National Pen business, as well as preproduction startup costs of $1.8 million for a new U.S.

manufacturing facility that started production in March 2025.

Additionally, the benefit from gross profit growth in the product categories listed above continues to be negated by the decline in revenue from certain higher margin product categories like business cards, as well as increased advertising spend of $1.2 million.

The decrease to operating income of $20.2 million during the nine months ended March 31, 2025 was driven by the non-recurrence of approximately $10 million of items that benefited the prior-year period, as well as more than $8 million of discrete items that negatively impacted the current-year period, which included an Australian land duty tax in the second quarter of the current fiscal year, as well as the impairment charge and preproduction startups costs discussed above.

The current-year period was also impacted by the same effects of product mix shifts as described above, as well as increased advertising spend of $15.7 million and higher operating expenses.

These items were offset in part by $11.2 million of lower amortization of acquired intangible assets due to the runoff of fully amortized assets across several of our previously acquired businesses and reduced share-based compensation expense of $5.8 million.

For three months ended March 31, 2025, net loss increased by $2.8 million to $8.0 million, due to higher income tax expense and increases in unrealized losses on derivative contracts that are not designated as hedges, which was partially offset by the operating income increase described above and lower interest expenses due to our recent repricings of our senior secured Term Loan B.

For the nine months ended March 31, 2025, net income decreased by $18.4 million to $41.2 million, due to the operating income decline described above and increased income tax expense, which was offset in part by lower interest expenses and higher unrealized hedging gains.

Adjusted EBITDA decreased during the three and nine months ended March 31, 2025, for similar reasons described above, as increased advertising spend and operating expenses more than offset the growth in gross profit.

Gross profit growth in our fastest growing product categories continues to be offset in part by the decline in certain higher margin product categories that has weighted on gross margins as compared to the prior-year periods.

Refer to the "Additional Non-GAAP Financial Measures" section of Management's Discussion and Analysis for the full reconciliation of Adjusted EBITDA to net (loss) income.

During the nine months ended March 31, 2025 , cash from operations decreased $35.0 million year over year, primarily driven by the lower net income as described above, as well as unfavorable changes in net working capital year over year of $10.3 million .

Adjusted free cash flow decreased by $67.1 million for the nine months ended March 31, 2025, due to the operating cash flow decrease described above, as well as a $23.8 million increase in capitalized expenditures, primarily due to planned investments in new production equipment.

Proceeds from the sale of assets decreased by $4.1 million, driven by the sale of our previously owned manufacturing facility in Japan in the prior-year period.

Consolidated Results of Operations

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For additional discussion relating to segment revenue results, refer to the "Reportable Segment Results" section included below.

Total revenue and revenue growth by reportable segment for the three and six months ended December 31, 2024 are shown in the following table:

In thousands Three Months Ended December 31, Currency

Total revenue and revenue growth by reportable segment for the three and nine months ended March 31, 2025 are shown in the following table:

In thousands Three Months Ended March 31, Currency

Currency Impact of Acquisitions/Divestitures:

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Total revenue $ 789,468 $ 780,588 1% 2% 3% —% 3%

In thousands Six Months Ended December 31, Currency

In thousands Nine Months Ended March 31, Currency

Currency Impact of Acquisitions/Divestitures:

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These non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP.

For the three and nine months ended March 31, 2025, the reported revenue growth of $8.9 million and $74.4 million, respectively, was primarily driven by external revenue growth in our Vista and PrintBrothers reportable segments, partially offset by $15.6 million and $15.8 million of negative effects from currency exchange rate fluctuations as compared to the prior-year periods, respectively.

Excluding the effect of changes in currency exchange rates, the largest increase in reported revenue was from our Vista business with $18.4 million and $63.3 million of incremental external revenue for the three and nine months ended March 31, 2025, respectively.

Vista revenue was higher year over year across all major markets, with the most significant growth in the PPAG and signage categories.

Our PrintBrothers reportable segment also contributed $10.4 million and $26.4 million of increased external revenue for the three and nine months ended March 31, 2025, respectively, excluding the effect of changes in currency exchange rates, primarily driven by continued order volume and customer growth, partially offset by customers purchasing lower quantities in certain product categories.

For additional discussion relating to segment revenue results, refer to the "Reportable Segment Results" section included below.

Consolidated Cost of Revenue

Cost of revenue includes materials used by our businesses to manufacture their products, payroll and related expenses for production and design services personnel, depreciation of assets used in the production process and in support of digital marketing service offerings, shipping, handling and processing costs, third-party production and design costs, costs of free products, and other related costs of products our businesses sell.

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 2025 2024

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% of revenue 52.8 % 51.8 % 52.5 % 51.5 %

For the three and six months ended December 31, 2024, cost of revenue increased by $25.8 million and $49.8 million year over year, partially driven by higher production and shipping costs due to volume growth as well as increases in third-party fulfillment costs in some of our businesses, primarily due to product mix shifts toward faster growing complex product categories, some of which leverage our third-party fulfillment network.

In addition, cost of revenue was negatively impacted year-over-year by $4.2 million due to the non-recurrence of several items that benefited the prior year periods which included a favorable indirect tax ruling.

For the three and nine months ended March 31, 2025, cost of revenue increased by $12.3 million and $62.1 million year over year, respectively, driven by higher variable-based manufacturing costs of $7.0 million and $44.0 million, due to volume-related increases, as well as increases in third-party fulfillment costs of $3.0 million and $29.9 million, respectively, which were driven in part by product mix shifts toward faster-growing product categories that leverage our third-party fulfillment network.

Additionally, shipping costs increased $4.6 million and $8.8 million for the three and nine months ended March 31, 2025, respectively, and as a percentage of revenue, increased by 50 and 10 basis points, respectively.

Other discrete items that contributed to the increase in cost of revenue was the recognition of a $2.6 million impairment charge during the current quarter for our planned sale of a facility by our National Pen business, as well as increased preproduction startup costs that were recognized as part of a new U.S.

manufacturing facility that resulted in cost of revenue of $1.1 million and $1.6 million for the three and nine months ended March 31, 2025, respectively.

For the nine months ended March 31, 2025, the cost increase was also impacted by the nonrecurrence of a favorable tax ruling of $3.0 million that benefited the prior-year period.

Consolidated Operating Expenses

The following table summarizes our comparative operating expenses for the following periods:

Three Months Ended December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 2025 vs.

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Depreciation expense for information technology equipment that directly supports the delivery of our digital marketing services products is included in cost of revenue.

Technology and development expense increased by $2.9 million and $10.4 million for the three and six months ended December 31, 2024, respectively, as compared to the prior year periods.

The year-over-year increase was driven in part by $1.9 million and $3.7 million, respectively, of higher third-party technology costs driven partly by our businesses' further adoption of certain products offered through our mass customization platform, as well as increased business volumes, which has collectively increased consumption of those services.

Amortization of capitalized software also increased $1.1 million and $2.3 million, respectively, as compared to the prior year periods, due to an increase in the capitalized asset base driven by continued investment in technology capabilities across many of our businesses.

Technology and development expense decreased by $0.7 million for the three months ended March 31, 2025, as compared to the prior-year period, driven by $2.0 million of reduced expense from fluctuations in currency exchange rates and $1.3 million of lower share-based compensation costs, due to expense volatility from changes in the estimated attainment of the related performance condition of our 2025 PSU grants.

These decreases were partially offset by higher third-party technology costs and increases in amortization expense of capitalized software, due to a higher capitalized asset base driven by continued investment in technology capabilities across many of our businesses.

Technology and development expense increased by $9.8 million for the nine months ended March 31, 2025, as compared to the prior-year period, in part driven by $3.0 million of higher third-party technology costs driven partly by our businesses' further adoption of certain products offered through our mass customization platform, as well as increased business volumes, which has collectively increased consumption of those services.

Amortization of capitalized software also increased $2.7 million as compared to the prior-year period, due to an increase in the capitalized asset base driven by continued investment in technology capabilities across many of our businesses.

These items were offset in part by $1.1 million of lower share-based compensation costs, due to expense volatility from changes in the estimated attainment of the related performance condition of our 2025 PSU grants.

Marketing and selling expense

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Our Vista, National Pen, and BuildASign businesses have higher marketing and selling costs as a percentage of revenue as compared to our PrintBrothers and The Print Group businesses due to differences in the customers that they serve.

For the three and six months ended December 31, 2024, marketing and selling expenses increased by $12.0 million and $23.7 million, respectively, partly due to higher advertising spend of $8.3 million and $14.6 million, respectively, as compared to the prior-year periods, largely driven by increases in mid- and upper-funnel spend in our Vista business, as well as higher cost of performance advertising in the U.S.

market during the holiday peak.

Cash compensation costs increased by $4.8 million and $9.2 million, respectively, driven by our annual merit cycle, as well as hiring in our Vista business.

For the three and nine months ended March 31, 2025, marketing and selling expenses increased by $1.7 million and $25.4 million, respectively, partly due to higher advertising spend of $1.2 million and $15.7 million, respectively, as compared to the prior-year periods, largely driven by volume-driven increases to advertising spend, as well as targeted advertising investments.

Additionally, for the nine-month period, advertising was higher due to increases in mid- and upper-funnel spend in our Vista business, and the higher cost of performance advertising in the U.S.

market during the second quarter of the current fiscal year.

Cash compensation costs also increased by

$3.3 million and $12.5 million, respectively, driven by our annual merit cycle, as well as hiring in our Vista business.

These were offset in part by $1.0 million and $2.1 million, respectively, of lower share-based compensation costs, due to expense volatility from changes in the estimated attainment of the related performance condition of our 2025 PSU grants.

General and administrative expense

General and administrative expense consists primarily of transaction costs, including third-party professional fees, insurance, and payroll and related expenses of employees involved in executive management, finance, legal, strategy, human resources, and procurement.

General and administrative expenses increased by $8.1 million and $11.7 million, respectively, during the three and six months ended December 31, 2024 as compared to the prior year periods.

The increase in general and administrative expenses was driven by higher long-term incentive compensation of $4.8 million and $4.4 million, respectively, due to variability year-over-year in estimated payouts which resulted in a benefit in the prior year periods, as compared to expense in the current year periods, as well as higher cash compensation costs which were impacted by our annual merit cycle.

The increase was also impacted by a $2.9 million charge recognized in the current quarter for a land duty tax in Australia related to our 2019 redomiciliation to Ireland that we are appealing.

General and administrative expenses decreased by $3.7 million during the three months ended March 31, 2025 as compared to the prior-year period, driven by $3.3 million of lower share-based compensation costs, due to expense volatility from changes in the estimated attainment of the related performance condition of our 2025 PSU grants.

General and administrative expenses increased by $8.0 million during the nine months ended March 31, 2025 as compared to the prior-year period, driven by $5.1 million of higher long-term incentive cash compensation, due to prior-year reductions in estimated payouts for certain businesses, as well as higher cash compensation costs that were impacted by our annual merit cycle, and a $2.9 million charge recognized in the second quarter of the current fiscal year for a land duty tax in Australia related to our 2019 redomiciliation to Ireland that we are appealing.

These increases were offset in part by $2.5 million of lower share-based compensation costs, due to expense volatility from changes in the estimated attainment of the related performance condition of our 2025 PSU grants.

Other Consolidated Results

Other income (expense), net

Other income (expense), net generally consists of gains and losses from currency exchange rate fluctuations on transactions or balances denominated in currencies other than the functional currency of our subsidiaries, as well as the realized and unrealized gains and losses on some of our derivative instruments.

Other (expense) income, net

Other (expense) income, net generally consists of gains and losses from currency exchange rate fluctuations on transactions or balances denominated in currencies other than the functional currency of our subsidiaries, as well as the realized and unrealized gains and losses on some of our derivative instruments.

In evaluating our currency hedging programs and ability to qualify for hedge accounting in light of our legal entity cash flows, we considered the benefits of hedge accounting relative to the additional economic cost of trade execution and administrative burden.

Based on this analysis, we execute certain currency derivative contracts that do not qualify for hedge accounting.

The following table summarizes the components of other income (expense), net:

Three Months Ended December 31, Six Months Ended December 31,

2024 2023 2024 2023

Gains (losses) on derivatives not designated as hedging instruments $ 33,632 $ (13,668) $ 13,063 $ (5,356)

Currency-related (losses) gains, net (2,107) 13,062 6,560 10,363

The following table summarizes the components of other (expense) income, net:

Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 2025 2024

Total other income (expense), net $ 31,678 $ (391) $ 20,186 $ 6,028

The increase in other income (expense), net was primarily due to the currency exchange rate volatility impacting our derivatives that are not designated as hedging instruments, of which our Euro and British Pound contracts are the most significant exposures that we economically hedge.

(Losses) gains on derivatives not designated as hedging instruments $ (14,640) $ 9,071 $ (1,577) $ 3,715

Currency-related gains (losses), net 5,131 (12,434) 11,691 (2,071)

Other gains (losses) 68 (288) 631 733

Total other (expense) income, net $ (9,441) $ (3,651) $ 10,745 $ 2,377

The changes in other (expense) income, net was primarily due to the currency exchange rate volatility impacting our derivatives that are not designated as hedging instruments, of which our Euro and British Pound contracts are the most significant exposures that we economically hedge.

We expect volatility to continue in future periods, as we do not apply hedge accounting for most of our derivative currency contracts.

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Interest expense, net primarily consists of interest on outstanding debt balances, amortization of debt issuance costs, debt discounts, interest related to finance lease obligations, accretion adjustments related to our mandatorily redeemable noncontrolling interests, and realized gains (losses) on effective interest rate swap contracts and certain cross-currency swap contracts.

Interest expense, net decreased $1.4 million during the three months ended December 31, 2024, primarily due to a year-over-year decrease to our weighted average interest rate (net of interest rate swaps) on our senior secured Term Loan B arising in part from our repricing actions in May 2024 and December 2024 that reduced our credit spread.

Interest expense, net increased $0.8 million during the six months ended December 31, 2024, primarily due to the impact of changes in our estimated redemption amount of mandatorily redeemable noncontrolling interests, which has resulted in $2.7 million of higher interest expense, net, year over year.

This was partially offset by a year-over-year decrease to our weighted average interest rate (net of interest rate swaps) on our senior secured Term Loan B arising in part from our recent repricing actions as well as less interest expense associated with our 2026 Notes driven by the prior-year purchase of a portion of those notes.

Gain on extinguishment of debt

During the three and six months ended December 31, 2024, we recognized $0.7 million and $0.5 million of losses on the extinguishment of debt primarily due to the net write-off of unamortized debt discount and financing fees associated with the refinancing of our Term Loan B.

Interest expense, net decreased $3.2 million and $2.4 million during the three and nine months ended March 31, 2025, respectively, primarily due to a year-over-year decrease to our weighted average interest rate (net of interest rate swaps) on our senior secured Term Loan B arising in part from our repricing actions in May 2024 and December 2024 that reduced the credit spread on our outstanding debt.

Gain (loss) on extinguishment of debt

During the nine months ended March 31, 2025, we recognized $0.5 million of losses on the extinguishment of debt primarily due to the net write-off of unamortized debt discount and financing fees associated with the refinancing of our Term Loan B.

Refer to Note 8 in our accompanying consolidated financial statements for additional details.

The prior year periods includes gains of $0.3 million and $1.7 million, respectively, arising from the purchase of a portion of our previously outstanding 2026 Notes.

Income tax expense

In thousands Three Months Ended December 31, Six Months Ended December 31,

In thousands Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 2025 2024

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Effective tax rate 294.5 % 195.4 % 50.6 % 37.3 %

Income tax expense for the three and six months ended December 31, 2024 increased versus the prior comparative periods due to an increased full-year forecasted effective tax rate, excluding loss entities with no tax benefit.

Income tax expense for the three and nine months ended March 31, 2025 increased versus the prior comparative periods due to an increased full-year forecasted effective tax rate, excluding loss entities with no tax benefit.

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 and nine months ended March 31, 2025 and 2024, in accordance with GAAP.

We believe that our income tax reserves are adequately maintained by 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 therefore there is a possibility that final resolution of these matters could have a material impact on our results of operations or cash flows.

However, the final determination of our tax return positions, if audited, is uncertain, and therefore there is a possibility that final resolution of these matters could have a material impact on our results of operations or cash flows.

Refer to Note 9 in our accompanying consolidated financial statements for additional details.

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Refer to Note 11 in our accompanying consolidated financial statements for additional details.

Three Months Ended December 31, Six Months Ended December 31,

2024 2023 (1)

2023 2024 2023 (1)

Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 (1) 2025 vs.

2024 2025 2024 (1) 2025 vs.

Reported Revenue

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Segment Revenue

Vista's reported and constant-currency revenue growth for the three and six months ended December 31, 2024 was 3% and 5%, respectively.

Revenue growth for the three and six months ended December 31, 2024 was stronger in Europe, as well as globally from product categories like promotional products, apparel, signage and packaging and labels.

Revenue growth was dampened by a decline in consumer products in North America during the seasonally important second quarter and a decline in business cards and stationery in the U.S.

in both periods presented.

For holiday products in the U.S.

more intensive discounting from competitors, significantly higher advertising costs in performance channels and fewer buying days during the holiday season combined to reduce revenue versus the prior year periods.

Additionally, there was a postal strike in Canada during the second quarter of the current fiscal year that also negatively impacted demand during the holiday peak.

Vista's reported revenue growth for the three and nine months ended March 31, 2025 was negatively affected by currency exchange fluctuations for both periods by 1%, resulting in constant-currency revenue growth of 4% and 5%, respectively.

Revenue growth for the three and nine months ended March 31, 2025 was stronger in Europe.

In addition, growth was stronger across most major markets, for product categories like promotional products, apparel, signage and packaging and labels.

Revenue growth was dampened by a decline in the business cards and stationery product category in the U.S.

in both periods presented, including negative impact from algorithm changes in the organic search channel that we've continued to optimize against.

Segment Profitability

For the three and six months ended December 31, 2024, segment EBITDA decreased by $15.4 million and $17.2 million, respectively, primarily due to the non-recurrence of items that benefited the prior-year periods of $4.6 million and $6.4 million, respectively, and the impact of product mix shifts largely driven by the declines in North American consumer products that was influenced in part by the Canadian postal strikes, as well as declines in business cards and stationery, each of which have high gross margins.

Vista advertising expense increased year-over-year by $6.4 million and $13.6 million, respectively, which drove the revenue growth described above, and was impacted by a higher cost of advertising during the peak consumer weeks in North America, as well as unfavorable shifts in channel mix due to weaker performance in organic search and free channels.

For the three months ended March 31, 2025, segment EBITDA increased by $1.3 million, driven by $1.6 million of gross profit growth due to the growth of higher-value orders particularly in the PPAG, signage, and packaging and labels categories, which was partially offset by the decline in business cards and stationary.

For the nine months ended March 31, 2025, segment EBITDA decreased by $15.9 million, primarily due to modest gross profit growth, driven by similar dynamics that are described above, which was more than offset by $14.7 million of higher advertising spend, as well as higher operating expenses as compared to the prior year.

The increase in advertising spend was primarily driven by the timing of mid- and upper-funnel advertising spend during the first half of the fiscal year in North America.

In addition, the segment EBITDA decline was also influenced by the non-recurrence of items that benefited the prior-year period of $6.4 million.

PrintBrothers

Three Months Ended December 31, Six Months Ended December 31,

2024 2023 (1)

2023 2024 2023 (1)

Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 (1) 2025 vs.

2024 2025 2024 (1) 2025 vs.

Reported Revenue

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Segment Revenue

PrintBrothers' reported revenue growth for the three months ended December 31, 2024 was negatively affected by currency impact of 1%, while currency exchange fluctuations had a minimal effect on the six months ended December 31, 2024, resulting in constant currency revenue growth of 6% and 5%, respectively.

Constant-currency growth was driven primarily by continued order volume growth, partially offset by customers purchasing lower quantities in certain product categories.

PrintBrothers' reported revenue growth for the three and nine months ended March 31, 2025 was negatively affected by currency of 3% and 1%, respectively, resulting in constant currency revenue growth of 7% and 6%, respectively.

Constant-currency revenue growth was driven primarily by order volume growth, as well as volumes related to the German elections which benefited a portion of the current-year periods.

Order volume growth continues to be offset in part by customers purchasing lower quantities in certain product categories.

Segment Profitability

PrintBrothers' segment EBITDA for the three and six months ended December 31, 2024 decreased $5.5 million year over year for both periods presented.

The segment EBITDA decrease for the three and six months ended December 31, 2024 was driven by the non-recurrence of discrete items, including government incentives from one jurisdiction, which benefited the prior year periods by $4.1 million and $2.1 million, respectively.

In addition, advertising spend was higher by $1.6 million and $3.0 million, respectively, driven by one of the segment's businesses testing into new digital marketing channels, as well as higher variable long-term incentive compensation expense of $0.3 million and $0.7 million, respectively, due to in part to variability in estimated payouts.

For the three months ended March 31, 2025, PrintBrothers' segment EBITDA increased by $0.5 million, due to gross profit growth that was driven by revenue growth described above, partially offset by increased advertising spend and operating expenses.

Currency exchange fluctuations had a negative year-over-year impact of $0.5 million for the three months ended March 31, 2025.

PrintBrothers' segment EBITDA for the nine months ended March 31, 2025 decreased $5.0 million, partially due to an increase in advertising spend of $4.4 million, driven by one of the segment's businesses testing into new digital marketing channels, as well as higher operating expenses that were offset in part by gross profit growth that was driven by the revenue growth described above.

Currency exchange fluctuations had a negative year-over-year impact of $0.2 million for the nine months ended March 31, 2025.

The Print Group

Three Months Ended December 31, Six Months Ended December 31,

2024 2023 (1)

2023 2024 2023 (1)

Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 (1) 2025 vs.

2024 2025 2024 (1) 2025 vs.

Reported Revenue

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Segment Revenue

The Print Group's reported and constant-currency revenue growth for the three and six months ended December 31, 2024 was 7% and 6%, respectively.

The Print Group revenue has benefited from increased fulfillment to other Cimpress businesses, as well as pricing optimization.

The Print Group's reported revenue growth was negatively affected by currency exchange rate fluctuations of 3% and 1%, respectively, resulting in constant-currency revenue growth for the three and nine months ended March 31, 2025 of 6% for both periods presented, and was driven by increased fulfillment for other Cimpress businesses.

Segment Profitability

The increase in The Print Group's segment EBITDA during the three and six months ended December 31, 2024 as compared to the prior year periods was largely driven by revenue growth described above and gross margin expansion due to reductions in key input costs such as raw materials.

The gross profit growth for the three months ended December 31, 2024 was partially offset by higher variable long-term incentive compensation expense of $1.9 million, while variable long-term incentive compensation was lower for the six months ended December 31, 2024 by $0.9 million due to variability in estimated payouts.

In thousands Three Months Ended December 31, Six Months Ended December 31,

2024 2023 (1)

2023 2024 2023 (1)

The decrease in The Print Group's segment EBITDA during the three months ended March 31, 2025 as compared to the prior-year period was largely driven $1.8 million of startup costs related to Pixartprinting's new U.S.

facility, as well as higher variable long-term incentive compensation expense of $1.4 million due to variability in estimated payouts.

Currency exchange fluctuations had a negative year-over-year impact of $0.5 million for the three months ended March 31, 2025.

The increase in The Print Group's segment EBITDA during the nine months ended March 31, 2025 as compared to the prior-year period was largely driven by revenue growth described above and gross margin expansion due to reductions in key input costs such as raw materials.

The gross profit growth for the nine months ended March 31, 2025 was partially offset by $2.8 million of startup costs related to Pixartprinting's new U.S.

In thousands Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 (1) 2025 vs.

2024 2025 2024 (1) 2025 vs.

Reported Revenue

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Segment Revenue

For the three and six months ended December 31, 2024, currency exchange fluctuations positively impacted National Pen's revenue growth by 0% and 1%, respectively.

The segment's constant-currency revenue growth was 1% and 3% as compared to the prior year periods, respectively.

National Pen revenue growth was driven by growth in e-commerce, cross-Cimpress fulfillment for other Cimpress businesses, and telesales.

For the three and nine months ended March 31, 2025, National Pen's constant-currency revenue growth was 1% and 3% as compared to the prior-year periods, respectively.

National Pen revenue growth was driven by growth in e-commerce and cross-Cimpress fulfillment for other Cimpress businesses.

These growing channels were offset by revenue declines in mail order where National Pen continued to optimize for efficiency of direct mail advertising.

Segment Profitability

The decrease in National Pen's segment EBITDA for the three months ended December 31, 2024 was driven by a reduction in gross profit, due to gross margin compression driven by unfavorable product mix shift and increased freight costs versus the prior year periods.

Currency exchange fluctuations had a positive year-over-year impact of $0.7 million for the three months ended December 31, 2024.

The increase in National Pen's segment EBITDA for the six months ended December 31, 2024 was driven by the revenue growth described above, and $1.6 million of lower advertising spend intended to drive efficiency across channels.

Currency exchange fluctuations had a positive year-over-year impact of $1.3 million for the six months ended December 31, 2024.

The decrease in National Pen's segment EBITDA for the three months ended March 31, 2025 was driven by a reduction in gross profit, due to gross margin compression driven by unfavorable product mix shift and increased freight costs versus the prior-year period.

This was offset in part by $0.9 million of lower advertising spend intended to drive efficiency across channels.

The increase in National Pen's segment EBITDA for the nine months ended March 31, 2025 was driven by the revenue growth described above, and $2.5 million of lower advertising spend intended to drive efficiency across channels.

Currency exchange fluctuations had a positive year-over-year impact of $1.3 million for the nine months ended March 31, 2025.

All Other Businesses

Three Months Ended December 31, Six Months Ended December 31,

2024 2023 (1)

2023 2024 2023 (1)

Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 (1) 2025 vs.

2024 2025 2024 (1) 2025 vs.

Reported Revenue

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Segment Revenue

All Other Businesses' revenue growth was negatively impacted 2% and 1% by currency, resulting in constant-currency revenue growth of 3% and 7% during the three and six months ended December 31, 2024, respectively.

BuildASign, the largest business in this segment, delivered strong growth from fulfillment for other Cimpress businesses, as well as growth in their signage products, which was partially offset by lower revenue for home decor products.

All Other Businesses' revenue growth was negatively impacted 3% and 1% by currency exchange rate fluctuations, resulting in constant-currency revenue growth of 8% and 7% during the three and nine months ended March 31, 2025, respectively.

BuildASign, the largest business in this segment, delivered strong growth from fulfillment for other Cimpress businesses, which was partially offset by lower revenue for home decor products.

Our smaller Printi business delivered constant-currency revenue growth versus the prior-year periods.

Segment Profitability

For the three and six months ended December 31, 2024, segment EBITDA decreased $3.7 million and $3.0 million versus prior year periods, largely driven by higher long-term incentive compensation expense of $2.8 million and $3.8 million due to a prior year reversal of expense driven by changes in estimated payouts year over year that was a benefit in the prior year periods and did not recur during the current year periods.

gross profits declined year-over-year during the seasonally significant second quarter for our BuildASign business, driven by lower revenue in home decor products, as well as gross margin compression driven in part by temporary production inefficiencies related to new capabilities.

For the three months ended March 31, 2025, segment EBITDA increased $1.9 million versus the prior-year period, largely driven by the revenue growth described above, and lower long-term incentive compensation expense of $0.9 million due to lower estimated payouts.

Currency exchange fluctuations had a positive year-over-year impact of $0.2 million for the three months ended March 31, 2025.

For the nine months ended March 31, 2025, segment EBITDA decreased $1.1 million versus the prior-year period, largely driven by higher long-term incentive compensation expense of $2.9 million due to a prior-year reversal of expense driven by changes in estimated payouts that did not recur during the current-year period.

In addition, gross profits declined year over year during the seasonally significant second quarter for our BuildASign business, driven by lower revenue in home decor products, as well as gross margin compression driven in part by temporary production inefficiencies related to new capabilities.

Currency exchange fluctuations had a positive year-over-year impact of $0.4 million for the nine months ended March 31, 2025.

Central and Corporate Costs

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These costs also include certain unallocated share-based compensation costs.

During the three and six months ended December 31, 2024, central and corporate costs increased by $1.2 million and $6.4 million, respectively, as compared to the prior year periods, due in part to a $2.9 million charge recognized in the current quarter for a land duty tax in Australia related to our 2019 redomiciliation to Ireland that we are appealing.

In addition, third party technology costs increased, as a result of continued adoption and usage of mass customization platform products that are developed by our central technology teams.

These increases were partially offset by lower unallocated share-based compensation expense year-over-year of $2.4 million and $4.6 million, respectively, due to lower attainment estimates associated with performance share units granted during the current fiscal year.

During the three months ended March 31, 2025, central and corporate costs decreased by $4.6 million as compared to the prior-year period, driven by lower share-based compensation expense of $6.1 million, due to lower

attainment estimates associated with performance share units granted during the current fiscal year.

This cost decrease was partially offset by higher cash compensation costs, mainly in our central technology organization, as a result of hiring and our annual merit cycle.

During the nine months ended March 31, 2025, central and corporate costs increased by $1.8 million as compared to the prior-year period, due in part to a $2.9 million charge recognized in the second quarter for a land duty tax in Australia related to our 2019 redomiciliation to Ireland that we are appealing.

In addition, cash compensation costs in our central functions increased, as a result of both hiring in our central technology organization and our annual merit cycle.

We also recognized higher third-party technology costs, as a result of continued adoption and usage of mass customization platform products that are developed by our central technology teams.

These increases were partially offset by lower unallocated share-based compensation expense year over year of $7.9 million due to lower attainment estimates associated with performance share units granted during the current fiscal year.

Liquidity and Capital Resources

Consolidated Statements of Cash Flows Data

Six Months Ended December 31,

Nine Months Ended March 31,

Net cash provided by operating activities $ 190,598 $ 225,627

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Net cash used in financing activities (107,413) (157,506)

The cash flows during the six months ended December 31, 2024 related primarily to the following items:

The cash flows during the nine months ended March 31, 2025 related primarily to the following items:

Cash inflows:

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• Adjustments for non-cash items of $154.0 million primarily related to adjustments for depreciation and amortization of $105.1 million, share-based compensation costs of $42.7 million, and deferred taxes of $5.8 million, partially offset by unrealized currency-related gains of $7.0 million

• Net working capital inflow of $45.8 million, primarily due to favorable changes to accounts payable and accrued expenses, driven in large part by timing impacts from our seasonally significant second quarter

• Proceeds from the settlement of derivatives designated as hedging instruments of $5.4 million

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Cash outflows:

• Capital expenditures of $68.2 million, of which the majority is related to the purchase of manufacturing and automation equipment for our production facilities

• Purchases of our ordinary shares for $56.9 million

• Capital expenditures of $43.4 million, of which the majority related to the purchase of manufacturing and automation equipment for our production facilities

• Internal and external costs of $47.6 million for software and website development that we have capitalized

• Payment of withholding taxes in connection with share awards of $16.8 million, primarily driven by the vesting of restricted and performance share unit grants

• Repayments of other debt, net of proceeds from borrowings, of $8.0 million

• Net payments of $5.6 million associated with the refinancing of our 2026 Notes and amendment to our revolving credit facility, including financing fees paid.

• Net repayments of debt of $21.2 million, including the impact of the refinancing of our 2026 Notes and amendment to our Senior Secured Credit Facility, as well as financing fees paid.

Refer to Note 8 in the accompanying consolidated financial statements for additional details.

• Payment of withholding taxes in connection with share awards of $19.9 million, primarily driven by the vesting of restricted and performance share unit grants

• Payments for finance lease arrangements of $5.9 million

• Net working capital outflows of $4.6 million, primarily due to increases in inventory levels, driven in part by product mix shifts and raw material cost increases

• Purchase of noncontrolling interests of $4.1 million

Additional Liquidity and Capital Resources Information.

At December 31, 2024, we had $224.4 million of cash and cash equivalents and $1,610.5 million of debt, excluding debt issuance costs and debt premiums and discounts.

During the six months ended December 31, 2024, we financed our operations and strategic investments through internally generated cash flows from operations and cash on hand.

At March 31, 2025, we had $183.0 million of cash and cash equivalents and $1,607.7 million of debt, excluding debt issuance costs and debt premiums and discounts.

During the nine months ended March 31, 2025, we financed our operations and strategic investments through internally generated cash flows from operations and cash on hand.

We expect to finance our future operations through our cash, operating cash flow, and borrowings under our debt arrangements.

We have historically used excess cash and cash equivalents for organic investments, share repurchases, acquisitions and equity investments, and debt reduction.

During the six months ended December 31, 2024, we purchased and retired 657,193 of our ordinary shares for $53.0 million.

During the nine months ended March 31, 2025, we purchased and retired 714,667 of our ordinary shares for $56.9 million.

We evaluate share repurchases, as any other use of capital, relative to our view of the impact on our intrinsic value per share compared against other opportunities.

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Indefinitely Reinvested Earnings.

As of December 31, 2024, a portion of our cash and cash equivalents were held by our subsidiaries, and undistributed earnings of our subsidiaries that are considered to be indefinitely reinvested were $86.6 million.

As of March 31, 2025, a portion of our cash and cash equivalents were held by our subsidiaries, and undistributed earnings of our subsidiaries that are considered to be indefinitely reinvested were $91.0 million.

We do not intend to repatriate these funds as the cash and cash equivalent balances are generally used and available, without legal restrictions, to fund ordinary business operations and investments of the respective subsidiaries.

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Contractual Obligations

Contractual obligations at December 31, 2024 are as follows:

Contractual obligations at March 31, 2025 are as follows:

In thousands Payments Due by Period

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(1) Operating and finance lease payments above include only amounts which are fixed under lease agreements.

Our leases may also incur

variable expenses which are not reflected in the contractual obligations above.

(2) Interest payments are based on the interest rate as of December 31, 2024 and assume all Term SOFR-based revolving loan amounts outstanding will not be paid until maturity but that the term loan amortization payments will be made according to our defined schedule.

Our leases may also incur variable expenses which are not reflected in the contractual obligations above.

(2) Interest payments are based on the interest rate as of March 31, 2025 and assume all Term SOFR-based revolving loan amounts outstanding will not be paid until maturity but that the term loan amortization payments will be made according to our defined schedule.

Senior secured credit facility and interest payments include the effects of interest rate swaps, whether they are expected to be payments or receipts of cash.

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However, due to the uncertainty of the timing of future cash flows associated with our uncertain tax positions, we are unable to make reasonably reliable estimates of the period of cash settlement, if any, with the respective taxing authorities.

Accordingly, uncertain tax positions of $9.0 million as of December 31, 2024 have been excluded from the contractual obligations table above.

Accordingly, uncertain tax positions of $9.2 million as of March 31, 2025 have been excluded from the contractual obligations table above.

See Note 9 in our accompanying consolidated financial statements for additional information on uncertain tax positions.

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We rent manufacturing facilities and office space under operating leases expiring on various dates through 2037.

The terms of certain lease agreements require security deposits in the form of bank guarantees and letters of credit, with $2.8 million in the aggregate outstanding as of December 31, 2024.

The terms of certain lease agreements require security deposits in the form of bank guarantees and letters of credit, with $2.7 million in the aggregate outstanding as of March 31, 2025.

Purchase Commitments.

At December 31, 2024, we had unrecorded commitments under contract of $207.2 million.

Purchase commitments consisted of third-party fulfillment and digital services of $93.2 million;

At March 31, 2025, we had unrecorded commitments under contract of $374.7 million.

Purchase commitments consisted of third-party cloud services of $247.6 million;

third-party fulfillment and digital services of $76.1 million;

software of $35.7 million;

third-party cloud services of $36.6 million;

production and computer equipment purchases of $7.6 million;

insurance costs of $5.8 million;

professional and consulting fees of $3.7 million;

production and computer equipment purchases of $3.0 million;

production-related temporary labor of $1.7 million;

advertising of $0.7 million;

and other commitments of $1.0 million.

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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 and reduced the minimum credit spread on borrowing and the minimum commitment fee on unused balances, depending on our First Lien Leverage Ratio.

Our $250.0 million senior secured revolving credit facility has $237.3 million unused as of December 31, 2024.

There are no drawn amounts on the revolving credit facility.

As of December 31, 2024, we have borrowings under our Restated Credit Agreement of $1,078.2 million, consisting of the Term Loan B, which amortizes over the loan period, with a final maturity date of May 17, 2028.

Our $250.0 million senior secured revolving credit facility has $237.5 million unused as of March 31, 2025.

There are no drawn amounts on the Revolving Credit Facility, but our outstanding letters of credit reduce our unused balance.

Our unused balance can be drawn at any time so long as we are in compliance with our debt covenants, and 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 (as defined in the Restated Credit Agreement) calculated as of the last day of such quarter shall not exceed 3.25 to 1.00.

Any amounts drawn under the Revolving Credit Facility will be due on September 26, 2029.

Interest payable included in the above table is based on the interest rate as of March 31, 2025 and assumes all Term SOFR-based revolving loan amounts outstanding will not be paid until maturity but that the term loan amortization payments will be made according to our defined schedule.

As of March 31, 2025, we have borrowings under our Restated Credit Agreement of $1,075.5 million, consisting of the Term Loan B, which amortizes over the loan period, with a final maturity date of May 17, 2028.

2032 Senior Notes and Interest Payments.

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The Restated Credit Agreement and the indenture that governs our 2032 Notes contain covenants that restrict or limit certain activities and transactions by Cimpress and our subsidiaries.

As of December 31, 2024, we were in compliance with all covenants under our Restated Credit Agreement and the indenture governing our 2032 Notes.

As of March 31, 2025, we were in compliance with all covenants under our Restated Credit Agreement and the indenture governing our 2032 Notes.

Refer to Note 8 in the accompanying consolidated financial statements for additional information.

In addition, we have other debt which consists primarily of term loans acquired through our various acquisitions or used to fund certain capital investments.

As of December 31, 2024, we had $7.2 million outstanding for those obligations that have repayments due on various dates through September 2027.

As of March 31, 2025, we had $7.2 million outstanding for those obligations that have repayments due on various dates through September 2027.

Finance Leases.

We lease certain facilities, machinery, and plant equipment under finance lease agreements that expire at various dates through 2037.

The aggregate carrying value of the leased assets under finance leases included in property, plant and equipment, net in our consolidated balance sheet at December 31, 2024 is $27.6 million, net of accumulated depreciation of $31.3 million.

The present value of lease installments not yet due included in other current liabilities and other liabilities in our consolidated balance sheet at December 31, 2024 amounts to $31.9 million.

The aggregate carrying value of the leased assets under finance leases included in property, plant and equipment, net in our consolidated balance sheet at March 31, 2025 is $29.3 million, net of accumulated depreciation of $32.4 million.

The present value of lease installments not yet due included in other current liabilities and other liabilities in our consolidated balance sheet at March 31, 2025 amounts to $32.8 million.

Additional Non-GAAP Financial Measures

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We do not, nor do we suggest, that investors should consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

Adjusted EBITDA is defined as GAAP operating income (loss) plus depreciation and amortization plus share-based compensation expense plus proceeds from insurance not already included in operating income plus earn-out related charges plus certain impairments plus restructuring related charges plus realized gains or losses on currency derivatives less the gain or loss on purchase or sale of subsidiaries as well as the disposal of assets.

Adjusted EBITDA is defined as net (loss) income plus income tax expense plus (gain) loss on early extinguishment of debt plus interest expense, net plus other expense (income), net plus depreciation and amortization plus share-based compensation expense plus earn-out related charges plus certain impairments plus restructuring related charges less the gain or loss on purchase or sale of subsidiaries as well as the disposal of assets.

In addition, adjusted EBITDA includes the impact of certain items that are recognized in other income, net which includes realized gains or losses on currency derivatives that are intended to hedge our adjusted EBITDA exposure to foreign currencies for which we do not apply hedge accounting, as well as proceeds from insurance recoveries.

Adjusted EBITDA is the primary profitability metric by which we measure our consolidated financial performance and is provided to enhance investors' understanding of our current operating results from the underlying and ongoing business for the same reasons it is used by management.

For example, for acquisitions, we believe excluding the costs related to the purchase of a business (such as amortization of acquired intangible assets, contingent consideration, or impairment of goodwill) provides further insight into the performance of the underlying acquired business in addition to that provided by our GAAP operating income.

As another example, as we do not apply hedge accounting for certain derivative contracts, we believe inclusion of realized gains and losses on these contracts that are intended to be matched against operational currency fluctuations provides further insight into our operating performance in addition to that provided by our GAAP operating income.

Adjusted free cash flow is the primary financial metric by which we set quarterly and annual budgets both for individual businesses and Cimpress-wide.

Adjusted free cash flow is defined as net cash provided by (used in) operating activities less purchases of property, plant and equipment, purchases of intangible assets not related to acquisitions, and capitalization of software and website development costs that are included in net cash used in investing activities, plus the proceeds from sale of assets, payment of contingent consideration in excess of acquisition-date fair value, and gains on proceeds from insurance that are included in net cash provided by operating activities, if any.

Adjusted free cash flow is defined as net cash provided by (used in) operating activities less purchases of property, plant and equipment, purchases of intangible assets not related to acquisitions, and capitalization of software and website development costs that are included in net cash used in investing activities, plus the proceeds from sale of assets, payment of contingent consideration in excess of acquisition-date fair value, and gains on proceeds from insurance that are not included in net cash provided by operating activities, if any.

We use this cash flow metric because we believe that this methodology can provide useful supplemental information to help investors better understand our ability to generate cash flow after considering certain investments required to maintain or grow our business, as well as eliminate the impact of certain cash flow items presented as operating cash flows that we do not believe reflect the cash flow generated by the underlying business.

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We believe it is important to view our adjusted free cash flow measure only as a complement to our entire consolidated statement of cash flows.

The table below sets forth operating income and adjusted EBITDA for the three and six months ended December 31, 2024 and 2023:

In thousands Three Months Ended December 31, Six Months Ended December 31,

The table below sets forth net (loss) income and adjusted EBITDA for the three and nine months ended March 31, 2025 and 2024:

In thousands Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 2025 2024

GAAP operating income $ 80,949 $ 107,679 $ 120,288 $ 141,779

Net (loss) income $ (8,020) $ (5,181) $ 41,211 $ 59,642

Exclude expense (benefit) impact of:

Income tax expense 12,144 10,610 42,290 35,527

(Gain) loss on early extinguishment of debt (19) — 498 (1,721)

Interest expense, net

26,995 30,158 87,575 89,946

Other expense (income), net 9,441 3,651 (10,745) (2,377)

Depreciation and amortization 34,300 37,072 105,057 116,103

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Restructuring-related charges 466 128 728 277

Include (expense) benefit impact of:

Realized gains (losses) on currency derivatives not included in operating income (1) 375 945 (1,857) 2,995

Include certain items that are a part of other income, net:

Realized gains (losses) on currency derivatives (1) 340 (349) (1,517) 2,646

Adjusted EBITDA $ 90,700 $ 94,158 $ 310,725 $ 349,328

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Refer to Note 4 in our accompanying consolidated financial statements for further information.

The table below sets forth net cash provided by operating activities and adjusted free cash flow for the six months ended December 31, 2024 and 2023:

In thousands Six Months Ended December 31,

The table below sets forth net cash provided by operating activities and adjusted free cash flow for the nine months ended March 31, 2025 and 2024:

In thousands Nine Months Ended March 31,

Net cash provided by operating activities $ 190,598 $ 225,627

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis