Cimpress N.V. Aktie

Welcome to the Cimpress Q1 FY '27 Earnings Call. I'm Meredith Burns, Vice President of Investor Relations and Sustainability. Thank you, everyone, for joining us. With us today are Robert Keane, Founder, Chairman and Chief Executive Officer; and Sean Quinn, EVP and Chief Financial Officer. We appreciate the time that you've dedicated to understand our results, commentary and outlook. This live Q&A session will last about 45 minutes or so and we will answer both pre-submitted and live questions. You can submit questions live via the questions and-answers box at the bottom left of the screen. Before we start, I'll note that in this session, we will make statements about the future. Our actual results may differ materially from these statements due to risk factors that are outlined in detail in our SEC filings and the earnings document we published yesterday on our IR website. We've also published non-GAAP reconciliations for our financial results on our IR website. We invite you to read them. And now I will turn things over to Robert.

Thanks, Meredith, and thank you all for joining us today. As I noted in my letter to last night's earnings release, first quarter fiscal '27 financial results were below our expectations. That being said, we remain confident in the financial results we will deliver for the full fiscal year because, as we mentioned at the start of the fiscal year and as we reiterated at our investor day, we set our fiscal '27public guidance below the plan we are working toward internally. The first quarter has not changed our view that we will deliver that significant profit and cash flow growth in fiscal '27, and that the expansion will continue through fiscal '28and beyond. That said, the world is uncertain, and we are able to achieve deeper cost reductions because of the strong progress on the efficiency foundations which we have been working on for the past year.

So we are accelerating cost reduction measures as an insurance plan for meeting our financial goals. Put simply, we remain confident in our fiscal '27 guidance, and our board, our executives, and the leaders of our businesses and central teams are all aligned on that, and we all take seriously the guidance commitments we have made to our shareholders and debt holders. Now, let me spend some time on examples of the many areas of progress we are making and are excited about, consistent with the themes we laid out in our September 30th Investor Day. This all gives us further confidence that we are doing the right things to deliver amazing customer value while also driving to our financial targets. First, we are growing high-value customer wallet share through elevated products.

In VistaPrint in Q1, we grew variable gross profit per customer 7% year-over-year, and the variable gross profit from customers who generate more than $650 in annual VGP grew by 15%. Also, in Q1 versus the same quarter last year, our packaging business, BoxUp, grew its revenues with external customers by 16%, while also more than doubling its cross-Cimpress fulfillment revenue to VistaPrint. VistaPrint, in turn, is using the BoxUp product range to grow its own high-value packaging customers. These examples illustrate a fundamental transition of Cimpress' per customer lifetime value, which we've been speaking about for the past several years. We are successfully building on our foundational capabilities that traditionally addressed only a relatively small portion of our total addressable market. We are becoming a branding partner to our customers thanks to our expanded product range, improved site merchandising, and service tailored to high-value customer needs.

We are earning customer trust for a much larger portion of the small business marketing wallet, which means they become much higher lifetime value customers for Cimpress. That is an important tailwind for our future of healthy growth. Although the headwinds from our legacy products and our traditional base of small, low LTV customers are currently offsetting tailwinds from high-value customers, the mix of our gross profit is shifting steadily towards high LTV customers. A second theme from our investor day was that our investments are widening our manufacturing and supply chain advantage. For example, in VistaPrint in the European operations, we went live with a new production line that has slashed the cost of producing beautiful full-color corrugated boxes. In the U.S., Pixartprinting has launched and is growing fast with booklets, catalogs, magazines, and roll labels produced in its new Pennsylvania facility.

And we are rapidly increasing the output of two new production facilities in Mexico that combine highly productive state-of-the-art capital equipment with low-cost operations. Third, we are developing new channels to reach customers. A great example of our new channel development is our strategic partnership with Canva, which we continue to nourish by launching in new geographic markets and especially by growing the product footprint, and through our work to create a deep technology integration for the benefit of Canva customers and our production volumes.

Fourth, we are gaining confidence in the benefits we are and will drive from the closer collaboration between VistaPrint, National Pen, and BuildASign. This collaboration includes anticipated OpEx savings from moving to a shared technology platform, the acceleration of our momentum in promotional products, apparel, and signage, and optimization of advertising spend across the brands of these three businesses.

And we expect to see additional and significant financial benefits of this tighter collaboration in the coming quarters. Fifth, we are applying AI to drive growth and efficiency. We see AI becoming a significant tailwind for Cimpress. By democratizing design, it is expanding the online opportunity for customized physical marketing products. We are making focused investments in LLM discoverability and agentic commerce efforts to make us faster and lower cost while expanding the top of our funnel. AI is helping us become more efficient in all of our operations, which is enabling us to achieve and accelerate our planned cost reductions. Sixth, our tuck-in acquisitions are on track to deliver the value that we discussed at our Investor Day. Recent acquisitions in our Upload & Print segments performed in line with our expectations and positively contributed to our reported growth rates.

PrintBrothers grew revenues by 28% on a reported basis, while The Print Group grew 13%. To close, the Q1 headline numbers reflected specific headwinds, but do not change our conviction for this fiscal year or for our long-term trajectory, which is firmly on track. We have clear plans across our teams to achieve fiscal '27 and fiscal '28 strategic and financial goals, and we remain positive on our prospects for growing per-share cash flows, anchored by a durable, scale-based, and innovation-forward competitive advantage in the mass customization of print. With that, I will hand it over to Sean to walk through the financial results and outlook. Sean?

Thanks, Robert, and thanks, everyone, for joining us for the call today. I will start off with the quarter. It was a quarter that we did not meet expectations, as Robert alluded to. Revenue was $934 million, up 8% on a reported basis, with organic constant currency growth of 2%. That 2% was below our expectations. The difference between our reported growth and organic constant currency growth comes from the tuck-in acquisitions that we have done recently. VistaPrint's organic constant currency growth was 2%, with strength in commercial products the apparel, marketing materials, and packaging. Just to note, the backlog in VistaPrint was elevated at the end of the quarter, which we do expect to help revenue in Q2. Upload & Print grew reported revenue 23% combined, with organic growth of 4% combined.

Our all other businesses segment grew 17%, led by BuildASign and the Canva partnership, which is growing quickly, but not material yet to our consolidated results. Adjusted EBITDA was $89.8 million, down 9% from a year ago. Most of that decline came from the cost of continuing to build out our North American manufacturing network, where startup costs were $5.9 million higher year-over-year. In addition, we absorbed $4.2 million of duties and tariffs on certain goods sold to the U.S. customers, and we had $1.8 million of higher energy-related input costs net of pricing. We also had $1.4 million of impact from the nonrecurrence of a compensation benefit in the year ago period. And then those headwinds there, from a cost perspective, were partly offset by $7.5 million of IEEPA tariff refunds that were related to prior periods.

As we noted in last night's release, we expect the year-over-year impact of both manufacturing startup costs, but also the new Canadian tariffs to reduce in the second half of this year. From a segment perspective, I just wanted to point out that the new duties and tariffs, the cost there weighed primarily on VistaPrint, but the refund benefits were almost exclusively in National Pen. On cash, operating cash flow improved $3.9 million to $28.9 million for the quarter, driven by $10 million of lower net working capital outflows and also lower cash interest. And adjusted free cash flow was an outflow of $9.3 million. That was an improvement of $8.5 million versus last year, reflecting the operating cash flow improvement, but also lower capital expenditures and capitalized software.

Turning to the balance sheet, net leverage at the end of the quarter was 3.2 times trailing 12 months EBITDA, as calculated under our credit agreement. That is up slightly from the 2.9 times at the end of fiscal 2026, and the primary reason for that increase is the SAXOPRINT acquisition that closed at the beginning of July. And I should note that that leverage calculation does not reflect the expected proceeds from the sale-leaseback of the acquired facility as part of that acquisition. We ended the quarter with $120 million of cash and $35 million drawn on our $250 million revolver, which we used to partially fund the acquisition. So, liquidity remains strong, and as a reminder, we have no material debt maturities until fiscal 2033. Let me turn to the outlook now.

We are maintaining our fiscal '27 guidance, which is reported revenue growth of at least 7%, organic constant currency growth of at least 3%, adjusted EBITDA of at least $520 million, and adjusted free cash flow of approximately $200 million. For fiscal '28, we continue to target 4% to 6% organic constant currency growth, at least $615 million of adjusted EBITDA, and approximately 45% conversion of that EBITDA to adjusted free cash flow. in September, when we had our Investor Day, I had walked through a bridge. That bridge, starting with our fiscal '26 adjusted EBITDA of $459 million and walking across to the at least $520 million for fiscal '27 guidance. That included tuck-in M&A, which is contributing $18 million-$21 million. It included currency contribution of $5 million-$10 million and about $25 million of in-year cost savings.

Start-up costs, which as we noted, weighed on the Q1 results, are a larger year-over-year headwind in Q1 and also in Q2. And then that will start to reduce in the second half of the year. Also, at the same time, our cost savings and the benefit from recent acquisitions will be building through the remainder of the year. The organic growth piece of that bridge, which was the minimum that we need to achieve our guidance, is the part that we need to see improve, and we are hard at work to do that. Which brings me to cost actions and given the first quarter results were behind our plans, and it is a dynamic operating environment, we are accelerating our cost reduction plan, and these actions, in our view, are an insurance policy against the risk of organic growth lagging.

The reason we are able to do that and go deeper there is because of the efficiency foundations that have been put in place over the last year. From a revenue growth perspective, it is important to note that in the quarterly phasing for this year, which is not part of our guidance, we did not give quarterly revenue growth. Just in that quarterly phasing, we did plan for lower growth in our second quarter, the quarter that we are now in, the December quarter. There are two reasons for that. The first is an expected year-over-year decline in the consumer category for VistaPrint. And the second one is that we have been reducing advertising spend at National Pen, particularly in direct mail, which is the right trade-off, and we continue to see that. But seasonally, that has the most year-over-year impact on revenue for National Pen in Q2.

On the balance sheet, our path to delevering has not changed. We continue to expect net leverage to be approximately 2.5 times as we finish this year, and meaningfully below 2.0 times at the end of fiscal 2028, subject to capital allocation choices that we may make. As we reach those lower leverage levels, we expect to have more flexibility in how we allocate capital, including share repurchases. The initiatives that drive that fiscal '27 and fiscal 2028 profit growth, they are in motion. We expect that growth to build from Q2 through the rest of fiscal '27 and into fiscal '28. And the management team and our board are very focused on these targets. We are confident in our ability to deliver them. And so with that, let's turn to your questions. Meredith?

Great. Thanks, Sean. Thanks, Robert. [Operator Instructions] We did have a number of pre-submitted questions as well that we will get started with shortly, and we will pepper the live questions in as we go. Our first question, I am going to toss to Sean. Sean, can you help explain where exactly performance was below your expectations? We note that the items you referenced in COGS in the earnings document, but it also looks like SG&A and advertising increased $21 million-$22 million year-over-year, while gross profit only increased by about $5 million. And then I think a related question which is helpful in answering this is there anything to note specifically in VistaPrint, as it looks like that segment had a tough comp year-over-year?

Yes. I am going to start with VistaPrint. That is where the largest gap was relative to our expectations, as was alluded to. I will go into some detail here because I think it will be helpful. First of all, you are right, the Q1 last year for VistaPrint was a strong quarter, so from that perspective, it was a tougher comp. Last year, we had good growth, 5% constant currency growth. We had a little bit of gross margin expansion. We also had some advertising leverage. So those were good ingredients for a strong quarter. There are a few things that I will call out for VistaPrint as to why that was not the case this quarter. The first one was that revenue growth was muted. I mentioned in my remarks, there is some backlog increase that will flow through in Q2.

We also did have, it is mentioned in the release, a revenue recognition change on the Wix partnership, which it is just a presentation topic, but has a little bit of impact on the growth rate. If you normalize for those, the growth rate was consistent with what we had in Q3 and Q4 of last year for VistaPrint, which was 3%, but our ambitions and our expectations are for higher than that. From a regional perspective, Europe was slower, and we saw that in our Upload & Print businesses as well, so that would be one call-out just from a regional perspective on revenue. And that was one of the main gaps to expectations overall, again, trickling into the Upload & Print businesses as well. We have seen some change in channel mix and channel performance as well, and that has the most impact on VistaPrint.

Some of that change in VistaPrint's channel mix is from changes that we've been making in how we're allocating our performance marketing. All of that's informed by incrementality studies. I think we're taking a very data-driven approach there. We have a very rigorous and continuous experimentation and iteration agenda there, which we'll use to continue to optimize. But we have changed quite a bit our channel mix in terms of where we're spending and how we're spending. So that's what we're driving. The other part is that changes that are more structural, and that could be the role of AI Overviews in Google, could be more search traffic that's moving from organic to paid, the increasing importance of LLMs in the discovery process. And so this quarter, in Q1, bookings in organic search and affiliate for VistaPrint were the weakest in terms of year-over-year performance.

And that definitely was a drag on the results. We don't think that that is insurmountable. It is a changing and evolving environment, but it is a near-term headwind, and especially when it comes to how we're acquiring new customers, you see that in particular, and we're evolving with that. It's an evolution, of course, that's in its early innings. I think there's a few data points that are interesting here that I'll call out. One is that an AI-assisted organic discovery, so all things LLMs, it's our fastest growing channel. We're seeing that also yield high value customers as well, which is good to see. Of course, it's smaller today, but I think that's a good early sign that we're there. We're seeing positive signs. And it's also a big area of focus for the team.

We have quite a robust agenda ahead of us in that area over the next quarters, and we have focus teams that are working just on that. The other one is that we're seeing strong growth in uploads, notably from customers that are designing in LLMs and bringing those designs to VistaPrint. And again, I think that's a strong signal here of the benefit of democratized design. We've mentioned that, including in our investor day, and the opportunity that presents as we make agentic commerce easier for customers to be able to access the breadth of our product portfolio with those designs. I think that's an interesting data point as well. The Robert talked about in his remarks, the growth that we're seeing with high value customers, and that's very much continued. I won't go through those examples here.

The gap to the expectations that we had were really coming from the lower value customers, but that still is an important part of our total base, particularly for new customers, that we can then graduate to high value customers over time. So that's kind of the picture on the revenue side, focused primarily on VistaPrint. On the cost side, there are some material year-over-year impacts that contributed to VistaPrint's gross margin decline, and in some cases, were a gap to expectations. These were called out in the release. In VistaPrint specifically, $5 million in North American manufacturing startup cost, that was the increase year-over-year, $3 million of duties and tariff expenses, that was up over last year. Then just under $1 million of net energy related input costs.

On the manufacturing startup cost and the duties and tariffs, as we said in the remarks, we expect those to start to reduce in the second half of the year. And on tariffs specifically, we have mitigation steps that we're executing against. They just take some time, and that's why that impact is delayed to the second half of the year in terms of seeing those reduced. There was some reference to some other cost line items, ad spend, and our kind of overall OpEx. I would say ad spend ticked up as a percentage of revenue for VistaPrint, but it was down slightly at a consolidated level, not much to talk about there.

That will move around quarter to quarter, but we did have some more aggressive experiments later in Q1 in VistaPrint in our performance marketing, and we'll manage that across our full funnel spend as we move through the year. Not too much to call out there. And then on the OpEx side, I think we're seeing the efficiency initiatives that we have been driving come through. As an example, in VistaPrint, OpEx is down year over year. We'll continue to see more of that across our businesses as we execute on the cost agenda that we have. There's a lot there, but I guess in summary, it would be lower growth in VistaPrint and also generally in Europe, and then the specific cost impacts, primarily the ones that we called out in the release. I would say that's the focal point.

I'm going to stick with you for the next one. It's a good follow-up to that commentary. Can you help explain and break out what you view as one-time items? So, startup costs, restructuring costs versus structural items. So increased depreciation and amortization or import duties or negative net pricing, or SG&A increases.

Yes. I'll do my best to contextualize these. I think one time is probably not necessarily the appropriate characterization for some of these because they will continue but fall off. So anyway, let me try and help here. So I think the items that are more one time in nature, or I would say not recurring, would be the manufacturing startup cost, and we've included this in the bridges that we've done in our last two investor days. They are with us for a period of time as we are doing the startup activities. As volume increases, those startup costs start to fall away, and again, that's included in our bridge. So I would say that's more kind of non-recurring on a steady state basis, and we'll start to see that reduce in the second half of this year.

For tariffs and duties, that is something that we do not know what the duration of the new Canadian tariffs will be. As I said, we have mitigating actions that we are taking. Those just take some time to reorient the supply chain. We will start to see those take hold more substantially in the second half of the year in terms of reducing that cost. And then in terms of restructuring cost, we had about $4 million of restructuring costs this quarter. Those kind of go hand in hand with some of the efficiency initiatives that we are driving. We will have more of that as we execute on our plans. That is in service of a lower run rate cost base. So those are the ones that I would call it as maybe non-recurring is the right way to say that.

The structural ones, I described some of the revenue growth headwinds in Q1. I think the legacy product and in some regards, some of our legacy channels like resellers, those trends remain. We have been talking about those for years now. So that would be part of the structural things. Then, I think at the same time, we are driving growth with high-value customers, and I think we cannot lose sight of that. We have a very clear strategy on the growth side as well, with high-value customers growing wallet share. That includes a lot of new product introduction. We have been investing against that over recent years. And we continue to do so this year, and we are seeing strong signs of progress here. Again, Robert outlined that, I will not repeat that. Also, the progress with new channels and tuck-in M&A. That is the sort of the offset.

In terms of higher energy costs, we have really, across all of our businesses, we saw some negative impact there in Q1. We called those out in the release. We have, in some cases, put in additional pricing offsets already there this quarter, particularly as it relates to shipping costs. So that one, I would say, is a mix. Of course, we cannot control those input costs. We will continue to test on the pricing side and do what we can there. And as I said, we have already made some additional steps in Q2. But those will likely be with us for a while.

Okay. I am going to ask the next question of Robert. Sean just talked about structural headwinds. If we have got structural headwinds, how does that factor into the company's view on keeping the guidance flat or consistent with prior messaging?

Well, the headline is that we are doing more on the cost side, so I will go a little bit more into that. I think it is important to step back, and Sean, I believe you talked about this a little bit, but even before looking at Q1 results, the phasing for year-over-year profit growth we planned for, and again, we still stand by that guidance, was weighted towards the back half of the year, when M&A contribution is going to be building. Currency benefits were more weighted outside of Q1. A lot of the cost-savings actions will naturally bring more benefit in later quarters because they need to be implemented or only have been recently implemented. Revenue, the drivers of that should also build as well as we continue to see the gains in high-value customers, as we gain that small business market or marketing wallet share.

Again, elevated products like packaging, event booths, apparel, promotional products. And as that builds, we are boosting them and supporting them with high-value customer-oriented service operations. Again, those are in the ramp stage. Finally, the relationship with, actually, I will say two things. The relationship we have with Canva is ramping, and we are building manufacturing gains, which will help mitigate some of the gross margin compression we have seen, and allow us to compete more effectively. So, that is all kind of before considering Q1. And as of the start of this year, we have certainly ground to make up, as we have talked about last night in our release and Sean spoke about today. Our internal budget, again to repeat, is higher than our guidance, which allows us to absorb some of the headwinds relative to our public guidance.

Although we have clear plans on the growth side, and I do not want to leave the impression that we are not doing that, we covered a lot of that in the September 30th investor day. We do not want to be, and we will not be dependent on accelerating revenue growth, to hit our bottom-line numbers, which is why we are taking cost-oriented actions deeper and sooner than we had originally planned. So that should cover us even if revenue were to stay lower or we were to continue to see the gross margin pressure persist. In summary, again, we are accelerating by going deeper and sooner with cost reductions. And that is how it factors into our guidance.

Okay. That is a super helpful answer. I am going to stick with you for the next one, which is about tuck-in acquisitions. Are they on track?

Yes, absolutely. The financial contribution from M&A this quarter was in line with our expectations, so on track. There is no change for our expectation that for the year, that is increased revenue from acquisitions will be $165 million-$175 million, and an in-year increase of EBITDA of $18 million-$21 million. The Q1 revenue contribution from acquisitions was $60 million, and the EBITDA net of transaction costs was $3.5 million. I do want to say those are important financial numbers. We are on track. But beyond those financial headlines, we see great operational integration happening as planned, and we see synergies from these acquisitions that are certainly at least at plan, and we expect those to build throughout fiscal '27 and into fiscal '28.

I have a related question, Sean, because those acquisitions were in our Upload & Print businesses. Here we go. The reported EBITDA for Upload & Print combined was surprising. Based on disclosures, we had estimated about $6 million of inorganic EBITDA being layered on top of the $44 million that we had last year, leading to a pro forma $50 million of EBITDA, assuming 0% organic growth. The actual value, however, was much lower at $42 million. Can you help us understand the delta?

There are a few main drivers. There are a number of smaller things, too. I will call out the main ones. I should say, while my answer to the earlier question was focused on VistaPrint, which is where the largest gap was versus our expectation. As I mentioned, there was weakness generally in Europe from a revenue perspective, and that is here impacting the Upload & Print businesses. And I think the question refers to 0% organic growth, so I will not cover revenue as part of that bridge to the numbers that were expected but just wanted to call that out here. So the main drivers of, first of all, on the M&A front, what Robert just said. We are on track for what we expected, and also we continue to be on track for what we expect to deliver for the full year.

That said, the impact for Q1 is not ratable in terms of the quarterly progression throughout the year. The impact for Q1 is lower than what we expect as we get to Q3, Q4, simply because of the synergy build. There is also a little bit of seasonality there as well. So the $6 million that was referenced in the question, the contribution for Q1 was $3.5 million net of transaction cost, so that is $2.5 million of the delta there that you are trying to bridge. And then, just in terms of the organic operations other than M&A, again, I will not go through the revenue drivers because you have assumed 0% growth. There was a $2 million cost for a catch-up accrual, which is something that is probability-based, based on the probability of achievement, so kind of an accounting concept.

That is, I would say, a one-off, and it is not indicative of run rate operating costs. So, $2 million also would feature in your bridge. I would call out the energy-related input costs in terms of things that, like what is the main thing that impacted gross margins or gross profit year-over-year. That was just under $1 million of impact across the combined group. Currency also for the group was unfavorable by a little under $1 million, even though on a consolidated basis, it is favorable. All of our hedging gets done outside of our segments, and so currency for the group was unfavorable by a little under $1 million. And then if you add all that up, that is roughly $7 million of the $8 million that you are trying to bridge. Again, there is a longer tail of smaller items beyond that, but hopefully that is helpful.

Robert, question for you about the macro environment. Is the ongoing unrest in France expected to have a material impact on The Print Group in Q2? If so, can you please help us quantify the impact, and how might this impact our ability to reach the targets that we have set for ourselves?

No, I would say, as of now, we would not call out the unrest in France as having a material impact on our ability to reach the targets based on everything we see today. Of course, it is a fluid situation. But we do not see that as impacting our ability to hit the bottom line. France is an important market for us. It is our third largest country by revenue, largely between Print Group and VistaPrint. We have seen some impact during the last weeks, but it has not been very significant. And I would say if you go back to Q1, before October, it was a tough market. But I think that had more to do with the fact that we are stronger in the reseller channel, which is being disintermediated by ourselves and some others.

Secondly, in the summer, there was some extreme heat and fires in Southern Europe, including France. So, I would say those are the more impactful areas.

Let's stick with macro, and let's stick with Robert for this next one. There's been an across-the-board deceleration across most business units over the past 4 months to 6 months. To what do you attribute this?

Just to make sure we're talking apples-to-apples, I respond to this in our consolidated organic constant currency growth. On a segment level, when you look at it does include our push to do cross-Cimpress fulfillment. So, there are reasons why growth might be faster in one segment versus the other as we shift production around. So looking at the consolidated organic constant currency, yes, there's been some deceleration in the last 6 months. If I step back, our organic constant currency growth rate overall was 3% in fiscal '25. It was 4% in fiscal '26. It was 2% in this last quarter. Per our guidance, we still expect to get at least 3% for the full year. I think there are a mix of impacts that we've already commented on.

But just to summarize, one, the trend in legacy products like business cards, consumer products, which is something we've talked about for the last 2 years or 3 years. Secondly, legacy channels like resellers. I just mentioned that in the French context, where we have business where we sell to local printers or local graphic designers who then sell to the end customers. That market tends to move toward a direct relationship to the end customer. It benefits a lot of our Cimpress businesses, but for the Upload & Print businesses, we have a few that have been historically, they have a higher percentage in the reseller, and they're seeing that impact. So, I think The Print Group is the most salient example of that. And then there's some more notable impact on VistaPrint.

We mentioned, I think Sean just mentioned some of the channel performance that he just went through, everything from how Google is switching over to AI Mode and the other things which I won't repeat. Now we do have very clear growth initiatives. Many of them are longer lead time because we're building up production capabilities to be highly competitive in new product areas. And we have a lot of service operations moving towards high-value customers. But at the risk of repeating too many times, we are adjusting our cost structure, and we're allocating capital, so we're driving efficiency in some places while also taking advantage of the assets we have and the cost advantages, we have. And being more selective about where we do that but still driving forward on growth whilst cutting costs.

So most of the external growth comes from a small number of our businesses, in part because of our push to do cross-Cimpress fulfillment. I would say the increased collaboration across VistaPrint, BuildASign, National Pen is a great example of that. We have decreased advertising spend in National Pen. That has led to lower revenue growth, and it has been a drag on their growth, but it is important choice for profitability.

And we can redirect that capital into what I would call our flagship brand in North America, VistaPrint. We are also leveraging more shared platforms, technology specifically, to cut costs, be more efficient, and give a better experience. Again, all that is something we have talked about. I am going to pause there so I do not go on too long with a specific question, but I think we do see that across-the-board deceleration you are asking about as something we can handle.

Sean. Next question. At VistaPrint, we would have expected slightly stronger growth and profitability given advertising investments remain flattish as a percentage of sales. PPAG continues to grow quickly, as does VGP per customer. However, top line growth was quite muted at 2%, and EBITDA came down slightly if you exclude startup costs, suggesting that there are headwinds. Are we thinking about this the right way? If so, can you describe these headwinds? For example, is a legacy product something else?

Yes. Hopefully, much of this was covered in the earlier question that I answered in terms of where there are headwinds. I should mention just a slight correction. VistaPrint ad spend as a percentage of revenue was up a little over 100 basis points from last year. It was actually up a little bit, which only furthers the question here. And not too much to add to the earlier comments, but maybe just a few things. I would say there is no big call outs from a product perspective in terms of a meaningful change in trend in Q1 versus looking at that over, call it a trailing 12-month period. I think the channel story is probably the more notable topic. And of course, that has impact on category performance to some extent, but it was not like we saw any sort of meaningful or quick change in any category.

In terms of first-time buyers, I think between the combination of just the legacy product trends that were already in place and then also the channel shifts, that has had the most impact on business cards and consumers, specific to first-time buyers. Maybe that is the other thing that is notable.

I am going to stick with you. This one should be a quick one. What are the assets that are held for sale on our balance sheet?

Yes, it is the fair value from the SAXOPRINT facility that we are actively marketing for sale-leaseback. So that is the way that the accounting rules require you to hold that on the balance sheet at fair value. That fair value, if you look at on the balance sheet, is a little over $46 million, which could change a little bit. We are moving through that marketing process, and that is all net of any selling cost as well. So that process is ongoing, but that is what that is on the balance sheet.

Okay, next question. On holiday. As we approach the ever important holiday season, is there anything that we are doing differently to ensure a very successful Q2?

There is a lot that we are improving on for this year. And there is a rhythm to this. Every year, we always do an extensive audit of what went well last year, what did not go well, and then we build that immediately into the plan for the next year. So we are very much in that cycle, and now we are at the time where it is all execution mode right now.

But I think one of the things that was notable last year that we did was really try to lean more into rather than shift a lot of our messaging and our merchandising and our assortment to these consumer-specific products. We try to lean much more into holiday solutions for small businesses, and we will take another step in that direction this year. You can see if you go onto the VistaPrint site, you hopefully will get that sense in terms of the creative content that you see, the messaging that you see, the products that you see. The consumer part of holiday is really important as well. But that approach allows us to continue to build on the messaging and relevance that we have with small businesses throughout the entire year. I would say thematically, that is probably the biggest thing to call out.

And that cuts across a lot of what we do. It cuts into how we are thinking about the assortment that we need, quality improvements that we might need, or changes in attributes. It goes into how we are thinking about discoverability. And you might naturally think of the holiday season and consumer as holiday cards, calendars, photo products, like canvas prints or photo books. We have a very relevant holiday assortment and content that we have expanded quite a bit in promotional products, in gifts, in signage, in packaging for the small business use case for holiday. I think, again, if you just go onto the site, you should see that come to life. And then the other thing is that in VistaPrint, we have a new kind of brand framework and platform called Print Your Possible™.

And so our holiday approach kind of fits underneath that, and we are really trying to make sure that VistaPrint is positioned as the one-stop shop, which we try and do all year round, but in this case, a one-stop shop for everything that you need to create holiday magic this season, as a small business. I think, again, if you go onto the site or you see any of our brand advertisement, I think we have a really good and strong collection of creative ingredients that will bring that brand platform to life, in new ways for holiday, but again, in a way that is very congruent with our messaging throughout the year, and I think sets us apart from competitors as well. So that is the main thing in our approach.

I focus there on VistaPrint because that is the biggest area for holiday, but there is a number of our businesses, notably BuildASign and National Pen that also have a seasonally tick up and they equally are focused on the execution for the holiday season and are ready for what is ahead. Just maybe coming back to the financial part of all that. Consumer, it has come down in our mix quite a bit over the years, relative to our consolidated revenue. It is less than 10% today. It does tick up in the December quarter, but it is less in the mix than it once was. But as I also mentioned in my earlier remarks, in terms of the quarterly phasing for growth in the second quarter, we expected this year to have lower growth in the second quarter for two reasons.

One is that we do expect year-over-year decline in the consumer category for VistaPrint, as we focus successfully on growing high-value, small business customers. But in the consumer category specifically, we expect some year-over-year decline. And then we have also been reducing advertising spend, Robert mentioned this earlier, at National Pen, particularly in direct mail, and we are seeing that that is the right trade-off. But seasonally, that has the most year-over-year impact on revenue in Q2. So, a few call outs there.

Thank you, Sean. Robert and Sean, we have exhausted the list of both pre-submitted and live questions, so I will turn things over to Robert to wrap us up.

Thanks, Meredith. Before we go, I would like to leave you with a couple of thoughts that I believe matter most. First of all, our long-term trajectory is on track. We have clear plans across our teams to achieve our FY '27and FY '28 strategic and financial goals. We are putting in an additional insurance policy into place, through added cost constraints, and reductions. And we are certainly expecting the profit and cash flow benefits of our efforts to build in the back half of the year based on the timing of the revenue momentum and the planned cost reductions. And with that, thank you for joining the call. Thank you for your continuing willingness to entrust your capital with us.

Hello, and welcome to Cimpress' 2026 Investor Day. My name is Meredith Burns, Vice President of Investor Relations and Sustainability. I'm very happy that you're here with us to learn about the progress that we're making across Cimpress. Today, we will hear from executives representing Cimpress, VistaPrint, Upload & Print, National Pen and BuildASign. It's a great lineup. There are management bios available in the speaker bio tab of the webcast viewer. All right.

Now let's talk about how we're going to spend the next roughly 3 hours together. Robert will start with some perspective on our advantages and progress against our strategic and financial goals. Next, Maarten will discuss creating value through shared technology and AI. Then Florian will demonstrate the progress we're making in VistaPrint. Sean will review our financial results and outlook, along with a deeper look into recent tuck-in M&A. Now at that point, we're going to take a short break and then come back for 2 panel discussions, one on manufacturing and supply chain excellence as a driver of growth and efficiency and the other on AI as a driver of growth and efficiency.

And then finally, we'll finish with a Q&A session to cover any other questions beyond those panel discussion topics. Now in terms of what to expect today, we are going to cover both pre-submitted and live questions during the event. You can submit questions using the Q&A chat button, and we will take as many questions as we can in the Q&A session at the end of the event. A replay and supporting content will be available on our website after the event. Some of the numbers that we will show or discuss today are non-GAAP.

You can find reconciliations to GAAP measures posted on ir.cimpress.com or in the Download section of the live webcast viewer. And finally, you can expect that we will be sharing our thoughts about the future. So this is a great time to note that our actual results may differ materially from these statements about the future due to risk factors that are outlined in detail in our SEC filings and also here on this slide. We invite you to read them. And with that, let's get started with Robert Keane.

Thank you, Meredith. Welcome, everyone. I really want to thank you for your interest in Cimpress. My goal this morning is really to share my perspective on our company, why our competitive moat in manufacturing and supply chain is widening and becoming even more valuable in an AI-driven world and how our strategy and execution is underpinning our fiscal 2028 financial targets. Cimpress helps millions of businesses build brands, stand out and grow. The customized physical marketing products and the branded merchandising, which we produce bring our customers' business identity to life in tangible physical form.

The value that we deliver to our customers has made us the global leader in web-to-print mass customization, delivering high-quality, affordable, customized physical products quickly and conveniently even in low quantities. Thanks to our disruptive business model, our deep bench of talented team members and our scale advantages, Cimpress has delivered a long history of growth and profitability. Importantly, we have a clear growth strategy and very specific operational initiatives to extend that thread record. That's why more than a year ago, we set out public targets for fiscal 2028 adjusted EBITDA and why we recently raised that target. The trajectory is straightforward. In fiscal '26, we generated $3.7 billion of revenue and $458 million of adjusted EBITDA.

Our fiscal 2028 targets takes adjusted EBITDA to at least $615 million. Just as importantly, that profit growth converts to a meaningfully higher free cash flow and significantly reduces our leverage. In his session, Sean is going to take you through the specific drivers and the financial path for each of these years. Note that our uppermost objective is not actually EBITDA. It is intrinsic value per share. But as I wrote in the annual letter we published in July, we're using EBITDA as a measurable milestone by which investors can judge our progress on the path to significantly higher intrinsic value per share.

Now our market, the web-to-print market is an evolving one, and we are leaning into that and capitalizing on the market forces and trends that are driving that evolution. First, generative AI is lowering the barrier to create attractive visual assets. That's a tailwind for Cimpress because design so often needs a physical manifestation. Second, our manufacturing and supply chain capabilities are world-class and unmatched.

AI is democratizing design creation. And as that happens, Cimpress benefits from our hard-to-build defensible capabilities in the physical realm. Who can manufacture a bespoke physical product even in small quantities, deliver it quickly and do so profitably at unbeatable prices? That is Cimpress.

We are the lowest cost producer with the broadest product offering, the greatest market share and the largest geographic footprint in the web-to-print world. And third, we are growing strongly with products that we refer to as elevated products, and we're evolving into new channels via partnerships and expanded advertising opportunities. Now the addressable market for small and midsized business physical marketing and branded merchandising across North America, Europe and Australia exceeds $100 billion.

But most of that volume is still offline and web-to-print penetration varies significantly by product category. For our legacy products like business cards, holiday cards, flyers and photo [ books ], online penetration is high and our market share is very strong, but growth is slow given the market's maturity. Average per customer value is also low because the use cases for these products are relatively limited.

In contrast, large categories and several of these create a very large market, which remains offline. Web-to-print penetration is happening. It's early, and Cimpress is leading the migration online. These categories largely consist of what we call elevated products, and I'm going to discuss those in detail shortly because they make up the majority of the wallet that businesses spend on physical marketing and branded merchandise, they are also essential to attract, to serve and to retain high-value customers.

That is what our strategy is built to do. Our strategy places high-value customers at the center. Everything else is in service of them. When we serve high-value customers well, we win more of their wallet share, which increases their lifetime value, and we get better for all of our customers. Around high-value customers, we have 3 strategic objectives: rapid growth of elevated products, design enablement and manufacturing and supply chain excellence. We also have 3 ways of working. Those are velocity, continuous improvement and efficiency and shared strategic capabilities, for example, our mass customization platform and our procurement expertise.

Wrapped around all of that is AI, and we're using AI to deliver customer value faster to remove friction, to boost productivity, and we're doing that across every business and in every function. So this strategic framework is a key part of how we align our team members to our priorities, and you'll find more details and examples of this in my annual letter. We translate our strategic framework into action via growth levers and efficiency levers. Our growth levers are wallet share expansion, elevated products, new channels and tuck-in acquisitions or equity investments.

Our efficiency levers are manufacturing and supply chain excellence, standardizing and sharing technology platforms, increasing the collaboration between various Cimpress businesses and AI-driven simplification and automation. We staff operational initiatives at Cimpress with talented team members whose job is to execute on these 2 types of operational levers. And that ensures operational execution. It also makes us confident that we are going to significantly expand our adjusted EBITDA and free cash flow over the next 2 years while simultaneously funding investments that will support revenue and profit growth well beyond fiscal 2028.

In the next few slides, I'll give you some examples of progress in each of these drivers. Let's start with wallet share. and the gains we've been making there. And I'll use our largest business as an example. The chart on the left shows VistaPrint's annual variable gross profit as an average amount per customer. This is a metric that we share with earnings each quarter, and it allows you as investors to track our progress. VistaPrint grew that metric 10% in fiscal 2026, which was an acceleration over the multiyear CAGR since 2021, which has been about 7%.

High-value customers are the primary driver of the expansion, which you see on this slide. Historically, VistaPrint's customer base was characterized by high churn, price-sensitive, low LTV customers ordering deeply discounted business cards and other legacy products. That actually was a very strong foundation that served us very well in our early history, but we have fundamentally evolved our offering, and we're growing our wallet share in the same type of businesses who had previously only purchased our legacy discount products.

As VistaPrint satisfies more of a small business' brand building needs, retention increases, lifetime gross profit per customer expands and customer acquisitions are amortized more effectively, thanks to that higher LTV. You'll hear much more about this in Florian's presentation on VistaPrint. Let me turn to elevated products. And as I mentioned a few moments ago, these are fundamentally important to attract, serve and retain high-value customers. The images on this slide show examples of these types of products. Customers place a higher value on these items because they really are primary touch points for their brand identity.

Being great at these types of products allow Cimpress to earn a much larger portion of their overall marketing budgets. And in some cases, like packaging, we become an integral component of the products which they sell, and that actually leads to even stronger revenue retention rates due to our customers' ongoing replenishment needs. In fiscal '26, promotional products, apparel and gifts, something we group together under the term PPAG, represented $825 million in revenue across Cimpress. That accounted for about 22% of our revenues.

Within VistaPrint, constant currency PPAG revenue growth was 11%, reaching over $355 million, with variable gross profit from this category growing 16%. In custom packaging and labels, we have these specialized brands, for example, BoxUp in North America and Pacty in Europe. And together, those 2 firms or companies achieved constant currency growth of 33% in fiscal 2026. Now elevated products require sophisticated mass customization capabilities and manufacturing capabilities. So we are investing in these operations in order to deliver highly competitive quality, highly competitive fulfillment speed and highly competitive price.

Here are examples of products that are launching in fiscal '26 that either did launch in '26 or will be launching in '27. In custom food and beverage packaging, we're launching assortments that restaurants truly value for conveying their brands like tray liners, paper bags, snack trays, paper cups. Our pricing, like all of our products is competitive at any order size. And most of these packaging products are sustainable by design. For example, home compostable paper products replacing unbranded plastic takeout containers.

In corrugated boxes, our production lines are setting new industry standards for time to customer with 0 setup fees and very low minimum. Our vision is custom-branded boxes in the quantities that every business needs, no matter how low, no matter how high, at unit prices previously reserved for generic unprinted craft cartons. We also rapidly are expanding our products for events like trade shows, markets and fairs and building supply chain and decoration capabilities to vastly expand our customized apparel range. We'll show you more examples of the VistaPrint -- in the VistaPrint presentation and in the manufacturing panel, we can discuss this in more detail.

Cimpress' market leadership and unique capabilities are opening up the options we have to reach more customers through new channels via partnerships. And the clearest validation of this opportunity is our partnership with Canva, which we announced in July. Canva reaches hundreds of millions of monthly active users who create billions of visual assets. And we've launched an initial suite of Cimpress fulfilled products across North America, Europe and Brazil, and the number of products is growing each month. For Canva, we provide a trusted, highly capable fulfillment partner with unmatched quality and geographic coverage.

For Cimpress, this opens up a new scalable way to serve customers without acquisition costs. And as I mentioned in my annual letter, part of our design enablement strategic objective is to be able to turn beautiful designs into custom physical products regardless of the source of the design. So this partnership is a clear example of doing exactly that. Over our history, we've deployed capital to acquisitions, and we've certainly made mistakes, but we've also had some very strong successes. One large group of successes is our Upload & Print reporting segment, where the cumulative cash flows since acquisition have far surpassed the $730 million we originally invested.

Today, our acquisition playbook is based on what we've learned from prior experience, both successes and failures. We look for highly rational tuck-in acquisitions that we expect to meet a threshold of 20% or better base case returns and which strengthen our capabilities in elevated products add focused production hubs and/or integrate directly into our fulfillment networks to better serve high-value customers. Our most recent acquisitions and equity investments have been Mixam, [ Truyol ], Print Alliance and SAXOPRINT, and these have directly supported our strategy.

For example, Mixam brings a new channel of customers for elevated products, specifically books, catalogs, magazines that will bring volume to our focused production hubs. [ Truyol ] is a leader in Spain for high-end online printing. Print Alliance expands our Austrian capabilities for higher-value customers and SAXOPRINT brings low-cost producer capabilities for flyers, booklets and similar products. Sean is going to spend some more time on our recent acquisitions in his presentation, including some examples of the financial results for these tuck-ins.

Now let's move from growth drivers to efficiency drivers. Our manufacturing and supply chain capabilities remain an unmatched competitive asset that we are -- and we are strengthening that advantage to reduce our cost of goods while improving our quality and speed. We have an engineering-first manufacturing culture that excels at lean production. We operate over 3 million square feet of production space via our mass customization platform, which Maarten is going to discuss, we're now optimizing production across different businesses and different facilities.

The capital equipment and the engineering initiatives in which we've been investing over the past several years will drive significant profit and cash flow growth in future years. We're already seeing financial benefits in some areas. In others, the start-up costs, which we are incurring are currently suppressing profits. Those benefits, however, will be a material part of achieving our fiscal '28 financial targets as the benefits come online at the end of FY '27 and those start-up costs roll off in fiscal '28. As I mentioned, Maarten will cover MCP in a moment, and Florian and the manufacturing panel will share some more about our capabilities and what that is unlocking across Cimpress.

Behind our manufacturing footprint and our customer-facing technologies sit the software backbone of Cimpress, our mass customization platform. Building out that platform required substantial organic investment...

[Technical Difficulty] I'm not sure what happened. I seem to have lost my connection. Can I check someone from the...

Robert, you're all set. You were back.

Thank you. I apologize, everyone, for that glitch. I was saying that building out the platform we have has required a lot of investment. But today, that platform is more mature. It's increasingly battle tested, and we are starting to generate substantial operational leverage from it. Many of our businesses have migrated or are in the process of migrating their technology to our mass customization platform microservices, that's for order routing, product catalog configuration and automated prepress. And by doing so, we're eliminating duplicative software investments and reducing third-party software licensing.

This continues with a next wave of standardization in customer experience platforms, and Maarten is going to provide examples of that as well in his presentation. Another lever for efficiency is deeper operational collaboration and capabilities sharing. Internally, for 2 years, we've been shifting towards a more balanced place on the scale between decentralization and centralization. Now we are maintaining autonomy for teams where that is important for driving speed and innovation.

On the other hand, in areas where the benefits of scale and efficiencies are clear and strong, for example, sharing technology infrastructure or supply chain management, our individual businesses are collaborating more deeply than they have done in the past. And a great example of this is the tighter collaboration that's happening between VistaPrint, National Pen and BuildASign, where the teams are working closer to share knowledge and capabilities in multiple areas across tech, product launch processes, Cross-Cimpress fulfillment, procurement, high-value customer service and advertising optimization.

Once again, you'll hear more about this in other sessions. And we also saw that we have a pre-submitted question on this topic. So Florian and Brian and I will discuss this further during the Q&A session. Note that this type of increased collaboration is also happening in our Upload & Print reporting segments. But for the sake of time today, we're going to focus the discussion on what we're doing on -- with the businesses that you see on this slide.

Now AI besides having great opportunities on the front end is also a central catalyst for operational velocity and efficiency. And we're cultivating a culture of active AI experimentation to simplify workflows to reduce operational friction, to speed up execution and importantly, to reduce costs. All of these AI implementations are seeking to generate direct measurable value, both for the customer and for the Cimpress bottom line. All across Cimpress, teams are embracing process simplification and AI in ways that make us stronger. And we have a panel discussion again on this topic, where we'll discuss many more examples and how they also support our fiscal '28 financial targets.

So in closing, what you're going to hear today is that we have entered fiscal '27 with strong operational momentum, expanding competitive moats and a clear line of sight to sustained earnings and cash flow growth. Throughout the presentations and discussions today, you'll hear 3 consistent themes. Our strategy and our investments are growing customer wallet share and improving scale advantages. We have significant and clear actionable levers across both top line growth and bottom line cost efficiencies.

These levers directly support our financial plans for fiscal '27 and fiscal '28, establishing a firm foundation for ongoing growth beyond those 2 years in order to maximize our long-term intrinsic value per share. So before I pass it over to Maarten, we're going to share a video with you, which really brings to life and brings you inside our manufacturing operations to better understand the scale, the technology and the human expertise that powers tens of millions of customer deliveries every year.

And in a world where AI will revolutionize so many aspects of all of our lives, including providing incredible productivity and gains to manufacturing, we are excited that Cimpress' core competitive differentiation is the mass customization of beautifully tangible physical products. These unrivaled capabilities are the heart of Cimpress. They always have been, and they enable our mission to help businesses build brands stand out and grow customized physical products and branded merchandising. So here's the video to illustrate that point.

[Presentation]

Awesome video. Hello, everyone. I'm Maarten, and I'm the CTO here at Cimpress, and I got the honor to operate our mass customization platform. And as Robert outlined in our strategy in action, focused on both growth and efficiency and focus on both growth and efficiency. And in my session, I will highlight how our operations and technology strategy supports those goals. At the core of our technology strategy is our mass customization platform or MCP. It connects our businesses, production facilities and third-party suppliers to share technology.

To understand why that actually matters, consider the complexity of a customized product, right? A customized -- if a customer chooses a shirt, then select different attributes like the size, the quantity and the decoration techniques like do I want to print it or embroider. And those choices then affect the pricing and how we prepare the artwork for the product and which facility can actually produce that order and now extend that across every product from business cards to packaging to apparel. That complexity runs through every capability you see here from our site merchandising to our product catalog, manufacturing and fulfillment.

And every business in our entire industry has to manage this. And with MCP, Cimpress can invest strategically in solving these challenges and leveraging those capabilities across our company. That means our businesses can introduce products faster and benefit from capabilities you would otherwise have to develop separately. It also helps us reduce our OpEx with duplicated technology removal or the use of our production network more efficiently, really built once shared across Cimpress. And now with that, I'd like to give some examples of how that translates in business results.

MCP operates at a significant scale with around EUR 3 billion of our Cimpress revenue flowing through this platform. Our businesses serve unique customers and markets, but they share the technology and production capabilities, and that helps them to launch products faster, access the lowest cost of production and deliver consistent products every time across global markets. It also creates opportunities to bring new partners into our network. One example we're particularly excited about is our strategic partnership with Canva that Robert just mentioned.

Canva chose us to give -- to best serve its customers. And through MCP, we enable the integration between Canva and Cimpress just in a matter of weeks. And we could move that quick because we've already had the underlying tech capabilities in place. That's where the scale of MCP becomes a competitive advantage. We can use those shared capabilities and leverage our global scale and manufacturing supply chain capabilities. At around EUR 80 million of production measured as the cost of goods now flow between our Cimpress businesses.

That's what the chart here on the left shows. And we've started to increase our focus on using this established MCP capability to get more value from our combined production network. The benefit comes from both lowering production costs and new growth opportunities. And across Cimpress, these efforts have generated a cumulative total of more than EUR 50 million in incremental variable gross profit since our fiscal year 2024 when we really started pushing on this. That's the financial benefit here highlighted here on the right.

So by using this production capabilities we already have, we can reduce the need for new capital investment or lower our production cost or expand our offerings faster. These are concrete benefits from connecting our businesses through our MCP. And you'll hear more -- some more powerful examples about Cross-Cimpress fulfillment in our manufacturing roundtable later today. We know that a broader product selection is very good for our customers, and it drives up sales too. But in customization, adding product means handling all of these variations that I just mentioned, material sizes, materials, sizes, decoration methods and production requirements.

So what we've done through MCP, we've built a shared digital model of this world and all of its complexities. It captures the product details and manufacturing rules that our businesses need to sell and produce these products. The digital model gives our AI a powerful foundation. And our AI agents and our agents can interpret supplier information and map it into our product catalog standards, automating work that previously required people to do it all manually. Once the product is in our shared catalog, businesses across the network can use that information to bring it to market faster.

The combination of our industry knowledge, structured data and AI lets us expand our catalog at a speed and scale we couldn't even achieve manually. The acceleration is already visible. Over the last 12 months, average monthly new products onboarded to our third parties has tripled from around 800 products to 2,400 products. And the new products created by our businesses have more than doubled from 600 to 1,400 a month. At National Pen, the automated product setup process has gone from 2.5 months to minutes with the setup cost falling from $300 to $6 per product, exciting.

With the progress we made in modernizing our technology over the years, we have the opportunity to share more of these capabilities across Cimpress and reduce the cost of building and maintaining similar systems separately. A good example is our Cimpress Experience platform, where we've basically taken the customer experience technology developed at VistaPrint and made it available as a shared platform, obviously connected with still to MCP. That means other businesses can benefit from the capabilities we've already invested in on the VistaPrint side, including design tools, personalization, marketing optimization while keeping their own branding and customer experience.

As we improve those shared capabilities, the businesses using the platform then also benefit from the same investment that helps us deliver better features, faster and reduce duplicated development and ongoing operational costs. We've already migrated National Pen's first test market to the Cimpress Experience platform with additional markets and brands expected to follow in the upcoming quarters. This is just another example of getting more value from our existing technology investment, extending proven capabilities across more of Cimpress.

A nice other practical application of AI is using customer data to identify who's at risk of leaving and act to retain them. VistaPrint did a test across 3 European markets and showed encouraging results with an estimated annualized benefit of around 700,000 in additional variable gross profit. And what excites me is where we can actually take this, right? As more businesses not only adopt MCP, but now also the Cimpress Experience platform, we have an opportunity to bring more of this consistent data into these models, improving our understanding of our customers and applying what we learn more broadly across Cimpress and across more and more use cases.

Like I mentioned, I can't say it enough, our manufacturing and supply chain network is a major competitive strength. MCP connects that network so our business can use its capabilities immediately at scale. Every customized order brings its own artwork and production requirements. We need to turn what the customer creates and something a facility can reliably manufacture. And that's what you see here, right? We analyze the file, we check and improve the artwork, combining AI with human expert review and preparing the products for production.

MCP then connects that order to a facility with the right capabilities, taking into account geography, equipment. And that's how our global infrastructure handles more than 30 million orders, over 15 million customers annually. The value is managing all that individual complexity through the shared technology. And as we improve the shared capabilities, we can apply those improvements across the network everywhere immediately. And if you followed our Investor Day over the years, thank you, by the way, for that.

You've seen how we've applied AI to artwork processing, a.k.a., how do you put this image on a physical product at volume? How do you do that at volume? And automating that work was essential to keep the cost manageable. We started with traditional machine learning models and progressed over time in deep learning and now use today's generative AI models, including LLMs and [ multimodal ] image generation models. We've been putting AI to work in our operations for many years, and that expertise actually matters.

Our teams have learned how to apply these models to the complexity of customized products and integrate them into real production workflows. Our artwork capabilities will continue to improve. But what's changing now is how broadly we can apply AI across Cimpress. Robert mentioned that, too. You've already seen examples in our product catalog expansion or customer retention, as I just mentioned. But we're also applying it and developing AI capabilities in our customer service, how do we do software development, product search, pricing, promotion management.

And what excites me is the combination, years of our practical AI experience, the data and the capabilities in our now shared -- more shared platforms and the tools that more teams can now use. That gives us more opportunities to improve how we work and how we serve our customers. The track through all of these examples is that we're getting more value from the capabilities we've already built by sharing them across Cimpress. MCP and the Cimpress Experience platform gives us a common foundation.

AI helps us to do more with it, increasing engineering capacity, accelerating product launches, making customer interactions more relevant and lowering the cost to maintain and invest in these capabilities. You've seen some concrete results today and our opportunity now is to extend those benefits across more of our businesses and more of our operations, supporting growth while lowering the cost of delivering it. We'll explore that further also today in our AI roundtable with leaders putting those capabilities actually to work. And with that, thank you. I'd like to hand it over to Florian.

Good morning, everyone, and thank you, Maarten. I'm Florian, the CEO of VistaPrint. Over the past year, VistaPrint delivered consistent revenue and EBITDA growth and is on track to support Cimpress' FY '28 target of at least $615 million in adjusted EBITDA. And today, I'll show you what powers our current momentum and where we're focusing to drive profitable growth. In my presentation today, I'm going to cover 3 things: our ambition, how we're winning with high-value customers and our 5 priorities for sustained profitable growth in the future.

At VistaPrint, our ambition is to be the leading destination for small businesses custom print needs from design to print. And to us, that means much more than just fulfilling an order. We want to be their #1 print partner for every print need, occasion and stage of their growth. And we achieved this with 4 things that set VistaPrint apart. One, we're truly a one-stop shop. Our breadth of assortment allows us to meet the diverse needs of all types of small business customers. Two, we enable them to design in any way that works best for them, whether they prefer designing using an AI tool or start with one of our templates, work with a human designer, they can do it all with ease on VistaPrint.

Three, we offer the best assurance and advice, no matter where customers are in their journey. And four, we invest in and harness the power of the Cimpress manufacturing and supply chain network that Robert described earlier. So let's now talk about how we're winning with high-value customers and to see what working with VistaPrint looks like in practice, let's hear directly from the businesses we serve.

[Presentation]

I love that reaction at the end from Madeleine. That's what happens when we deliver across the customer brand presence from [ tablecloths ] and totes to custom apparel.

But obviously, winning a customer's first order is just the start. Our goal is transforming first-time buyers into high-value, long-term relationships. Look at Sourmilk, for example, a New York startup. When they joined us in 2025 at the time with just 2 employees, they needed a professional brand fast. And as they expanded into pop-ups and major events, we scaled right alongside them supplying banners, table runners, stickers and apparel. And Sourmilk is not an isolated success story. They represent our primary growth engine, customers generating at least $650 in annual gross profit or VGP.

We're tracking approximately the same $650 threshold as last year, representing our top 2%. In fiscal '26, this group generated 32% of our total VGP compounding at 17% annually. And that growth is happening across both volume and value. VGP per customer grew at a 3% CAGR, while the number of customers in the segment grew at a 12% CAGR. And just like Sourmilk, these customers rely on us far beyond business cards, like signage, apparel and promotional products driving the relationship.

These $650-plus VGP customers represent what we can achieve with our value proposition and the differentiators that make VistaPrint unique. They buy from twice as many product categories. They order almost 6x more per year, and they spend 3.4x as much when they do. So net, they buy more broadly, more often and in larger orders. A question that I often get is, are these $650-plus customers all new customers? And the answer is that the growth is coming from both new and repeat. In other words, we're attracting new high-value relationships while developing those we already have, and that gives us 2 opportunities to build on, not just one.

Let's take a deeper look at new customer acquisition. Higher-value customers enter across a far broader set of categories. Promotional products, apparel, signage and marketing materials are their primary entry points. And so we're not dependent on business cards to attract high-value relationships. Let me bring this all together. Cumulative value per customer is compounding because our high-value customer engine is working. Our $650-plus VGP customers drive this expansion across every dimension, buying broader, ordering more frequently and spending more per order.

And importantly, the majority of the segment comes from repeat customers with whom we're expanding our share of wallet over time. Let's now turn to our key focus areas to accelerate profitable growth. We are executing on 5 priorities, and I'll dive into each one in turn, starting with the one on the left, high-value customer growth. There are 3 parts to this: expanding our assortment of elevated products, making it easier for customers to discover, design and buy and providing tailored assurance and advice.

As Robert already mentioned, elevated products are key to capturing a greater share of our customer spend. Categories like packaging, labels, apparel, promotional products and signage are driving our year-over-year VGP growth, particularly among high-value customers. And this directly proves that our targeted investments are paying off. In FY '26 alone, we launched more than 5,100 new products, focusing heavily on elevated ones and process automation and the Cimpress network helped make that scale possible. But adding products is only part of the answer.

Customers also need to discover, design and buy them easily. And that's why we're making ongoing optimizations to improve the experience for elevated product purchases. We're making it easier to apply designs across our product range. We're improving sampling so customers can see and feel complex products before making larger purchases. We're also making it easier for customers to bring designs created elsewhere into VistaPrint with a special focus on streamlining the path from AI-driven design to print -- we're personalizing the customer journey through better recommendations and conversational shopping experiences.

And in fact, in FY '26, the share of VGP generated through personalized placements increased 21% year-over-year. Taken together, these investments make our broad offering easier to use and they enable the one-stop shop that we want to be for all of our customers. While we deliver great service to every customer, we also know that high-value customers often have more complex needs that benefit from dedicated human support. And that's where our high-value account teams come in. Using real-time data, we intervene proactively the moment a customer gets stuck or wants help, guiding complex orders from artwork through to delivery.

And that isn't just great service. It also makes sense commercially. In fact, in FY '27, these specialized service teams are projected to generate $8 million in incremental VGP. And the proof is not just the dollars. The proof is also in the feedback that we get. Hundreds of 5-star Trustpilot reviews mention our team members by name. That's how we are a trust and build lifelong customers. Moving on to our second priority. That is manufacturing, expanding our capabilities for growth while driving efficiency.

Starting with the growth side, we continue to expand our assortment of elevated products. And in FY '26, launched in-house production for corrugated boxes and luxury bags in Europe, and we're now establishing a dedicated food packaging hub in North America. And to maximize our return on capital, we leverage Cross-Cimpress fulfillment. That happens in 2 ways. First, we broaden our catalog without spending extra CapEx by sourcing products from sister companies with focused production hubs. So that could be booklets from Pixartprinting or could be signage from BuildASign.

Then second, we fill our own focused production hubs like the European luxury bags and corrugated box lines by fulfilling orders for sister brands across the group. Cross-Cimpress fulfillment, therefore, gives us a massive structural advantage, driving higher margins, higher asset utilization and better capital efficiency. Beyond Cimpress fulfillment, continuous cost discipline inside our own facilities is an important part of our manufacturing agenda. And in FY '26 alone, that operational discipline delivered about $8 million in cost savings.

It was driven, for example, by packaging and carrier optimization, scrap reduction, higher labor productivity and leveraging Cimpress procurement for equipment and material purchases. I'm now going to turn to our third priority, marketing ROI. And that's about maximizing the efficiency of every dollar we deploy across the entire funnel. And I'm going to start at the top of the funnel. VistaPrint starts from a position of strong brand recognition. We're the #1 in prompted print awareness among small businesses in the U.S., France and the U.K. And while that brand awareness gets us in the door, sustained growth does require building deep brand relevance, and that's the role of our refreshed brand positioning.

Print Your Possible is our new creative platform. And what it does is it taps into that joy that our customers feel when they turn their ideas into something tangible from a custom T-shirt to a storefront sign to premium packaging and marketing materials. But I suggest you see for yourself, let's take a moment to watch our brand Hero film.

[Presentation]

Yes. As you can see, we don't just print our customers' logos. We print their purpose and their passion and really want to see them for much more than just business cards, but across the entire physical marketing from signage to apparel and branded merchandise. Let's move further down the funnel to performance media. A lot going on there. We use rigorous incrementality testing and in some countries, order level LTV prediction to channel capital into high-return areas. And in search of strong returns, over 25% of our performance spend is now in social media and video formats.

At the same time, we're also an early mover in AI advertising. We joined OpenAI's advertising pilot at launch in February, quickly becoming a top 10 global advertiser by spend. And our full product catalog is connected, and we're executing a U.S. conversion lift study to measure incrementality. And that is in addition to our existing presence in Google AI mode and Microsoft Copilot. But frankly, the objective across every channel is very simple to maximize cohort LTV by acquiring higher-value customers upfront and expanding our relationships with existing ones.

Our fourth priority is AI-enabled simplification and automation. We are using AI across the entire organization to deliver outcomes faster and more efficiently. Every logo that you see on this chart was designed directly by the team leading that project, and I couldn't be prouder of the grassroots ownership our people are showing. This is a broad-based transformation touching every function across VistaPrint from software engineering and analytics to marketing, creative, customer care, all the way through to finance, HR and manufacturing.

And these aren't just theoretical pilots. Behind every achievement on this chart, there is a practical change to how we operate, delivering real benefits and execution velocity, cost efficiency and growth. And that brings me to our fifth priority to build a resilient, future-ready organization. We want to build the most entrepreneurial culture, one where people take ownership and innovate on behalf of our customers. We've, in fact, always believed that innovation must be part of running the business, not separated from it. And our Vista behaviors provide that foundation.

One year after launch, we've seen high engagement scores in adoption, application and awareness. And the Vista behaviors aren't just something that we talk about. They're woven into how we work every day from the questions that we ask in interviews to how we evaluate performance, share feedback and celebrate success. And in light of the massive opportunities ahead on our AI journey, we are building capabilities across 3 pillars: AI skills, leadership development and future-ready competencies. First, AI skills. We're driving active AI engagement and upskilling across the entire organization.

For example, we launched an AI development goal requiring every team member to build automation directly supporting the role. Our teams have completed over 5,000 AI courses and more than 800 employees have engaged in hands-on building through our workshops. And today, our peer learning community spans over 1,500 team members sharing daily use cases to transform how we work. Second is leadership development. In FY '26, close to 90% of our managers completed foundational leadership training focused on instilling an entrepreneurial culture.

And third, future-ready competencies. In FY '27, we're launching targeted training in 9 essential skills, including systems thinking and resilience to keep our workforce agile. And to be clear, the goal here isn't training for the sake of training. It's building teams equipped with the capabilities to leverage technology, move faster and deliver bottom line results. So let me bring it all together. We have a clear strategy, a high-value customer growth engine across both new and repeat customers and an increasingly efficient operating model. And by executing on our 5 priorities, we're driving durable EBITDA expansion and building a stronger, more profitable VistaPrint. Thank you all for your time today. And with that, I'll hand it over to Sean.

Great. Thank you very much, Florian. Appreciate it. And good morning, everyone. It's great to have you all here. The -- I'm going to finish before we go into the panel discussions with a financial review session. And in this next roughly 30 minutes or so, I'm going to largely focus on the path that's ahead of us for the next 2 years to deliver on the outlook that we've provided. We think it's an exciting one. It involves substantial profit and cash flow growth. And it's a path that, as you'll hear, we remain very much confident in, and it has the management team's full focus.

I'm also going to touch on our capital allocation priorities, as I normally would. This year, I'm going to take a specific double-click on tuck-in M&A, just given we've had some more activity there recently and some more questions from investors of kind of the path forward there. So I'll spend a little bit more time there than I have in the past. First, as Robert referenced earlier, too, I just want to reiterate our commitment to our uppermost financial objective, and that's to maximize our intrinsic value per share.

The -- as I go through the slides that follow here, I'm going to talk about other metrics, and that includes our multiyear adjusted EBITDA targets. We've shared those targets, again, as Robert said, because we think it's helpful to have a public, very measurable milestone on the path to our significantly higher per share free cash flow that holds us accountable and hopefully, you agree, gives you a concrete way to track our progress. And we would never pursue the targets that we're talking about in a way that sacrifices our ultimate objective.

As you can see from the charts here on this slide, over time, we've had both substantially increased free cash flow, and we've also reduced our total shares outstanding by nearly 50% since the time of our IPO. Based on the plans that we're going to review today, if you just do the math, we expect our free cash flow per share to be roughly $11 per diluted share at the end of fiscal '28. And at least in my view, I think that that's clearly not reflected in our equity value today. So turning to the next slide.

One year ago at our Investor Day, for the first time, we outlined a 3-year plan to demonstrate substantial profitability and cash flow growth. And the reason we did that is we felt like it was important for us to make that clear in terms of the financial progress we would make following a period of strong operational progress and also investments to enable the financial progress that we had expected. The first year of that plan was fiscal 2026. I'll briefly cover the highlights of last year in a minute, but I think the headline there is that our growth in adjusted EBITDA was ahead of what we guided to 1 year ago.

At the end of July, for the first time, we introduced our specific fiscal '27 guidance, which is for at least 7% reported revenue growth and 3% organic constant currency revenue growth. We expect significant growth in our adjusted EBITDA to at least $520 million and free cash flow to approximately $200 million. And these results, importantly, will start to more meaningfully reduce our net leverage, as you'll see in a later slide. I'm going to walk through the drivers of how we get there so that all this becomes more tangible for you.

Moving then to fiscal '28, we expect the investments that we've made and also the cost saving initiatives that we're executing on to be approaching their full run rate. And so we expect 4% to 6% organic constant currency growth at least $615 million in adjusted EBITDA. That, I should note, is up from the at least $600 million target that we established at last year's Investor Day. And then we continue to expect adjusted EBITDA to convert to adjusted free cash flow at approximately 45%. So that's roughly $277 million of adjusted free cash flow as our profitability significantly increases, but also as our heavier period of CapEx starts to moderate.

That will allow for another meaningful reduction of our net leverage to below 2.0x our trailing 12 months EBITDA. And of course, all that's subject to capital allocation choices. One of the themes that you'll hear me repeat a few times in this session is that the profit and the cash flow growth builds as we move through the next 2 years. And so that ramp really starts in Q2 of this year as these things start to take hold, also M&A starts to be a more material contributor, and we expect that to continue for the -- really for the next 7 quarters.

We're confident that we'll deliver on our plans. And on this next slide here, I'm just going to outline 4 reasons why that's the case. First, Cimpress has delivered profitable growth for over 2 decades. We've constructed these expectations to be achievable, and that's why we use this at least framework. Guys, can you go to the next slide? Yes. Thank you. Just of note here, we -- as I said before, we increased our fiscal '28 target from the at least $600 million that we gave last year to the at least $615 million that we are reiterating today.

The second one is that delivering against these targets, it is the top company priority, and we really used it as an organizing framework for our strategic initiatives and our operating plans. You would see that in our regular cadence of operating rhythms that we have. You would see it in our internal comms. We have an ambitious agenda, but with a clear governance, and that's also something that we review regularly with our Board to maintain rigorous oversight on our capital deployment of our strategic initiatives and also all the efficiency projects that we have as well.

The third thing is that our leaders are compensated primarily through performance-based equity. And those performance criteria are tied directly to these plans and our internal performance targets are actually set higher than what we've committed to externally. And then lastly, we believe we have a clear line of sight to reaching these goals. And a lot of that comes from the fact that the heavy lifting on foundational investments is largely behind us. And now our focus is fully on the required execution. The time, the effort and the capital, which has been substantial that we've allocated to these growth and cost savings initiatives, it is really meaningful.

And as you'll see in a moment, the vast majority, at least in my view, from here is really an execution story. So starting with a quick overview of fiscal 2026, and I'll be relatively brief here. We delivered 10% reported revenue growth and 4% organic constant currency growth. That was above the expectation that we had set for the year. Our adjusted EBITDA was $458 million, also higher than the guidance we provided at last year's Investor Day. Our adjusted free cash flow was $122 million.

That was weighed down somewhat by higher levels of CapEx, that CapEx directly supporting the strategic and financial targets that we have, also slightly less favorable working capital timing than we had expected. And then we ended the year on track with our leverage guidance, which was 2.9x trailing 12 months EBITDA as defined by our credit agreement. So I think the summary there, year 1, we did what we said we would do. In terms of proof points, as you've heard in some of the earlier presentations, we've made meaningful progress with elevated product and high-value customer growth.

One of the things that I think doesn't show up in the numbers is that there was significant foundational progress that was completed in this last year that enables future growth and cost savings over the next 2 years. That's really important. We also closed 4 tuck-in acquisitions that I'll dive into in more detail later, and those will contribute meaningfully to our plans. And then the higher contribution from M&A is why we increased our fiscal '28 adjusted EBITDA target that I earlier mentioned.

So now let's turn to fiscal '27, the year that we're now in. And you can see here a bridge of how we expect to accomplish our fiscal '27 guidance. The bridge that I'm going to go through now is a new level of detail and hopefully, you'll find to be helpful. The bridge here starts with our fiscal '26 actual adjusted EBITDA, that's the $458 million and walks over to our guidance of at least $520 million for fiscal '27. Walking from left to right here, the first bridge item is the $18 million to $21 million of adjusted EBITDA growth that we expect from tuck-in M&A.

That is a combination of the fact that we have a full year of results from the stand-alone businesses that we purchased last year and also the one that we closed at the very beginning of this fiscal year, SAXOPRINT, but also the increasing synergies as we advance through the year and integrate these businesses into the Cimpress network. That number is consistent with the commentary that we gave with our year-end earnings. And I would just say we remain very much on track here. The second bridge item is $5 million to $10 million of year-over-year benefit from currency. Those benefits are contracted and therefore, also very much remain on track.

The third bridge item reflects the increased year-over-year start-up costs for our North American production network. And this is enabling substantial future cost savings. You're going to see that in the fiscal '28 bridge. I'll go through next. But it will be a higher investment in fiscal '27 compared to last year. So that's a drag, and then that drag will reverse in fiscal '28. And then next, we expect the in-year impact of our cost savings initiatives to contribute $25 million. The plans for these are in place. They'll be actioned throughout the year, and so that is the in-year impact.

And then the remaining $11 million to $19 million is the minimum adjusted EBITDA needed from organic contribution in order to achieve our guidance of at least $520 million. And that results in full year adjusted EBITDA growth of at least $62 million. As a reminder, because we've used this framework last year as well, this minimum required from organic growth is the minimum. So rather than the specific amount that we expect, that is the minimum that we need to make this bridge work. And really, this construct is what do you have to believe as an investor to believe we can hit these numbers.

And hopefully, you believe that, that is a very reasonable amount in that last item of the bridge. Importantly, we also expect free cash flow growth to be about 60% based on our guidance of approximately $200 million. And as I said before, that's the combination of 2 things: one, profitability growing and that dropping through to free cash flow, but our CapEx levels will remain similar to last year. So that will still be at an elevated level. As noted, these contributions will ramp through the year. Q1 also carries a higher amount of that plant start-up cost year-over-year. So we expect the weight of these initiatives to really to build from Q2 onward.

Let's now do the same thing for fiscal '28. And here, again, I'll start with fiscal '27 baseline of the $520 million that I just went through. And then I'll walk that across to our raised fiscal '28 target of at least $615 million. First, we expect the contribution from tuck-in M&A to contribute an additional $10 million in adjusted EBITDA. And the reason for that is that our synergies here will continue to build. And so we'll be at a full run rate for fiscal '28 or almost a full run rate. So that's really driving that growth there year-over-year.

Essentially, these things become organic contribution as we anniversary the acquisitions. But we thought for purposes of the bridge, it was clearest that we keep that separate for its purpose here. And I should also mention that this does not assume that we deploy additional capital to M&A in fiscal '28.

Next, the plant start-up costs that I talked about in the last slide, tied to our North American production network expansion that weighed on profitability in fiscal '26 and also in fiscal '27 will roll off and that provides a $10 million uplift in fiscal '28. The largest contributor to adjusted EBITDA growth here comes from our cost savings initiatives, where we unlocked the remaining $50 million in benefit.

Across the 3 years, this delivers at the high end of the $70 million to $80 million range for cost savings that we outlined at last year's Investor Day. So we feel good about the execution against that. And a lot of those cost savings initiatives will have been executed as we exit fiscal '27, but the full year impact will be impacting fiscal '28.

And then finally, we need at least $25 million of organic growth contribution and that's supported by the initiatives that you heard about today, including our elevated product growth, leveraging recent CapEx investments, including the ones that we're doing this year, wallet share gains with high-value customers, growth in Cross Cimpress fulfillment and then also growth in new channels like the Canva partnership. Together, that brings us to our fiscal '28 target of at least $650 million -- $615 million in adjusted EBITDA.

And in Robert's opening session, he outlined our growth and efficiency initiatives. So I'm going to turn back to those now to demonstrate how those support these numbers. So in Roberts -- again, the same framework that Robert used here. I'm not going to go back through the kind of strategy component of this. I just want to connect it to the numbers that we just went through.

The recent investments that we've made behind these 4 drivers here position us, we believe, to deliver the organic growth for fiscal '27 and fiscal '28 that is required by those targets. And again, it's a net lease framework. And so we believe we can do more than that.

Just briefly, those drivers that Robert went through, our wallet share with our highest value customers, which, as you saw in the VistaPrint session is really the primary engine of a profitability growth there. Elevated products, where we're shifting mix into higher-value categories and leveraging cross-Cimpress fulfillment to do so.

Our VistaPrint packaging labels category, I think, is a great example, grew 33% in fiscal '26, starting to get to larger scale. New channels like the Canva partnership and also our upload and print expansion into the U.S., which is enabling growth in VistaPrint as it gets access to products that we didn't previously produce in North America. And so really there, we're getting access to the manufacturing innovation and know-how that Pixartprinting has established for years in Europe.

Paolo will talk a little bit about that in one of our panel discussions. And then finally, tuck-in M&A, which I'm going to come back to separately. If you take these together, these are what support the organic contribution in our bridges. And so now let me turn to the efficiency side of things, which is the larger driver over the next 2 years. And on efficiency, it's really a story of timing and phasing. FY '26, I would say, was primarily a foundational year. There was modest financial impact, but it was really a foundational year to enable the next 2 years.

And now the contribution starts to build as we really as we get into Q2 here of this fiscal year and for the next 7 quarters. There are 4 main initiatives or categories of initiatives, manufacturing supply chain excellence is a significant contributor, and that comes through our cost of goods sold savings.

There's a few things that drive that as we expand our North American network, but also as we shift volume to focus production hubs and also in-source from third parties. I think one of the markers of that, and Maarten referenced this in his slides, we've had a 50% increase in the volume flowing over cross-Cimpress fulfillment last year, which is like kind of the enabler for the start of a lot of those cost savings.

And then the other 3 you see here, they all reduce OpEx. So that is standardizing technology, leveraging our mass customization platform. It is increased collaboration across VistaPrint, National Pen and BuildASign, and also AI-driven simplification, which we'll cover in a later panel that I'll moderate. And together those make up the majority of the total savings, and again, those 3 on the OpEx side.

So these ladder directly to our target. We had $3 million of benefit in fiscal '26 from some of the actions that we had taken towards the end of the year. And then we have, in total, $25 million of incremental savings in the fiscal '27 bridge and another $50 million in fiscal '28.

As we execute on these plans, just turning to how this impacts our balance sheet, we will have a further strengthening of our balance sheet, but also this will provide more capital allocation flexibility as well. If you look at the chart here on the left, our expanding EBITDA and the strong cash flow generation that we expect will reduce our net leverage from 2.9x at the end of fiscal '26 to approximately 2.5x exiting fiscal '27. And then we have the opportunity to be below 2.0x exiting fiscal '28.

On the right is our debt maturity profile, and that's in excellent shape. I just want to touch on that briefly. We did refinance our Term Loan B back in May. And so our high-yield notes and our term loan B both mature in fiscal 2033. They happen to be in different calendar years, but the same fiscal year. And then we also ended last year with strong liquidity from a cash and cash equivalents perspective, but also a $250 million revolver that's undrawn. So strong liquidity and no material maturities until fiscal 2033. So balance sheet is in good shape.

As we increase the balance sheet flexibility that we have, we're also going to unlock meaningful capital allocation optionality. Our primary use of capital as it has been, will remain funding high ROI organic opportunities funding innovation, funding, capital capability enhancing projects, and we'll continue to do that at disciplined hurdle rates.

I think both last year and also this year, the way that comes through, most notably is in our CapEx investments, which have been higher. Last year at Investor Day in my slides, I went through some very specific examples of the return and payback profile of these types of investments. And if you go back and look at that, the headline is very strong, high probability outcomes. It's kind of at the center of our core competency.

We do expect that after higher CapEx in fiscal '26 and then also in this year, fiscal '27 that, that would moderate as we turn to fiscal '28. And so kind of if you think about organic investment overall over these next 2 years, we would not expect an increase to organic investment levels relative to fiscal '26. But in fiscal '27, there's still a still a pretty high pace of CapEx investments.

On the buyback front, this is something that we look at on an evergreen basis. We'll continue to be disciplined here and importantly, continue to really look to match intensity of repurchases with the gap between our share price and at least our view on intrinsic value. But we'll do all that while we manage to our net leverage commitments.

I would say that within those net leverage commitments, we do have room for repurchases while still meeting that guidance. So this will be something we'll consider on an ongoing basis and I would expect to play a role in our capital allocation to some extent over the next 2 years.

And then there's M&A. And we do continue to not anticipate doing individually material acquisitions. But tuck-in acquisitions and equity investments have proven to be an attractive use of capital for us. And importantly, not only a good use of capital, but also directly supporting our strategy. And we did have a pickup in activity over the last year here.

So given that we thought it was appropriate to cover this topic in a little bit more detail this year. It is a viable avenue of high-return capital deployment in the future as well. And so we just want to kind of walk through how we approach this, why it makes sense for us and also the kind of the return profile of some of our past transactions.

So let me start by saying that there's -- I think there's really 3 main reasons why we believe this is an interesting opportunity for us. The first is that -- and this is fairly obvious, just given our role in our market. We have very significant advantages and assets that we can exploit.

The businesses that we acquire plug directly into our scale-based advantages they plug into our shared capabilities. They can operate with our other businesses, leveraging cross-Cimpress fulfillment. And all of that reduces our cost of goods sold while also providing for revenue opportunities across our portfolio through new product introduction.

The second one is that we can acquire -- we have been able to acquire these businesses at compelling valuations relative to post synergy cash flows. There's 2 parts to that one. One is our advantages that we bring, which clearly help the post synergy cash flows. I think the other one is that we operate in a maturing highly fragmented market. And we think that, that market dynamic will only make these opportunities more prevalent in the years to come. And all of that together allows us to have a target base case IRR for these tuck-ins of 20% or higher.

And then lastly, in this area of tuck-in acquisitions, we have a proven track record. And we haven't talked as much about some of these because they tend to be on the smaller side. But these, we do have a proven track record with, and I would say that they have been high probability outcomes. The other thing is that they can leverage our existing management bandwidth, which is important.

And so these transactions have at least recently broadly fallen into 3 buckets. One is opportunities for further vertical integration. The next is where a company has unique manufacturing or product capabilities that can be leveraged into our existing businesses or further into our existing businesses. And then suppliers that have material Cimpress volume that they fulfill and that we have experience with, and we can further vertically integrate there.

The acquired businesses, as I said, plug into the Cimpress network and scale advantages. And there are some specific advantages that we bring to these acquisitions and sometimes they bring to us no matter what archetype they fall in. And so I just wanted to cover this at a high level here.

The first one, again, probably the most obvious is procurement synergies. And this is where we leverage our group scale to lower input costs, and that happens across raw materials, across freight, logistics, capital equipment, consumables and acquired businesses are able to leverage that scale and our established relationships to reduce cost. This can happen very quickly. And so these are very quantifiable, and we can action these very quickly. They're also oftentimes very significant.

Our manufacturing network optimization by routing like-for-like orders to focus production hubs and doing that more and more through cross Cimpress fulfillment. We can meaningfully lower unit production costs and also fill plant capacity. And that's also allowing us to forgo CapEx that we would have otherwise spent. So that's an important one.

From a vertical integration perspective, we're able to in-source volume that was previously fulfilled by third parties oftentimes, and that allows us to eliminate margin stacking and also gain operating control over that volume. I think the other benefit there is that the more volume that we can put through focused production hubs then has a compounding benefit for our existing businesses as well.

From a new products and channels perspective, acquired product capabilities are leveraged across Cimpress brands, and that allows us to accelerate the launch of Elevated Products at lower cost. I'm going to share an example of that in a moment. But also allows us to offer those products that we previously didn't offer, but we can offer them to customers that are already familiar with the services that we provide which is -- which means that we can get to market quicker. We sometimes also get access to new distribution and channels, and we're able to leverage our strong production into those new areas of distribution or new channels.

And then the last is just tax optimization as we integrate these businesses into our global corporate and financial structure, not to integrate fully operationally but integrate them into our corporate structure, we're able to optimize cash taxes, and that can contribute to post-synergy free cash flow generation as well.

So on the slide here, you can see the 4 tuck-in acquisitions that we've completed over the last year. As we said, when we disclosed these throughout last year, for all of them, we expect base case IRRs that are 20% or higher. And here on this slide, you can just visually see how each of these also fits with the strategic objectives that Robert reviewed at the outset today. And those are growth of elevated products, design enablement and manufacturing excellence.

Across these 4 acquisitions that you see here, we deployed $117 million in net cash for the Saxoprint acquisition, which is the most recent that's net of sale leaseback proceeds that we expect to get on the real estate. And that $117 million of invested capital acquired $235 million in trailing revenue and $21 million in trailing EBITDA prior to synergies.

In this fiscal year, we expect these businesses to contribute to growth of approximately $170 million in year-over-year revenue. And as I said in the bridge, $18 million to $21 million in adjusted EBITDA with profit and cash flow scaling further as we unlock synergies.

I'm going to touch on 2 of those 4. And the first one is Saxoprint. That's the most recent one we've done. It's the largest of the 4. It's part of our PrintBrothers reporting segment. And Saxoprint directly advances our manufacturing and supply chain objective while also further enabling us to lower the cost to produce high-value elevated products. They bring a state-of-the-art, and you can see parts of this here on the slide, state-of-the-art almost 260,000 square foot production facility that's based in Dresden, Germany. And that facility is engineered specifically to be the lowest cost producer for key elevated products, like flyers, booklets, brochures, catalogs, magazines. And so the value creation on this one comes from really from optimizing network scale.

We're already shifting volume to Saxoprint as a dedicated production hub for its core product strengths. We are rerouting in the other direction, noncore items from Saxoprint to other focused production hubs across Cimpress. And then we are expanding new product offerings across our broader customer base, and we're doing that through cross-Cimpress fulfillment.

And then finally, as is the case with all these, we'll optimize procurement, leveraging our combined scale. So for Saxoprint, we're very excited about the synergy opportunities here. We actually expect that the synergy opportunities will be greater than the trailing stand-alone business results, just to put kind of that impact in perspective and those will ramp over time, including ramp throughout this year.

On Mixam, a little bit of a different profile here. We acquired a 50% controlling stake with -- this operates within the Print Group segment. And the core value driver here centers on design enablement and also expanding elevator products. Mixam provides a market-leading e-commerce workflow that simplifies the creation of books, catalogs and magazines, very difficult to design historically. They do an amazing job of it. And they use AI-powered layout tools and automated prepress quality checks in order to do that and make it easy for the customer.

On the synergy front, Mixam had previously relied 100% on third-party outsourced fulfillment. We had done a part of that as well by in-sourcing a significant part of that production volume directly into our existing Print Group facilities, including the new one for Pixartprinting in the United States. We're able to immediately capture improved gross profit margins on that existing volume.

We'll also expand Mixam's catalog by introducing new physical product options from our broader Cimpress network through cross-Cimpress fulfillment. That's -- that work has already started. And then here, again, we'll leverage our consolidated purchasing scale to drive procurement cost savings as well.

Finally -- so those are recent deals we had done. We thought it would be helpful to just go back in time a little bit and take 2 prior tuck-in acquisitions to demonstrate how these have worked. And Here, I've chosen -- the first one I'll go through is in North America. The second one you don't see on the screen yet is in Europe. And each of these falls into a different archetype.

So I think these are a pretty good representation of how these have worked for us in our recent past. So this first example here is an acquisition that we did in 2021. It was in the United States.

And this allowed us to push more deeply into the packaging category. You hear us talk about that with elevated products, very relevant there. Also very relevant with high-value customer growth. And customers that are purchasing these products display a higher propensity for repeat purchases but also a purchases across other categories. So a great product for us, and we wanted to push more deeply into it in the United States and broader North American market.

The annual revenue has grown from $6 million at the time of the acquisition to $18 million. More than half of that growth is coming through cross-Cimpress fulfillment, fulfilling for VistaPrint. And this was a net new product for us. And so all that is incremental.

Importantly, last year's revenue growth for this business was 33% and the EBITDA margin was 25%. And the free cash flow at the time of the acquisition was just a few hundred thousand dollars. Last year they did $5 million if you include the benefit that sits on the VistaPrint side. And our invested capital was $17 million.

So while the free cash flow yield was about 30%, when you have a business growing over 30% with EBITDA margins of 25%, there's clearly a lot of room for that to increase further based on that growth and margin profile. So a great example.

Example 2 that you now see on the screen here is a business in Europe. It's a business that we acquired in 2020. Invested capital was $8 million. Different profile. It was an existing supplier that we knew well that we vertically integrated to capture very highly accessible operational synergies, also to avoid future CapEx in our own facility, which you don't see factored into these numbers.

The growth here also was catalyzed by cross-Cimpress fulfillment. Last year, it generated $3 million in free cash flow. That represents just under 40% annual cash flow return on the consideration that we paid. And that brings the cumulative free cash flow to $13 million that $13 million when you compare to our invested capital is 60% more than the invested capital. So very strong returns, return on equity is sort of incalculable.

And ultimately, as we evaluate these types of acquisitions, we do that based on the free cash flow yield. We also do that, as I said for this last one, based on the cumulative free cash flow that we are able -- that we have generated relative to invested capital. And if we're able to buy at attractive multiples of profit and free cash flow and post synergies oftentimes, we can cut those multiples in half. And we can get benefits through cross-Cimpress fulfillment, then these can be highly attractive uses of capital that complement our organic growth investments.

So with that, Meredith, I will turn it back to you.

Wonderful. Thank you, Sean, and thank you for that deeper dive on M&A. I know our investors will be excited to have heard that. I do have a housekeeping note for attendees right before we take our quick break. A PDF of the slides that you have seen this morning is now available in the webcast viewer though you will need to refresh that viewer in order to have those show up but those are now available now that we're through the entire set of prepared remarks.

Now at this point, we're going to take a 10-minute break. So please grab another cup of coffee, stretch your legs and then definitely make sure that you come back because after the break, we have some wonderful panel discussions and a Q&A session with leaders across our business. Thank you.

[Break]

And welcome back to Studio 54, I mean Cimpress Investor Day. I hope you enjoyed your break or the great energetic music that we were just playing during the break. Okay. Let's get started with our first panel discussion on manufacturing and supply chain excellence as a driver of growth and efficiency. This will be hosted by Robert.

Thank you again, Meredith. So as discussed in the main section by myself and several others, our manufacturing supply chain capabilities really are world-class and unmatched. And in this session, I'm really happy to have three of our executives here today to give you a little bit more depth on what we're -- what we mean by that, including some really specific examples. So I'm here with 3 people, Bryan Kranik, who's CEO of 2 of our reporting segments, National Pen and BuildASign.

Michael Fries, who is a member of the VistaPrint executive team. He also importantly leads VistaPrint Europe. And in terms of this session, something directly relevant to the session is he leads manufacturing for VistaPrint overall. And last but not least, Paolo Roatta, who is CEO of our Print Group reporting segment and that includes Exaprint, Pixartprinting, Packstyle, Tradeprint and Easyflyer.

So there's a lot of opportunities here that we could talk about. But we've mentioned the importance of elevated products to our strategy because they're so valued by high-value customers.

And what I'd like to do is do a little bit of a roundtable here. I may come back to some of you a few times. But starting with Michael, could you give a couple of maybe 2 examples of what you've been seeing happening in -- maybe we start with 1 example, then I'll go to some others, and we'll come back to you of some elevated product development that we've done.

So hello, everybody. So from the VistaPrint side, a strong focus of the last months has been implementing paper bags capabilities in Europe and now also in North America, meaning on the 1 hand, standard paper bags that would be used in food takeaways and other applications but also now luxury paper bags, more high-end bags that can be used in many different businesses.

Our value proposition is the value proposition that we're really strong in, making small quantities available very fast so that people require less dispositions less warehousing, less commitment to a product and they can use a product and even a personalized and individual product in smaller quantities. But if they want to use that in their everyday business, they can also repeatedly buy from us on demand as you need them because we offer a strong pricing position.

So we bring together our mass customization capabilities with new products and enable new products and the way we've enabled other products. This has been launched first in Europe and is now, as I said, coming to North America.

Great. And I know we don't go into competitive details on how we do this exactly from a for confidentiality and competitive reasons. But diving into what you said was this is different because of its ability to do low quantity. But what's the -- we're not just coming in and doing standard bags like many, many other people do. What are the -- can you describe kind of the tricks of the trade, so to speak? What are our engineers -- what have our engineers been able to figure out how to do that the industry currently doesn't do?

So one thing is making sure, as Maarten has explained, we have strong data flows so that we can deal with many smaller orders and get them seamlessly to our printing environment in a high quality and adapted to the product. Second step is that we standardize the product in a way that we can produce many different orders of the same kind in a sequence so that we get to reasonable manufacturing structures and that get us the cost that our customers are looking for.

Third, we're using digital printing technology so that we can really go to small quantities and leverage that having the small -- but also the medium-sized quantities in good quality. And the third thing is that we use our supply chain network outbound to get the products to our customers quickly. so that we can be really fast and go low on quantities compared to other offerings that use different methods require higher quantities and much longer lead times.

Great. Paolo, let me switch over to you. And last year at the Investor Day, we talked about the commitment we had made to invest in bringing our Upload and Print businesses and Pixartprinting specifically into the U.S. You've been -- for more than a year, been your team has been building out that capability. And can you talk a little bit about what we're doing there and what we've learned in Europe or bringing to the U.S. market.

Yes, for sure. I think our factory in Pennsylvania and Warrendale is a concrete example of what manufacturing excellence means. For us, as the Print Group, manufacturing excellence is a cornerstone of our competitive advantage. We believe in partnering with our technology vendors that we consider partners more than suppliers because together with them, we develop new ways of delivering our products or manufacturing our products for our customers in a way that is faster, more efficient, that allows us to bring more choices.

And all the expertise we have developed in Europe in this area, especially in the category of labels and stickers where it's over a decade of expertise and investment and also in the area of booklets, magazines, catalogs or the multipage product.

All of this expertise, we have exported that into the American market. And this is now allowing us to grow more than -- to grow double digit, to grow very fast. Like you mentioned, it's a little bit over a year. We launched the plant. We have a very strong collaboration with VistaPrint and we are able to offer VistaPrint products with a wider gamut in terms of sizes in terms of finishing, in terms of formats, in terms of materials, and that's because of the advancement we made in technology. We believe in just to finish there, we believe in continuous improvement but also coupled with innovation and very often disrupting innovation.

Great. And just one side note. [ Pat ], I think when we were speaking before, I mentioned it, and I certainly think Sean mentioned it that the acquisition or the investment we made in Mixam has also brought a lot of volume that we are -- much of that is going through the -- or will be going through the Pennsylvania facility.

Yes, absolutely.

Bryan, can I turn it to you for a few examples.

Yes. So a couple of examples that I think are great that really hit on the themes of this roundtable not only elevated products, but also really how we leverage cross-Cimpress fulfillment partnerships to leverage our manufacturing excellence as a driver of growth. And efficiency gains.

So on the BuildASign side, 1 great example this year is around BuildASign taking on the fulfillment of canopy tents for VistaPrint in North America at the end of last year.

VistaPrint previously generated about $2 million in annual revenue from the sale of tents which were previously fulfilled by a third-party fulfiller, and candidly, due to the cost that they were getting from the fulfiller, VistaPrint was simply just priced too highand wasn't able to really compete within the market.

BuildASign was able to take on -- take this product in-house and take on the fulfillment and as a result, able to reduce their COGS by 60%, which really enabled VistaPrint to compete much more effectively in price relative to the market.

I'm really proud to say that since that change, this is now on a run rate to triple its revenue and quadruple its variable gross profit just by being more competitive in the market. We also have a long list of tent-related NPIs that will be coming out over the next couple of months. So I fully anticipate this trajectory to just increase.

And in addition to the cost savings, we also took the opportunity to really enhance the quality of the product as well, which is very well evidenced by the 4.8 out of 5 stars that you see on VistaPrint right now for that product.

On the National Pen side, I think a great example is around lanyards Vista previously had been doing about $3 million a year with -- through the sale of lanyards and that once again was fulfilled by a third-party fulfiller. We identified this opportunity and work jointly to bring brand fulfillment in-house by National Pen.

In the lanyard example, we were able to drive a 70% reduction in variable COGS by bringing it in-house, which has enabled VistaPrint to more than double its variable gross profit and grow revenue by over 50%.

In addition, we were able to lower the minimum order quantity from 75 with the previous fulfiller all the way to 8 and we were able to reduce the turn times from order to delivery to the customer by an average of 3 days. So I think 2 great examples from both businesses of elevated products as well as the XCF partnerships.

Thanks, Bryan. Michael, I think you have a couple of other things I recently was in -- the Netherlands, the Dutch factor in VistaPrint saw some exciting things maybe -- but I know there's also some exciting things happening in North America. So I'll let you talk about some of the various other elevated project elevated product projects, which are going on in VistaPrint.

So speaking about our Venlo experiences first, Robert. We've just launched a corrugated packaging line in VistaPrint Europe, and we are producing different kinds of boxes, RSC boxes , Setup boxes that are not only available to VistaPrint, but to the whole Cimpress network in Europe for making the same uplift of the product and quality improvements and speed of delivery improvements that I just spoke about for paper bags also available for prorogated packaging. So that's a great step forward.

Second thing also in the environment of packaging, we are going deep on food and beverage packaging with a first step in North America. We are on top of the current offering that we already have of cups, paper cups. We also add trays, napkins and other food and beverage packaging products so that we can, at the end, offer a broad assortment from low quantities, but also up to higher quantities and very fast delivery.

The third thing that we're currently building in North America is just in time wide assortment apparel, making a wide assortment of apparel available without the need to warehouse the products, but we cooperate closely with partners who warehouse the products, who make them available to us on demand. We then personalize and ship to our customers within days so that is a very broad assortment that is fast turnaround time that low capital utilization so that overall is a great business model for us and for our customers.

And one thing, this probably applies to the examples that Paolo and Bryan mentioned. But listening to you talk, it links back to what I said in the beginning of my presentation, we are in an evolving market. And 2 of the products you just mentioned, I think, are investing some of the evaluation that is happening in the greater market.

So food and beverage packaging, we're in a world where takeout delivery is more and more popular. So the Uber Eats, the DoorDashes of the world. And if you're a small business restaurant owner, you really want to be able to not be known as an Uber Eats brand, you want to be known as your restaurant. And food packaging provides a great opportunity to do that.

And then when I think of the corrugated packaging products, which I just recently saw, and we already do those in North America. But if you're a, let's say, an Etsy or a Shopify e-commerce supplier, again, you need to really build your brand through your packaging and that directly addresses it.

So it's an example of the market does change over time, and I'm happy to see some of the movement that we've been able to do to address those small business needs all around building their brand.

I'm going to switch over to cost efficiencies and network optimization. You mentioned a few of those, Bryan, in your examples where some of the elevated products, we also really cut costs. But maybe talk about more I'll call it legacy products. In your business, for example, a lot of the wall decor has been a long-standing product, but we're moving quickly into beach flags and betters. And how have you seen build aside driving cost efficiencies.

Yes. So I just -- I think in general, well, I'm really proud of the fact that both BuildASign and National Pen have really been at the forefront of leveraging cross-Cimpress fulfillment to basically drive growth and efficiency gains. BuildASign over the past year, fulfilled nearly $24 million in variable COGS for other Cimpress businesses, which is tremendous.

As Maarten shared earlier, this is a very important metric that we like to track as we feel like it's a great indicator of us growing potential savings as we move more volume to focused production hubs and which obviously includes in-sourcing from 3PS. Also notable is that these same products were able to generate almost $100 million in external product revenue for Cimpress and $75 million in variable product gross profit. So a huge profit driver for the company overall.

On the National Pen side, it's a very similar story. National Pen fulfilled $17 million in variable COGS for Cimpress overall last year. And probably one of our proudest achievements is around our Upload and Print business. We have started to work very effectively with our upload and print teams on this really new category for them, right? They don't have a ton of experience with PPAG.

So we were able to basically open up this greenfield opportunity for them. Last year alone, they -- we fulfilled $1 million in COGS for them, which equated to $2.7 million in external revenue. And this is now our fastest-growing partner across the Cimpress network.

Right. Michael, do you have any thoughts on cost efficiencies?

Yes, many. One thing, Bryan spoke about Mexico and the role of Mexico in National Pen and BuildASign fulfillment structures. And as VistaPrint in North America, we have also made a step into Mexico. I already spoke about paper bags and food packaging that we serve from our Mexico site.

And we will establish Mexico site as part of the overall VistaPrint fulfillment network so that in the end, we will have 3 VistaPrint sites, 1 in Canada, 1 in Nevada and 1 in Mexico serving our North American customers.

For Europe, we already spoke about corrugated and paper bags. We fulfill that for all Cimpress partners in Europe. And we also have a very close cooperation with other Cimpress business units in Europe to use them as focused production hubs for orders fulfilled for VistaPrint from labels, book magazines to flyers and folders, those products are often coming from our Cimpress partners.

And in roll labels, books and magazines, we have an especially close cooperation with Pixartprinting, where we use the wide assortment, the broad available order quantities and the scale of the establish structures and Pixartprinting to make it available to our customers and also to get the products in great quality and at very good margins for VistaPrint.

Great. Paolo, I think that touches on something which Michael just described comes from you or from your team. I'm going to probably ask you -- do you have any specific numbers or details you can share on those label...

Yes, sure. Yes. Michael just mentioned the, I would say, brilliant cooperation that we have in the area of labels and stickers where the network optimization that is enabled by the MCP allows Pixartprinting, which is the center of excellence for the production of labels to integrate with the flow Vista printing at the reach, the VistaPrint here of the customers.

And as it was mentioned in the annual letter, our collaboration last year allowed an improvement for an improvement of 37% year-over-year in terms of VGP. So this is quite a substantial impact on the economics of the category, which is a very nice and growing category.

Yes, and it goes both ways. As Michael was saying, we're able to couple the manufacturing excellence of the Print Group in certain categories, like booklets and labels with the market reach of VistaPrint.

And vice versa, as Michael was saying, we leverage on the expertise developed in Venlo in VistaPrint for corrugated or for paper bags to offer to our customers. And being able to produce in-house products that otherwise we would either source from the market or that would not have the breadth of possibilities that we have now while leveraging the capabilities of VistaPrint.

Great. I'm trying to keep to this -- the amount of time, Meredith that you gave me. I think we're pretty close to 25 minutes. Can I just do a time check. Could you...

Five minutes.

Okay. Great. Okay. What is it -- Michael, I'm going to go to you? Well, actually, a lot of you have been in this industry for a long time. So -- but what is it about -- I often use the term mass customization, we do. And when we realize it, the bulk of the industry you're going after, the market we're going after is offline, like what differentiates how Cimpress operates from that offline competitor? Anyone you can kind of love to jump in and spend 5 minutes talking about that higher level perspective.

So I think the mass customization approach is in its core an industrial approach, making really industrial processes, high efficiencies available to products normally are produced in smaller quantities and in a more manual of producing them. So if you look into our factories, you will find a lot of manufacturing engineers, process engineers to design processes who work on quality structures.

We have strong IT capabilities to guide everything we do with IT optimization. That's very different to a typical printing company. And so we really make industrial approaches, accessible also to medium quantities because we define a product assortment and then bring many, many orders from the Internet together to be produced together in a very efficient way, but individually for each customer.

Right. Bryan or Paolo, do you have anything you want to add to that?

Yes, I agree with Michael. I'm fully aligned with him. I believe the difference that Cimpress brings to the market is a fact that we do industrialize the process of producing small quantity in a very rapid turnaround. So we're able to minimize the cost of a small lot of products of items and make it comparable to the industrial cost of a very large product because we combine all of these orders together. Of course, in order to be able to get that kind of economies of scale, you need scale. You need large sizes.

The fact that a plant like VistaPrint is printing 15,000 orders a day or many of our plants are in that ballpark of a number of orders, allows us to be super efficient in having very tiny unit cost and then being able to reflect that as an advantage to our customers and therefore, being very competitive. And this is an advantage that other players that have the sites are not able to compete with.

And I would probably just add product depth as well. The smaller player can not nearly compete with the product depth that we're able to maintain due to the size and scale of what we do. I think Florian touched on it earlier, being a one-stop shop is really not realistic for a smaller player when you're not aggregating volumes like we are at this level.

It's interesting you say that. I was in -- I spent a lot of time traveling to our production facilities. Recently, I was in Austria, where we had just -- we had 4 different facilities that we leased a new building we consolidated into one, which generated a lot of efficiencies in and of itself. But Austria is a relatively small market. We don't publicize the revenues of that particular business, but it's between $50 million and $100 million. So it's not a small business, but it's on a Cimpress scale, very small.

And the team there and Managing Director there was telling me that about 30% of our revenues in Austria, in Druck before our acquisition of Print Alliance comes from cross-Cimpress fulfillment products. And that's really allowed us to really grow that business where a business that size in that market couldn't afford to have that breadth and depth of products that when we have something like $2 billion of revenues across Europe, they can source from other parts of the business, including certainly, I think Pixartprinting, Print Brothers group and VistaPrint, National Pen are all suppliers to them.

Meredith, I'm going to turn it over to you. I want to thank you, Bryan, Michael and Paolo. These guys will all be on the general Q&A, and I've seen we've gotten a couple of different manufacturing questions, we'll be back to you with more questions in a little bit.

Thank you, Robert, and thank you, everybody. That was a great discussion. I am so excited about our manufacturing capabilities, our new product introduction. This food packaging thing, I'm so excited about -- I mean I'm excited about everything, the event, everything. So, so good. But we are going to shift gears now.

So we're going to move on to AI now as an enabler of growth and efficiency. This panel will be hosted by Sean.

Very good. Welcome to the second panel here. So I think listen, AI, it's a critical topic for any business. It's a critical topic for us. Robert mentioned earlier, and there's actually a few questions that have come in on this too, but how with generative AI really taking shape and getting more penetration, how that lowers the barrier to great visual assets for anyone and how that's a tailwind for Cimpress, given our role in kind of the physical manifestation of that, which you just heard about in the prior panel.

I'm not going to focus on that in this panel. I'm really going to focus on this panel what are we doing? And where are we focusing from an AI perspective throughout Cimpress internally. This has definitely been -- and it's an area investors are very curious about. It's been a measurable driver for us for sure, it factors into the growth and efficiency drivers that we've talked about, and we're seeing impact really across all domains so we have 6 leaders here for the panel. They're all close to this work. Their teams are close to this work. And so let's dive right in.

And I'm going to start where AI touches the customer probably most directly, and that's how we serve and grow the relationships that we've already have. And this is where there's both growth and efficiency stories that kind of converge. And so I'll try and hit on both those.

So Florian, I'm going to start with you just given the prevalence of this topic in your presentation earlier, you focus a lot on growth with high-value customers in your presentation. Can you just share maybe some examples of where we're leveraging AI to help us to both retain and deepen our relationships with high-value customers today, including some of the work we're doing with personalization, which we've touched on a little bit in the past Investor Days.

Yes, sure. Thanks, Sean. Yes. I mean, first, starting with sort of the customer care and account management space. Within that, really, to me, there are -- there are 2 flavors of that, right? One flavor is the sort of fully automated, no human interaction side of things where AI has really drastically increased the velocity at which customers can self-service and get help through chat. And that is especially important for elevated product purchases because these are products that often require a bit of interaction.

And when you go to the Vistaprint website, look at our Vista Assistant, you can actually get product advice through that chat interface, which is great because that allows us, especially for elevated products, to engage customers at an early stage and then drive those purchases, which are key to deliver high-value customer growth.

On the human interaction side, I would say that even this coming quarter, we'll be launching AI customer summaries that will then equip our team members with what they need to know in the moment about the customer, their request and how they can best sort of frame their interactions with customers based on what they might need next. And that in itself, too, is really a combination of various, I would say, modular developments.

The -- what you need next sort of module is one that we've been developing over time, and it's actually now powering some of our sort of on-site recommendation toolings. And then there's obviously continued development from there. I mean one -- something that I noticed a lot when I talk to customers is just the sheer amount of customers who now design using an AI tool and then come to us and upload that design.

And it's interesting because that in itself really gives us new opportunities because it means we can personalize the website experience for those customers because, basically, by what they upload, we get a sense for what the logo is, what their color palette is. And so that allows us to make the whole site experience a lot more personal than what it used to be.

And then the last area I'm going to call out is the relevance of our marketing messaging. We -- and I think I talked about this even at last year's Investor Day, we're able to put together our marketing campaigns from reusable, prebuilt, creative add-on libraries.

So the model will pick what a customer sees and the model will, based on the feedback, then continually improve the relevance and drive the engagement of the marketing messaging and campaigns that we put in front of them. So there's a couple of examples. It's really fascinating, and it's obviously driving a ton of improvement for customers and the business.

Yes, absolutely. Cool. Great examples, Florian. Thank you. And then, Paolo, maybe I'll turn it to you. I think a lot of the examples that Florian had, I would say, are more on the growth side. There's an element of efficiency there, too. But I would say your teams were out of the gate very quickly, leveraging AI on the efficiency part of this, especially in Pixartprinting. So maybe just walk us through what your teams are doing from an AI perspective on both service and the cost to serve our customers.

Absolutely. In the Print Group, AI is changing the way we operate across many areas. And this is how it impacts on the way we serve our customers, it impacts on the efficiency we operate. For example, you mentioned Pixartprinting. Today, 60% of the chat sessions of our customer care department are operated, fully operated by AI. And these sessions receive 80% positive feedback. And the rate of first contact resolution is as high as 77%.

And this means that, you mentioned about cost reduction, in the course of the past 3 years, we were able to reduce the team by 21% in spite of the business growing and normally, the customer care resources would grow in a relationship with the growth of the revenues.

In spite of this cost reduction, Pixartprinting, not later than last month, got the #1 rank in a national award for customer service, professional services, especially in the area of quality of service and professional competence. So I'm proud to say that AI is part of our broader efficiency improvement, and it has not impacted on the quality of the service that we provide. But that's one area.

Another example could be in the marketing department or in the go-to-market where we are able to apply AI for the creation of campaigns, for the translations. This, again, Pixartprinting, more than 12 different markets with all the declinations of languages across Europe are handled through AI, the design workflows as well. And this has allowed us to significantly reduce cost to the point that we're able to produce 300% more content than before the introduction of AI.

This means that we can deliver more localized versions and more service with the same resources. So the opportunity of AI for us is to lower the cost of serving our customers and at the same time, to increase the capacity to support our growth.

Great stuff, Paolo. And as I said, I think especially in Pixartprinting, you guys are out of the gates quick. And so these -- at this point, these are very kind of measurable and very real things that we're seeing. So great stuff there.

Maybe let's turn to the customer acquisition end of the spectrum here. And this is an area that's evolving really quickly in terms of where customers or potential customers do their searching, do their discovery, and that's moving more towards AI and agents. And so let's just talk about how we acquire today, how we're positioning for that shift. And I think maybe, Florian, this is relevant across all of our businesses to varying degrees, but especially relevant in Vistaprint. So I'll come to you on this one.

And I think we're using AI and customer acquisition now. But like what are we doing to make sure that, that move from today's channel mix to agentic commerce and the world of agentic commerce is as smooth as possible and that we're positioned to take advantage of whatever opportunities lie ahead.

So yes, as you say, clearly, winning in these LLM chatbots is a top priority for us. It is where more and more potential customers and existing customers are starting their journey. So we have to be there. Now what are the key things that we're doing? I mean, obviously, it starts with making sure that we're discoverable. And that has a technical component, right?

You heard from Maarten, and you'll hear from Adam, and I think about all the work that we're doing on structuring our data, structuring our content to make sure that it is relevant and sort of can be consumed. But then I also always like to remember everyone that I'm thinking of LLM chatbots, quite frankly, also is just the most demanding customer and the most savvy customer we've ever had because it's almost like they're omniscient, right?

They know every price. They've read every customer review. They've read every product review. And so really, in some ways, the good news is that the basics still matter, the basics of delivering on time, the basics of having a great quality product and the basics of having a broad assortment. And so the good news is we're actually pretty good at those basics. And obviously, we keep improving on those basics. But to me, that is also part of just making sure we are discoverable as a primary brand within those -- the new channels.

Besides that, and to support that, we have put in place measurement that tells us where we can improve to be recommended more often by some of these LLMs and the bots. We're -- I talked about this. We're definitely also investing in direct advertising spend. We're improving the signals that we send to our media platforms so their AI-powered systems can do a better job of finding high LTV potential opportunities for us.

And then also the continued investment that we're making in our brand, I think, is important in that context because it creates a deeper connection. So we remain a direct destination or continue to be known, including to LLM chatbots as a destination, which then means we are discoverable and which means customers trust us with their business.

Great. Such an important area. I know firsthand, it's a big area of focus for us. Adam, maybe I'll just offer up the opportunity for you. Is there anything that you want to add in terms of just -- there's a lot of -- Florian mentioned data structures and other elements, but there's a lot of infrastructure stuff here. Anything you want to add in terms of what we're building underneath all this to enable it?

Yes, sure. I think as Florian mentioned, obviously, there's a lot more just discovery happening on these agentic platforms. And so the good news is the industry has basically standardized on a protocol to make these integrations more native. And so whether that's our on-site agentic experience or our off-site, with Canva, with OpenAI, with Google, whoever that may be, we've been spending a lot of time building our foundational infrastructure around something called model context protocol, which unfortunately has the acronym of MCP that we try to navigate internally effectively.

But we've been building this core infrastructure, which is similar to the Web 2.0 days of where everyone had to have a consistent API that was able to be integrated to all these other experiences. This is effectively the agentic version of that. So we've got all the foundational plumbing that now gives us the ability to not just integrate but also have like a truly native experience.

Florian mentioned how so many more of our customers are now starting their designs in this experience. We want to make sure they can start with the design and continue the experience if needed, to do discovery, to do checkout, to do customization natively in those platforms. So I think you'll see more here, and I feel really excited about the advancements we've made in this space.

Yes. Thanks, Adam. I know how close you are to that work. So great stuff there. There was a live question that has come in that is broadly connected to this. So let me just ask it here, and I'll probably turn to you again, Adam and also Maarten on this one.

But the question says, how do you see the rise of end-to-end capable AI agents like Muse, news of the last week, impacting your business and in particular, your customer relationship over time. So maybe Maarten and Adam, again, probably with a focus on the infrastructure piece, can you comment on that? And if anyone else wants to jump in, feel free to do so.

Yes. I'll answer a little bit with the infrastructure for sure, but also a little bit on the question itself. I really like Florian's answer just now because he also said the customer will become much more savvy with all of that data. And we already saw some news with Muse that some major retailers out there were trying to block it because pricing becomes extremely transparent in these kind of things. And again, I do think we're positioned pretty well with those basics and continue to improve them.

And so indeed, the basics, structured data, building an amazing model context protocol, like Adam just said, is key. And then this becomes more like a new sales channel. That's how we really see this to develop, and we're just on top of it. We're not completely there yet. It's not live everywhere. But we are fully on top of this in terms of like this is going to be a major sales channel.

I mean I change completely my behavior, how I work in the Internet search, these kind of things, as most -- everybody has done now, and you can just see where this is going, and we're going to be on top of that. Adam?

Yes. And just to add, I think about sort of the mobile era as like an interesting equivalent where we used to just be on desktop and then we had mobile, and we had to completely rethink what the experience is like in a smaller device that allowed customers to still consider their journey and have this experience with the brand. I think agentic is just another version of that.

And so when we think about these integrations, we need to make sure, hey, this is not just about our site or mobile experience. It's now about what is the agentic experience where I can still go through design and customization and not have to leave where I am, whether it's in ChatGPT or Gemini or another tool.

And so I think that native commerce experience outside of just having the infrastructure plumbing is also going to be really critical for us so that we can have these truly native agentic commerce experiences offsite.

Great. Thanks, guys. It's a great question and a highly relevant one as well. I'm going to keep moving here and turn to a slightly different topic. You heard in some of our presentations about new product introduction and product selection being an important part of our growth path. And so let's just talk a little bit about how AI is allowing us to do that and do that better, both from a speed and cost perspective.

Bryan, I'm going to turn this to you in the promotional products category. This is just a must. There's -- new product introduction is a constant. And so can you just maybe walk through what the National Pen team has built in this area, but also how that might have applications beyond just National Pen?

Yes. And Maarten actually touched on this in his presentation, but I think it's such a quintessential example of how AI can positively impact our business as well as the customer experience. So definitely, we want to touch on this multiple times. So one thing I've learned very quickly about the PPAG category is providing customers with a large product selection is absolutely key to being competitive in the market. It's also critical to be consistently refreshing, your product assortment, as trends move very, very quickly through this category.

So NPIs, or new product introductions, are absolutely critical, as you said, Sean. As a result of this realization, the National Pen team embarked on a goal of really 10x our rate of NPI, right? How do we move 10x faster than we are today and 10x more efficiently? I'm very proud to say that they blew out that goal by far, and they have now built and started to deploy an AI-driven process redesign that cuts the cost of selecting, configuring and merchandising new products by more than 95% while increasing throughput speed by more than 20x.

So we're talking. It used to be months from beginning to end of the process to now minutes. It used to be -- our estimate was about a couple of hundred dollars of work based on all the individuals had to touch the process. And now it's down to $5, right? And so just tremendous breakthrough to be way more efficient, and we're off and running with that new process.

The other thing I'd add is this also comes back to the Cimpress Experience platform, right? And now that National Pen is on the Cimpress Experience platform, or moving towards it, we are now enabling the same technology and the new process for Vistaprint as well. So now basically, both businesses are really benefiting from this breakthrough.

Great. Thanks, Bryan. I think what's great about that example, one, it's having a material impact, something that's really important, but also it involves the complete redesign of an end-to-end cross-functional process. It's not like little productivity improvements, it is a complete redesign, rethinking and putting agents really front and center in that redesign. So anyway, a great example. Thank you.

The -- let's maybe turn to some of the aspects about just how we operate, some of the things that will also lead to efficiency gains. And of course, technology is front and center in the AI discussion. So maybe let's start there.

Adam, I'll start with you here. And maybe you can just give an overview on some of the things that in our engineering teams that we're doing to embrace AI in the way we operate. I think from an external perspective, it's just -- it's hard to like get a glimpse into how we work, how that work is changing. And so maybe just talk a little bit about how that is happening in the engineering domain.

Yes, sure. I think there's probably 2 aspects to this. The first is, I would say, within engineering. So I think we all know writing code and all these things has completely disrupted software engineering as a job, and we've all been rethinking how we work. So one of the big innovations we've been focusing on internally for engineering is something we call our software factory. You may hear things like harnesses and things of that nature.

Basically, what this is, is the ability for us to provide context and automatically generate code at scale with the right guardrails, the right security checks. And so for example, we have teams that had backlogs of maybe some security fixes that they wanted to fix, and we can now rip through those in days or writing tests or running experiments. So we are just drastically rethinking how do we take our strategy, product work and turn that into working prototypes so we can get feedback faster in our overall kind of software factory machine.

And then if I think about just the general tooling, and so Bryan kind of hit on like the product introduction, so what enables that underneath are kind of a couple of platforms that we've built for the broader organization. And so this enables individuals or teams to build agents that can take on workflows, take on automations to do some important work.

For example, we have a 3PF claims processing. This historically has been a process where maybe a supplier failed a commitment to us through an SLA, someone had to take that, manually upload a PDF to a third-party site, file a claim. We had to make sure this was done within a certain time frame or we couldn't file that claim. That process has effectively been completely automated, which are real dollars that we can now recoup, and we have a system that does that, validating QA in our site.

So we want to make sure that product descriptions and details actually match what we're getting from suppliers in terms of what they're getting on the website. That's historically been a pretty manual process to go individually look at products, and certainly in a world where we're 10x-ing our product introduction, we need to support a QA process that scales. And so we can manually fire up agents that can go validate the quality and all the efficacy of the data on those sites to make sure it matches effectively.

So I think internally in engineering, our software factory and then for the organization more broadly, we've now got these agentic automation platforms that we are enabling businesses to drive more end-to-end business workflows, which has been really promising.

Great. Thanks a lot, Adam. And then maybe just briefly, if Maarten or Adam, you want to touch on this in terms of -- we're going to get to the people impact of all this in a moment. But in terms of like how teams are organized? Anything you want to share just in terms of how that's starting to get reshaped, anything relevant to share there?

Yes, I can extend. So I think given all those changes and how much more -- how differently we're writing software these days, I think the outcome of that from our perspective is sort of wider, flatter teams. I think we are rethinking the boundaries of teams. There's now opportunity to own a much more broad scope.

And I think within those teams, just given how effective these AI tools are, what we're seeing is kind of small pods of 2 to 4 engineers, owning a problem end-to-end, sort of acting like this mini start-up within the team can really drive a lot of efficiency, move really quickly, get to outcomes really quick. And so we think that general model of the flatter teams with the pods inside is going to be a bit of the model of the future of how teams work.

Yes. And it's exciting. And Adam is certainly like spearheading that in the organization on many parts, which is awesome. At the same time, I also want to emphasize the fact that if an engineer would start today startup all by themselves and greenfield something, you can be instantly agentic and off to the races.

But the reality is also, at a larger enterprise, we have many processes and systems that you basically have to rethink how the teams organize. If you've ever been close to software development organizations, they have their methodologies of agile or Kanban, Extreme Programming, and there's all these kind of methods that have happened over the last 2 decades, and product thinking, et cetera. Almost everything of that gets a little bit put against new line.

Now the good thing is we're like full into it, like on all cylinders, but it's going to take a few months until a few quarters until you really reach the core of systems that work right now running all of Cimpress and say, okay, that whole team is now organized and structured. So an exciting completely new world, but also, to be realistic, that we got to do some change management across the whole organization, as does every company around the planet probably.

Great. Thank you, guys. And we're a little tight on time. I wanted to go through some other kind of OpEx examples like conversational analytics and some other things. But why don't we skip ahead to a really, really critical part of this, which is really all things to do with people and org and culture. And Louise, you're at the center of this. And so let me flip it to you. Could you speak to that? What we're doing to upskill people, L&D, organizational shifts, all things, people, I'll throw that one to you.

Yes, absolutely. Thank you. Let me -- actually, I'll start with actually what we've done on the culture side. So a year ago, we launched our new Vista behaviors and really just specifically to strengthen kind of the entrepreneurial culture and build momentum around AI. And so a lot of the new behaviors really focus on speed and customer focus, bold experimentation. So key attributes that really matter in the AI world.

So that's like been a really important kind of evolution that we've gone on over the past year and really embedding all these behaviors into kind of day-to-day work, from how we hire, how we develop talent, how we review performance. So really, the goal is changing how we work in an AI-first model from a culture perspective.

On the L&D side, Florian mentioned it in his presentation, we've kicked off AI development goal for every single team member across the footprint. They're working on that through the end of the year and something about how they're going to simplify, automate, use AI in their daily work. And the response has been huge.

Team members have just kind of dove right into completing AI courses, kind of doing hands-on experimentation, and we have just a really robust learning community where we're sharing kind of real learnings and use cases.

As we head to FY '27, we're going to really double down on upskilling on human competencies that complements kind of this kind of whole AI-first shift. So key skills like system thinking, change management, resiliency, high judgment, these are really important skills that all team members are going to need to manage AI effectively.

And then maybe I'll cover off one other thing, which is how do we think about the organizational shift. Adam just covered it as well. But we really want to think about what shifts for the team members and how they work with AI differently from how they're doing that today. So team members will really start to move to become kind of the orchestrator really and set the strategy and the intent and really figure out what problem are we solving, whereas an AI agents actually figure out how to execute that problem and really deliver the end-to-end outcomes.

So moving to this agentic model isn't just about redesigning the orgs, it's about how team members become kind of the single-threaded owners over broad outcomes. And I think this will also change our cost curve significantly. It allows us to really kind of scale and execute faster and better and achieve larger outcomes without increasing headcount.

Awesome. Thanks very much, Louise. It's such a critical component to all of this, and there's a lot of work ongoing there. So thank you. The -- I'm going to end this with -- and I'd ask either Maarten or Adam to chime in and do like the 30-second version of this, but a lot of benefits we talked about. Those benefits are real, but this stuff does have a cost to it. This is a big topic.

And just maybe touch on from an investor perspective, what are we doing to control costs? How do investors know that we are taking modern approaches, have the right controls and governance in place? Brief answer, go.

I'll go first. 30 seconds is I feel really excited that we took very early steps to get our "FinOps and instrumentation" really tight. So we know where every dollar goes for every department, for every AI application that we run. So auditing, reporting, governance is really tight. Normally, you do these things, then you spend months trying to figure out where all the dollars have gone. So we made a lot of upfront investments in the infrastructure in terms of where all those dollars are going.

We're also looking at other avenues, things like open source models, which have a very different cost profile, like orders of magnitude, different cost profile. And then lastly, I will say we are investing in some technology, which allows us to basically automatically route requests to the most cost-effective model.

So today, in most scenarios, you manually choose the model you want to use for the task. In the future, we think there's a more dynamic element to that where we can have technology actually choose the most cost-effective model for us automatically. So that's my 30 seconds of where we've been focusing.

Thanks, Adam. Maarten, any last words?

Adam said it perfectly.

Great. All right. We'll end it there. Thanks, everyone. Exciting area, a lot of progress. And I'm sure there'll be more questions in the general Q&A. So back to you, Meredith.

Fantastic. Thank you, Sean. Thank you, everybody, on both of our panels. You are not off the hook yet. So I will remind everybody that if you are going to be speaking in this session, please reengage with your camera and microphone at that point, or your camera now is fine, too.

Okay. How do you think -- we're going to move right into the Q&A. We have pre-submitted questions, and we also have live questions, and thank you to our investors and sell-side analysts who have submitted these questions.

All right. How do you think about the decision to acquire a business versus signing a multiyear supply agreement? When would you choose one option over the other? And I'm going to ask Robert to answer this one.

Okay. Well, first of all, we don't typically have multiyear supply agreements for production operations. We do have them for materials and logistics suppliers, but they are not acquisition targets for us. So when we look at firms, should we invest in them on a minority or partial equity basis or acquire them, first and foremost, is strategic fit.

And is the company going to help us with our objectives? For example, is it going to strengthen our capabilities and elevated products? Is it going to add focused production hubs or integrate directly into our fulfillment network so that we can better serve high-value customers?

Secondly, it really comes down to economics. That, we roll into an ROIC calculation. And if we don't have a base case returns above 20%, we won't do that. And that's a combination of the business, the price we pay and the synergies we can feel confident about.

So we have a long list of companies could fit those 2 criteria, subject to, again, an attractive purchase price. So the choice we are making is more -- first of all, what other use of capital we have, organic investments, share buybacks. And then we get to M&A, what is the best option given our management bandwidth and the criteria I just described.

Wonderful. Thank you, Robert. I will stick with you for this next question. We knew we would get a question on Canva, and yes, we did. I'm hoping that -- we got 2. I'm hoping that you will provide detailed information on the partnership with Canva.

I'm particularly interested in knowing whether this is an exclusive partnership, or could you strike similar deals with other design platforms like Adobe Express? And then another question on how the partnership is doing relative to our expectations so far, and what kind of contribution we expect from it in FY '27?

Okay. Well, for contractual reasons, we cannot share details about the economics or financial results. But I can say we're growing fast off a small base. We, as a business, and they are very excited about the potential of this partnership. Jumping to exclusivity, no, in neither direction. Canva still works with a network of highly qualified print service providers. They have historical relationships with Canva, and we have the ability to pursue relationships with other partners. So that's a technical answer.

I'd say in terms of the spirit of our partnership, it is very much one of cooperation and growth where we feel this is a win-win opportunity. We're working very closely together. We've established a team in Australia to work closely with them.

And we're going to the other question, we are less than a year into this partnership. We started talking about this in the very end of 2026 calendar year -- I'm sorry, 2025 calendar year. And we're -- I'd say we're doing very much in line with expectations so far. We always are looking to do better, but we're happy. And I think Canva, to our knowledge, is happy as well.

Wonderful. Thank you, Robert. Sean, I got a question for you. A couple of questions on this one from folks. When you gave your guidance back in July, you didn't include anything for the new 50% Canadian tariffs, but those have since become effective. What is the impact on the company? And what's your expectation for how that will impact FY '27 results relative to your prior guidance? And then another one similar asking about the tariffs in Canada, in particular, and the impact on cost and margin.

Yes. Yes. So these Section 338 tariffs came into effect August 19, I believe. So that was after earnings. And so that started to have an impact on us. I think we made some remarks about this in our -- either on the live call or in our earnings stocks, saying that these tariffs only impact a small percentage of the products that we produce in Canada, but there is impact, and that's impact that as we went through over the last 1.5 years or so, that we continually look to mitigate that risk and make operational changes.

And I think we've demonstrated that we have a competency to do that, leveraging our broader supply chain, and we have a great set of folks and leaders that are doing this work every day. It's been a big area of focus for us. As it relates to the guidance, we didn't put anything in our original guidance. And obviously, now I said we were having some impact from a cost perspective.

That is balanced by the fact that we also didn't include the refunds that we anticipated for Phase II and Phase III IEEPA tariffs that we're starting to get those additional refunds come through now. On the tariff cost, like we have no idea what the duration of these will be, if they will change, go up, go down. But based on everything that we know today, for the full year, the way that I would think about it, the way that we've modeled it is that broadly speaking, the increased tariff cost will be offset by the tariff refunds that we anticipate getting or have already started to get.

The thing that will differ is that quarter-to-quarter, like, for example, in Q1, I would expect that the refunds will be more than the increased tariff cost. It will probably be the other way around in Q2. And then there will be a curve of which we'll be bringing down the impact because we're putting all of our mitigation in place. So TLDR, I would say, for the full year, net neutral between the 2. But yes, these are having an impact. And yes, we're on it in terms of how we operationalize against that.

Thank you, Sean. A lot of work going on in order to make that happen. Okay. We are going to shift gears a little bit here, and I'm going to call on Florian here, but the question is a little bit involved that it asked some questions about metrics. So stick with me here.

You've mentioned the shift towards elevated products is having -- is increasing your average order value. What effect is the shift having on the frequency of orders? Can you show a figure that plots the average number of orders per customer over the last few years? Can you show the percentage of repeat customers over the last few years?

So Florian actually did share a partial answer to this question. This is a pre-submitted question in his presentation for Vistaprint, where he showed the comparison of different order stats for the 650-plus variable gross profit per customer population versus the average for all customers. So Florian, I'm wondering if you can just sort of give a sense for the trends there because that was just a point in time.

No, absolutely. So really -- and I hope this came through in my presentation, where we're focused is the $650 VGP plus type of customers, which, as you saw in my presentation, is a growing segment of customers. And that segment of customers, just to repeat the facts that I shared earlier, has really interesting characteristics.

And to the specific question on order frequency, these customers order 8.7x a year. Our average -- sort of the non-$650, so the ones below that threshold order around 1.6x per year. So there's a factor of 5.6 as you move sort of from non-$650 to $650-plus VGP customers, which is significant.

So rather than looking at the averages, I guarantee you, we're internally very much focused on growing that segment of customers because to us, it is what is possible as we deliver on our value proposition.

Nevertheless, coming back to the question, when you look at the combination of all customers and the combination of the different measures that I also referred to earlier, what you will see is that the number of categories shopped and items per order are up across the population. The total number of orders is actually lower, but the AOV, the average order value is up significantly. And that is driven by product mix and a few other outputs of the strategy that we're delivering on.

So that's roughly the picture. And again, I think rather than look at the average, I really encourage everyone to look at our ability to drive growth with that segment of customers that is so central to our strategy and that responds well to the investments we've made, especially in elevated products.

Thank you, Florian. Very helpful. Okay. I'm going to toss this next question to a combination of Robert and Bryan. So this is a question -- this is a great question. In January, you announced that National Pen and BuildASign will share capabilities with Vistaprint. Does this mark a shift toward more centrally coordinated decision-making? Or does the decentralized model remain intact? And Robert, why don't you start first, and then we'll move to Bryan.

Great. So first, it's an important question, and it's a multifaceted answer. I'll start out by saying, yes, we are -- and I mentioned this, we are moving towards what I'd say is a more balanced place between decentralization on one hand and centralization on the other. And we're also moving more towards cross-business collaboration and common platforms.

Now in areas, we are especially -- we are doing that in areas where the benefit of scale, of efficiency can be very strong and shared technology infrastructure, supply chain management are great examples of that. Now that being said, we are working hard to maintain autonomy, excuse me, for teams where that drives speed and innovation.

So first of all, manufacturing innovation happens within the businesses. And I would say even within our larger reporting segments within different parts of those segments, so different parts of PrintBrothers or Print Group or within Vistaprint, different facilities because we need those teams to be very close to the production floor, the supply chain of capital equipment, the production engineering and have a strong understanding of the customer needs.

And that's really -- that proximity, which many different parts of Cimpress, but for example, Pixartprinting has been incredible for decades, that close cooperation is critical. So it's not an all -- a choice of all of one thing or all the other.

And because manufacturing innovation and therefore, a lot of new product introductions happens on this decentralized autonomous basis, we use this federation approach as opposed to a really centralized state where cross Cimpress fulfillment allows us to have different parts of Cimpress take advantage of that different -- those different innovations.

I'd also say that when we have smaller businesses that are growing very fast or have a very specific geography in which they focus on, we leave them heavily decentralized. They can -- I mentioned the Austrian example, they can use cross-Cimpress fulfillment, but we want -- we are cognizant of both the advantages and disadvantages of centralization and vice versa for decentralization.

I'm going to say one last thing on central platforms like the mass customization platform or global procurement. First of all, we try to design those to be configurable. They're not one single approach so that different parts of Cimpress can use them in different ways. And that's an important component of that configurability as opposed to a single solution.

Bryan, I'm going to turn it over to you to talk a little bit about the cooperation between National Pen, BuildASign, and Vistaprint, which is not really a central thing. It's happening within several of our reporting segments, but I'm aware of and I get updates on, but I'm not driving. So can you talk about that from a decentralized perspective?

Yes. I think in general, this whole move is trying to get the best of both worlds, right? And how do we leverage the areas where we still want decentralization and autonomy within the businesses plus benefit from where it makes sense to be more centralized. I think there was probably also sort of a realization that a lot of the growth initiatives for both BuildASign and National Pen were very closely aligned with a more centralized view, as I touched on earlier about cross-Cimpress fulfillment, et cetera.

But the real -- another huge benefit though, that I want to really touch on is this, the capabilities and these assets of both National Pen and BuildASign that we are now leveraging to help Vistaprint. So there's some great examples so far today. The -- I already talked earlier about the 10x NPI, moving to the Cimpress Experience platform. So basically getting the businesses on the same complete end-to-end, same technology stack.

Other examples are -- we're currently -- I'm sorry, National Pen has tremendous expertise in the direct mail channel. And so we're -- as well as telesales, and we're leveraging both those, with a test on the -- for the Vistaprint customers currently.

And then finally, I think a lot of people forget that National Pen is now celebrating its 60th year anniversary of being incorporated. So there is some deep, deep experience in terms of product development and sourcing around the PPAG category that candidly, has probably been really benefiting National Pen up to this point. And now we are taking that expertise and using it for the benefit of Vistaprint. So I think overall, this has been a great move and a great change and the right thing for Cimpress overall.

Wonderful. Thank you. And the way that I always think about this topic is not one is right in all circumstances and the other model is right -- is wrong in all circumstances. It's really where are we in our evolution. And so we are able to do things and share capabilities together now because of the maturity of where we are from a technology perspective.

And so that wasn't available to us 5 years ago, all of this collaboration. But because it is available to us now, of course, we're taking advantage of this because we can and it's the right thing to do from a cost perspective and from a revenue growth perspective.

Okay. We're going to move on to another question about MCP actually. And Robert, I'm going to ask you to weigh in on this one. So we've been talking about the opportunity around MCP for years, but it seems like we're finally starting to see it impacting growth in margins. What is driving that?

I'll jump in and then Maarten, obviously, leading MCP and being very actively involved in the Cimpress -- inter-Cimpress revenues of cross-Cimpress fulfillment may want to jump in. But this has been a great example of -- when we say we want to focus and focus, that's a short way of saying we have to execute.

And it also touches on that last question we just spoke about, that in centralization or decentralization, we know that aggregating similar products into single focused production lines or production hubs drives great advantages, both for customers and for Cimpress shareholders. That's just a core part of mass customization. Volume brings a lot of benefits.

We also understand the importance of having proximity to customers and decentralization. So we've been working for multiple years to understand the impediments to driving more of the MCP marketplace vision for the last several years, and then focusing on that detailed execution to build out the culture, the technology, the incentives, the processes and yes, the technology around that.

So I'll start with the technology. That's certainly gotten more mature. It's better and more robust. It will be better and more robust 2 years from now. But I think we -- I think we almost focused too much on the technology early on where, yes, the technology matters, but there are many other things that needed to be addressed. Very closely related to the technology was the establishment and the enforcement of common product standards across Cimpress. So how do you define the customization?

We had initially not centralized that. And in retrospect, we now realize without common standards, this may sound obvious in retrospect, a high-volume software-driven platform can't ever become a platform without common standards. So enforcement of that was important.

Secondly, I guess, third after the technology enforcement, is once you establish those standards, they can be an impediment because they're expensive or complex to move from one set of standards to a new set of standards. And to lower the configuration cost of that movement, Maarten's team built a centralized MCP operations team that's developed AI-based automation and whose team members are located in low-cost locations, mainly Tunisia and India. And that has radically lowered the cost and hassle to our businesses to move on to product standards, and it's greatly increased the compliance to those product standards, and that allows more flow.

I think importantly, just being very explicit about our declaration that we are moving to this federated approach of focused production hubs and that we want the volume to move to the best facility for this, that has helped. And then I'd say last but certainly not least, people respond to what their incentives are, what their reporting structures are, what their financial incentives are. And individual businesses and managers now are exposed to what's good for Cimpress overall rather than what was previously showing up on their local financial reporting system.

So I often say, from my perspective, it's moving from Cimpress' left pocket to right pocket where the margin of a fulfillment order went. But prior to a few years ago, we were literally having different parts of Cimpress negotiate with each other over who would get that margin. And about 1 to 2 years ago, we moved to a new management financial reporting model, which we've explained in our public Investor Relations documents of cross-Cimpress fulfillment, and that leads to this intersegment reporting, which we report.

But the effect of that for our frontline leaders and team members is that the merchant, the part of Cimpress buying the product is only charged the variable cost of production, and that makes it very attractive to them to move to the focused production hub.

So I think what I just gave is 5 or 6 different components of what's driven the shift in the last several years, where I think the question was saying we're starting to see the impact in growth and -- on profitability and margins. It was not one silver bullet. It was really multiple years working through all these different things. And I know there was a very long answer. Maarten, do you want to add anything to that?

I would love to add more of a background story real quick. 10 years ago, Robert and myself had the pleasure to have a sit down dinner with, I think, the CTO of Amazon, Werner Vogels, to get advice specifically about platform building in a larger company. And he also said, it's going to take 10 years, right, to get to the final end of it. And there's going to be many, many value drops in between.

And we have certainly seen that, but we're really getting to that point where we have a mature platform. It's working. All those business synergies are really, that Robert just mentioned, are coming there, coming to fruition. And it's hard when you buy companies. There's all the cultural differences. We've always done it these ways, and et cetera, what Robert said, too.

But now it's just becoming so obvious that MCP is that better thing to just work together with that it becomes easier to have these conversations instead of hard as it was 5, 6 years ago because MCP was indeed maybe too technically there, but not mature enough to really run the processes at scale on it.

So it's been a long investment run, but we're finally getting there. I'm extremely proud of the teams and everybody, that we're getting to this point, and it's a real asset now for the organization. So in the end, we have to listen to that advice. I remember that Robert even asked, can we do it in 5? And he certainly tried to make me go faster all the time.

Thank you, both. Thank you. All right. We're going to stick with the topic of what MCP powers here. We had a question, this was pre-submitted. So along with intersegment revenue, it is useful to see intrasegment revenue within the Upload and Print groups in particular. This seems like a useful figure to track the use of the mass customization platform. Can you provide a figure that shows intrasegment revenue over the last few years?

And I will just say that I'd like to point the asker of this question and everybody else as well that's on the call. Maarten did show a figure, a chart on Slide 28 of our prepared presentation. And the chart there was the variable cost of goods from cross-Cimpress fulfillment. That is not -- that is across all of our businesses, right?

So it's what our businesses are transacting with each other, the variable cost of goods there. And what that means is that is a different number and a higher number than what is taken out and shown with intrasegment -- or intersegment, which is what we report with our earnings announcement every quarter. And so you do get a sense here with the number that we showed in Maarten's presentation on true business-to-business volumes.

And Meredith, I think it's important. Just one more clarification on that. That, I believe, was a chart of the variable gross -- the variable cost of goods that we had. And internally, we focus on the cost of goods, not the revenue because what we do -- we're trying to lower the cost of goods, and different parts of Cimpress have different margins depending on their advertising intensity or their types of products. So it shows the trend you're asking about.

Now we don't plan to share that intrasegment, for example, within PrintBrothers or within Print Group on a quarterly basis like we do for intersegment, but it is growing. And I can say we don't have a team member today here from PrintBrothers, but that's the other part of Upload and Print besides Paolo's portion.

It's definitely growing between WIRmachenDRUCK Group, Print Alliance and Printdeal. But Paolo, you're here. So I'd love to have you give some examples within Upload and Print, within the Print Group, specifically, what's happening? And what are you seeing there?

Yes. Within the Print Group, also the intrasegment business is growing. So that means Pixartprinting producing for Exaprint or Exaprint producing for Pixartprinting, or other business units within the group. And it is growing, and it is a substantial number. But beyond the value of the revenues, the value there is that each business can provide -- can offer more products without having to develop their own capabilities in their own plants.

And also, each business can serve their customers with a closer plant than the plant that they had available within their own business unit. As an example, of the first case, Pixartprinting is using -- or the second phase, Pixartprinting is using the plant in Montpellier, Mauguio by Exaprint to serve their customers in France or the plant by Tradeprint in Dundee U.K. to serve the customers in U.K.

On the other hand, because it works both ways, both Exaprint and Tradeprint use Pixartprinting plant for the production of labels because that's where the expertise of that particular category is concentrated. So all this is allowed by the Cimpress technology platform, the MCP that we just talked about. It took 10 years for us to have it to the level of today. And today, this process is running seamless.

And so thanks to that, we're able to produce all this intrasegment business that goes on top of the intersegment business, which is even bigger than the business that all of the plans of the Print Group are doing for all of the other business units. And the Print Group is serving every single business unit in Europe and also Vistaprint in Europe and in the U.S.

So at the end, these capabilities allows us to bring more choice and better value to the customers. It allows us to bring more volume, more growth through our specialized plants. And also, this is built on the capabilities that we already have. And so more volume in the same plant means more efficiency and therefore, more margin.

Thank you, Paolo, and thank you for being such a wonderful steward of our capital and the capital that our shareholders entrust to us because you are looking for efficiency gains everywhere you can and also ways to grow our revenue everywhere you can. Fantastic.

All right. So we're going to move into a next question for Sean. Sean, this is a guidance question. What are the biggest factors that could deviate the FX-neutral revenue guide from our target of 3%, both to the upside and to the downside? So hypothetical here.

Hypothetical. Top of my head, I would say the kind of a condensed version -- on the upside, condensed version of what you heard today. So what are we doing with our launches of elevated products, like what's the pace there? How quickly is that volume ramping? So that's one.

The reality is that like the upside there, I think, in terms of like upside relative to our guidance, is relatively limited just because those things have a natural growth curve to them and that would happen kind of during the year.

The next one is our partnership with Canva. And so that would be clearly a call out if that ramps up faster. And then I think the other one to call out, which is less about like how do we grow faster and more about where were -- where we have decay, how do we decay slower, which has a really big impact because that is still a meaningful portion of the business.

And that would be in things like business cards where we have planned for declines. Does that happen less than we have planned for? Or even in some of the channels that have similar characteristics where there's -- we've planned for a decline like in the reseller channel, does that happen slower. So I think those are the things to call out on the upside.

On the downside, I hope we set our guidance appropriately realistically, we believe. But -- so on the downside, that decay that I just mentioned happened faster than we expected, which has not been the case, but that would be the kind of the inverse of the upside one that I just talked about.

And then the other one is just, I think, like macro environment generally, and we've talked about this for a long time. We performed well in difficult macro environments. They're not all -- none of these kind of macro -- like challenging macro environments are created the same. There's -- from a customer perspective, they're dealing with inflation, they're dealing with complex trade environment, dealing with all things AI.

So it is a complex environment. So that's the other one I would call out. There's nothing specific there that I would call out in terms of what we're seeing. But on the downside, that's the other one I would call out.

Thank you. Let's stick with you, Sean, for the next question as well. I'm looking for a quick answer here. How do we think about the impact of rising interest rates, both operationally and from a balance sheet/leverage standpoint?

An important topic these days. The headline here is that we have a mix of fixed and floating debt. And then on our floating debt, which is our term loan B, we also have interest rate swaps that we layer in. And when you put all that together, we have a little over 50% of our debt that is fixed. And we have contracted swaps that kind of keep that relationship in place at least for the next 2 years roughly.

And then we also have, on the asset side, we have cash and we have marketable securities, and our treasury team looks to get the highest yield possible on that. So those are the 2 inputs as rates change.

Every year in our 10-K, we have to disclose what a hypothetical 100 basis point move in interest rates would be. And what we put in the last 10-K is about $7 million increase if rates move by 100 basis points, but that doesn't factor in what would happen on the cash side. So the net impact would be a little bit less. So it's small relative to our balance sheet, small relative to our cash flows.

I think the other thing I would just highlight that I mentioned in our slides is that, in my slides, we have -- we don't have our term loan and high yield mature in fiscal 2033. And so we don't need to go to the market anytime soon other than if it was to our benefit to reprice or something like that.

Great. Thank you. One more question that we've got before we close things out, which is about the Upload and Print segment. So how is the health of Upload and Print relative to macro in Europe? What kind of growth rate should we expect in FY '27?

All right. Let me take that. The European market overall is slow, and this allows us to strengthen our position and take share. We see many smaller competitors have flat or falling sales. Our size, the fact that we are able to leverage our combined strength of all our businesses in Europe, our capital, our capabilities, all of that is our real differentiator compared to the market or to our competitors because this make it possible for us to invest into new categories, to invest into new channels, into new geographies, like the example that we mentioned before about opening up a plant in the U.S.

And this allows the Upload and Print division to continue growing in terms of profitability and to continue to innovate, which is one of the key ingredients of our winning formula.

Sean, do you want to add anything?

Yes. Just -- we don't give guidance by segment from a revenue perspective, but maybe just 2 other things to add. One is I think the environment and the kind of the structural impact of what Paolo just referenced also ties back into, to some extent, of what I went through on the tuck-in M&A side, just in terms of how that dynamic plays a role in tuck-in M&A opportunities and valuation multiples and so on.

And then the other thing is just I think we would expect generally that the external growth in our Upload and Print portfolio, absent a couple of maybe outliers, would be broadly in line with our consolidated revenue growth in terms of the true external growth. That gets complicated a little bit in what we report because as was just talked about, we have these businesses, especially Paolo's businesses in the Print Group fulfilling for Vistaprint. That's revenue -- reported revenue there. So that makes the growth rate a bit higher.

And then we do have some businesses there that are growing quite quickly like textile and packaging growing very quickly. And then the offset is that we have some channels and some businesses that have more concentration in these channels that are declining, like the reseller channel, Exaprint is a good example in Paolo's segment, where there's just more concentration there. That overall trend is good for our businesses at a Cimpress level, but it's a fact of life for some of those businesses that historically were more reseller-focused.

Thank you, Paolo and Sean. Okay. I am going to turn the call back over to Robert for closing remarks.

Well, I want to say thank you again for all the time you've invested today, either to learn about us or to learn about Cimpress. I hope you really take away the 3 core messages I outlined in my opening presentation. Again, those were that our strategy and our investments are growing, our customer wallet share and improving our scale advantages.

Second, we have really significant and clear actionable levers both across both the top line growth areas and the efficiency in cost. And those levers directly support our financial plans for fiscal '27, the year we're in now and next year, fiscal '28, establishing a really firm foundation for growth beyond fiscal '28 that will help us continue to build our long-term intrinsic value per share.

So thanks again for your time, and please, have a great day, everyone.

Welcome to the Cimpress Q4 Fiscal Year 2026 Earnings Call. I will now introduce Meredith Burns, Vice President of Investor Relations and Sustainability.

Thank you, Ari, and thank you, everyone, for joining us. With us today are Robert Keane, our Founder, Chairman and Chief Executive Officer; and Sean Quinn, our EVP and Chief Financial Officer. We appreciate the time that you've dedicated to understand our results, the commentary and outlook, particularly at year-end. This live Q&A session will last about 45 minutes or so, and we'll answer both pre-submitted and live questions. You can submit questions via the questions and answers box at the bottom left of the screen.

Before we start, I'll note that in this session, we will make statements about the future. Our actual results may differ materially from these statements due to risk factors that are outlined in detail in our SEC filings and the earnings document we published yesterday on our website. We also have published non-GAAP reconciliations for our financial results on our IR website, and we invite you to read all of those.

So now I'll turn things over to Robert.

Hi, everyone. Thank you very much for joining us today, and it's great to be here. Meredith, thank you. I want to start with my perspective on the strong progress that we've made against the strategic and the operational themes that we've been pursuing for a while now. Then Sean is going to take you through our Q4 results and our updated guidance.

We made great progress in fiscal 2026, right along the path that we've been describing for the past few years. That's true of our strategic objectives, manufacturing and supply chain excellence, elevated products and design enablement. And it's true of our ways of working, the handful of shared capabilities like our mass customization platform, our velocity and our efficiency. I gave a lot of examples in my annual letter, so I won't go through them again here, but I'd really encourage you to read it. It lays out these themes and where we're investing to grow revenue and take out cost.

For those of you who have not yet read the letter, excuse me, there's one thing I want to call out, our new strategic partnership with Canva. Canva is one of the largest design platforms in the world, hundreds of millions of people use it every month. We've launched a first set of Vistaprint-branded products in Canada and the U.S. And by the end of September, we'll have expanded that range significantly, and we'll have gone live in more than 25 additional countries.

Canva is a real leader in Artificial Intelligence, and Canva AI will plug directly into Cimpress systems. There's a deep technical integration. So a customer can go from a design prompt to a professionally produced print-ready Vistaprint product without ever leaving Canva. That gives us a meaningful new on-ramp to customers at scale, and it gives Canva a production partner it can trust for its print shop strategy. It's a real growth opportunity for both companies. The strategic partnership is in its early days, and we're excited about where this can go. I'm sure you'll have questions, but I'll tell you upfront, we can't share much more today because of the confidentiality terms of the partnership.

One more piece of progress that's worth speaking about today is since our last call, we did close on the acquisition of Saxoprint. The logic here is simple. Saxoprint gives us a high capability focused production hub, exactly the kind of asset our cross-Cimpress fulfillment strategy is built on. It will strengthen PrintBrothers directly in the near term. And over the longer, I'd say, midterm, the value will extend beyond PrintBrothers across our European businesses. It's another deliberate step in building the shared production capabilities and capacity that make the whole of Cimpress network stronger. We're excited to have Saxoprint on our team.

So let's step back to the big picture of where Cimpress is overall. First, the momentum we built this past year puts us in a strong position to deliver our profitability and free cash flow commitments through fiscal 2028. And the investments we're making will keep those metrics going well beyond 2028. Second, our competitive advantages are significant. We have thousands of talented, dedicated people, all pulling in the same direction on strategy, on operations, on our financial goals. And every year, we give our customers more value.

No competitor matches our scale and none matches our ability or our willingness to keep investing in new product categories and in world-class manufacturing and supply chain. Third, ever since our start-up days, we've harnessed digital technologies and software to create real value for customers while driving down costs. And AI is going to be a very exciting next chapter in that long history. But here's the thing. We've always made our money by producing customized physical products better than anyone else. These are real tangible things. So even as AI speeds up the velocity with which we can create value and take out cost, it does not threaten our core economic engine. That engine is a huge growing range of customized physical products that we produce every day with high quality, low cost and fast turnaround.

So to sum it up, Cimpress is executing well against the plans I laid out in my investor letter a year ago and which our executive team walked you through in more detail at our Investor Day last September. And those plans build on years of work and the investment before that. We're building real capabilities and real advantages, ones that let us serve customers better and keep up our multi-decade disruption of a very large, very fragmented market for customized marketing products and branded merchandise. Better profitability will show the intrinsic value that we're building per share. It will deliver it without ever losing sight of the long term. Our path ahead is clear.

On the numbers, this progress has let us raise our at least target for 2028 -- fiscal 2028 to $615 million of adjusted EBITDA with free cash flow conversion of around 45%. Now let me be clear about why we share a multiyear EBITDA target. It is not because EBITDA is our top objective. It isn't. Our top objective is and has always been intrinsic value per share.

We share EBITDA as a target because it's public, it's measurable. It's a milestone on the path to much higher cash flow per share, and it holds us accountable. And it gives you a concrete way to track our progress. And I want to be direct about this. We would not chase this target through decisions we thought sacrificed intrinsic value per share for the near term. We just wouldn't do that. But we strongly believe that we can see multiple years of EBITDA expansion compatible with our intrinsic value per share objectives.

With that, I'll hand it over to Sean to walk through the quarter and our financial outlook for the next 2 years. Sean?

Great. Thanks, Robert, and thanks, everyone, for joining us today. As Robert said, fiscal year 2026 was a strong year for Cimpress. We're on the right path operationally. And importantly, we have cohesive plans for delivering on what we've laid out for the next 2 years in our fiscal '27 guidance and also our increased fiscal '28 targets.

The full year revenue in fiscal 2026 reached $3.74 billion, up 10% on a reported basis and 4% on an organic constant currency basis. Adjusted EBITDA grew 6% for the year and that was getting us to $458.5 million in total. For Q4, consolidated revenue grew 9% on a reported basis and 3% on an organic constant currency basis. We continue to see good progress in our ability to better serve high-value customers. One of the best indications of that is the continued variable gross profit per customer growth in Vistaprint, which we've been reporting throughout this year, and that increased 9% year-over-year, continuing that multiyear trend.

For the quarter, adjusted EBITDA was $120.4 million. As noted in yesterday's release, Q4 profitability was impacted by a few items outside of our core operations. We had $7.1 million in higher start-up costs for our North American manufacturing network build-out. We had $4.7 million write-off of Canadian duty drawback receivables that we're actively contesting after a long-standing ruling was revoked and that happened right at the end of the quarter. And we had $1.8 million of inventory write-downs and all that was partially offset by the IEEPA tariff refunds that we had in the quarter of $6.9 million.

Relative to guidance, we came in below where we expected. The duty drawback topic, the inventory write-downs and also an adjustment that was necessary for variable long-term incentives all came up at the very end of the quarter. That was about $10 million of negative impact on adjusted EBITDA. We also had 2 other smaller items. The impact of currency was less favorable than we had expected just based on changes in rates from the end of April when we had updated guidance. And then we had transaction costs for the Saxoprint acquisition as well. The 2 of those combined are about $2 million. Candidly, that's a lot of noise there. As demonstrated from our go-forward guidance that I'll review in a moment, these topics don't change our charted profitability and cash flow growth path.

Adjusted free cash flow was $70.5 million for Q4, and it was $122.4 million for the year. As we've discussed throughout the year, this reflects our higher manufacturing capital expenditures, all those to drive unit cost reductions and also expand elevated product capacity and capabilities. Net working capital was a significant inflow in Q4 as it normally is. But for the full year, the impact of net working capital was an $11 million use of cash, which we expected to be a small inflow for the year. That's just timing, nothing structural there, but that was the other impact relative to our full year guidance.

We ended fiscal 2026 in a strong balance sheet position. Net leverage was 2.9x. Trailing 12 months EBITDA is calculated based on our credit agreement. That was consistent with what we guided to throughout the year, and that's down from 3.1x at the end of fiscal 2025. Our liquidity remains robust. We had $249 million in cash and cash equivalents at the end of the year. We also have our $250 million revolving credit facility. And I should note that we, during the quarter, closed on a new $1.1 billion Term Loan B that's now due 2033 and replaces our prior Term Loan B that was due in 2028.

So turning to our outlook now. Our fiscal 2027 guidance reflects strong continued financial momentum and also significant growth in profitability and cash generation. Specifically, we expect reported revenue growth of at least 7% on an organic constant currency basis, that's 3%, net income of at least $125 million, adjusted EBITDA of at least $520 million, that represents over 13% growth year-over-year and then operating cash flow of approximately $370 million and adjusted free cash flow of approximately $200 million. That's also significant growth year-over-year.

In the earnings document, we provided some additional commentary that you might find helpful just as the assumptions and context for our fiscal 2027 guidance. I'm not going to go through all that here, but I thought it might be useful to just provide a high-level bridge from where we ended up fiscal 2026 at $458.5 million of adjusted EBITDA to the guidance of at least $520 million for next year.

And the first one is, as we noted in our release yesterday, the contribution from M&A. So we had a number of recent tuck-in acquisitions. We expect those to contribute $18 million to $21 million in incremental adjusted EBITDA growth. So that is the growth year-over-year. The revenue attached to those is $165 million to $175 million in fiscal '27. And all that incremental EBITDA is both the full year run rate earnings from the stand-alone businesses, but also the initial synergy realization as well, which we'll be ramping throughout the year.

From a currency standpoint, we do expect currency to be favorable in fiscal '27. Based on current exchange rates and also our contracted hedges, currency is expected to provide $5 million to $10 million positive year-over-year impact on profitability, which that is contracted, so we have visibility to that. And then the remaining $31 million to $39 million of adjusted EBITDA growth comes from a combination of the contribution from organic growth, but also all the cost efficiencies that we're executing on as we've been outlining over the last year.

And those cost efficiencies include both the structural cost of goods sold reductions that are driven by cross-Cimpress fulfillment and focused production hubs and also the investments that we've been making in -- throughout our production network, but also operating expense savings, including the full year impact of actions that have already been taken in fiscal '26.

On the cash flow side, in fiscal ' 27, we expect CapEx and capitalized software will remain at similar levels to fiscal '26, while lower cash taxes and the adjusted EBITDA growth that I just outlined will drive the significant growth in adjusted free cash flow to the $200 million.

Just quickly on the topic of tariffs as it relates to fiscal '27. The trade environment remains dynamic. There were 2 new U.S. tariff measures announced last week. The first one is a broad-based Section 301 tariffs of 10% to 12.5%. Those have already taken effect, and those replaced the 10% global tariff rate that had expired that same day that these went into effect. Our outlook had already assumed the 10% continuation of the Section 301 duties previously. And so this one is, in essence, built into our guidance.

The second one is the 50% tariff on certain Canadian goods under Section 338, and those were announced to take effect on August 19. Given the implementation uncertainties, we haven't included those Section 338 tariffs in our guidance. But of course, we've been doing plenty of work on this. Our preliminary review shows that these duties would affect a small portion of products fulfilled in Canada for U.S. customers, and we're actively operationalizing supply chain and fulfillment adjustments to mitigate a substantial portion of any prospective cost impact. As hopefully, has been clear over the last 1.5 years, I think our team has done a great job being dynamic and addressing these changes as needed when they come up.

Turning to our fiscal '28 targets. We remain confident, as Robert said, in our organic constant currency revenue growth expectation of 4% to 6%. But importantly, in yesterday's release, we raised our fiscal '28 profitability and cash flow targets to net income of at least $192 million, adjusted EBITDA raised to at least $615 million, up from our prior target of at least $600 million and then adjusted free cash flow conversion of approximately 45%, which is consistent with our prior guidance, but on the higher EBITDA base implies roughly $275 million in adjusted free cash flow.

The primary driver of this target increase is a higher expected contribution from M&A compared to our prior remarks, and that's based on the transactions that have closed over the last few quarters. Otherwise, I'd say we remain on track for the other components required to deliver against this at least, and that's important at least target, namely the cost savings previously outlined, the runoff of plant start-up costs, which, as noted for fiscal '26 were sizable, the favorable currency impact and then the contribution from organic growth that's required to bridge the remainder.

Achieving these targets will drive a meaningful reduction in our debt leverage as well. We continue to expect net leverage to decrease to approximately 2.5x exiting fiscal '27 on the way to be meaningfully below 2.0x by the end of fiscal '28, all subject to capital allocation choices such as share repurchases.

With that, Meredith, why don't we open it up for questions?

Thanks, Sean. As a reminder, you can submit questions during this webcast via the questions and answers box at the bottom left of the screen. We also have pre-submitted questions, and then we'll mix some live questions in as well. We've had some overlapping questions. So let's jump to our first one.

Robert, this one is going to be for you. Actually, there's a couple of questions on Canva, unsurprisingly. Robert, can you expand more on the economics and nature of the partnership with Canva? Why was now the time to enter this strategic partnership? And how big could the Canva strategic partnership be? How much does Canva benefit your FY '27 and FY '28 guidance?

Okay. Well, thank you. Let me start with the nature of the partnership. This is a deep technical integration. Both Canva and Cimpress, first and foremost, we worry about the value we bring to customers, empowering our customers to do great things that make them really proud of what they've designed and, in our case, printed. But right underneath that, supporting that commitment is incredibly high-quality software talent at both companies. And a key aspect of this partnership is that we have the technology chops, the technology talent to work as an equal partner with Canva. And our engineers are working together every day.

We've actually built a dedicated team in Australia that includes great engineers who've been part of our tech team since we acquired 99designs 5 years ago. And that's really valuable to both parties, given that Sydney is the headquarters of Canva, and we are able to work very closely with them. So our ability to work at high speed and a tech talent equal differentiates us. I'd say that's the overwhelming nature of the partnership that you don't see from the service.

Second, the nature of the partnership is this huge breadth of depth and products in markets and geographies across the world, including our brands, Vistaprint in the future, Printi in Brazil in the very near future that customers know and trust. And that's important for Canva, I believe, I can't speak for them in having brands that customers recognize and trust.

So in summary, all of the organic investment and the acquisitions as well that we've done over the last 12 years have gotten us to a place where we've been in a very good position to work with Canva, and that includes our technology, our product and our service operations investments. As to why is this a good time now, and I'll say why is it good for both parties.

Again, I can't speak for Canva, but I can say some things that are for us certainly and then what they've spoken about publicly. Both companies have in the past 2 years or so evolved how we think about this intersection of design and print. I wrote in the letter last night, we spoke last year at our Investor Day in September about design enablement. And we see the design is being democratized, that customers have a wide choice of design tools. They're certainly our own excellent print-focused tools, but they include third-party tools and increasingly generative AI. And they bring capability or choice to customers to design any way they want, and they can move fluidly. They want to move fluidly between these, and we recognize and embrace that kind of cross tool fluidity.

So our aim is customer happiness rather than trying to lock anyone into our own proprietary tools. And hundreds of millions of customers per month design at Canva primarily for digital applications like social media and presentations, but clearly, many of them also want to produce physical manifestations of their designs. And Canva is, therefore, very important for us in our design democratization understanding. And I would add that Canva really is at the leading edge of bringing Artificial Intelligence capabilities into design.

So again, sticking to the words you can see Canva say for themselves, they have at Canva Create, their annual launch event, spoken about a launch of Print Shop where they recognize print as an increasingly key aspect of their full suite of the types of products that they want to empower their customers to design on from presentations and social media and many other digital media, but including the physical world. And only Cimpress has the breadth, the depth, the quality, the cost-effective or the cost competitiveness and the geographic coverage of customized printed products.

So again, I think from a -- why is a good time for both parties, we both had slight evolutions in our respective strategies at that intersection of print and design. As to economics, I noted in my comments, we can't share more today because of the confidential terms of the partnership and because it's in its early days. Just let me say that we think, and I believe Canva very much thinks this is an opportunity to provide great value to our customers and in doing so, to be very economically attractive to our shareholders. One thing which is obvious, so it's not confidential, but just to be clear, we do gain a major channel to reach customers that we haven't had before, and we think that is economically attractive.

So I'll close by saying our past 10 or 12 years, we've been making huge investments in technology modernization in the mass customization platform and new product introductions and production efficiency and competitiveness and geographic expansion and moving towards higher-value customers. And I think that those investments are very healthy for Cimpress overall, but this Canva partnership is a third-party specialist expert evaluation of how valuable those investments have been. And so we think it, in many ways, reinforces our belief that we've been on the right path making these investments over the past years.

Thank you, Robert. Great. Next question that we had come in. Sean what are the drivers of growth acceleration between FY '27 and '28? Organic constant currency revenue growth of at least 3% in FY '27 and 4% to 6% in FY '28. Also, what accounts for the lowered net income guide for FY '28 to at least $192 million, it had been $200 million before.

Yes. Okay. On the growth side, I mean, I think, first of all, like when we set our guidance for fiscal '27, we want to set that at a level that we feel very comfortable with. And I think despite some of the noise at the end of Q4 there from an adjusted EBITDA perspective, you see this in terms of how we establish guidance in fiscal '26 and then performed against that. For recall, we started out fiscal '26 with revenue guidance growth of 2% to 3% organic, and we ended up at 4%.

So as we enter fiscal '27, we want to take a similar approach. So for the growth rate, at least 3% that is -- that does imply a slight deceleration from what we did for the full year of fiscal '26. It is consistent with what we did for Q4. Again, we want to set that at the appropriate level. As we turn to fiscal '28, and we've been talking about 4% to 6%, what can drive that acceleration. I think there are a number of things.

This isn't where I would naturally start, but given Robert was just talking about the relationship with Canva, of course, new channels like that would be one driver. But from an organic perspective, we've been making a lot of investments. It was a big CapEx year in fiscal '26. It will be another big CapEx year in fiscal '27. A lot of that is for efficiency drivers, but there's a big part of it that is also for growth drivers in terms of expanding our elevated products, capabilities and capacity, things like pushing further into packaging, for example, is a great example of a new growth driver.

So that is really what drives the organic acceleration. It is the continued push into -- further and further into elevated products. As we do that, we're almost sort of entering into new markets within the context of our total addressable market and then the new channels, like I said, like Canva as an example.

On the net income front, to be honest, there's not much to read into that. The net income, even though we've increased our fiscal '28 adjusted EBITDA target, the net income as a starting point went down a little bit. There's a few pieces to that just in terms of our GAAP results. There's a little bit of higher depreciation, but there's amortization from the recent M&A that we've done. There's some small changes to our GAAP tax expense, but that doesn't flow through to changes in our cash taxes. So I really wouldn't read too much into that, just some small tweaks from a GAAP perspective.

Thank you, Sean. All right. Robert, a couple of questions for you on the topic of mergers and acquisitions. First, what have been the main lessons from past M&A successes and failures? And how does that relate to why the M&A that we did in FY '26 made sense? And how should we think about the shift to more M&A in FY '26 compared to '24 and '25? Is there now an opportunity set that has opened up that didn't exist before? Or was it simply that there were other capital allocation opportunities that were more compelling in FY '24 and '25, for example, share repurchases?

Okay. Let me start with the lessons and start with the lessons of our mistakes, which are -- we don't have time on the call to go through all my mistakes in my life, but let's talk about M&A. I think, one, don't stray into digital or into new geographies where both of those really didn't match what we were excellent at. Let me talk about digital.

Over the multiple decades, as you followed us, we've been attracted to Webs, it's websites, ourselves, Depositphotos and Crello, which is now VistaCreate because it was obvious to us from a customer need that customers wanted to design and protect their brand and their image in digital spaces as well as in physical spaces. And we just found in retrospect, the competition there, the focus needed there, we did not have the capabilities to really lead and frankly, the valuations of those markets for acquisitions are very elevated. And so we found that those didn't work.

And then I'd say geographically, although today, we're very optimistic about what we're doing in Brazil, in India, especially with the partnerships with people at Canva, the economics there have been very tough for us. And I'd say that we also -- for those again who followed us for multiple decades, our early attempts to go into China and Japan, just really made it -- I think we were not successful. So stick to our knitting of print in geographic markets where we already are there.

So where have we been really successful? I think it's been a great way to bring in capabilities of just product and talent that we don't have or to strengthen talent and product ranges we have. Examples of that are certainly getting into Upload & Print, which today is really a critical part of our business and a very important part and growing part of Cimpress overall, getting into packaging, promotional product areas where we've just seen -- although we've talked about National Pen not being the type of ROI we really would have wanted to have. When you actually look at the nonquantifiable benefits of getting into a very strong supply chain for promotional products, it's been very helpful. So I think its capabilities are building the product.

And an important lesson is avoid paying anything other than very reasonable multiples of cash flow and EBITDA. And I think that maybe is a lesson that applies to anyone in any M&A world. So how do we think about the shift towards this? I wouldn't call it a shift. I think there are many different opportunities in the spectrum of capital allocation we have ranging from just keeping dry powder for future to share buybacks to organic investment. We do think about those all as fungible.

The types of acquisitions we've been doing right now, and I think that very much represent what we'd be doing in the future are tuck-in acquisitions where we're buying relatively small businesses directly related to what we do as a business in the areas I just mentioned. And I think our future acquisitions to the extent we do them, will follow that pattern.

Thank you, Robert. All right. Moving on to a question for Sean. Sean, can you clarify or expand on expectations for incremental returns on invested capital organically and via M&A, especially as CapEx normalizes working capital as a source of funds in the coming years?

Sure. And I think the reference to working capital and CapEx normalization is just -- I think that speaks to the kind of access to capital that we'll have beyond fiscal '28. So the -- I think in terms of organic incremental returns, one, we've been very happy with what we've been seeing, including in the fiscal '26 organic investments that we've been making, CapEx and manufacturing and supply chain being probably the main domain where those investments are being made, but it's, of course, not exclusive to that.

When you look at the results, our aggregate results get weighed down by things like the start-up costs that are attached to that, that have a near-term impact on earnings. But as we deliver on both the cost reductions that we've outlined, as some of those start-up costs come off, as we make more progress pushing into elevated products, growing with high-value customers, I think those strong returns on the organic investments that we've been making recently will start to shine through a bit more, and that's actually a big part of the fiscal '28 targets that we have, starting to really see that come through and also see that come through in the form of higher EBITDA margins because the incremental returns on organic investment have more impact.

And I think at a consolidated level, like I said, that sometimes gets -- that gets blended in also with parts of the business that have less growth. We talked about legacy products in some places declining. And we'll see more impact from the incremental returns on invested capital organically that we've been doing, but also from an M&A perspective.

At our last Investor Day, we shared on the CapEx side, which is a big part of those investments, some specific examples of the return on invested capital for those investments. And you can see, if you look back to those, they're generally 20%-plus type returns. Many of them also quite fast paybacks. And so these are pretty obvious investments that we would want to continue to make, and we think we'll have continued opportunities to make well beyond fiscal '28 from a CapEx perspective.

On the M&A side of things, we've said that for the recent M&A that we've done, I think we said this for each of the 4 that we've announced over the last 6 to 8 months or so that we expect to generate base case returns on capital that are well in excess of 20%. And I think that for the those types of tuck-in acquisitions, and Robert just talked about some of the learnings that we've had on the M&A front, I think that's a pretty fair benchmark for what we would expect as we think about both the stand-alone businesses, but also the synergies we can bring.

And we do plan to go through this in a bit more detail on our September Investor Day, just explaining kind of the economics of these tuck-in acquisitions and giving you some of the kind of archetypes of what we think makes sense, but also going through some of the numbers of recent ones that we've done, so you can see what the returns have been there.

And then I think as we get out to fiscal '28 and free cash flow increases, I think this maybe is the point of the question, you combine that with lower net leverage, we'll have ample capital to reinvest, whether it be in organic investments, whether it be in some tuck-in M&A, share repurchases, we can pay down debt and we'll be patient on that, and we'll evaluate all those opportunities on a relative basis. But we think that there's a -- there are -- we kind of like these layers of possible avenues to reinvest capital at high rates after fiscal '28 when we'll have a lot more available capital to do so.

Thank you, Sean. All right. We've had some questions on our market opportunity and our future opportunity. So I've got a representative one that covers all the bases here for you, Robert. Can you provide some color on the runway and length of time you see beyond FY 2028 in terms of continued growth in cash flow per share as you address the TAM that you've outlined in past Investor Days. Conceptually, is this TAM growing or declining over time? And does it even matter given the degree of white space?

Thank you. We see a long runway for continued cash flow growth well beyond 2028. And we're going to be leveraging our competitive scale across this huge market. I'll come back to the TAM in one moment, but the investments we've made over the past several years over the past decade in modernizing our technology, in repositioning Vistaprint, moving into elevated product categories really position us to sustain growth past our fiscal '28 targets in n terms of EBITDA, but also cash flow.

And the direction of cash flow will clearly be up and to the right as far as we believe. And there will probably be annual fluctuations, especially in cash flow, but we definitely also believe that we are going to be able to avoid the major cash flow swings that we've seen in the past 5 to 7 years, which we had as we navigated the pandemic, the subsequent supply chain inflation. And while doing so, said we were going to continue on our commitment to invest in tech migration and the repositioning of Vistaprint during that -- those tough times.

So I think looking forward to that continued growth in cash flow per share definitely up to the right with much less volatility than we've seen in the past, although some annual fluctuations in cash flow, I think, are probably part of that. But we're very optimistic.

As to our TAM, you're right. It's about what we see. It is what we think it's been for quite some time, roughly $100 billion. But there are underlying product categories that are shifting. So products like promotional products, logo apparel, packaging are pretty much growing with GDP at the market level. We're growing much faster than that, whereas legacy print categories like business cards or flyers are slowly declining. But when you put all that together, the market is steady to slightly growing.

And our investments in moving into elevated products are really getting us into a lot of those markets that are not facing the headwinds we see in some of our legacy products. We're also getting into markets that are much less penetrated from an online perspective. So that's why we really believe the wallet share of our existing customers is a big driver of how we can drive into that TAM as well as, of course, getting to new customers, including our own customer acquisition channels and partnerships like we are doing with Canva.

So I agree with your question, which said something to the fact that given the size of this white space doesn't really matter. It doesn't really matter. We're a roughly $4 billion company over the coming 12 months and $100 billion market. So what's most critical is continuing our low-cost producer status through manufacturing efficiencies and scale and having incredible customer value across the user experience.

Thanks, Robert. I'm going to follow up quickly while we're talking about TAM because we've got another question that I think is related. What do you think about the TAM of high-value customers and how much share you currently have with those customers?

So I would respectfully disagree with what I think is the premise of the question. High-value customers are already in our -- most -- we have huge numbers of customers who are not high-value customers for us who are buying a lot of print products elsewhere. And so wallet share is a key part of our growth into this TAM. And so HPCs are part of our TAM of $100 billion.

And in the past, because we didn't have the broad product line, because we didn't have the focus on that, especially at Vistaprint and I would say, even at some of the BuildASign properties, we focused more on these lower-value relationships, as you call them in the customers where we are selling $50, $100, $150 a year to customers, and we're shifting to selling customers thousands of dollars per year. But they are part -- they're one and the same or the same TAM.

Thanks, Robert. Helpful clarification there. All right. Sean, another question for you. How should we think about the level of run rate maintenance CapEx after this growth period is completed as compared to where it is currently? Is there a percentage of growth CapEx that is almost certain to get converted to ongoing maintenance going forward post 2027, 2028?

Yes. I'll start with the latter part of the question. And I think part of that will, but also as revenue grows. So I think the right way to think about it is that maintenance CapEx should still stay around 1.5% of revenue. And that's been, on average, the case for a bit. I think what we're going through now, we've -- in fiscal -- actually starting in fiscal '25, but certainly in fiscal '26 and again, in fiscal '27, we've had some pretty significant build-out of new facilities.

And if you go back into our history, for obvious reasons, you see these kind of elevated levels or spikes in our CapEx when we are building out new facilities for obvious reasons and then that kind of settles back down. The -- and that's what we're going through now. And in fiscal '28, we do, as I said earlier, we do expect our CapEx levels to decrease in absolute dollars from fiscal '26 and '27 levels, but then also as a percentage of revenue, of course, be down even further.

I think the other thing that plays into this is M&A, and you can also see this in our historical trends. When we, for example, started to buy into what is now our Upload & Print portfolio because of the capacity that offered and as we started to, in more recent years, get more capacity utilization because of our initiatives with Cimpress -- cross-Cimpress fulfillment, that's enabled maintenance CapEx to come down some because we're getting better capacity utilization.

And I expect that will only improve, but also with some of the more recent M&A that we've done and could do in the future in terms of tuck-in acquisitions. That also serves to somewhat lower maintenance CapEx as well. So that's kind of the story. But I think as we get to fiscal '28, we'll see that moderation and then we'll get back to levels that are pretty consistent with where we've been in our recent past.

Thanks, Sean. And of course, that was all CapEx from a physical CapEx perspective. I'm going to follow up just so that you can hit on capitalized software as well as our investors tend to want to understand what the trends are there, too. So if you could just make a couple of comments on that [indiscernible] perspective.

Yes. We expect that to be basically flat year-over-year in '27. And I think as we look forward, that's another -- in that kind of walk from our profitability to free cash flow, that's another area I expect us to continue to get leverage. And I think all of our efforts from an AI perspective are part of that as well. But I expect us to be able to get leverage out of that line, either not seeing much growth or maybe even opportunity to actually lower that given all the benefits of AI in terms of how development is done. So that would be the path there.

Thank you so much, Sean. Robert, we've got one more question in the queue here. I'm just going to ask you if there have been any changes in the competitive landscape recently?

No, it really has not been at all. It's been very consistent. I'd certainly say post-pandemic, we did see -- I'd have to think back when it was a time long ago where we were seeing what we felt was pretty irrational pricing in the European Upload & Print space that has very much dissipated. We live in a very, very competitive world, but I think that's healthy. It makes us better. It keeps us hyper focused on just improving our customer value, but there's no macro change.

If I try to quantify or describe that in a little more detail, we live in a world where the vast majority of printers and sign shops and promotional product distributors are less than 10 employees and 90% of them plus or less than 100 employees. And if you look at the big companies in printing and packaging, promotional products, they don't serve small customers well.

They don't even really want to serve them even what we consider high-value customers, against someone who might order several thousand dollars a year from us on average, those are tiny customers for what the big print and packaging and promotional product companies target where they're going after enterprises. So I would say that there's no change to that broad description of the competitive landscape, and we're still very optimistic about our opportunity to continue to take market share.

Great. And just as a point of clarification, that more intense competitive irrational behavior in the European market was pre-pandemic in around 2019 time frame, and the pandemic actually helped to quiet that down quite a bit.

Thank you for that. Yes. Correction on that date.

All right. Robert, I'm going to turn it back over to you for closing remarks.

Thank you, Meredith. And let me leave you all with the few things that I think matter the most. First, the strategy we're winning with is the same one we've been pursuing for years and describing to you all along, higher-value customers, elevated products, manufacturing excellence and design enablement. We're now changing course. It's working. Second, in fiscal '26, we kept strengthening the value we deliver to customers, driving up efficiency and picking up the velocity with which we make improvements.

Third, our path is clear. We're building leading capabilities and real competitive advantages, the kind that let us serve customers better and keep our multi-decade disruption of a very large, very fragmented market for customized marketing products and branded merchandise.

Fourth, the investments we've made over the past in technology modernization and in product expansion and in many other areas are paying off on more than one front. They've positioned us to win organically. They've created clear synergy opportunities for tuck-in M&A. And now they've attracted a major strategic partner in Canva, a company that is better than anyone in the world to evaluate just how unique Cimpress is given our combination of our technology our product range, our manufacturing capabilities, our geographic reach and very importantly, our culture and capability to combine entrepreneurial speed with massive scale.

And fifth, on the financials, we're confident we'll hit our newly raised fiscal '28 at least profitability target, along with the cash flow conversion and leverage reduction we've laid out for you before. One housekeeping item that I want to touch on before I close. Please do save the date on your calendar for our Annual Investor Day, that's September 30, 2026, from 8:00 a.m. to 11:00 a.m. Eastern.

And with that, thank you for joining our call, and thank you for continuing to entrust your capital with us.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Welcome to the Cimpress Third Quarter Fiscal Year 2026 Earnings Call. I will now introduce Meredith Burns, Vice President of Investor Relations and Sustainability. Please go ahead.

Thank you, Lisa, and thank you, everyone, for joining us. With us today are Robert Keane, our Founder, Chairman and Chief Executive Officer; and Sean Quinn, EVP and Chief Financial Officer. We appreciate the time that you've dedicated to understand our results, commentary and outlook. This live Q&A session will last about 45 minutes or so, and we'll answer both pre-submitted and live questions.

You can submit questions live via the quest-answers box at the bottom left on the screen. Before we start, I will note that in this session, we'll make statements about the future. Our actual results may differ materially from these statements due to risk factors that are outlined in detail in our SEC filings and the earnings document we published yesterday on our website.

We also have published non-GAAP reconciliations for our financial results on our IR website, and we invite you to read all of those. Now I will turn things over to Robert Keane.

Thanks, Meredith, and thank you to our investors for joining us today. Before Sean reviews our Q3 financial results and our guidance updates, I'll share my thoughts on the recent progress we've made on the strategic and the operational themes that we've covered in detail in our annual letter of July 29 and in our September Investor Day.

Our Q3 earnings document highlights recent examples in a number of categories. First, elevated products are fueling a step function improvement in our per customer lifetime value and our wallet share. Every quarter, we're improving our ability to help millions of businesses build their brands, stand out and grow, thanks to our customized physical marketing products and branded merchandise.

One metric which demonstrates our progress is that Vistaprint's variable gross profit per customer grew 13% year-over-year in Q3, and that's also our 13th consecutive quarter of growth in this metric. We see similar themes in our Upload & Print businesses as well. Second, investments in the Cimpress MCP in our manufacturing operations in cross-Cimpress fulfillment and in artificial intelligence are reducing COGS and operating expenses while increasing the velocity of new product introductions and user experience improvements. In the earnings document, we provide multiple examples of where we are leveraging our deep expertise and scale advantages in manufacturing, where we're using AI to improve customer experiences and to drive operating leverage. Also where we're using our shared software services to reduce costs and improve performance and where we are growing the collaboration between our businesses, for example, deploying shared marketing capabilities.

And third, we continue to march along a clear path to fiscal 2028 adjusted EBITDA of at least $600 million and significantly lower leverage. Progress in the areas I just spoke about has allowed us to start driving down the cost of goods sold and drive up the operating efficiencies that support our previously communicated plan to achieve these financial results.

Our gross profit is growing in part due to the scale advantages we have in manufacturing, new product introductions and many production optimizations within our plants and between Cimpress businesses. We expect more financial benefits in fiscal '27 and fiscal '28 as larger COGS efficiencies from ongoing manufacturing network optimizations kick in and our new production facility start-up costs, which are currently burdening our P&L shift to incremental profitability, thanks to volume growth.

Additionally, we drove advertising efficiency in Q3 while continuing to grow revenue and gross profit. We expect more here in the coming years as we launch more elevated products that grow our wallet share with higher-value customers. We also implemented several OpEx reductions this quarter that will generate annualized savings of $11 million between Vistaprint and National Pen. In last year's earnings -- I'm sorry, in last night's earnings release, we announced two tuck-in acquisitions that we made in April. The first is PrintBrothers acquisition of 85% of Truyol. They're the Spanish leader for elevated brand-building print, packaging and signage products.

This acquisition allows us to expand our product offering into higher-end products while capturing immediate cost synergies through materials and shipping savings, which we bring due to our much larger purchasing power. Second, we've taken a 50% stake with operating control in Mixim, and that will marry Mixim's market-leading customer experience for books, catalogs and magazines with the Print Group's manufacturing strength and their experience for these products. Both of these are in our Upload & Print segments, and we see them as great examples of where we can allocate capital to tuck-in acquisitions. We expect each of these acquisitions to generate base case returns on our capital well in excess of 20%. They continue a string of about a half dozen acquisitions within our Upload & Print segments over the past 3 years, and they are positioning us to bring our mass customization capabilities into the core of the very large markets, which still remain offline with traditional and less competitive production techniques.

We always horse race the capital we allocate to acquisitions against share repurchases, against debt reduction and against organic capabilities development. We generally have a higher hurdle rate for acquisitions given they're typically higher risk. However, our experience in these particular types of tuck-ins is that they are proving to be relatively low risk because of the attractive prices we're paying relative to the post-synergy cash flow. In other words, we are proving to be relatively low-risk, high-return capital outlays.

So to sum it up, we're executing well, and we remain confident in our multiyear plan to significantly grow profits and to significantly reduce our net leverage. We are strengthening the value we deliver to customers, increasing operational efficiency and accelerating the velocity with which we drive these improvements. We still have more work to do to deliver the shareholder returns we expect, but we are on the right path and our path is clear.

Now I'll turn things over to Sean to discuss the financial results for the quarter and our outlook.

Great. Thanks a lot, Robert, and thanks, everyone, for joining us today. Cimpress delivered a strong third quarter. Our adjusted EBITDA surpassed $100 million for the first time in the Q3 period, growing 11% year-over-year. And with strong year-to-date execution, we're again raising our fiscal '26 revenue and profit guidance, which I'll go through in a moment. Consolidated Q3 revenue grew 12% on a reported basis and 4% on an organic constant currency basis. Reported revenue was again aided by currency tailwinds and also the acquisition in our PrintBrothers segment that we completed during the second quarter.

Vistaprint revenue grew 7% on a reported basis and 3% on an organic constant currency basis. The expected decline in business cards and stationery was more than offset by growth in our elevator products. As we noted in last night's release, severe weather in North America dampened results during January and February, and then we saw an acceleration in growth in March.

Our Upload & Print businesses combined organic constant currency revenue grew 8%, driven by order count growth and Cimpress fulfillment with support also from regional elections. Reported revenue for these businesses grew 26%, combined with currency benefits and again, the tuck-in acquisition that we made in Q2, which contributed $15 million to reported revenue during the quarter. Turning to profitability. Adjusted EBITDA was $100.5 million in Q3, an increase of $9.8 million year-over-year. Q3 consolidated gross profit grew 10%, the result of revenue growth, cost improvements, benefits from currency and again, the tuck-in acquisition. And we did have $3.3 million of production start-up costs for the expansion of our North American production network, which weighed on EBITDA, although that was mostly offset by currency benefits of $2.7 million in the quarter. Adjusted free cash flow declined $23.9 million to an outflow of $54.6 million. As I think most of you know, Q3 for us is typically a seasonal working capital outflow. That working capital outflow was higher this year, mostly due to timing, but also unfavorable currency movements on working capital.

Cash taxes were also about $5 million higher compared to last year. From a balance sheet perspective, net leverage at the end of Q3 was 3.0x our trailing 12 months EBITDA. That's as calculated under our credit agreement, and that's consistent with last quarter despite the fact that we repurchased approximately 288,000 shares at an average price of $76 per share in Q3. Maybe just as a point of reference, we have not purchased any shares in April.

Turning now to our guidance. We again raised our revenue and profit expectations for fiscal 2026 based on the strong Q3 results, but also our expectations for the remainder of the year. It's worth noting that we do expect to experience cost increases associated with recent increases in energy and oil prices, and that is factored into this updated guidance.

For the full year, we now expect revenue growth of 9% to 10% after incorporating the recent acquisitions and currency benefits, and that translates to 4% to 5% growth on an organic constant currency basis. We expect net income of at least $87 million and adjusted EBITDA of at least $465 million.

We expect operating cash flow of approximately $298 million to $303 million and adjusted free cash flow of approximately $130 million to $135 million. And we expect net leverage to be at or below 3.0x by the end of fiscal 2026. That is also a slight improvement from our prior guidance.

As we start to look now ahead to fiscal '27, we're going to provide more specifics with our year-end release in July, but we thought it was appropriate to start to share a little bit more as we expect to take another significant step towards our fiscal '28 targets next year in terms of adjusted EBITDA growth.

We're still finalizing our plans for fiscal '27, but we do expect adjusted EBITDA growth next year to be in excess of 10%. And we also expect to have meaningful growth in adjusted free cash flow. And I think it's worth spending a few minutes here. Our free cash flow conversion this year was lower, and that was expected based on the guidance that we have had in place throughout the year. Capital expenditures and cash taxes were both higher this year. And then there's also some timing in working capital, and I just mentioned that was unfavorable for Q3.

From a working capital perspective, there's nothing structural to that. It's really -- for us, it's not unusual to have some variability there. In fiscal '27, we expect the growth that we'll have in adjusted EBITDA that I just referenced greater than 10% to have much more flow-through to free cash flow. And I'll just go through a couple of components there to set expectations.

Capital expenditures, we expect to still be at similar levels to this year as we complete the ongoing projects that we have in place. But we do expect capitalized software to be relatively flat. We expect cash taxes to be lower next year, and we expect working capital inflows to be more favorable. And so when you put that all together, we expect to have significant free cash flow growth in fiscal '27.

And as Robert noted earlier, we do remain confident in our ability to deliver our fiscal '28 targets. which I'll again reiterate as 4% to 6% organic constant currency revenue growth, at least $200 million in net income, adjusted EBITDA of at least $600 million, adjusted EBITDA to free cash flow conversion of approximately 45%. Just doing the math, that implies at least $270 million of free cash flow. And from a leverage perspective, we expect to exit fiscal '27 with net leverage of approximately 2.5x and exit fiscal '28 with net leverage below 2.0x, subject to capital allocation choices.

Each quarter this year, we've provided increased visibility to the pillars of how we'll meet those fiscal '28 targets. And of course, we still have more to go. If you go back to our September Investor Day, I went through a session that walked from fiscal '25 adjusted EBITDA to be at least $600 million in fiscal '28. And in each of those pillars, we've made good progress. I just wanted to run through them each quickly now.

Starting with the growth in fiscal '26, our latest guidance that I just went through is now $15 million higher than the guidance that we started the year with. We still feel good about the $70 million to $80 million in efficiency gains. We had in that bridge, the midpoint there, $75 million that we expect to have exiting fiscal '27.

And we touched on some tangible examples of these initiatives in last night's earnings and throughout the call so far today. But just to reiterate, we have meaningful COGS efficiencies from manufacturing projects, from our work with focused production hubs and cross Cimpress fulfillment.

From an AI standpoint, we're seeing productivity improvements, and that extends well beyond the examples that we provided in the letter. Increased collaboration between Vistaprint, National Pen and BuildASign, including shared software services and marketing capabilities is starting to take hold and other operating cost efficiencies, including the $11 million of annualized cost reductions that we've already actioned between Vistaprint and National Pen late in Q3, as we talked about as well in the release last night.

Our work on this one is not done in terms of the overall cost savings, but we remain confident in our ability to deliver this pillar, and these are clear examples of our progress. The next pillar is the plant start-up cost, which we expect to roll off as planned. That one is just math.

On the M&A front, we touched on this in the letter as well, but with the three tuck-in acquisitions this year, we expect contribution in fiscal 2027 to be approximately $125 million of revenue and $13 million of adjusted EBITDA. That's well above the $10 million of adjusted EBITDA over a 2-year period that was in that bridge. And so we're ahead of plan there. Currency contribution is also tracking ahead of plan as well. The original contribution of which was set at $10 million total for fiscal '27 and '28 combined in that bridge. We're tracking ahead of that. And then the last pillar was just mathematically, what do you have to believe from organic growth contribution to get to at least $600 million of adjusted EBITDA.

And when you update for everything I just stepped through, that leaves a minimal contribution needed from organic growth over the next few years to get to at least $600 million of adjusted EBITDA. Our results for this year and the momentum that we're building based on the progress that Robert outlined earlier, leaves us confident here as well. Achieving these fiscal '28 targets will generate very meaningful per share free cash flow growth and also significantly reduce our net leverage. From the Board down through our teams, we're laser-focused on this.

And so with that, Meredith, let's turn it over to questions.

[Operator Instructions] So our first question is for you, Sean. Can you explain why currency is benefiting operating income and EBITDA, but it had a negative impact on free cash flow this quarter?

Yes, so that's been a theme throughout the year that currency has benefited adjusted EBITDA. And as I just said in the remarks on our forward-looking guidance as we -- really for fiscal '28, but it's true for fiscal '27 as well. We expect -- we continue to expect currency to be favorable year-over-year in '27 and '28 from an adjusted EBITDA perspective. And that really just has to do with the direction of travel of our main currencies relative to the dollar, the euro being our largest net exposure from an adjusted EBITDA perspective. And we have a currency hedging program where we average in over each quarter for some currencies over a 2-year period, for some currencies over a 1-year period depending on our forecast visibility. And so that means that as rates change, there's a little bit of a delayed effect of when we either benefit or get hurt from those currency changes.

And right now, we're certainly in this period of getting help from that. So that's the story from an adjusted EBITDA perspective. And like I said, because we average in each quarter and we contract out for our largest exposures over a 2-year period, that gives us visibility also to what we expect in fiscal '27 and fiscal '28, which will continue in the direction of positive impact.

So then on the -- we mentioned that the currency impact on working capital was negative. That operates under a little bit of a different dynamic. And what we saw in Q3, I mean, just to do the kind of maybe an illustration of how the math works, we have -- at the end of the December quarter, we typically have a bunch of liabilities in our working capital that then get flushed out in Q3, and the opposite is true in Q2 and Q4.

And so if you think about it, at the end of December of 2024, I don't have the rates in front of me, but I think the euro, that's our largest exposure. The euro is at, I think, [ EUR 104 million ] or thereabouts. And at the end of December of 2025, it was somewhere around [ EUR 116 million ]. And so if you imagine you have, just for illustration, EUR 100 million of liabilities that will flush through in Q3. And at the end of December 2024, that was worth EUR 104 million. At the end of December of 2025, that was worth 116 million in U.S. dollar terms. And so that has a negative impact when you have an outflow quarter from working capital.

The opposite is true as well, right? So in Q2, because it's a large working capital inflow quarter, also for Q4, the quarter that we're now in is a large -- typically a large working capital inflow quarter. There, we benefit from that dynamic. So that's all normal stuff. And over the course of a year, tends to even out and certainly over a multiyear period. But that was the dynamic that we had in Q3.

All right. I'm going to go to Robert for the next question. Robert, here's some more math. This is a fun call. We got a lot of math. Robert, am I calculating correctly that you paid $35 million for three acquisitions that are expected to yield $13 million of adjusted EBITDA next year. Is that less than 3x forward EBITDA? Or am I missing something?

Your math is correct. But it is important to note that, that math is based on our consolidated reporting, and we have two of the acquisitions where we purchased less than 100% because the founder of each of those has stayed active and kept his investment or each of their investments in their -- the businesses they founded. And we really like that. It creates great aligned incentives for both Cimpress and the founder. But as we noted, we bought 85% of Turl. We expect to pay for the full acquisition amount, the 85% over 3 years. So not all of that is upfront, but it will be a small use of cash in fiscal '27 and '28. We also bought 50% of Mixim. So the implied valuation is higher if you're calculating off the enterprise value of 100% ownership. That being said, even if you adjust for that, we paid very attractive multiples of both profit, of EBITDA, of cash flow and our base case returns on the capital are also very attractive with a relatively short payback.

Okay. A question for Sean on leverage. Sean, how will you be able to keep net leverage at 3x trailing 12-month EBITDA at the end of Q4 when you have already spent $25 million on M&A in April and your free cash flow guidance has come down?

Yes. Under -- the way it works under our credit agreement, we're able to take credit for trailing 12-month EBITDA when we do an acquisition. So we don't get just what is in our reported results, but we look back over a 12-month period. And that makes sense. We also get to take pro forma benefit from any synergies that we expect to have. And really -- and there, we're limited to the things that are under our control. So that tends to be the things that are on the cost side, procurement savings and the like.

The updated guidance that we provided for at least $465 million, that implies further year-over-year EBITDA growth in Q4. And so obviously, that plays into the leverage expectations for the end of Q4 as well. And then if you do the math on our full year free cash flow guidance, as is typical, like Q4 is a large free cash flow quarter, and we do expect significant free cash flow in Q4 as well. I think at the midpoint of the guidance range, it's somewhere around $80 million if you just do that math.

So anyway, so that's how you get to the leverage guidance that we provided. And then just referencing back to the prior question as well that Robert just answered, we did pay less than 3x for the recent M&A because of the dynamics that Robert just went through.

Sean, I'm going to stick with you on this next one. Can you please comment on each segment -- we get this question every quarter. Can you please comment on each segment's revenue performance in the month of April versus last year? What trends have you noticed?

We try not to get into too much detail on a particular month's performance. And so we'll stay true to that here. But yes, I think I think the main takeaways, and I can understand why this question gets asked, especially in the current environment. I think the key takeaways are, one, we felt comfortable increasing our guidance for the full year. Obviously, we only have 1 quarter left. And so that's based on what we're seeing in April. It's also based on our forecast for the rest of the year. So I think that's a signal of confidence. I know that there's obviously a lot of focus right now on the health of SMBs, the health of consumers from a demand perspective.

And I'll just say we haven't seen a change there in April. And so anyway, so we feel good about the updated guidance that we provided. And again, maybe I'll just also reiterate to the guidance that we have provided, which is increased for revenue and profitability does also consider increased fuel and energy costs in that guidance. And we will have some of that in Q4.

Robert, I'm going to shift to you for the next one. You bought some shares this quarter and your Board authorized more purchases. That was in March for anybody who missed it, a $200 million authorization that replaced the last one. Will there be more repurchases in Q4?

So we don't provide forward guidance about repurchases. I will describe how we think about it. It's the same as we've said many times before. First of all, we do want to repurchase shares when we think they are undervalued, and we do think our shares are still undervalued, although less so than earlier this year.

Second, like any capital allocation, we horse race share repurchases against other options, and we're in a cycle of higher-than-normal CapEx where we see excellent returns. And as we discussed a few moments ago, we have some very attractive tuck-in acquisition opportunities. So we just have to take those into account.

And third, -- from the cash available, we are solving for a number of different things in fiscal '26, Sean talked about higher cash taxes, on favorable net working capital timing and very importantly, our commitment to deleverage plus the normal seasonality of the business. So we do have a very strong balance sheet, strong liquidity. We think we'd be able to continue to have attractive capital allocation opportunities in the future.

We certainly will continue to look at M&A -- I'm sorry, excuse me, share buybacks is a use of that. But again, I would go back to that leverage once again because we have called for net leverage to be below -- at or below 3x by the end of this quarter. And it's really something that's important to us to achieve.

Okay. Sean, a question for you. Based on everything you went through at the opening of the call, why aren't you updating your FY '28 targets at this point? I know you said there's still work to do on the cost savings piece, but every other part of that bridge was favorable?

Yes. I think it's a fair question and fully expected that question. If you take a step back, we put these targets in place. I think the first time we started to talk about them was in Robert's letter to investors at the end of July. So we're talking about less than 1 year ago. And that was just after we finished the year where we did a little over $430 million in adjusted EBITDA. So at the time, we were basically saying that we'd grow our adjusted EBITDA around 40%. I think it's 39% or something over the next 3 years. and also with pretty sizable -- sizably improved free cash flow conversion on that as well. And so that's a lot of growth.

So just to keep things in perspective. But when we put the targets in place, we did it as this at least framework, and we had that in the guidance that we've used throughout this year as well. So that, of course, means it could be higher. But from the Board down through the management team, we're completely committed to delivering what we said we would do. And hopefully, it's clear from what we outlined at the beginning of the call earlier that we're making good progress, and we're confident that we'll meet or exceed those targets. But we still have a long way to go.

Our updated guidance for fiscal '26 that we just went through is $465 million. So we still have a long way to go to make sure that we deliver against at least $600 million over the next 2 or so years. In our view, I think if you just model out what the free cash flow per share would be in fiscal '28 based on the targets that we have and also knowledge that, that would also imply significantly lower leverage, and that's part of our targets as well. I don't think that these fiscal '28 targets are today reflected in how we're valued. And so we'll keep updating each quarter on our progress, but we're going to leave our fiscal '28 targets as they are. There are certainly areas that we're ahead of plan based on what I shared earlier. And so I think the main takeaway for investors should be that the probability of achievement has continued to increase each quarter based on the progress that we're making and the specific examples that we shared.

And it is in at lease framework. So we're certainly -- we certainly could end higher -- but we have 2 years to go, and we don't want to get ahead of ourselves because we want to be sure that if we provide a committed target that we're sure that we hit it.

Great. Sean, I'm going to stick with you for the next few questions here. So first up, are you able to estimate how much of a revenue benefit the Upload & Print business has got from regional elections during Q3?

Yes. We didn't break that out. There's -- every quarter, there's always some change in activity. And this quarter, there happened to be in some countries in Europe, some nice volume growth attached to regional elections, and that tends to impact a few products in particular. It wasn't like the dominant trend by any stretch, but it definitely was a help including in France. And -- but we were not going to break out that specifically. But for posters, flyers, there was definitely some help there. It's sometimes hard to like the -- it's not like we can see it overall in the volume, but it's not like we're scanning the content of every order and then trying to categorize that as if we're an election or not. So that's why it's a little bit difficult to break that out, and we don't seek to do that externally, but definitely helps this quarter.

Next question for you. Can you provide more color on the weather disruptions to Vistaprint's revenue in January and February?

Yes. If you'll recall, in each of January and February, there were some very significant snowstorms -- and typically, like if we -- we'll look at bookings for each day on a map, right? And so you can see that by state, year-over-year trends, et cetera. You can get more specific than that if you really want to drill down even further geographically. But imagine you're looking at a map and you can see a bunch of green and red based on year-over-year bookings.

Typically, what would happen when there is a severe snowstorm is all the impacted states that you might expect if it was happening in the Northeast or if it was happening in the Midwest or whatever, you could see very clearly in that visualization, the states that are impacted and that's pretty normal stuff.

And one of the things that was different about the large storm that hit in January was that -- and also across the Southeast, there were significant issues with the electrical grid and freezing and winds and freezing rain. And so there are a lot of states where there are significant power outages. And of course, that impacts people's both focus on coming to Vistaprint in this case and ordering what they need, but also ability, right, because they were -- they had power outages. So we can see -- when that happens, like we can see it very clearly like what states are impacted whoever. And that was just a broader impact than what we would typically see when there's a snowstorm in the winter months. And so that's what we're referring to. And it's a real thing, like it has a real impact.

That dampened the results in January. There were some similar storms in February that were pretty severe. And then as we got to the -- towards the end of February and then into March, in Vistaprint, we saw a definitive acceleration in results, leading to overall a strong quarter for Vistaprint.

Okay. And can you provide more color on the cost increases that you expect from energy prices? And will you look to offset that with price increases?

Yes. Well, there's -- obviously, energy prices or oil prices are, at some point, an input to a lot of our either raw materials or logistics cost inbound freight, outbound freight. So there's certainly impact. Some of that impact is a little bit delayed depending on the respective supply chain for the particular material.

On the logistics side of things, again, for inbound freight, outbound logistics, that's a little bit more real time. The way a lot of our, for example, outbound logistics work is that contractually, there's a fuel surcharge that is a variable that can go up or down depending on where oil prices are and if they're outside of a certain bound. And so the cost increases will happen. They're real. And I think that's to be expected.

We do expect that in large part, we would be looking to pass these on from a price standpoint. And to the extent that the increase specifically in oil prices and the flow-through that impact that has on logistics costs, especially for outbound logistics, that also then as hopefully, those prices at some point, normalize that we would then bring that back down. And so there's certainly -- we'll have some cost impact in Q4. It's not overly material, but it's notable, and we do expect that much of that will be offset by price increases, yes.

That brings us to the end of our pre-submitted and live questions. So I'm going to turn the call back over to Robert to wrap things up.

Thanks, Meredith. The key takeaways from our announcement today are we've raised our FY '26 revenue and profit guidance for the second time. And we certainly expect to end the year -- the fiscal year with net leverage that is more favorable than our prior guidance. Strategically and operationally, we are progressing in key areas that I discussed briefly today that we covered in much more detail in my July letter to investors and in our September Investor Day. At the top level, what we continue to do is enable millions of businesses to build their brands, stand out and grow by leveraging our core competitive strength in manufacturing and supply chain excellence and by continuing to improve the customer experience to drive efficiency gains.

Our ongoing progress reinforces our confidence in our path to fiscal '28 EBITDA of at least $600 million and approximately 45% free cash flow conversion, coupled with significant reductions in net leverage. And achieving that result should really drive significant returns for long-term investors. So I'll wrap up by saying thank you again for joining the call, and thank you for continuing to entrust your capital with us. Have a great day.

This does conclude today's program. Thank you all for joining, and you may disconnect.

Good morning, and thank you for standing by. Welcome to Sempra's Second Quarter Full Year 2026 Earnings Follow-up. I would like now to turn the conference over to Meredith Burns, Vice President of Investor Relations and Sustainability. Please go ahead.

Thank you, Michelle, and thank you, everyone, for joining us. With us today are Robert Keane, our Founder, Chairman and Chief Executive Officer; and Sean Quinn, our EVP and Chief Financial Officer. We appreciate the time that you've dedicated to understand our results, commentary and outlook. This live Q&A session will last about 45 minutes or so, and we'll answer both pre-submitted and live questions. You can submit questions live via the qu-wtomc. Before we start, I'll note that in this session, we will make statements about our future. The actual results may differ materially from these statements due to risk factors that are outlined in detail in our SEC filings and the earnings document we published yesterday on our website. We also have published non-GAAP reconciliations for our financial results on our IR website. We invite you to read them. All right. And now I will turn things over to Robert.

Thanks a lot, Robert, and thanks, everyone, for joining us on the call today. Q2 marked a milestone for Cimpress. We exceeded $1 billion in quarterly revenue for the first time ever, with organic constant currency growth of 4% through the first half of the year, which was ahead of the annual guidance range that we had previously provided of 2% to 3% and year-over-year adjusted EBITDA growth in the first half of the year that is equal to the full year dollar growth that was in our prior guidance. We are raising our annual guidance for revenue, for adjusted EBITDA and for free cash flow, and I'll go through those all in a moment. For the quarter and Q2, revenue grew 11% on a reported basis and 4% on an organic constant currency basis with revenue growth across all of our segments. Reported revenue was aided by a tuck-in acquisition in our Print Brothers segment as well as the benefits from currency. In Vista, organic constant currency growth of 5% was up from 3% in the prior year quarter, and that continued to be supported by growth in promotional products, apparel and gifts and packaging and labels, which each grew double digits. We've covered this before, but just as a reminder, and Robert alluded to this as well, our elevated product categories help us to serve and retain high-value customers that make up our most profitable customer deciles. In terms of our legacy products, business cards and stationery declined 1% for the quarter. That's consistent with Q1 and also an improvement from last year's decay rate. Geographically, while we had growth across all markets in Vista, strong performance in North America was the main driver of the acceleration in growth versus the prior year quarter. Turning to our other segments. Upload and Print customer and order count increased and fueled combined organic constant currency revenue growth there of 6%. The tuck-in acquisition that we completed in the quarter contributed $18 million to the Print Brothers segment reported revenue, which grew 26% this quarter and 6% if you exclude that tuck-in and also currency benefits. The Print Group, National Pen and BuildASign continued to increase their crossSimpress fulfillment volumes as they act as a fulfillment partner on behalf of Vista. And National Pen revenue also benefited from some tariff-related price increases. Turning to profitability. Adjusted EBITDA increased by $6.6 million year-over-year. Q2 profit dollars increased 8% on a consolidated basis from growth in our higher-value elevated product categories and also supported by favorable currency movements. Gross margins declined 110 basis points, and most of that was from the tariff impacts at National Pen, both the tariff costs, but also the offset of tariff pricing. In Vista, segment EBITDA improved 10% or approximately $10 million, resulting from revenue strength, but also stable gross profit margins and currency benefits. Robert referred to this earlier, but I'll say it again, Vista's variable gross profit per customer grew 9% year-over-year, a continuation of a trend that we've seen for some time and a strong indication of our continued strategic progress

Profitability at Vista was negatively impacted by about $2 million associated with the hurricane that hit Jamaica at the end of October that Robert talked about, a portion of which may be recoverable through insurance in future periods. Profitability was also dampened by $1.5 million of production start-up costs for expansion of our North American production network and also $1 million of tariffs net of pricing increases.

We do expect that, that impact of tariffs should lessen in future quarters and supply chain remediation continues to ramp up. And lastly, currency provided a $4.1 million benefit to EBITDA this quarter that should be a source of some continued year-over-year favorability in the second half and also as we look ahead to next year as well. Adjusted free cash flow declined $9.2 million to an inflow of $124 million. We had lower net working capital flows this year versus last year, there's just normal timing. And as we've guided, capital expenditures were higher as we invest in the expansion of our North America production network, but also we invest behind efficiency and the expansion of our production capabilities for elevated products.

From a balance sheet perspective, net leverage at the end of Q2 was 2.97x trailing 12 months EBITDA and that's as calculated on our credit agreement. That's down sequentially from last quarter despite allocating over $25 million to share repurchases in Q2. Our cash position ended the quarter at $258 million, and we continue to have $250 million remaining on our credit facility that is undrawn at the end of the quarter.

Turning to our guidance. As I said before, we've raised our expectations for fiscal '26 based on the strong results from the first half of the year, we now expect revenue growth of 7% to 8% and 3% to 4% organic constant currency revenue growth. We expect net income of at least $79 million and adjusted EBITDA of at least $460 million, up from the previous $450 million. We expect operating cash flow of approximately $313 million and adjusted free cash flow of approximately $145 million, that's up from previously $140 million. And we continue to expect net leverage to decrease slightly by the end of fiscal '26 from the FY '25 level of 3.1x.

We also, as Robert said, we remain confident in our ability to deliver on our fiscal '28 targets, which, again, I'll reiterate as 4% to 6% organic constant currency growth in fiscal '28, $200 million in net income, adjusted EBITDA of at least $600 million, adjusted EBITDA and free cash flow conversion of approximately 45% and from a leverage perspective, we expect to exit fiscal '27 with net leverage of approximately 2.5x as we begin to expand profitability more significantly and then exit fiscal '28 with net leverage below 2.0x subject to capital allocation choices, such as share repurchases.

With that, Meredith, why don't we open it up for questions.

Thanks, Sean. As a reminder, you can submit questions during this webcast via the questions and answers box at the bottom left of the screen. We had a good number of pre-submitted questions on a range of topics. Where there are thematic overlaps, I will combine some questions to make sure that we're addressing what's on people's minds. So let's take our first question.

Sean, this one is going to be for you. How would you characterize the holiday season that just concluded for Vista? Did it go as planned, better or worse, what worked and what did not? And are there any trends within holiday cards worth mentioning, either regarding the industry, your market share or anything else? And what was the percentage change in cost per click in U.S. consumer this year.

Okay. Overall, it was a strong quarter for Vista, and I said this in my earlier remarks, but I would highlight North America as the source of strength compared to last year. I think on the Q1 call, I talked a little bit about our approach for the holiday season and what gave me optimism. And one of the things is that we had an evolved approach to the holiday season this year, with just, I would say, more balanced approach leading into the things that have been working for us, including elevated product growth and being intentional about not shifting as much resource to consumer-specific messaging. And I would say we're happy with how that was executed. Team did a great job and is a strong result overall.

In the release, we didn't get into too many specifics on consumer growth, et cetera, but I'll give you a few data points, and the question I think was quite focused on the U.S. and also holiday card. Volume even holiday cards and calendars in the U.S. was flat year-over-year. And in Canada, it grew double digits. So I think that's -- those are good data points. And I think some of that's because of what we're comping especially in Canada, there were a few things last year. But I think that data point, coupled actually with the improved DK rate in business cards from last year. I think that shows that these legacy products are still relevant, but also that we can continue to influence these trends through our experience, selection, merchandising, other things in our control.

In Europe, we had a tougher comp. Last year was quite a strong holiday quarter for consumer in Europe. And in Europe, consumer was down a little bit year-over-year in Q2. So I'd say that was the weak spot if I was going to name one. But again, it was a tough comp. As we look at things like data on Google Search volumes and such, it would suggest that we took share this quarter. Some of that data is a little fuzzy in terms of how precise that is with market share. But directionally, I think that would be the case.

Year-to-date, just from a consumer perspective, consumers flat year-to-date in constant currencies in Vista with a little bit of gross profit growth. So we do continue to expect to see a little bit of consumer growth outside of the holiday peak in particular from elevated products we've launched with consumer use cases.

With respect to the question on cost per click, those aren't details that we get into in any specific markets. But I would say just in general, in terms of -- certainly on the performance marketing side of things, I would just say that -- we're being bold in our testing agenda. Our channel mix continues to evolve, and that was the case in Q2. It has evolved quite a bit. And that won't be the case just for Q2, I would say that kind of in general, it's an exciting area, and we're looking forward to continued progress there.

Thank you, Sean. I'm going to stick with you for the next question. So strong Q2 results represent a continuation of trends to serve from Q1 and led you to raising your guidance. Can you talk about the biggest areas of outperformance versus your initial FY '26 guidance? .

Yes, sure. There weren't really any big areas of outperformance. I -- it was really a solid quarter of execution really across the board. I think that was the case in Q1, too. And there was, of course, a few unexpected things as well. Robert talked about the -- and I mentioned in my remarks, the hurricane in Jamaica. There were a few others, but we were able to overcome those operationally and then we did have some help from currency too. On the revenue side, I think in terms of like how we're tracking to our plans, I would say we're basically on track -- when we set our guidance, if you go back to the words we put around that, we did note that we factored in potential uncertainty.

And I think for revenue, we're now confident increasing because of what we've been able to deliver in the first half of the year. The reported growth also factors in now -- about 100 basis points of growth from the acquisition that we did in Q2, and then you could see currency continues to be a tailwind. And so that's factored in, but pretty consistent with the impact that we had included for the original annual guidance.

From an EBITDA perspective, again, I would say we're delivering to our plan almost exactly on our plan for H1. And now we've already attained the full year EBITDA dollar growth that was implied in our annual original annual guidance. And so we've updated that. You may recall Q1 was a record Q1 for us from an EBITDA perspective. And Q2 is always a seasonally really important quarter. So with the solid Q2 now behind us, -- and having had a record Q1, we now feel comfortable raising our EBITDA guidance for the year. And through the first half of the year, I would say Vista is on track. Upload and Print overall has been strong. Those are our 2 biggest sources of EBITDA and the operational themes that are driving those results are all very consistent with what we shared at our Investor Day and Robert started the call with today.

One other thing that has helped to support adjusted EBITDA growth is currency. I mentioned this in my remarks as well, with the euro and the pound strengthening, that's favorable for our results, both from a revenue and EBITDA perspective. And that has been a little bit of ahead of our plan. That should continue to be the case with some of the year-over-year benefit in H2. And then as we lock in our hedges, looking out past FY '26, we have visibility to continue EBITDA favorability from currency as well. So -- that was one of the bridge items that we had in our path to our fiscal '28 targets, if you can recall the slide that we used at our Investor Day. And I would say there, we feel good about where we're at based on what we've contracted and then also recent further strengthening in the euro and the pound.

Thank you, Sean. All right. We're going to move along to a question for Robert. At Vista, you called out that promotional products, apparel, gifts and packaging, along with labels, all grew at double-digit clip during the quarter. How are the underlying trends progressing for these customer cohorts? Robert?

Sorry, I had a. So the strong growth you're talking about really does demonstrate how we've been driving our wallet share SMBs, thanks to the past and the ongoing investments. So those investments, especially in elevated products and manufacturing capabilities that allow us to be very competitive in elevated products have really played part. In our Investor Day, we had a slide and we showed the top 2% of our customers at Vista contribute just about as much total variable gross profit as the bottom 80% combined. And it's really that top 2 and top 10% to 20% of our customers -- and that level of spend, which represents our future. So they play a big role in our results and the trends that we see in those portions of our new cohorts are very, very healthy. to your putting more specifically, the underlying trends we're seeing are progressing very well. Starting last quarter, we began discussing the variable gross profit per customer as a way that you as an investor can evaluate our progress in serving these higher-value customers and growing wallet share. So that includes everything I've just talked about for your question. Just recall, Q1, that growth was 7% and in Q2, it was 9%. So we like what we see there. It's very consistent with our strategy.

There's still a lot of opportunity in categories amongst all customers who are in markets that are less penetrated from an e-commerce perspective. And there are large addressable markets that we are addressing that we have not done so much so in the past. We're investing with behind this with CapEx, with expanded capabilities and fundamentally lowering the cost of production, for example, through focused production hubs so that we can push further into these categories like packaging, like apparel, et cetera, serving customers with great products they need at great prices with beautiful quality and delivery times. So that's where Cross Cimpress collaboration is playing a role in an increasing role. CF across Cimpress fulfillment is already something we're doing to lead new product introductions, lower costs. The increased collaboration we just announced between Vista National Pen, it's going to accelerate CF, but also other types of collaboration in promotional products in packaging as well as in signage, which I'll get back to the drivers of the underlying trends in your question.

Thank you, Robert. Let's stick with you here for the next question. Can you talk about the North American business for the Print Group? How have things trended versus your initial expectation? And how do you view the opportunity ahead for the business? Can you quantify its contribution in the quarter? And how do you think about its growth going forward?

Great. We're on track. As planned, we're focusing on building out the production capabilities. We have revenues in this unit, but they're still small. I think it was about $3 million for the first half, but growing quarter-over-quarter a fast clip. That being said, from a revenue perspective, we're just getting started and we have fixed costs that are weighing down on our overall EBITDA and CapEx, but that is very consistent with our plans and how we think about this. We've not yet started putting any ad spend against Pixartprinting or U.S. site other than small tests. We like the opportunity ahead, but we want to make sure we have everything right from a production and delivery perspective. In the near term, the bigger opportunity is really growing volumes as of a pillar through crossing press fulfillment for Vistaprint in multi-basmall formats and labels and other products. .

Now Pixartprinting printing has always been very strong in manufacturing innovation around those areas, amongst other areas. So we've taken the investments that we've made in Europe in the past multiple years and exporting that capability into North America for these products where we really don't today have focused production hubs like we do in Europe for those particular product lines. and we are coming -- we believe we've been doing so we're going to be a low-cost producer in North America that we can scale those categories through Vistaprint as well as the Pixartprinting brand. But a little bit analogous to what we're doing with National Pen and build design. We see that a big part of that production operation can be volume that goes to the Vistaprint brand in North America. We're excited about Pixartprinting in North America as a brand, but it will be part and parcel of a broader entry that we're planning.

Thank you, Robert. So you just mentioned the closer collaboration between Vista National Pen and BuildASign. So we do have a question on that. It seems that in bringing National Pen and BuildASign closer together, there will be a lot of capability sharing. Product development, sourcing, performance marketing, direct mail and manufacturing were all quoted in the January 13 release as part of the collaboration. What will remain separate and why?

So we are going to keep the brand separate and focus on integrating what I'll call the back-end capabilities of National Pen and BuildASign to drive growth and drive profitability at VistaPrint in North America. I'm actually in Europe as well with Pen -- National Pen is strong in Europe and is doing great collaboration already. with VistaPrint and our Upload and Print businesses. So it's really the brands that will stay separate and more and more collaboration will happen on the back end. We're doing that because we continue to believe that it is advantageous to have multiple brands in the market both from a search perspective, which shows up in front of the customers, but also be able to vary our value propositions into different brands.

But on the back-end operations, all of these investments we've been making over the past years in technology platforms, manufacturing talent in other areas are allowing us to take synergies or drive synergies and importantly, drive customer value by sharing those capabilities. I'll give you a couple of examples of that. We talk a lot about Cross-Cimpress fulfillment. We accelerate the benefit of focused production hubs, which still remain decentralized because teams who are very close to that market focus on not only what the customer needs are, but how to best produce the product, but we are incentivizing volume to flow to the most efficient highest quality production operations we have. And over time, there's a lot of benefits to that. It increases profitability, increases product introduction, we get better capacity utilization and so on.

On the tech replatforming that creates opportunities, obviously, in our technology investments to do 2 things. First of all, take the best-in-class and certainly at a very minimum, the best in Cimpress capabilities and share that across different brands. But secondly, to share the cost and, therefore, drive efficiencies in our software development and other technology investments. So that recent announcement about Vista National Pen and Buildisign, we expect to extend this to other areas. Now why last reason that these businesses are doing this is, generally speaking, they're serving similar types of customers and customer use cases.

The other thing that is common between these is they have a higher spend in advertising as a percentage of revenue if you were to compare them to our Upload & Print businesses. So with access to the same product catalogs, via MCP and across in equipment that makes the sharing possible and we can optimize our advertising spend across those different brands that all may show up in the same Google search or other areas and make sure we're getting the best ROI across the board for all of Cimpress, not an individual brand. So there's things that will still be unique about these businesses, and they will remain with respect to specializations, but we do believe, as I've just described, there's a lot that we can share.

Thanks, Robert. I'm going to stick with you for one more question for now. How do you view the opportunity ahead for Cross Cimpress fulfillment to continue to drive down COGS? And how much headroom do you think there is ahead -- is there a certain level of cross Cimpress fulfillment activity per business that you would like to achieve? .

Okay. I've already mentioned a lot of this in today's call. But in summary, Cross Cimpress fulfillment is a big opportunity. It's another example of past and current investments that are driving both top line and bottom line growth. It's part of our execution plan to achieve the EBITDA expansion to at least $600 million by fiscal '28. So -- that's how we view it. Now we're still early in the opportunity for cross-Cimpress fulfillment, but it's growing fast. It was a little over $40 million in the first half of fiscal '25 and now it was over $80 million in the first half of this year. So it basically doubled with the midyear. We believe that last year, that delivered about $15 million of gross profit increase as a result of that -- again, that was for fiscal '25 ending June. Our scale-based manufacturing advantages that we've always talked about for decades in mass customization, typically happen on a product-by-product basis. So we have, through these focused production hubs, the opportunity to lower cost, improve quality, improve speed, expand our product lines, increased utilization of invested capital by aggregating all this volume into these focused production hubs.

And I'd say beyond that, but very closely related to cross-Cimpress fulfillment with the announcements, we've mentioned with National Pen and BuildASign, but similar things that we're doing in Europe with our Upload & Print businesses. We have great, very strong teams who are experienced in the product category launch process, the new product introduction process for specific areas just like we do at VistaPrint. And we're able to have teams specialize in the areas their strongest at. So as to what level of cross impress fulfillment we'd like to achieve, we don't disclose that specifically, but we do expect this to grow strongly for some time to your question, there's a lot of headroom ahead.

Thank you, Robert. All right. Sean, let's take a technical question. In the quarter, it looks like the company allocated $22.6 million for the purchase of noncontrolling interest. -- what position did the company buy? Any details you can share would be appreciated, what noncontrolling interests remain outstanding.

There are 2 transactions that make up that a little bit more than $22 million. Both of them were in our Print Brothers segment. $11 million of that was a mandatory redemption that required us to purchase the remaining shares from minority holders that sold a portion of their equity interest to us in fiscal '23. And then the other 1 is, was the remaining $12 million of that $22 million or so that relates to minority equity holders in a smaller business within PrintBrothers that exercised the put option to sell those shares. In terms of other noncontrolling interest, that remain outstanding. There's nothing material. You can see this on the face of the balance sheet. We have $6 million of redeemable noncontrolling interest outstanding at the end of the quarter.

We don't have anything in terms of anything mandatorily redeemable. And I'll just maybe add that those 2 transactions in the quarter were contractual all of the minority shareholders that were part of these transactions remain active in our business, and we are in active discussions with them on buying back into the respective businesses with a long-term horizon. And so we look forward to concluding those conversations.

All right. Next question on M&A. We got some live questions on M&A, too. We'll definitely cover the answer to those in the next couple of questions. Robert, the company did a tuck-in acquisition for $10.4 million in the quarter, and you noted in your earnings document that the company has a healthy pipeline of potential tuck-in M&A opportunities. How much capital is the company willing to allocate here? Also, I believe in the past, the company used a 15% hurdle rate for any tuck-in M&A deals. I assume the fiscal Q2 tuck-in deal clears this hurdle but any financial details you can provide would be interesting.

Your assumption is absolutely right. It's very easily clear hurdle. But let me give you a little more detail about this particular tuck-in. We purchased an Austrian printing group with annual revenues of about $70 million in annualized EBITDA of about $5 million prior to synergies, and we have very significant synergy opportunities ahead. The enterprise value we paid wasn't just the $10 million or $10.4 million. It included debt. But if you take the equity plus debt that enterprise relative to the pre-synergy EBITDA we paid was comfortably below $5 million. .

Now inclusive of synergies, we expect that multiple to be much lower, and we expect the return on this investment to be very comfortably higher than 15%. The purchase price was also done at a very attractive multiple of cash flow after-tax cash flows relative to the care delaying -- where we're deploying there. Strategically, it really positions us in Austria to grow faster in elevated products like multipage products, but also importantly to -- through cross Cimpress fulfillment, used that Austrian production capabilities, especially in Germany and use some of our German production operations to expand products into the acquisition. That is one of many examples of the synergies we see before us that will lower our post-synergy multiple.

Now this is a tuck-in, I'll call it, acquisition, which brings both customer relationships, but vertical integration has fast payback, very clear have to deliver profitability and cash flow now and over the coming years. Importantly, we have a strong leadership team in Austria who's doing very well at group.at. That's part of PrintBrothers. They've been with us for years. they sourced the deal. They proposed the deal once it was approved, they led it. They're taking full accountability for it, and they're managing this. And so I'd say all those things I just talked about exemplifies what we're looking for in tuck-ins, strategic fit against our goals of elevated products, manufacturing supply chain, importantly, also with strong Cimpress leaders on the front lines who sponsor and lead the deal with strong cash-on-cash returns to the capital we put there with high IRR and capabilities that either complement or accelerate our existing communities.

Now your question, I think, was how much capital we'd be putting into other tuck-in M&A. That, frankly, is coming -- depending on other capital allocation opportunities. we'll be looking at the relative return and risk versus buying back our own shares by the investments we're making in internally that we've been talking about a lot in this call that are driving cash flows through production operations, our commitment to delever our balance sheet and then, of course, these types of deals. So it's hard to say what it will be specifically. We don't see this as a fundamental singular or even top 3 driver of how we're going to get to our FY '28 goals. But as I think we've talked about since the September Investor Day, we do see it as a part that's consistent with our strategy, which has good returns to capital and will be part of that overall path.

Thanks, Robert. So there is a follow-up question here that I think you can touch on pretty quickly because you've already talked a little bit about this. But -- the question is, my understanding is that the company measures any potential M&A deals or any capital allocation decisions against the returns from repurchasing shares. -- with the stock trading at a low valuation, especially if the company achieves its fiscal 2028 target, does this imply that tuck-in M&A deals in the pipeline potentially exceed a 15% hurdle rate? .

Absolutely, yes. .

I love it. Shortest answer ever. All right. We're going to move on to Sean, another capital allocation question. On capital allocation, share repurchases stepped up during the quarter and net leverage fell below 3x. How should investors be thinking about the magnitude of repurchases in the back half of the year? And Sean, one thing that I want to add to this just because we got a live question, somebody asking us basically what our position is on our valuation at this time. .

Okay. Yes. Well, there's still some level of repurchases that we can do in the second half of the year within the net leverage guidance that we gave. So we left some room for that. Of course, and Robert just touched on this, too, but any of our capital allocation is always dependent on a lot of factors, including other opportunities. But in this case, share repurchases are always price dependent. But Yes, I would say, listen, we were really happy to allocate a little over $25 million to repurchase in Q2. We did that at an average price that was below $70. We still believe it's a very good use of capital at recent price levels. So I still would expect some in the second half of the year, probably a bit less in terms of intensity overall in the second half of the year relative to -- certainly relative to where we're at in Q2. But again, always price dependent. In terms of -- I mean, I guess I kind of implicitly cover the other one. I mean, listen, we just ramped up the repurchases that we did in as just said, we feel that, that was a very good use of capital, buying back below 70%. And as I just said too, like we would still view that as very attractive at current price levels, and we have room to do repurchases in H2. And so we would put dollars behind that.

Great. So this next question is basically getting up the math behind what we might do in the back half of the year at 1x, which is essentially where the leverage level is currently. EBITDA will be increasing by at least $10 million, and the business is expected to generate incremental adjusted free cash flow, which includes working capital for the remainder of the year. Is there a specific planned share repurchases or M&A that's driving the guidance? .

Yes. So yes, all that math is right. Our free cash flow, as you can see, we reported in the first half of the year was $107 million. So versus the $145 million in the guidance, that implies $38 million of free cash flow in the second half of the year. That does already include the higher CapEx that we've also assumed in our guidance. And then we have $10 million of EBITDA growth implied in the guidance in the second half of the year as well. We don't provide specific guidance on other capital allocation that we do in the normal course because, again, as I just said, it depends on a lot of factors, including price, but also relative opportunities, et cetera. But with the free cash flow and EBITDA that I just outlined and you've outlined in the question, yes, there is some room for for other capital allocation on top of the -- any organic investments that were already included in the plan. That includes for repurchases and still allowing us to end the year slightly below 3.1x. So we have provided some room for them.

Thanks, Sean. All right. We're going to take a break for a second from financial questions. Can you talk a bit about how you view the opportunity for you in a genetic commerce? How are you -- are you in talks with any LLM providers today? How far away are you from being able to integrate into chat GPT or Gemini?

All right. So it's something that I think the entire world will move towards, and we certainly have been investing in that at the highest levels, myself and our CTO of the entire Cimpress executive team are spending time specifically on these subjects. I won't go into very specific discussions. But yes, agenetic Commerce is coming. We are working on that. And we feel comfortable that we will be at, if not the lead baton thrower, but very much at the front of the parade.

So next question for Sean. Could you please help us bridge or provide color around the difference between the all-time high trailing 12-month EBITDA of $469 million from Q4 of FY '24 to the trailing 12-month EBITDA today of $451 million. Gross profit has increased by $79 million over the same period, and contribution profit has increased by 52%, while EBITDA has decreased by $18 million. SP1 This is some

Heavy math on the fly here. So I'll cover this high level. And I do think it's a good question. And I think stepping back, we've actually used a similar framing as we look to architect what we need to hit in fiscal '28 looking back 2 years and saying, what needs to be true for us to make sure that we're having more EBITDA flow-through -- and we have a large cost efficiency component that we've talked about in our targets going out to FY '28. And part of it is we'll address kind of what is in the end of this bridge between what was our prior -- our highest ever EBITDA in fiscal '24, which is the base that you referenced in the question and where we're at today. So there's a few things -- again, I'm going to go high level because I don't have all the math in front of me, but I think that 1 of the big things is that in -- if you look at Q2 of FY '24, we had about $12 million of nonrecurring benefits in that quarter, which supported the full year. So that's relevant for your question, but it's also kind of a good data point as you look back just for Q2 that we just reported versus 2 years ago.

So that didn't repeat. So that's a bigger 1 in the math. In fiscal '24, that was the year where we were coming off of -- we were basically supply chains were normalizing. Input costs were normalizing as well and coming down. So we had pretty sizable reductions in input costs that year, but still kind of favorable pricing. So there's some net benefit to that in gross profit which is kind of already covered in your math. We also -- it was after that, that we had starting in FY '25, starting to see some overall declines in business cards and holiday cards. Those are more stable this year, but that has some impact on the math too. We do also have start-up costs this year for plant expansion, and we didn't have that before. And then really the remainder and other than the nonrecurring items, probably the biggest impact is just the remainders in OpEx with technology costs being the largest driver. And again, I connect that back to where and why we need to drive efficiency as we march to the FY '28 targets. One of the things that offsets that in the other direction is currency is a little bit more favorable in the current TTM versus where we were at back in fiscal '24. So that's high level. But hopefully, that hits on the key drivers.

I'll stick with you for the next 1 as well. on FY '28 targets. So should we be thinking about the bridge to FY '28 a bit differently than what was communicated at the Investor Day? Is $40 million of organic incremental benefit still the target? And is $10 million from tuck-in M&A is still a target. SP1 Okay. This is a great question. Thank you. The the bridge that we --

This is a great question. Thank you. The the bridge that we the question of is this bridge that we did at Investor Day. And in that bridge, that the objective of that bridge was to show what we needed to get to at least $600 million in EBITDA in fiscal '28. So it wasn't necessarily for each of the pillars in there, it wasn't a target per se. Importantly, the last pillar was what organic growth, what we needed in EBITDA contribution we needed from organic growth to get to $600 million, and that was the $40 million plus. So that wasn't to say that, that was necessarily the target, but that was the math you needed. And the whole point at bridge is kind of what you need to believe, especially from organic growth.

So we'll update that bridge at the end of the year. I think it's a helpful framing and hopefully gives all of you confidence as well. But the pillars in that bridge, they're still the right ones. And maybe I'll just -- I'll run through them quickly just to give you a little bit of commentary because it is a really important topic. So the first thing in that bridge, I'm just looking at on my screen here, was our fiscal '28 growth, and now we've increased that by $10 million based on our guidance update today, okay. We still feel good about...

Just fiscal '26...

Sorry, for fiscal '26. Fiscal '26, that's been updated. That's been increased by $10 million. And so that's an improvement relative to the original bridge. We still feel good about the $78 million to $80 million of cost savings, and that's the -- we use the midpoint there in the bridge, $75 million. And you heard today about some of the areas that we're focused on to drive that.

The next 1 is the runoff of plant start-up costs. That is -- frankly, that is just math and so we feel good about that. Tuck-in M&A has been a source of some questions today. That was the next 1 in the bridge. And again, we feel good about that as well. We've covered that -- the next 1 was currency benefits. I touched on that earlier, too. We have good visibility to what's in that bridge based on what we're already contracted. So I feel good about that.

And then the remainder is the organic growth needed to bridge to the at least $600 million. And that $40 million plus, that because we -- that represents 2 years, right? That's $40 million of organic growth flow through for 2 years. And again, that's just what you have to believe to get there. So as we get -- as we're able to provide all of you with increased confidence on the other pillars, and make that more tangible that will serve to also make that last element of the bridge more tangible and likely lessen over time in terms of what we need to believe. So -- so that's how we think about it. And like I said, we'll update more specifically on that bridge as we get to the end of the year. But hopefully, that's helpful in terms of kind of overall commentary. It's super important. And I just would add these FY '28 targets has -- they have all the attention of the management team, all the focus of the Board. And so we're laser-focused on this, and it's driving a lot in terms of our day-to-day focus of the management team.

Thanks, Sean. We have one more question that came in, just asking for a comment on the current state of our operations in Jamaica following the hurricane I don't know which one of you wants to answer -- any of you could? .

I'll jump in and say that I wouldn't say we're back at 100% of what we have. We are doing some renovations, but the teams are back at their desks, and we also -- where we don't have full capacity, we definitely have capacity in our service centers in Tunisia and the Philippines, which all stepped up big time in terms of helping out in the moment of the hurricane. So we're fine. I'd overlay that with, unfortunately, the hurricane hit right -- a week or 2 before our peak period Black Friday, Cyber Monday kind of the worst time of year to hit in terms of a peak season capacity. Besides having built back capacity, the volumes we have going through service centers in all parts of our business are lower now than they are in the peak period at the end of November, early December. So we're fine.

And maybe I could just add 2 things. One is I mean this hierarchy devastated Montego Bay. And so like our team members suffered devastating impact, and we've done a lot to try and help them. But frankly, I mean, these I said this multiple times internally. -- may be proud to be part of this team seeing the response to help them, but also the response to help make sure that our operations were running smoothly to support customers, too. And I just want to make sure it's clear that in terms of the impact financially, from an operational standpoint, things are stable, and we don't expect continued impact in terms of higher cost or lost gross profit in terms of how we support customers operationally, we're back to a stable place. Not to to continue to improve a little bit, but we're stable. -- we will continue to have some cost of just getting the office back to where it needs to be, the normal kind of remediation, that's where we do expect to have coverage from an insurance perspective. And so I would not expect this to be of any significance in terms of any drag on results in the second half of the year. And in fact, as we noted, yes, there's -- we'll pursue opportunities to recover some of the costs we've already incurred in the second half of the year. It's unknown when exactly we would recover that. That could stem into next fiscal year, but that process is very active.

Thank you so much, both of you. So that's it for the live and presubmitted questions that came in. So I'm going to turn things over to Robert to wrap up the call.

Thank you, Meredith. So the critical takeaways from the announcement we made last night, the conversation today are that halfway through fiscal '26, we are on track to deliver better financial results compared to our initial guidance for the year. The reason that's the case is because we are consistently executing and progressing in all the key areas that I've discussed today that are very consistent with what we talked about in July, in September, and I would say even in the years before that. These are elevated products that drive a step function improvement to our per customer LTV measured as gross profit per customer. MCP and the manufacturing capabilities that reduce cost of goods and OpEx by sharing overhead, increasing the velocity of new product introductions and user experience improvements, leveraging AI and other technologies to drive efficiencies and as someone just alluded to in the last question, I would say also revenue opportunities as we get into things like agent commerce in the future, increasing cross-Cimpress collaboration via CF, but also via broader collaborations as exemplified by the announcements we made with Vistaprint, National Pen and BuildASign. All of those factors reinforce our confidence in our path to fiscal '28 EBITDA of at least $600 million and approximately 45% free cash flow conversion, coupled with, as we've said many times, significant reductions in our net leverage.

So I'll wrap up by saying thank you to our investors for joining the call, and thank you for continuing to entrust your capital with us. Have a great day.

This concludes today's conference call. Thank you for participating, and you may now disconnect.

Thank you for joining us. My name is Marlane Pereiro. I'm the high-yield cable and media analyst at Bank of America. I'm pleased to have with us from Cimpress, Jonathan Chevalier, Senior Vice President, Treasurer and Vista Finance; and Meredith Burns, Vice President, Investor Relations and Sustainability. Thank you for joining us.

Thanks so much. Thanks for hosting us. We're happy to be here.

Always a pleasure, Meredith. So we'll start out with the presentation.

Yes. So I'm going to go at a pretty quick clip through a few slides here, and then we'll leave lots of time for a fireside chat Q&A. So I'd like to say thank you to everybody who's here in the room, also the people that are on our webcast. Today, we will talk about the future and our thoughts about the future. There are risks to investing in our stock, which you can see listed on this slide, but also in much more detail in our SEC filings, so you should check those out. One thing that we will not be doing today is we won't be providing an intra-quarter update on the December quarter. So sorry, but that's not what we're here for, but happy to talk about the longer-term future for sure. And then there are some non-GAAP measures in this presentation, which you can find a reconciliation to on our website at ir.cimpress.com.

So at Cimpress, we help millions of businesses build brands, stand out and grow via custom print and promotional products like the ones that you see here on this slide. This is something that we excel at, and we've been doing for a very long time, which you can see on this next slide. This just shows our revenue over the course of the last 21 years. And the bars that are stacked, the blue part of the bar is our Vista business, which you'll know as Vistaprint. That is our organic business during this period of time. The gray bars actually represent the companies that we have acquired over time and then subsequently grown through this period. You can see the CAGRs.

And during this period of time -- not this period of time, during the last 10 years, we've had $2.3 billion of unlevered free cash flow and over $1.5 billion of adjusted free cash flow. So very cash generative. So what we do is web-to-print mass customization. What that is, is being able to deliver custom products even in small quantities with the reliability, quality and affordability of mass production. Customers care about this and love this because it helps them build their brands. It provides a fast turnaround, broad choice, low prices, high quality, e-commerce convenient and quantities that are right for them even if they're a very small business. And it is very hard to do. How we do it is we combine scaled talent across multiple organizations like manufacturing, software, design, advertising, service operations and product development.

We have -- we operate in a very large and fragmented market. It's about $100 billion in North America, Europe and Australia. And that market represents a range of different types of products. We have products that came to the mass customization paradigm relatively early, like paper-based products like business cards, postcards and flyers. For us, we call those legacy products. We've been in that market for a very long time, and they're more mature. The end markets have been shrinking over time. We have been growing over time until very recently that has matured and that is a little bit of a drag on our revenue growth.

However, we have this long history and track record of bringing more and more product categories into the mass customization paradigm. Some examples of recent places where we've been focusing are on this slide -- on this slide, paper bags, corrugated boxes, paper cups, drinkware, flexible packaging, sophisticated signage, roll labels, stickers, multipage booklets, you get the idea. We also have expanded our capabilities in being able to offer these massive explosion of SKUs in the promotional products industry, partnering with suppliers for just-in-time inventory like type of inventory management. We've also expanded into faster shipping speeds for our customers as well. And so -- and we've done that through the combination of capabilities that I talked about on the last slide.

So I will say that there is a lot that we have been investing in on the product front, on the manufacturing front. We went into that in a ton of detail in our September Investor Day. So if anybody is interested in that, you can find on ir.cimpress.com, the video recording of the Investor Day presentation and the slides and the transcript. And I would highly encourage you to go there because we really talked a lot about how getting into those more elevated products, those newer product categories where we've been able to bring the mass customization paradigm is helping us to grow our wallet share with higher-value customers. That's across our businesses. And in particular, in our Vista business, that's really been very helpful for us over the course of the last several years, and it's fueling the growth in both revenue and profitability.

Okay.

Sorry. Moving on. We have a strong capital structure. We've got no near-term maturities. We had a senior notes refinancing in September of 2024. That's an 8-year term. So those are 2032. Our Term Loan B was repriced twice in calendar year 2024, and that is a 2028 maturity date. And we've also had over the past couple of years, a couple of upgrades from our rating agencies. Currently, our credit ratings for the family are BB- and Ba3.

Okay. So we'll go into some outlook here. This is for the current year that we're in. We just finished our first quarter. We're a June 30 fiscal year-end. And so for fiscal '26, which ends this coming June of 2026, we have guided to revenue growth of 5% to 6% or organic constant currency growth of 2% to 3%. We're getting some help from currency this year. Profitability from an adjusted EBITDA perspective of $450 million, up a bit from where we ended in fiscal '25 and operating cash flow of $310 million and adjusted free cash flow of about $140 million. We are investing this year, particularly in capital expenditures, in new equipment and also fitting out some manufacturing locations that we are doing in order to bring these new products to market and also to optimize our network in terms of where we produce things and make sure that we're producing products in the most efficient place to produce them.

That will help us lower cost. In some cases, it will help us get product to customer faster, et cetera. And so there is, from a cash flow perspective, CapEx included in this guidance of about $100 million this year. Our maintenance-oriented CapEx is about 1.5% of revenue, and this will be about 3% of revenue or so. We also recently, at our Investor Day in September, introduced a framework for thinking about FY '28 a few years out. The reason why we are talking about FY '28 is because that is going to be the first year that we expect to be benefiting fully on an annualized basis from a lot of these improvements that we're making on the manufacturing side that we talked about, also other improvements and efficiency gains that we can get throughout the P&L in advertising and also in our operating expense.

Overall, we expect about $70 million to $80 million of annual EBITDA improvement through the combination, so all up and down the P&L, with a big part of that coming from COGS, but not only COGS. So in FY '28, which would be the first year that we get the full benefit of that, we would expect our constant currency revenue to be growing 4% to 6%. We would expect our adjusted EBITDA to be at least $600 million and our adjusted free cash flow conversion to be about 45% of that adjusted EBITDA. So what that would yield if we are successful or when we are successful in achieving these plans, it would drive our EBITDA margins from a little under 13% in FY '25 to about 15% in FY '28.

Now I'm not going to go through this in super detail, but we did provide along with this framework for FY '28, a bridge to help people understand like what goes into getting to that at least $600 million. That is something that for us is we're going to strive to do better than that, to do better than the $600 million. But the way that the math works out to get to the $600 million coming from where we were in FY '25 to FY '26, which is the guidance I just talked about. You've got the cost savings. We have some plant start-up costs in FY '26 that are going to run off in future years. We do expect some tuck-in M&A contribution.

We expect some currency benefit just based on the way that we do our hedging. And then what you have to believe in order to get to $600 million is at least $40 million of profit -- contribution profit growth from our organic growth. The contribution margin on that is that's implied with that at least $40 million is not very high. We would hope to and expect to do better than that, but we wanted to sort of help people see what the components were of getting to that at least $600 million.

And then finally, what would that yield? That would yield significant delevering for us. We -- as of Q1, we're at about 3.1x trailing 12-month EBITDA as defined by our credit facility definitions, based on getting to that minimum level of profitability and cash flow in FY '28. That means that we would be meaningfully below 2x net leverage by the end of FY '28, subject to capital allocation choices that we may make. And along that path, we expect to be at approximately 2.5x trailing 12-month EBITDA by the end of FY '27, which would still allow some room for share repurchases or other capital allocation that we may want to do along the way. All right. With that...

Great. Meredith, I have a few to start off and then, of course, happily turn it to the audience. Obviously, AI is a big topic. So how do you see AI impacting the business, both in terms of opportunities of optimization, but also what segments could be at risk from some level of disintermediation?

Great. Great question. Thank you. So AI is a very important topic for us across our businesses. I would say that on the opportunity side, we are pushing ourselves to uncover those opportunities across the P&L. And we see that in the software space, we see that in regular G&A and marketing, we're already getting some good successes there in terms of automating advertising decisions or automating creative content in advertising, getting more efficient in software engineering and documentation, things like that.

We have been very successful, I would say, but still pretty early in the type of thing that you would normally expect every e-commerce company to be doing in terms of customer service and automating there in terms of chatbots and also just making our representatives more efficient. So I'd say from an opportunity perspective, you've got like sort of the bucket of things we can do, we use AI for to get more efficient ourselves. There's another place that I think the AI is going to be disruptive, but could yield opportunity for us, and that is in the design space, obviously. People are really experimenting and in some cases, successful using AI to design different things.

And I think our view there, even though we offer design services, that's not where we make our money. We make our money on the sale of the physical products, the production and the sale of the physical products, and nobody does that better than us. And so to the extent that AI is going to further democratize design, further make designs more accessible to more people, we would expect that those people would want to put the designs on more physical things. And so that, that could ultimately benefit us. But we do need to manage that as we go because we have folks in our business that focus on either creating templates for our customers to use from a design perspective, creating AI tools themselves for our customers to use from a design perspective and also design support or do-it-for-you type of design.

So right now, we can use AI to help make those people more effective, more efficient. And over time, we just sort of need to manage like how does this go over that period of time. And then the one other place that I would say there is likely to be disruption, and we also need to manage it is on the advertising side in terms of making sure that we are ahead of -- or keeping pace with at least where the market goes in terms of currently paid search advertising and organic search in terms of the benefits that we get there and bringing customers into our businesses through to, okay, what do you have to do in order to make sure that you're coming up with great results in these AI agents and LLMs and things like that.

We think we just really have to focus on customer satisfaction, making sure that we continue to delight people and that we are generating strong reviews, strong ratings from those folks, and that will help us continue on that front. And then, of course, we're investing from a team perspective in making sure that, that transition goes as smoothly as we can as we go through, I would say, the next several years where things are going to be changing quite a bit from an advertising perspective.

And when we think about revenue growth, is that driven more by customer retention and/or better customer like retention rates, new customers or [ repeat ] customers?

I think it can come from both, but very clearly, what we are experiencing right now is wallet share gains and improvements with higher-value customers within our customer base. And so we have a situation where, okay, even the new customers are higher-value customers, the repeat customers, we're gaining more traction because we're gaining more wallet share and people are sort of -- the average is sort of moving up in terms of what that looks like from a variable gross profit perspective coming from our highest value customers. So that's probably -- and that's in the Vista business, but also in our other businesses, that has already been a feature. And so I would expect a little bit more on the revenue from existing customers than just pure new customers.

I mean our customer data shows that a lot of our customers are buying similar products that we offer, just not from us. So I think there's a huge opportunity as we gain kind of awareness of our assortment and get better at serving high-value customers that people will start buying a broader set of our products, and that's good. And in terms of like thinking about high-value customers then and advertising as a percent of revenue, there should be opportunity there to capture as we are more successful in just getting more money from customers that really we can serve the best.

Great. And as we think about capital allocation, obviously, you've laid out kind of the leverage trajectory. How should we think about your capital allocation priorities, especially once you get to that leverage target? And in terms of acquisitions, do you think Cimpress could be in a position to be an acquirer, possibly a seller of assets in '26? Any color there would be helpful.

Yes. I mean I think we've stated recently that, I mean, we're focused on the path that we've laid out. We could see a role for small tuck-in acquisitions that can really help us in different areas, let's say, new product, new technology. But yes, we don't expect any kind of major shift to what we've laid out in our guidance there. And I think we are just committed to the delevering path that we've laid out, subject to our financial policy and then opportunities that arise.

Great. Any questions from the audience? I shall continue. All right. Great. Obviously, tariffs were a big topic this year. So any impact in the recent quarter, any lingering impacts as we go into next year?

Great. Great question. So yes, a little bit, but it's actually been pretty good. We've been able in this last quarter to really limit the tariff impact to less than $500,000 in the quarter. And that's been a lot of hard work behind the scenes in terms of shifting our supply where we can to places that have lower tariffs or no tariffs and also raising prices where we can't in order to offset that. I should say for everybody that the tariff concept really only impacts Cimpress in our promotional products and apparel space for things like paper-based products, signage, packaging, labels, that is either covered by USMCA compliance or it is -- their informational products that can't be tariffed under IEEPA because it would be taxing free speech.

And so it's really confined to the type of products that aren't substantially transformed when we decorate them. So like on this table right here, Colin has a beautiful Cimpress water bottle, and that is something like that. It was a water bottle when it came to us, it was a water bottle after we decorated it with the Cimpress logo that doesn't change the function of it. And so that retains its country of origin. And so that -- those are the products where we have that impact. We did build in, in this fiscal year, about $5 million of potential downside risk. So we're tracking ahead of that right now in Q1, but it's a volatile environment. There have been changes that have happened already during this fiscal year, and they may continue to sort of rapidly evolve. And so that's why we built that downside risk into -- and that's factored into our guidance.

And then turning to the cost side. You expect to generate about $60 million of cost saves this year. Can you remind us or how should we think about the cost to achieve those savings? Are there further cost saving opportunities as well?

Yes. So the $70 million to $80 million of cost savings, as I mentioned in the presentation, comes across the P&L. The COGS piece of that is going to be material, and that is the thing that we're investing in right now. So in FY '25, we had elevated CapEx. In FY '26, we have elevated CapEx. That is actually helping us to improve the amount of what we call cross Cimpress fulfillment. It's when we can take a product that maybe we outsourced before to a third-party fulfiller and bring that in-house to a sister company or it also allows us to combine volumes from 2 different companies into a focused production hub.

And -- but that does take some moving around. It takes a little bit of investment. And so we're making that investment this year. That actually is weighing on our profitability this year a bit. I mentioned in the presentation, there's going to be about $15 million or so of start-up costs in FY '26 that will run off as the volumes grow in those production areas. So that's one of the ones where there's the biggest amount of investment. Jonathan also mentioned the advertising, which is the better we can get at these elevated products and penetrating into the customer wallet share for high-value customers, the more efficient our advertising spend can be. And so that can be a source for those cost savings as well or at least for margin leverage as we go.

And then as I mentioned before, AI is something that we are investing our time in and in some cases, our expense in terms of making sure that we are as efficient as we can be, and we're uncovering opportunities there.

Great. And from a cost structure perspective, how much would you say is variable?

So variable cost structure is actually quite high at Cimpress. It's about 65% of our costs are either variable, like truly variable like raw material shipping of our products or third-party fulfillers, things like that, or they're what we would call semi-variable, which is we have proven that we can keep those costs in line with demand. So think about customer service costs or advertising spend. These are things that we can affect relatively quickly. We've demonstrated our ability to do that, especially during the pandemic in a big way. And so that's something that we're very comfortable sort of viewing as a variable cost, even though in some cases, it would take an action to affect it.

Great. And then obviously, the longer-term target of $600 million driven by revenue growth, COGS perspective, et cetera, what is potential upside?

I'm going to decline to quantify the potential upside there. I will just reiterate, though, that our own internal plans will be to chart a better course than the $600 million. We see that as a minimum. And frankly, we see that as a minimum in terms of delivering returns on the investments that we've been making organically in this business. And so we do hope to do better, but I'm going to decline to size it.

Okay. And there was news or kind of a little while ago around Spruce House activist, can you discuss that relationship? Do you speak with them? Any context or color you can provide would be helpful.

Yes. So I'm not able to share a lot of detail there. We have spoken to them. They have been a shareholder for a long time, and we really appreciate their feedback and their constructive ideas. But beyond that, I can't share any details. I will say that there was an amendment to the 13D last night that came out. And they -- in that reserve the right to have all of the strategic conversations that they want to have to either buy shares or sell shares. But the reason why they updated was it looks like they have been a recent seller.

And then it seems that at least anecdotally, there appears to be some digital saturation with consumers wanting more tangible products and experiences. Are you kind of seeing any sign of this? Is it -- how would you characterize that? Or -- because I said at this point, it seems somewhat anecdotal, but...

Yes. I mean we've been in markets that have been in secular decline for years, and we've been able to grow for -- Meredith had a slide here where we've been growing for the past 20 years. So I think we do believe that there's always going to be relevance for physical products. And you think about the a lot of our products really represent a person and who they are, whether it's their small business and like it's their livelihood or it's their family and friends on the consumer products. So yes, we do think that there's going to be constant relevancy there.

Now we've been transparent that some of our legacy products like business cards have started to decline a bit. We do think there's a long runway there as well just because the kind of the use cases of those types of products aren't necessarily what you and I would envision in terms of like passing a business card across the table. It's like, hey, leaving a card for their -- at a restaurant so that they can be relevant physically because otherwise, they're not going to be seen. So yes, whether it's business products or consumer products, there's still going to be relevancy and it's for us, it's where do we meet those customers. And again, we do think a lot of our growth is going to be from the elevator products that there aren't digital substitutes for in terms of packaging, promotional products, signage, things like that.

Great. And then just a few quick free cash flow items. From a CapEx perspective, you mentioned 1.5% of revenue as maintenance. As a more normalized total CapEx number, how should we think about that?

Yes. So we -- I would say that if you look at CapEx plus the value of capitalized leases as a percentage of revenue over the course of the last 5 years or so, there were a few years where we were actually sub-2%. And so that maybe felt like we were a little underinvested just from a normalized perspective, there were reasons for that because that was at the period of time that we were completely migrating our technology stack in our largest business in the Vista business. And because of that migration, we were very inwardly focused. We weren't actually at that point in time, launching new products through our own manufacturing capabilities.

And so now that we're out from under that technology migration, and that's been several years now, we're coming back to it, but I think we're playing catch up a little bit. And so the amount that we're spending in '25 and '26 is probably a little bit more than a normalized level and the sort of 1.8% or 1.9% of revenue is probably a little bit less. So I'd say around 2% or a little more than 2% feels right as long as we're -- we have these opportunities to be investing in these new product categories or in efficiency gains within manufacturing.

Great. And can you remind us, are you a cash taxpayer?

We are a cash taxpayer. That is true. We -- last year, our cash taxes were about $33 million. That was low for us because we received over $10 million of refunds last year from prior year cash taxes. This year, our guidance is for $55 million to $60 million in cash taxes.

Should we think about that as a somewhat more normalized run rate reasonably.

Yes. I mean cash taxes is definitely a better thing to look at than GAAP taxes because there's a lot of volatility in our GAAP tax rate. On the cash tax side, you can sort of think of it in 2 different chunks. If you look at our Vista business, the way that generally works is the more profitable Vista gets the lower the effective cash tax rate is because of some tax planning that we've done there and have had been able to take advantage of for a while.

In our Upload & Print businesses, however, that behaves like much more like sort of a normal situation where as profitability grows, the taxes grow as well. And those Upload & Print businesses happen to be in some pretty heavy tax rate jurisdictions like Germany, Italy. And so that's sort of the piece where if that's growing faster, we would expect absolute dollars of cash taxes to be growing up faster as well.

Great. Well, we're out of time. Jonathan, Meredith, thank you so much for joining us.

Thanks a lot, Marlane.

Thank you.

Good morning, and thank you for standing by. Welcome to Cimpress' First Quarter Fiscal Year 2026 Earnings Follow-up Call.

I would like to introduce Meredith Burns, Vice President of Investor Relations and Sustainability. Please go ahead.

Thanks, Michelle, and thank you, everyone, for joining us. With us today are Robert Keane, our Founder, Chairman and Chief Executive Officer; and Sean Quinn, EVP and Chief Financial Officer. We appreciate the time that you've dedicated to understand our results, commentary and outlook. This live Q&A session will last about 45 minutes or so and we'll answer both pre-submitted and live questions. [Operator Instructions]

Before we start, I'll note that in this session, we will make statements about the future. Our actual results may differ materially from these statements due to risk factors that are outlined in detail in our SEC filings and the earnings document we published yesterday on our website.

We also have published non-GAAP reconciliations for our financial results on our IR website. We invite you to read them.

And now I'll turn things over to Robert.

Thanks, Meredith, and thank you to our investors for joining today.

Before Sean goes into a review of the Q1 financial results, I'm going to recap several of the strategic and operational themes that we covered in detail in our annual letter of July 29 and at our September Investor Day. And I'll provide a few examples from the first quarter of progress we've made in these areas.

First, elevated products are driving a step function improvement in Cimpress' per customer lifetime value, especially at Vistaprint. By elevated products, we mean products that customers value more highly than our legacy products for building their brands and growing their businesses. Note as well that elevated products are typically still in the early stages of the web to print and the mass customization market disruption curve, and that means there's still a long runway for future market gain and market share gains by Cimpress. Elevated products make up a high percentage of product categories like signage, logo apparel, promotional products, packaging, labels and multipage small format products like books, catalogs, magazines and booklets. With these products, we are earning customer trust for a much larger portion of their needs, which means they become higher lifetime value customers, the customers with higher lifetime value. And we're achieving this both with businesses who were already Cimpress customers as well as with newly acquired customers.

In the first quarter, Vistaprint grew revenues from promotional products, apparel and gifts, as well as packaging and labels at double-digit rates year-over-year. In our September Investor Day, I gave an example of custom paper cups and the impact that those products had to take one customer's lifetime value and multiply it fivefold in terms of gross profits. In the first quarter, Vistaprint started to optimize that new product offering, and that optimization drove an increase of more than 50% to the average item quantity.

Another example is that, we are capitalizing and executing on our past and ongoing investments in our mass customization platform and our growing scale in the elevated product categories in order to reduce our cost of goods sold and to increase the velocity of new product introductions. Doing so expands upon our already significant scale-based competitive advantages, which we have in manufacturing, and it explains why we're investing significant CapEx in our production operations this year. At the same time, we are consolidating volumes of similar products from multiple Cimpress businesses into focused production hubs, which further reduces costs and increases the returns on our capital expenditures.

A key enabler of this is MCP-enabled cross-Cimpress fulfillment. XCF connects the fulfillment operations of each of our businesses to the customer-facing operations of each of our other businesses. And it drove an incremental $15 million of gross profit in our last fiscal year, and we remain in the early stages of a multiyear layering of cross-Cimpress fulfillment-driven gross profits on top of last year's results.

So here are a few examples from this last quarter, Q1 FY '26 of how manufacturing excellence is driving both cost reductions and benefits to our customers. First, all segments grew their cross-Cimpress fulfillment revenue by double-digit or triple-digit growth rates this quarter. And that's now a material part of the volume growth for Upload & Print, National Pen and BuildASign segments, and it shows up in their revenues. And XCF is also very importantly, a material driver of how Vistaprint is rapidly expanding into elevated products, which, as I just mentioned, help us expand our wallet share of the Vistaprint customer base.

In terms of improved value for our customers, MCP's newest fulfillment software has enabled Vistaprint to launch next-day delivery of business cards in the U.S. in the last quarter. And National Pen migrated to the MCP shipping and logistics platform for National Pen's largest production facility, which immediately improved its ability to predict delivery dates and improve the accuracy of all the related customer communication around delivery. It also supports network-wide optimization and smarter decision-making across Cimpress since National Pen is a very important fulfiller to other Cimpress businesses.

Third, shared technology, organizational delayering and artificial intelligence are helping us constrain operating expenses while improving customer value. For example, in Q1, Exaprint migrated its Spanish site to MCP e-commerce infrastructure, and that is paving the way to migrate all of Exaprint's geographies in the coming year, which will lower technology costs and improve the Exaprint site functionality.

In another Q1 example, Vistaprint rolled out generative AI chatbot, agent assist and customer self-service features that have collectively improved customer care efficiency by 6% year-over-year.

And fourth, we have a strong financial future with a path to FY '28 EBITDA of at least $600 million, coupled with very significant delevering on our balance sheet. The cost reductions, which we took in the second half of fiscal '25 are already supporting operating expense leverage in both Vistaprint and National Pen. We see many more opportunities, big and small that will allow us to deliver on the $70 million to $80 million of annualized adjusted EBITDA improvements that we expect to have exiting fiscal '27 as part of our bridge to FY '28 targets. A portion of these savings will come from improvements in our cost of goods as we continue to progress in manufacturing and supply chain excellence via our CapEx investments across Cimpress fulfillment and focused production hubs. Another portion will come from opportunities to further reduce operating expense via organizational simplification and generative AI.

Next, our tech modernization and the operating model, which it enables has continued to mature, and this has made the capabilities and the strengths of each of Cimpress' businesses more and more extensible to other Cimpress businesses, thanks to more standardized and shared software services. Cross-Cimpress fulfillment has been an early example of shared product catalogs -- cross-Cimpress fulfillment with its examples of shared product catalogs and supply chain has been the first instance of this. But over time, this approach will also allow us to consider new approaches to how we allocate our resources in areas like advertising and operating expense in support of both revenue growth and efficiency.

So we're excited about the opportunities ahead to fulfill our multiyear financial objectives, and we're actively working to chart an even stronger financial course over this time period.

Now, I'll turn things over to Sean, who can discuss the financial results for the quarter as well as our outlook.

Great. Thanks a lot, Robert, and thank you to everyone for joining us today on the call. As we noted in last night's release, our first quarter marked a strong start to the fiscal year. Our revenue growth rate improved sequentially, exceeding our annual guidance range. And when you couple that with strong profitability, this provides a good foundation for achieving or exceeding our fiscal 2026 financial objectives. So let me walk through some of the details.

Our consolidated Q1 revenue grew 7% on a reported basis and 4% on an organic constant currency basis. For those that joined us for our September Investor Day, there I had said our organic constant currency growth at that time was tracking to about 5% that was in September. We ended at 4.4% with backlog a little higher than we had planned. So we maintained that pace. The main sources of growth in the quarter were from Vista and our PrintBrothers segment. In Vista, we drove continued strength in elevated products and specifically within promotional products, apparel and gifts and packaging and labels, which each grew significantly year-over-year. These product categories contribute to our ability to attract and retain high-value customers.

Turning to our legacy products, there in the business cards and stationery category, we declined 1% this quarter in constant currency versus a 4% decline in Q1 of last year. So that was an improvement as well. And there, we're benefiting from the work that we've done over the last year to improve the offering, but also to optimize after the organic search algorithm changes that we experienced last year, as well as the passing of the anniversary of the reallocation of some of our advertising spend away from that category based on incrementality testing that we had done.

Turning to our other segments. Upload & Print delivered solid growth through customer growth and also order volume growth. Reported growth there was 15% and constant currency growth was 8% combined. And in National Pen and BuildASign there, the revenue growth was driven through their growing role as a key fulfillment partner for Vista.

Turning to profitability. Our adjusted EBITDA increased $10.9 million year-over-year. That was our highest ever EBITDA for Q1 period. It was an 11% improvement over our previous high, which was in Q1 of fiscal '24, and it was a 12% increase over last year. So strong profitability result for the quarter. In Q1, gross profit dollars grew 5% on a consolidated basis from the continued success that we've seen in elevated products, as I mentioned previously, and gross margins at the same time contracted 80 basis points, partially due to the ongoing product mix shift that we've been talking about for some time now.

In Vista, as we continue to move Vistaprint to be the preferred print provider for a broad set of customer needs, especially with high-value small business customers. It's important that we're able to acquire and grow the wallet share of these customers. Robert referred to this a bit earlier. We added a new metric for Vistaprint in the earnings document, also in our financial and operating metrics spreadsheet that we published on our IR site, which is our variable gross profit per customer as one way for investors to be able to understand our progress over time and also sort of look back at how that's trended over the last years. As noted in our release, that variable gross profit per customer grew 7% year-over-year. And consistent with what we covered at our Investor Day, nearly all of this growth in Q1 is coming from our top 2 customer deciles and in particular, the top decile, which we think is a positive signal relative to the areas of our strategic focus.

The net impact of tariffs on our gross profit was minimal this quarter. I saw a question just come in on that. So we'll cover that in a bit in some more detail. There, we were able to offset almost all impact through pricing adjustments. Our largest tariff exposure remains at our National Pen business, and we continue to focus on mitigation there through pricing and supply chain optimization.

We also continue to execute against our plan to drive advertising efficiency. Advertising spend as a percent of revenue was down 80 basis points.

And then lastly, currency had a $2.9 million benefit to our adjusted EBITDA during the quarter as well, and we do expect to have some further year-over-year currency benefits over the remainder of the year.

Adjusted free cash flow improved year-over-year, too, but was an outflow of $17.8 million, driven by the typical seasonality of our net working capital, but also planned higher capital expenditures and capitalized software expense versus the prior year.

And from a balance sheet perspective, our net leverage at the end of Q1 was 3.1x trailing 12-month EBITDA as calculated under our credit agreement. That's flat from last quarter, and our liquidity position remains strong with cash and cash equivalents just over $200 million at the end of the quarter and our $250 million revolving credit facility remained undrawn at the end of the quarter as well.

Turning to our guidance. We've reiterated our expectations for the fiscal year, which is that we expect revenue growth of 5% to 6% or 2% to 3% organic constant currency revenue growth, net income of at least $72 million and adjusted EBITDA of at least $450 million. We expect operating cash flow of approximately $310 million and adjusted free cash flow of approximately $140 million. And we expect net leverage to decrease slightly by the end of the fiscal year, and we expect to drive more significant decreases in our net leverage in fiscal '27 and fiscal '28 as we execute on our multiyear plans. That all while still being able to allocate capital to the repurchase of shares along the way. So our Q1 results position us well to meet or exceed these FY '26 expectations that we've reiterated.

At our September Investor Day, we also discussed and Robert referred to this earlier, our outlook through fiscal '28. And the reason -- one of the reasons we did that is that's the first full year that we expect to see approximately $70 million to $80 million of benefits from efficiency gains that we described at the start of the year. The successful execution of our plans would result in Cimpress delivering at least $200 million of net income and at least $600 million of adjusted EBITDA in fiscal '28 with approximately 45% conversion of adjusted EBITDA to adjusted free cash flow. As Robert said, we have goals and aspirations to chart an even stronger financial course over this time period. That's something that we're actively working to do.

And with that, why don't we turn it over to questions, Meredith?

[Operator Instructions] So our first question is for Robert. Congratulations on a strong quarter. How was consolidated revenue "only up 4% on an organic constant currency basis if Vista was up 5%, PrintBrothers up 8%, Print Group up 8%, National Pen up 8% and all other businesses up 8%, again, all on an organic constant currency basis?" I'm sure I'm missing something.

Thank you for the question. It's a good question, and it's also important to understand one of the core parts of our strategy. This is due to cross-Cimpress fulfillment where businesses get revenues and profits from fulfilling for each other. But that revenue for a business selling to another Cimpress segment is eliminated in our consolidated results. And you can see that at the table at the top of Page 5 of last night's release. This is the intersegment eliminations line just above the total revenue line. Our segment reporting follows our internal management reporting to incentivize our teams to drive cross-Cimpress fulfillment.

Now let me step back again and just touch on cross-Cimpress fulfillment and say why we're so excited about this because it is very beneficial to Cimpress as a whole. And this change in how we do the internal accounting and financial incentives has been one of the pillars of driving this growth because it incentivizes the teams to look beyond their own business. And we're channeling very strong manufacturing and supply chain capabilities that come from a given part of Cimpress towards other parts of Cimpress who have customers and customer bases who want those products. And this is happening in many different directions, including Vistaprint supporting other parts of Cimpress. But it's happening most significantly where National Pen, BuildASign and Upload & Print are fulfilling for Vistaprint and driving or helping Vistaprint drive into elevated products and the service of high-value customers. So we do expect this to continue to increase, and it's a great example where we are leveraging synergies across all of Cimpress.

Thank you, Robert. Next question is for Sean. Sean, what is the current status of your dealings with Spruce House, who filed as an activist over the summer? Have you talked to them?

Sure. We have that with Spruce House, and we appreciate their feedback. We appreciate the feedback of all of our shareholders and debt holders, many of which we've also spoken to in the normal course over the last quarter.

I think as we wrote in our annual letter in July, we believe that the recent share price doesn't reflect our intrinsic value. And so, that's where all of our focus is. And we believe that as we execute against the plans that we outlined both in September at our Investor Day, but also we've reiterated last night and today, we think that, that's what can change that paradigm. And so, that's where all of our focus is and -- but we certainly appreciate their feedback and the feedback of any of our investors in terms of how we can best do that. And yes, that's where all of our focus is.

Great. Thank you. Sean, I'm going to stick with you. So a question, on the fiscal 1Q guide, which you reiterated, I think that's for the fiscal year that we reiterated. Can you unpack a bit more how the first quarter of '26 results position you for the remainder of the year and how you're thinking about the shape of the year?

Yes. I mean, we didn't give quarter-by-quarter guidance, but I think clear -- obviously, our revenue growth rate was ahead of the annual growth range that we provided. So we're off to a good start there. I think you all have less visibility to the pacing of -- from an EBITDA perspective in terms of what's required to hit that at least $450 million. And I think it's fair to say that our Q1 results were kind of ahead of the pace needed in our plans to do that. And that's why you see language like Q1 being a strong foundation for us to be able to achieve or exceed our plans for the full year.

So I think the main takeaway should be off to a good start. We feel confident -- very confident about our plans to meet or exceed this guidance. And listen, like we put that guidance in place with a clear understanding that we have a very strong commitment and a need to meet or exceed that. And so, off to a good start. Q2 is obviously a very important quarter for us. And so, we need to make sure that we continue that execution through Q2, and of course, the remainder of the year as well. But let's get through a strong Q2. And we'll update everyone again in a few months on that, and we'll go from there. But I think the takeaway should be off to a good start and the pacing is ahead of the pacing needed to meet the guidance that we provided for the full year.

Thank you, Sean. All right. Next question, I'll stick with you, Sean. Can you speak to the impact of tariffs during the quarter? Was it something that had an initial shock and then normalized throughout the quarter? Or was the overall impact relatively muted?

Yes, sure. A lot happening and continues to happen on this front. I think the headline here is that, as I mentioned briefly in my remarks earlier, the impact of tariffs was pretty minimal, less than $1 million on a net basis for the quarter. And there was no -- in terms of like was there an initial shock and then normalization, I would say no. It was -- there was not any sort of strangeness in the profile of how that happened in the quarter. There's -- one of the things that changed during the quarter was the removal of the minimis exemption, and we really didn't see anything of any material nature there as a result of that change, which is good to see. And we continue to be very focused on our risk mitigation efforts there.

Taking a step back, we -- the overall picture really hasn't changed from what we outlined even back in the April time frame, and we've updated since then, which is that, there are a large part of our revenue base in terms of things that are fulfilled outside of the United States for United States customers that are excluded or exempted under IEEPA, but also USMCA. And so, that broad coverage still exists. And so, we feel quite good about where we're positioned right now. That doesn't change the fact that we'll continue to make sure that from a supply chain perspective that we're doing everything we can in terms of risk mitigation. But really no overall change to our position from what we would have updated 3 months ago. We feel good about our position and yes, very minimal impact in the quarter.

Thanks, Sean. All right. So, Sean, we've had a couple of questions about the holiday quarter as well. So is there a framework that you can provide for how to think about the upcoming holiday season? Past experience has shown that competition for holiday-related consumer products has put pressure on your revenue growth as others try to compete more forcefully on price? And how are you thinking about the business' position heading into the holiday season, especially the consumers?

Sure. Yes, there's a lot here. It's obviously a very important time of the year for us, and there's a lot of planning that goes into it. I think last year, we had a number of headwinds that were from a macro perspective or kind of outside of our control. We also had just structurally in terms of how the calendar was set up, the most unfavorable setup, also a presidential election, which tends to be unfavorable because it kind of distracts from some of the buying season, especially the early part of the buying season. And then we had the organic search changes, which were a real headwind last year as well.

So if you sort of fast forward to this year and how those things change, I think, of course, there continues to be some volatility from a macro perspective, and it's impossible to know exactly what impact, if any, that can have on consumer behavior, but also things like the postal system in Canada, for example. But I think structurally, it's better than last year. We have 1 extra buying day. The headwinds that we faced in organic search, we feel very good about the progress that we've made there. The growth in the organic search channel for a number of reasons, but we put a lot of emphasis there has been showing very nice results even heading into the holiday season. So we feel good about having addressed that material headwind last year.

So we're confident in the plans as we head in. I think it's one of the things that we've really -- the question refers to just some of the competition that really spikes in those peak weeks. What we've really tried to do is take a step back this year and think about how do we really lean into our strengths, our areas of strategic focus that have been driving success outside of the holiday season as well and where is their relevance in the holiday season to really lean in further to those areas. So we feel really confident about the plans. The team is ready to execute. And like I said, I think we're lapping what were some structural headwinds last year or some other headwinds that we feel like we've addressed. And so, we feel good heading into the holiday season.

Excellent. Thank you, Sean. I'm going to stick with you again, and this is a question that I don't think you've seen yet. So why was tax expense so high at $17.8 million, eating up most of the $24.4 million income before tax? Can we expect high tax rates in the future?

Yes. Listen, I think our GAAP tax expense and our GAAP tax rate, to be honest, are, I think, are difficult to understand quarter-by-quarter because of a number of things, both in our structure, but also the ways that the accounting rules require us to handle certain things quarter-by-quarter, especially with the seasonality of our profitability as well.

And so, I would -- so the headline to your question is tax expense increased because our year-over-year increase in profitability. I would encourage you to focus more on cash taxes because I think that's both a more straightforward story, but also one that, as you think about how you model it, I think, is one that you can more consistently model those economic drivers in relation to our profitability. And there, cash taxes were lower than the P&L expense, but they're higher year-over-year, and we talked about this in some of our remarks at the end of July that we expected cash taxes to be higher this year, and that was one of the principal drivers of that is that, we received some refunds last year that won't repeat. And so, that was one of the drivers for Q1. But we do expect that for the full year, our cash taxes will increase, also driven by profitability increases that we expect this year as well.

Great. Thank you. That is all of the pre-submitted and live questions that we have received. So I'm going to turn things back to Robert to wrap the call up.

Right. Thank you, Meredith. As I hope you've heard, Cimpress is off to a great start for fiscal '26, and we are progressing in the 3 key areas that I discussed briefly today, and we covered in much more detail both in our Investor Day and in the July letter.

So first, elevated products are driving a step function improvement to Cimpress' per lifetime customer value, and that's especially true in Vistaprint.

Second, we are capitalizing on our past and ongoing investments in our mass customization platform and our growing scale in elevated product categories to reduce our cost of goods sold and to increase the velocity of new product introductions.

Third, shared technology, organizational delayering, simplification and artificial intelligence are helping us to constrain operating expenses while improving our value that we deliver to our customers.

And finally, we have a strong financial future with a clear path to fiscal '28 EBITDA of at least $600 million, accompanied by very significant debt deleveraging.

So I'll wrap up by saying thank you to our investors for joining the call, and thank you for continuing to entrust your capital with Cimpress. Have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.