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Business segment information | 9 Months Ended
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Sep. 30, 2024
Segment Reporting [Abstract] |
Business segment information |
NOTE 15: BUSINESS SEGMENT INFORMATION
Effective January 1, 2024, we revised our reportable business segments to align with structural and management reporting changes that better reflect our portfolio mix and offerings. We now operate the following reportable segments, generally organized by product and service type: •Merchant Services – provides electronic credit and debit card authorization and payment systems and processing services, primarily to small and medium-sized retail and service businesses. •B2B Payments – provides treasury management solutions, including remittance and lockbox processing, remote deposit capture, receivables management, payment processing and paperless treasury management, as well as fraud and security services and Deluxe Payment Exchange+, an accounts payable automation solution. •Data Solutions – provides data-driven marketing solutions, including digital engagement, financial institution profitability reporting and account switching tools, and business incorporation services. •Print – provides printed personal and business checks, printed business forms, business accessories and promotional products. The accounting policies of the segments are the same as those described in the Notes to Consolidated Financial Statements included in the 2023 Form 10-K. We allocate corporate costs for our shared services functions to our business segments when the costs are directly attributable to a segment. This includes certain sales and marketing, supply chain, real estate, finance, information technology and legal costs. Costs that are not directly attributable to a business segment are reported as Corporate operations and consist primarily of marketing, accounting, information technology, human resources, facilities, executive management, and legal, tax and treasury costs that support the corporate function. All of our segments operate primarily in the U.S., with some operations in Canada. Through June 2023, we operated our former web hosting business in portions of Europe and through partners in Central and South America. Revenue and long-lived assets related to our foreign operations were not material to our consolidated financial statements during the periods covered by this report. No single customer accounted for more than 10% of consolidated revenue during the nine months ended September 30, 2024 and 2023. Our chief operating decision maker ("CODM") is our Chief Executive Officer. He reviews EBITDA on an adjusted basis for each segment when deciding how to allocate resources and to assess segment operating performance. Adjusted EBITDA for each segment excludes depreciation and amortization expense, interest expense, income tax expense and certain other amounts, which may include, from time to time: asset impairment charges; restructuring and integration expense; share-based compensation expense; acquisition transaction costs; certain legal-related expenses outside of the normal course of business; and gains or losses on sales of businesses and long-lived assets. The CODM does not review segment asset information when making investment or operating decisions regarding our reportable business segments. The following is our segment information for the quarters and nine months ended September 30, 2024 and 2023. The segment information for 2023 has been recast to reflect our current segment structure.
|  | Quarter Ended September 30, |  | Nine Months Ended September 30,
(in thousands) |  | 2024 |  | 2023 |  | 2024 |  | 2023
Merchant Services: |  |  |  |  |  |  |  |
Revenue |  | $ | 93,531 |  |  | $ | 87,984 |  |  | $ | 288,536 |  |  | $ | 268,556 |
Adjusted EBITDA |  | 17,752 |  |  | 17,393 |  |  | 58,377 |  |  | 53,120 |
B2B Payments: |  |  |  |  |  |  |  |
Revenue |  | 75,140 |  |  | 74,581 |  |  | 214,788 |  |  | 226,118 |
Adjusted EBITDA |  | 15,264 |  |  | 16,074 |  |  | 42,537 |  |  | 44,741 |
Data Solutions: |  |  |  |  |  |  |  |
Revenue |  | 61,065 |  |  | 64,080 |  |  | 178,169 |  |  | 167,735 |
Adjusted EBITDA |  | 17,485 |  |  | 15,317 |  |  | 48,150 |  |  | 38,956 |
Print: |  |  |  |  |  |  |  |
Revenue |  | 297,313 |  |  | 304,282 |  |  | 909,393 |  |  | 942,839 |
Adjusted EBITDA |  | 97,407 |  |  | 98,044 |  |  | 282,226 |  |  | 298,015 |
Total reportable segments: |  |  |  |  |  |  |  |
Revenue |  | $ | 527,049 |  |  | $ | 530,927 |  |  | $ | 1,590,886 |  |  | $ | 1,605,248 |
Adjusted EBITDA |  | 147,908 |  |  | 146,828 |  |  | 431,290 |  |  | 434,832 |
All other:(1) |  |  |  |  |  |  |  |
Revenue |  | 1,395 |  |  | 6,917 |  |  | 10,329 |  |  | 49,648 |
Adjusted EBITDA |  | 448 |  |  | 4,130 |  |  | 5,672 |  |  | 22,170 |
Total: |  |  |  |  |  |  |  |
Revenue |  | $ | 528,444 |  |  | $ | 537,844 |  |  | $ | 1,601,215 |  |  | $ | 1,654,896 |
Adjusted EBITDA |  | 148,356 |  |  | 150,958 |  |  | 436,962 |  |  | 457,002 |
(1) Includes our North American web hosting and logo design businesses, which were sold in June 2023, and our payroll and human resources services business, which we are in the process of exiting (Note 6). The following table presents the reconciliation of total segment adjusted EBITDA to consolidated income (loss) before income taxes:
|  | Quarter Ended September 30, |  | Nine Months Ended September 30,
(in thousands) |  | 2024 |  | 2023 |  | 2024 |  | 2023
Total segment adjusted EBITDA |  | $ | 148,356 |  |  | $ | 150,958 |  |  | $ | 436,962 |  |  | $ | 457,002 |
Corporate operations |  | (43,454) |  |  | (49,068) |  |  | (128,217) |  |  | (146,304) |
Depreciation and amortization expense |  | (44,277) |  |  | (38,857) |  |  | (127,716) |  |  | (124,985) |
Interest expense |  | (29,905) |  |  | (32,034) |  |  | (90,910) |  |  | (93,982) |
Net income attributable to non-controlling interest |  | 38 |  |  | 26 |  |  | 103 |  |  | 80 |
Asset impairment charge |  | (6,700) |  |  | — |  |  | (6,700) |  |  | — |
Restructuring and integration expense |  | (11,265) |  |  | (29,364) |  |  | (37,031) |  |  | (70,935) |
Share-based compensation expense |  | (4,842) |  |  | (4,539) |  |  | (14,972) |  |  | (15,889) |
Certain legal-related benefit (expense) |  | 350 |  |  | (1,949) |  |  | 50 |  |  | (2,195) |
Gain (loss) on sale of businesses and long-lived assets |  | 5,208 |  |  | (4,324) |  |  | 29,190 |  |  | 17,618 |
Income (loss) before income taxes |  | $ | 13,509 |  |  | $ | (9,151) |  |  | $ | 60,759 |  |  | $ | 20,410 |
The following tables present revenue disaggregated by our product and service offerings:
|  | Quarter Ended September 30, 2024
(in thousands) |  | Merchant Services |  | B2B Payments |  | Data Solutions |  | Print |  | All Other |  | Consolidated
Checks |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 176,827 |  |  | $ | — |  |  | $ | 176,827 |
Merchant services |  | 93,531 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 93,531 |
Promotional solutions |  | — |  |  | — |  |  | — |  |  | 61,264 |  |  | — |  |  | 61,264 |
Forms and other business products |  | — |  |  | — |  |  | — |  |  | 59,222 |  |  | — |  |  | 59,222 |
Treasury management solutions |  | — |  |  | 58,574 |  |  | — |  |  | — |  |  | — |  |  | 58,574 |
Data-driven marketing |  | — |  |  | — |  |  | 56,520 |  |  | — |  |  | — |  |  | 56,520 |
Other |  | — |  |  | 16,566 |  |  | 4,545 |  |  | — |  |  | 1,395 |  |  | 22,506 |
Total revenue |  | $ | 93,531 |  |  | $ | 75,140 |  |  | $ | 61,065 |  |  | $ | 297,313 |  |  | $ | 1,395 |  |  | $ | 528,444 |
|  | Quarter Ended September 30, 2023
(in thousands) |  | Merchant Services |  | B2B Payments |  | Data Solutions |  | Print |  | All other |  | Consolidated
Checks |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 179,990 |  |  | $ | — |  |  | $ | 179,990 |
Merchant services |  | 87,984 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 87,984 |
Promotional solutions |  | — |  |  | — |  |  | — |  |  | 62,309 |  |  | — |  |  | 62,309 |
Forms and other business products |  | — |  |  | — |  |  | — |  |  | 61,983 |  |  | — |  |  | 61,983 |
Treasury management solutions |  | — |  |  | 59,224 |  |  | — |  |  | — |  |  | — |  |  | 59,224 |
Data-driven marketing |  | — |  |  | — |  |  | 59,561 |  |  | — |  |  | — |  |  | 59,561 |
Other |  | — |  |  | 15,357 |  |  | 4,519 |  |  | — |  |  | 6,917 |  |  | 26,793 |
Total revenue |  | $ | 87,984 |  |  | $ | 74,581 |  |  | $ | 64,080 |  |  | $ | 304,282 |  |  | $ | 6,917 |  |  | $ | 537,844 |
|  | Nine Months Ended September 30, 2024
(in thousands) |  | Merchant Services |  | B2B Payments |  | Data Solutions |  | Print |  | All Other |  | Consolidated
Checks |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 534,672 |  |  | $ | — |  |  | $ | 534,672 |
Merchant services |  | 288,536 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 288,536 |
Promotional solutions |  | — |  |  | — |  |  | — |  |  | 193,343 |  |  | — |  |  | 193,343 |
Forms and other business products |  | — |  |  | — |  |  | — |  |  | 181,378 |  |  | — |  |  | 181,378 |
Treasury management solutions |  | — |  |  | 169,000 |  |  | — |  |  | — |  |  | — |  |  | 169,000 |
Data-driven marketing |  | — |  |  | — |  |  | 163,339 |  |  | — |  |  | — |  |  | 163,339 |
Other |  | — |  |  | 45,788 |  |  | 14,830 |  |  | — |  |  | 10,329 |  |  | 70,947 |
Total revenue |  | $ | 288,536 |  |  | $ | 214,788 |  |  | $ | 178,169 |  |  | $ | 909,393 |  |  | $ | 10,329 |  |  | $ | 1,601,215 |
|  | Nine Months Ended September 30, 2023
(in thousands) |  | Merchant Services |  | B2B Payments |  | Data Solutions |  | Print |  | All Other |  | Consolidated
Checks |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 545,061 |  |  | $ | — |  |  | $ | 545,061 |
Merchant services |  | 268,556 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 268,556 |
Promotional solutions |  | — |  |  | — |  |  | — |  |  | 203,542 |  |  | 1,456 |  |  | 204,998 |
Forms and other business products |  | — |  |  | — |  |  | — |  |  | 194,236 |  |  | — |  |  | 194,236 |
Treasury management solutions |  | — |  |  | 180,864 |  |  | — |  |  | — |  |  | — |  |  | 180,864 |
Data-driven marketing |  | — |  |  | — |  |  | 153,346 |  |  | — |  |  | — |  |  | 153,346 |
Other |  | — |  |  | 45,254 |  |  | 14,389 |  |  | — |  |  | 48,192 |  |  | 107,835 |
Total revenue |  | $ | 268,556 |  |  | $ | 226,118 |  |  | $ | 167,735 |  |  | $ | 942,839 |  |  | $ | 49,648 |  |  | $ | 1,654,896 |

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