DLX

This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") provides a comprehensive overview of our financial condition, results of operations, and key factors affecting our performance. The following sections are included: •Executive Overview that discusses what we do and our operating results at a high level; •Consolidated Results of Operations; Restructuring and Integration Expense; and Segment Results that includes a more detailed discussion of our revenue and expenses; •Cash Flows and Liquidity and Capital Resources that discusses key aspects of our cash flows, financial commitments, capital structure, and financial position; and •Critical Accounting Estimates that discusses the accounting policies and estimates that require management to make complex judgments and assumptions and their application can have a material impact on our financial condition and results of operations. 24 Forward-Looking Statements This MD&A discussion contains forward-looking statements that involve risks and uncertainties. Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K") details known material risks and important information to consider when evaluating our forward-looking statements and is incorporated into this Item 2 of this report on Form 10-Q as if fully stated herein. The Private Securities Litigation Reform Act of 1995 (the "Reform Act") provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information. Statements using terms such as “should result,” “believe,” “intend,” “plan,” “expect,” “anticipate,” “estimate,” “project,” “outlook,” “forecast,” and similar expressions are intended to indicate forward-looking statements under the Reform Act. Use of Non-GAAP Financial Measures This MD&A includes financial information prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"). We also present certain non-GAAP financial measures, including free cash flow, net debt, adjusted diluted earnings per share (EPS), consolidated adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), and consolidated adjusted EBITDA margin. We believe that these non-GAAP financial measures, when reviewed alongside GAAP financial measures, can provide additional insight into our operating performance. Consequently, these measures are also used internally for management reporting. Our non-GAAP measures should not be considered substitutes for GAAP financial measures. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely solely on any single financial measure. Our non-GAAP financial measures may not be comparable to similarly titled measures used by other companies and therefore, may not facilitate useful comparisons. Reconciliations of our non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the Consolidated Results of Operations section. EXECUTIVE OVERVIEW We empower businesses to build stronger customer relationships through a broad range of trusted, technology-enabled solutions designed to facilitate payments, drive growth, and improve operational efficiency. Our comprehensive portfolio includes merchant services solutions, marketing and data analytics, treasury management solutions, and promotional products, as well as customized checks and business forms tailored to our clients' needs. We serve a diverse customer base, including small and medium-sized businesses, financial institutions, and some of the world’s leading consumer brands. In addition, we offer checks and related accessories directly to individual consumers. Our extensive reach, scale, and multi-channel distribution network enable us to deliver innovative solutions and reliable support, positioning us well as a valued partner to our customers. Our Strategy A comprehensive discussion of our strategy is provided in Part I, Item 1 of the 2025 Form 10-K. During the first half of 2026, we continued to execute on our strategic priorities of accelerating profitable growth, enhancing operational efficiency, and disciplined capital allocation. Accelerating profitable growth – We continued to execute on our strategy of growing our payments and data businesses while optimizing our overall portfolio, delivering stronger revenue mix and profitability. In March 2026, we completed the divestiture of the Safeguard small business distributor channel within our Print segment, a strategic action enabling greater focus on our growth businesses and ongoing portfolio optimization objectives. The divestiture reduced first-half 2026 Print segment revenue by approximately $47.1 million and Print adjusted EBITDA by approximately $4.9 million compared to the first half of 2025. At the same time, our payments and data businesses demonstrated strong momentum, collectively delivering 11.1% year-over-year revenue growth and a 14.6% increase in adjusted EBITDA in the first half of 2026. In June 2026, we entered into an equity purchase agreement and plan of merger to acquire Celero Commerce (“Celero”), a financial technology company that provides payment solutions to small and mid-sized businesses through a diversified distribution network. The transaction closed on July 31, 2026, with aggregate cash consideration of $625.0 million, plus payment of certain seller transaction expenses and other adjustments. The acquisition was financed through our amended credit agreement, via a combination of additional term loan financing and revolving credit facility borrowings. Further information regarding the amended credit facility agreement can be found in the Capital Resources section. Celero's platform is complementary to our existing payments offerings and is expected to accelerate the modernization of our payments technology, expand our distribution capabilities through Celero's diversified, partner-led model, and strengthen our competitive position by increasing scale, expanding channel reach, and deepening the value we deliver to a broader set of customers. 25 Enhancing operational efficiency – In the first half of 2026, we reduced selling, general and administrative (SG&A) expense by 6.4% year-over-year, reflecting the benefits of our ongoing cost management efforts. Additionally, despite revenue pressures in the Print segment, operational improvements resulted in adjusted EBITDA margin improvement for this segment. These results contributed to year-over-year increases in net income, consolidated adjusted EBITDA, and consolidated adjusted EBITDA margin in the first half of 2026. Disciplined capital allocation – We continued to apply our capital allocation framework, working to ensure investments are aligned with our growth objectives and deliver optimal returns. In the first half of 2026, net cash provided by operating activities increased by $32.5 million year-over-year, and we reduced total debt by $77.2 million compared to year-end 2025. The Celero acquisition reflects our commitment to accelerating growth, and we remain focused on disciplined deleveraging. The strong cash generation of our business, combined with available capacity under our credit arrangements, positions us well to service our obligations, reduce leverage over time, and continue delivering value for shareholders. 2026 Financial Results Highlights of our financial results for the first half of 2026 compared to the first half of 2025 include: •Consolidated revenue – Decreased by $20.3 million to $1,037.4 million, primarily driven by the first quarter business exit, which reduced revenue by approximately $47.1 million. Additionally, the ongoing secular decline in order volumes for checks, business forms, and various business accessories in our Print segment contributed to the decrease. These unfavorable drivers were partially offset by growth in all three of our payments and data businesses. •Net income – Increased by $18.5 million to $55.0 million, primarily reflecting the impact of our cost management and pricing initiatives, as well as lower restructuring and integration expense. Growth in our payments and data businesses further contributed to the improvement. Additionally, interest expense decreased $6.6 million year-over-year and we recognized a $5.1 million gain from the sale of the Safeguard small business distributor channel within the Print segment. These favorable factors were partially offset by the continuing demand softness and secular declines in the Print segment, inflationary pressures impacting material and delivery costs, and transaction costs related to the Celero acquisition of $5.6 million in the first half of 2026. •Adjusted EBITDA – Increased $20.1 million to $226.7 million, driven by the benefits of our cost management and pricing initiatives and growth in our payments and data businesses. These favorable impacts were partially offset by demand softness and the ongoing secular declines in the Print segment and inflationary cost pressures. In addition, our first quarter business exit resulted in a decrease in adjusted EBITDA of approximately $4.9 million. Adjusted EBITDA margin increased to 21.9% for the first half of 2026, compared to 19.5% for the first half of 2025. The margin improvement was primarily driven by our cost management and pricing initiatives, partially offset by inflationary pressures and the shift in mix toward our growth businesses. A reconciliation of net income to adjusted EBITDA can be found in the Consolidated Results of Operations section. •Net cash provided by operating activities – Increased by $32.5 million to $133.9 million. The increase was primarily driven by the benefits of our cost management and pricing actions, lower income tax payments due to the impact of federal tax law changes enacted in July 2025, favorable changes in working capital, and lower cash expenditures for restructuring and integration activities. These benefits were partially offset by higher payouts for performance-based employee cash bonuses related to our 2025 performance, demand softness and continuing secular declines in the Print segment, and inflationary cost pressures. •Free cash flow – Increased by $33.8 million to $85.9 million, reflecting the same factors that drove the increase in net cash provided by operating activities. We continue to reinvest the free cash flow generated by our Print business into our other businesses. Free cash flow is defined as net cash provided by operating activities less purchases of capital assets. A reconciliation of free cash flow to its most directly related GAAP financial measure can be found in the Consolidated Results of Operations section. Recent Market Conditions We continually monitor macroeconomic conditions and other external factors that may affect our business, including interest rates, inflation, small business sentiment, consumer spending trends, and global economic conditions. As of June 30, 2026, 68% of our debt had a weighted-average fixed interest rate of 8.1%, which provides partial insulation from changes in market interest rates. This capital structure helps moderate our exposure to interest rate volatility in a higher‑rate environment, although future changes in rates could still affect our borrowing costs due to our variable-rate debt. 26 Macroeconomic conditions, including inflation, energy price volatility, and fluctuations in logistics and certain raw material costs, continue to influence our cost structure, pricing dynamics, and customer demand. In response, we implemented targeted price adjustments, particularly within our Merchant Services and Print segments, to help offset increased costs while remaining mindful of customer price sensitivity. We continue to monitor these trends closely, including the potential for further cost volatility resulting from changes in energy markets, supply chain conditions, and raw material pricing. Global economic conditions remain uncertain, reflecting ongoing geopolitical unrest and evolving trade policies, treaties, and tariffs. These developments may disrupt supply chains, increase operating costs, and affect the availability, timing, and pricing of certain goods and services. In addition, heightened geopolitical tensions and an increasingly complex threat environment have elevated cybersecurity and technology‑related risks, reinforcing the importance of continued investments in information security, data protection, and technology resilience. We also closely track trends in small business sentiment and consumer discretionary spending, as these factors influence demand across our portfolio. Our analysis incorporates data from credit card networks, the Federal Reserve, leading economic forecasters, and our proprietary analytics. Recent economic indicators suggest continued caution among consumers and small businesses amid ongoing economic uncertainty and cost pressures. While employment conditions and other underlying economic indicators have generally remained stable, shifts in consumer and business spending patterns could influence transaction volumes in our Merchant Services segment and demand for certain discretionary products within our Print segment. Inflation, labor market conditions, trade policies, tariffs, and other macroeconomic factors may continue to influence customer purchasing behavior. A sustained period of economic uncertainty or a broader slowdown in economic activity could adversely affect our financial position, results of operations, and future growth prospects. Liquidity As of June 30, 2026, we held cash and cash equivalents of $34.9 million, along with an additional $384.3 million available for borrowing under our revolving credit facility. We anticipate that capital expenditures will be between $100.0 million and $110.0 million for the full year, compared to $95.3 million in 2025, as we continue to build scale across our product categories and invest in innovation. Our capital allocation priorities remain focused on responsible growth investments, debt reduction, and returning capital to shareholders through dividends, which are subject to quarterly approval by our board of directors. We believe that net cash generated by operations, together with our cash and cash equivalents on hand and available credit, will be sufficient to meet our operational needs, contractual obligations, and debt service requirements over the next 12 months. This assessment takes into account our working capital position and anticipated cash flows, including those associated with the additional debt incurred in connection with the acquisition of Celero. We regularly monitor our liquidity position in light of potential risks, including market volatility, interest rate fluctuations, and macroeconomic uncertainty, and we are prepared to adjust our capital allocation strategy as needed. As of June 30, 2026, we were in compliance with our debt covenants. Additional information regarding our long-term capital requirements and debt maturities can be found in the Cash Flows and Liquidity and Capital Resources sections. CONSOLIDATED RESULTS OF OPERATIONS Revenue Quarter Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 Change 2026 2025 Change Total revenue $ 499.3 $ 521.3 (4.2%) $ 1,037.4 $ 1,057.7 (1.9%) Total revenue decreased in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by the first quarter business exit discussed in the Executive Overview section, which reduced revenue by approximately $34.5 million. Additionally, soft demand for promotional products and the continued secular decline in order volumes for checks, business forms, and business accessories within our Print segment contributed to the decrease. These unfavorable drivers were partially offset by strong demand for our data-driven marketing services, which contributed a $14.7 million year-over-year increase in the second quarter of 2026. Revenue growth was further supported by strategic price increases implemented in response to inflationary pressures, particularly within our Merchant Services and Print segments. 27 Total revenue decreased in the first half of 2026 compared to the first half of 2025, primarily due to the first quarter business exit discussed in the Executive Overview section, which reduced revenue by approximately $47.1 million for the first half of the year. Additionally, soft demand for promotional products and the continued secular decline in order volumes for checks, business forms, and business accessories within our Print segment contributed to the decrease. These unfavorable drivers were partially offset by strong demand for our data-driven marketing services, which contributed a $35.1 million year-over-year increase for the first half of 2026. Revenue growth was further supported by strategic price increases implemented in response to inflationary pressures, particularly within our Merchant Services and Print segments, and by higher Merchant Services and B2B Payments volume reflecting new customer implementations. We do not manage our business based on product versus service revenue. Instead, we analyze our revenue based on the product and service offerings shown under the caption "Note 13: Business Segment Information" in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part I, Item 1 of this report. Our revenue mix by business segment was as follows: Quarter Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Merchant Services 21.6 % 19.5 % 20.5 % 18.9 % B2B Payments 14.7 % 13.6 % 14.2 % 13.3 % Data Solutions 16.5 % 13.0 % 17.3 % 13.7 % Print 47.2 % 53.9 % 48.0 % 54.1 % Total revenue 100.0 % 100.0 % 100.0 % 100.0 % Cost of Revenue Quarter Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 Change 2026 2025 Change Total cost of revenue $ 239.7 $ 242.0 (1.0%) $ 498.4 $ 497.4 0.2% Total cost of revenue as a percentage of total revenue 48.0 % 46.4 % 1.6 pts. 48.0 % 47.0 % 1.0 pts. Cost of revenue primarily includes raw materials for product manufacturing, shipping and handling costs, third-party costs for outsourced products and services, payroll and related expenses, information technology costs, depreciation and amortization of production and digital assets, residuals paid to independent sales organizations (ISOs), and related overhead. Total cost of revenue decreased in the second quarter of 2026 compared to the second quarter of 2025. The decrease was primarily due to lower costs associated with the soft demand for promotional products and the continued secular declines in the Print segment, as well as the impact of our cost management initiatives. In addition, the first quarter business exit discussed in the Executive Overview section reduced cost of revenue by approximately $16.3 million in the second quarter of 2026. These decreases were partially offset by the revenue growth and higher favorability in the prior year from vendor rebates in our data-driven marketing business, as well as inflationary pressures on materials and delivery costs. Total cost of revenue increased in the first half of 2026 compared to the first half of 2025. The increase was primarily due to the revenue growth and higher favorability in the prior year from vendor rebates in our data-driven marketing business, as well as inflationary pressures on materials and delivery costs. These increases were partially offset by lower costs associated with the soft demand for promotional products and the continued secular declines in the Print segment, as well as the impact of our cost management initiatives. In addition, the first quarter business exit discussed in the Executive Overview section reduced cost of revenue by approximately $22.3 million in the first half of 2026. As a percentage of total revenue, total cost of revenue increased in the second quarter and first half of 2026 compared to the same periods in 2025, driven by inflationary pressures and a shift in revenue mix toward our growth businesses. These increases were partially offset by the benefits of targeted pricing actions to address inflation and cost management initiatives. 28 Selling, General and Administrative (SG&A) Expense Quarter Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 Change 2026 2025 Change SG&A expense $ 202.1 $ 214.5 (5.8%) $ 411.5 $ 439.8 (6.4%) SG&A expense as a percentage of total revenue 40.5 % 41.1 % (0.6) pts. 39.7 % 41.6 % (1.9) pts. SG&A expense decreased in the second quarter of 2026 compared to the second quarter of 2025, primarily as a result of our ongoing cost management initiatives, including actions such as workforce adjustments across multiple functions. In addition, commission expense declined due to lower Print revenue volumes. The first quarter business exit discussed in the Executive Overview section further reduced SG&A expense by approximately $17.2 million in the second quarter of 2026. Partially offsetting these decreases in SG&A expense were transaction costs of $5.6 million related to the Celero acquisition discussed in the Executive Overview section. As a percentage of total revenue, SG&A expense decreased in the second quarter of 2026 compared to the second quarter of 2025, as our cost management actions and the impact of the first quarter business exit more than offset the impact of the acquisition transaction costs incurred during the quarter. SG&A expense decreased in the first half of 2026 compared to the first half of 2025, primarily as a result of our ongoing cost management initiatives, including actions such as workforce adjustments across multiple functions and the optimization of our marketing strategies. In addition, commission expense declined due to lower Print revenue volumes, and medical costs decreased. The first quarter business exit discussed in the Executive Overview section further reduced SG&A expense by approximately $23.0 million in the first half of 2026. Partially offsetting these decreases in SG&A expense were transaction costs of $5.6 million related to the Celero acquisition discussed in the Executive Overview section. As a percentage of total revenue, SG&A expense decreased in the first half of 2026 compared to the first half of 2025, as our cost management actions, the impact of the first quarter business exit, and reduced medical costs more than offset the impact of the acquisition transaction costs incurred during the first half of the year. Restructuring and Integration Expense Quarter Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 Change 2026 2025 Change Restructuring and integration expense $ 1.8 $ 4.0 (55.0%) $ 5.2 $ 11.7 (55.6%) We are actively pursuing initiatives aimed at improving operating efficiency and supporting earnings and cash flow growth. As we implement these initiatives, the amount of restructuring and integration expense is expected to fluctuate from period to period. Further information regarding these costs can be found in the Restructuring and Integration Expense section. Gain on Sale of Businesses and Long-Lived Assets Quarter Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 Change 2026 2025 Change Gain on sale of businesses and long-lived assets $ — $ — — $ 5.1 $ — — In the first quarter of 2026, we recognized a gain on the sale of the Safeguard small business distributor channel within our Print segment. Further information can be found under the caption "Note 6: Acquisition and Divestitures" in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part 1, Item 1 of this report. 29 Interest Expense Quarter Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 Change 2026 2025 Change Interest expense $ 28.0 $ 30.9 (9.4%) $ 55.6 $ 62.2 (10.6%) Weighted-average debt outstanding 1,415.8 1,525.9 (7.2%) 1,428.7 1,539.7 (7.2%) Weighted-average interest rate 7.2 % 7.6 % (0.4) pts. 7.2 % 7.6 % (0.4) pts. Interest expense decreased in the second quarter and first half of 2026 compared to the same periods in 2025 primarily due to a reduction in average debt outstanding, as well as a lower weighted-average interest rate. As of June 30, 2026, $440.0 million of our debt was subject to variable rates, which exposes us to fluctuations in market interest rates. Based on the amount of variable-rate debt outstanding as of June 30, 2026, a one percentage point change in the weighted-average interest rate would result in a $2.0 million impact on interest expense for the remainder of 2026. Income Tax Provision Quarter Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 Change 2026 2025 Change Income tax provision $ 10.9 $ 9.3 17.2% $ 21.7 $ 14.4 50.7% Effective income tax rate 36.2 % 29.3 % 6.9 pts. 28.3 % 28.3 % — The increase in our effective income tax rate in the second quarter of 2026 compared to the second quarter of 2025 was primarily driven by the tax impact of the surrender of company-owned life insurance (COLI) policies during the second quarter of 2026 and higher non-deductible executive compensation expense. Our effective income tax rate of 28.3% for the six months ended June 30, 2026 was unchanged compared to the same period in 2025. The 2026 rate benefited from a higher tax benefit related to employee share-based compensation and lower foreign income taxes. These favorable impacts were offset by several factors, including a $2.3 million increase in the valuation allowance related to a capital loss carryforward generated during the period that we do not expect to fully utilize, as well as the tax impact related to the surrender of COLI policies, higher non-deductible executive compensation expense, and state income taxes. Further information regarding our income tax provision can be found under the caption "Note 9: Income Taxes" in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part I, Item 1 of this report. Net Income, Diluted EPS, and Adjusted Diluted EPS Quarter Ended June 30, Six Months Ended June 30, (in millions, except per share amounts) 2026 2025 Change 2026 2025 Change Net income $ 19.2 $ 22.4 (14.3%) $ 55.0 $ 36.5 50.7% Diluted EPS 0.41 0.50 (18.0%) 1.18 0.80 47.5% Adjusted diluted EPS(1) 0.87 0.88 (1.1%) 1.92 1.62 18.5% (1) A reconciliation of net income to adjusted net income, as used in the calculation of adjusted diluted EPS, can be found in the following section. Net income and diluted EPS decreased in the second quarter of 2026 as compared to the second quarter of 2025, driven by the factors discussed above regarding our results for the second quarter. Adjusted diluted EPS also decreased year-over-year, primarily reflecting the soft demand for promotional products, the ongoing secular declines in the Print segment, inflationary cost pressures, and higher amortization expense driven by our technology investments. In addition, the first quarter business exit discussed in the Executive Overview section reduced adjusted diluted EPS on a year-over-year basis by $0.06 per share in the second quarter of 2026. These decreases were partially offset by the benefits of our cost management and pricing initiatives, as well as growth in our payments and data businesses and a reduction in interest expense. Net income and diluted EPS increased in the first half of 2026 as compared to the first half of 2025, driven by the factors discussed above regarding our results for the first half of the year. Adjusted diluted EPS also increased year-over-year, primarily reflecting the benefits of our cost management and pricing initiatives, as well as growth in our payments and data businesses and a reduction in interest expense. These favorable impacts were partially offset by the soft demand for promotional products, the ongoing secular declines in the Print segment, inflationary cost pressures, and higher amortization expense driven by our 30 technology investments. In addition, the first quarter business exit discussed in the Executive Overview section reduced adjusted diluted EPS on a year-over-year basis by $0.08 per share for the first half of 2026. Reconciliation of Non-GAAP Financial Measures Free cash flow – We define free cash flow as net cash provided by operating activities minus purchases of capital assets. We believe free cash flow is useful to both management and investors, as it provides a consistent metric for comparing the cash-generating ability of our operations across periods. It also offers insight into the cash available to support dividends, debt reduction (both mandatory and discretionary), acquisitions, other strategic investments, and share repurchases. However, free cash flow has certain limitations. Not all free cash flow is available for discretionary spending, as we may have mandatory debt repayments and other contractual or regulatory cash requirements that must be satisfied. Despite this limitation, we believe free cash flow is a valuable supplemental measure for evaluating our financial flexibility and our ability to pursue growth opportunities and return capital to shareholders. Net cash provided by operating activities reconciles to free cash flow as follows: Six Months Ended June 30, (in millions) 2026 2025 Net cash provided by operating activities $ 133.9 $ 101.4 Purchases of capital assets (48.0) (49.3) Free cash flow $ 85.9 $ 52.1 Net debt – Net debt is calculated as total debt less cash and cash equivalents. We use net debt to evaluate our financial leverage and overall balance sheet strength. By considering the cash and cash equivalents available to offset outstanding debt, net debt provides a more comprehensive view of our debt burden than total debt alone. However, net debt has certain limitations. Subtracting cash and cash equivalents may imply that these funds are readily available and will be used to reduce debt, which may not reflect management’s actual intentions or liquidity needs. Additionally, net debt may suggest that our debt obligations are lower than the most directly comparable GAAP measure. Total debt reconciles to net debt as follows: (in millions) June 30, 2026 December 31, 2025 Total debt $ 1,352.2 $ 1,429.4 Cash and cash equivalents (34.9) (36.9) Net debt $ 1,317.3 $ 1,392.5 Adjusted EBITDA and adjusted EBITDA margin – We believe that adjusted EBITDA and adjusted EBITDA margin are metrics that provide meaningful insight into our operating performance. These measures exclude the impact of interest expense, income taxes, depreciation and amortization, and certain other items that may vary for reasons unrelated to current period operating performance. Management uses these measures to evaluate our results of operations, facilitate period-to-period and peer comparisons, and inform strategic decision-making aimed at enhancing performance. We believe that growth in adjusted EBITDA and adjusted EBITDA margin reflects improvement in our operating efficiency and may be indicative of increased enterprise value. It is important to note that we do not consider adjusted EBITDA to be a measure of liquidity or cash flow. This metric does not reflect cash requirements for interest payments, income taxes, debt service, or capital expenditures. 31 Net income reconciles to adjusted EBITDA and adjusted EBITDA margin as follows: Quarter Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 2026 2025 Net income $ 19.2 $ 22.4 $ 55.0 $ 36.5 Net income attributable to non-controlling interest (0.1) — (0.1) (0.1) Depreciation and amortization expense 36.2 33.5 72.9 68.8 Interest expense 28.0 30.9 55.6 62.2 Income tax provision 10.9 9.3 21.7 14.4 Share-based compensation expense 6.5 6.2 13.2 11.6 Acquisition transaction costs 5.6 — 5.6 — Restructuring and integration expense 2.0 4.2 5.8 12.7 Certain legal, environmental and other expense 0.5 — 2.1 0.5 Gain on sale of businesses and long-lived assets — — (5.1) — Adjusted EBITDA $ 108.8 $ 106.5 $ 226.7 $ 206.6 Adjusted EBITDA as a percentage of total revenue (adjusted EBITDA margin) 21.8 % 20.4 % 21.9 % 19.5 % Adjusted diluted EPS – We believe that adjusted diluted EPS is a valuable metric that provides insight into our operating performance. Adjusted diluted EPS is calculated by excluding the impact of certain non-cash items and other items that we believe are not indicative of core operating results for the current period. By removing these effects, adjusted diluted EPS offers a perspective on the underlying performance of our business and facilitates more consistent comparisons across reporting periods. Management uses adjusted diluted EPS as a key metric to evaluate our operating results, assess performance trends, and inform strategic decision-making. This measure assists both management and investors in analyzing current period results and in assessing potential future performance by focusing on earnings generated from ongoing operations. It is important to note that while adjusted diluted EPS excludes certain items to enhance comparability, these items may recur in future periods and the amounts recognized may vary significantly. 32 Diluted EPS reconciles to adjusted diluted EPS as follows: Quarter Ended June 30, Six Months Ended June 30, (in millions, except per share amounts) 2026 2025 2026 2025 Net income $ 19.2 $ 22.4 $ 55.0 $ 36.5 Net income attributable to non-controlling interest (0.1) — (0.1) (0.1) Net income attributable to Deluxe 19.1 22.4 54.9 36.4 Acquisition amortization 10.1 11.4 20.8 23.2 Share-based compensation expense 6.5 6.2 13.2 11.6 Acquisition transaction costs 5.6 — 5.6 — Restructuring and integration expense 2.0 4.2 5.8 12.7 Certain legal, environmental and other expense 0.5 — 2.1 0.5 Gain on sale of businesses and long-lived assets — — (5.1) — Adjustments, pretax 24.7 21.8 42.4 48.0 Income tax provision impact of pretax adjustments(1) (3.4) (4.6) (8.2) (10.9) Adjustments, net of tax 21.3 17.2 34.2 37.1 Adjusted net income attributable to Deluxe 40.4 39.6 89.1 73.5 Re-measurement of share-based awards classified as liabilities — — — (0.1) Adjusted income attributable to Deluxe available to common shareholders $ 40.4 $ 39.6 $ 89.1 $ 73.4 Weighted average shares and potential common shares outstanding 46.4 45.2 46.3 45.2 GAAP diluted EPS $ 0.41 $ 0.50 $ 1.18 $ 0.80 Adjustments, net of tax 0.46 0.38 0.74 0.82 Adjusted diluted EPS $ 0.87 $ 0.88 $ 1.92 $ 1.62 (1) The tax effect of the pretax adjustments reflects the tax treatment and applicable tax rates for each adjustment in the relevant tax jurisdictions. Generally, this resulting tax impact approximates the U.S. effective tax rate applied to each adjustment. However, for certain items, such as share-based compensation expense and gains on sales of businesses, the tax effect is determined by whether the amounts are deductible or taxable in the respective tax jurisdictions and the applicable effective tax rates in those jurisdictions. RESTRUCTURING AND INTEGRATION EXPENSE Restructuring and integration expense consists of costs incurred in connection with initiatives to improve operating efficiency and support earnings and cash flow growth. These costs primarily include consulting and project management services, internal labor, facility closure and consolidation costs, and employee severance across functional areas. By the end of 2025, we had completed the material components of our North Star program, a comprehensive, multi-year initiative designed to enhance shareholder value by accelerating adjusted EBITDA growth, increasing cash flow, reducing debt, and improving our leverage ratio. Related restructuring and integration expense incurred during the first half of 2026 was not material. However, we continue to realize the benefits of actions taken under the program, which contributed to improved operating results in 2026. Both adjusted EBITDA and adjusted EBITDA margin increased year-over-year during the first half of 2026. These improvements were supported by a 6.4% reduction in SG&A expense. Within our Print segment, adjusted EBITDA margin also improved as a result of our optimization actions, even as revenue pressures continue in the business. In addition, net cash provided by operating activities increased by $32.5 million year-over-year, and we reduced total debt by $77.2 million compared to the prior year-end. These results reflect the ongoing benefits of initiatives completed in prior periods, as well as incremental improvements from current‑period actions. 33 The restructuring and integration expense recognized in the first half of 2026 relates to various employee reductions and other efficiency initiatives. The majority of the employee reductions included in our restructuring and integration accruals as of June 30, 2026, along with the related severance payments, are expected to be completed by the end of 2026. The 2025 and 2026 workforce reductions are expected to generate annual cost savings of approximately $2.0 million in cost of sales and $15.0 million in SG&A expense in 2026 compared to our 2025 results. These projected savings are attributable solely to the workforce reductions and are not intended to represent the aggregate impact of all cost reduction measures. Actual outcomes may vary due to factors such as inflationary pressures and continued strategic investments in the business. Further information regarding restructuring and integration expense can be found under the caption "Note 8: Restructuring and Integration Expense" in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part I, Item 1 of this report. SEGMENT RESULTS We operate four reportable business segments: Merchant Services, B2B Payments, Data Solutions, and Print. Our segments are generally organized by product and service type and reflect the way we manage the business. The financial information presented below is consistent with that presented under the caption "Note 13: Business Segment Information" in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part 1, Item 1 of this report, where information regarding revenue from our various product and service offerings can also be found. Merchant Services Results for our Merchant Services segment were as follows: Quarter Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 Change 2026 2025 Change Total revenue $ 107.6 $ 101.4 6.1% $ 212.5 $ 199.2 6.7% Adjusted EBITDA 25.1 21.7 15.7% 51.8 43.1 20.2% Adjusted EBITDA margin 23.3 % 21.4 % 1.9 pts. 24.4 % 21.6 % 2.8 pts. Total revenue increased in the second quarter and first half of 2026 compared to the same periods in 2025, driven by a combination of factors, including new customer implementations, higher transaction volumes from existing partners across several channels, and targeted pricing actions. These positive drivers were partially offset by pressure on consumer and business spending in certain customer channels. Adjusted EBITDA and adjusted EBITDA margin also improved in the second quarter and first half of 2026 compared to the same periods in 2025, reflecting targeted price increases, cost management initiatives, including the year-end 2025 purchase of residual commission rights from an ISO partner, and contributions from new client implementations. B2B Payments Results for our B2B Payments segment were as follows: Quarter Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 Change 2026 2025 Change Total revenue $ 73.5 $ 71.0 3.5% $ 147.1 $ 141.1 4.3% Adjusted EBITDA 18.3 15.6 17.3% 35.5 28.9 22.8% Adjusted EBITDA margin 24.9 % 22.0 % 2.9 pts. 24.1 % 20.5 % 3.6 pts. Total revenue increased in the second quarter and first half of 2026 compared to the same periods in 2025, driven by the onboarding of new lockbox and remittance processing clients, increased remittance processing volume, and the implementation of modest price increases to counteract inflationary pressure. These impacts were partially offset by pressure on remittance processing volumes in certain customer relationships. 34 Adjusted EBITDA and adjusted EBITDA margin also increased in the second quarter and first half of 2026 as compared to the same periods in 2025, largely attributable to our pricing strategies and ongoing cost management actions, including operational efficiencies within our lockbox processing operations and marketing optimization strategies. Additionally, the impact of new client implementations contributed to adjusted EBITDA in both periods. Data Solutions Results for our Data Solutions segment were as follows: Quarter Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 Change 2026 2025 Change Total revenue $ 82.3 $ 67.8 21.4% $ 179.7 $ 145.1 23.8% Adjusted EBITDA 18.1 20.4 (11.3%) 41.0 40.0 2.5% Adjusted EBITDA margin 22.0 % 30.1 % (8.1) pts. 22.8 % 27.6 % (4.8) pts. Total revenue increased in the second quarter and first half of 2026 compared to the same periods in 2025, driven by a year-over-year increase in data-driven marketing revenue of $14.7 million in the second quarter and $35.1 million in the first half of the year, reflecting strong demand for customer acquisition marketing activities, particularly from our financial institution partners. Adjusted EBITDA decreased in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by higher favorability from vendor rebates in the prior year, partially offset by the higher data-driven marketing volume. Adjusted EBITDA increased in the first half of 2026 compared to the first half of 2025, primarily driven by the higher data-driven marketing volume, partially offset by higher favorability from vendor rebates in the prior year. Adjusted EBITDA margin decreased year-over-year in both periods, driven by the prior-year vendor rebate favorability and changes in the mix and nature of campaign activity compared with the prior year. Print Results for our Print segment were as follows: Quarter Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 Change 2026 2025 Change Total revenue $ 235.9 $ 281.1 (16.1%) $ 498.1 $ 572.3 (13.0%) Adjusted EBITDA 86.0 90.4 (4.9%) 171.7 181.2 (5.2%) Adjusted EBITDA margin 36.5 % 32.2 % 4.3 pts. 34.5 % 31.7 % 2.8 pts. Total revenue decreased in the second quarter and first half of 2026 compared to the same periods in 2025, primarily driven by soft demand for promotional products and the ongoing secular decline in order volumes for checks, business forms, and various business accessories. In addition, during the first quarter of 2026, we completed the sale of the Safeguard small business distributor channel, which drove a decrease in revenue of approximately $34.5 million in the second quarter of 2026 and $47.1 million in the first half of 2026. These revenue declines were partially offset by our pricing strategies implemented to address inflationary pressures. Adjusted EBITDA also decreased in the second quarter and first half of 2026 compared to the same periods in 2025, largely attributable to the lower revenue and inflationary pressures affecting material and delivery costs. In addition, the exit from the Safeguard small business distributor channel drove a decrease in adjusted EBITDA of approximately $3.2 million in the second quarter of 2026 and $4.9 million in the first half of 2026. We continued to execute cost management actions, including disciplined operating expense control and process efficiency improvements, which partially offset these impacts. Adjusted EBITDA margin increased year-over-year in both periods, as pricing actions, cost management initiatives, and a shift in revenue mix toward higher-margin check products more than offset the effect of inflationary cost pressures. 35 CASH FLOWS AND LIQUIDITY As of June 30, 2026, we held cash and cash equivalents of $34.9 million. Additionally, we had restricted cash and restricted cash equivalents, which were included in settlement processing assets and other non-current assets on the consolidated balance sheet, totaling $19.5 million. The following table should be read in conjunction with the consolidated statements of cash flows located in Part I, Item 1 of this report. Six Months Ended June 30, (in millions) 2026 2025 Change Net cash provided by operating activities $ 133.9 $ 101.4 $ 32.5 Net cash used by investing activities (1.2) (44.3) 43.1 Net cash used by financing activities (390.2) (326.3) (63.9) Effect of exchange rate change on cash, cash equivalents, restricted cash, and restricted cash equivalents (1.1) 1.5 (2.6) Net change in cash, cash equivalents, restricted cash, and restricted cash equivalents $ (258.6) $ (267.7) $ 9.1 Free cash flow(1) $ 85.9 $ 52.1 $ 33.8 (1) See Reconciliation of Non-GAAP Financial Measures within the Consolidated Results of Operations section, which defines and illustrates how we calculate free cash flow. Net cash provided by operating activities increased by $32.5 million in the first half of 2026 compared to the first half of 2025. The increase was primarily driven by the benefits of our cost management and pricing actions, a $26.3 million reduction in income tax payments due to the impact of federal tax law changes enacted in July 2025, favorable changes in working capital, and lower cash expenditures for restructuring and integration activities. These favorable impacts were partially offset by a $12.4 million increase in payouts for performance-based employee cash bonuses related to our 2025 performance, continuing demand softness and secular declines in the Print segment, and inflationary cost pressures. Included in net cash provided by operating activities were the following operating cash outflows: Six Months Ended June 30, (in millions) 2026 2025 Change Performance-based employee cash bonuses(1) $ 36.8 $ 24.4 $ 12.4 Interest payments 52.8 54.9 (2.1) Prepaid product discount payments 10.1 16.0 (5.9) Severance payments 3.7 4.8 (1.1) Income tax payments, net of refunds 1.8 28.1 (26.3) (1) Amounts reflect compensation based on total company and segment performance. Net cash used by investing activities for the first half of 2026 decreased by $43.1 million compared to the first half of 2025. The decrease was primarily driven by proceeds from the surrender of COLI policies, as well as proceeds from the sale of the Safeguard small business distributor channel within our Print segment in the first quarter. Net cash used by financing activities for the first half of 2026 increased by $63.9 million compared to the first half of 2025, driven by higher net payments on debt and a holdback payment related to the prior year acquisition of the CheckMatch electronic check conveyance service business. Additionally, payments for payroll taxes on the vesting of employee share-based awards were higher due to our higher stock price. 36 Significant investing and financing cash transactions for each period were as follows: Six Months Ended June 30, (in millions) 2026 2025 Change Net change in settlement processing obligations $ (255.7) $ (258.4) $ 2.7 Net change in debt (79.4) (34.3) (45.1) Purchases of capital assets (48.0) (49.3) 1.3 Cash dividends paid to shareholders (29.2) (28.1) (1.1) Holdback payments for acquired assets (13.0) (0.5) (12.5) Employee taxes paid for shares withheld (12.7) (5.4) (7.3) Proceeds from company-owned life insurance policies 34.0 — 34.0 Proceeds from sale of businesses and long-lived assets 10.8 2.0 8.8 When assessing our liquidity and capital resource requirements, we consider a range of factors, including scheduled debt service, lease obligations, other contractual commitments, and contingent liabilities. Detailed information regarding the maturities of our long-term debt and our contingent liabilities can be found under the captions “Note 11: Debt” and "Note 12: Other Commitments and Contingencies," both of which appear in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part I, Item 1 of this report. Information regarding our lease obligations can be found under the caption "Note 13: Leases" in the Notes to Consolidated Financial Statements appearing in the 2025 Form 10-K, and information regarding our contractual obligations can be found in the MD&A section of the 2025 Form 10-K, under the section entitled Cash Flows and Liquidity. In April 2026, we entered into a 16-year facility lease, classified as a finance lease, which commenced in June 2026. The aggregate undiscounted lease payments total $88.3 million over the lease term, with $3.0 million due in 2027, $4.6 million due in 2028, $4.8 million due in 2029, $5.0 million due in 2030, $5.1 million due in 2031, and the remainder due thereafter. As of June 30, 2026, we held cash and cash equivalents of $34.9 million and had $384.3 million of available borrowing capacity under our revolving credit facility. We believe that net cash generated by operations, together with our cash and cash equivalents on hand and the available revolver capacity, will be sufficient to meet our operational needs, contractual obligations, and debt service requirements over the next 12 months. This assessment takes into account our working capital position and anticipated cash flows, including those associated with the additional debt incurred in connection with the acquisition of Celero, as discussed in the Executive Overview section. We regularly monitor our liquidity position in light of potential risks, including market volatility, interest rate fluctuations, and macroeconomic uncertainty, and we are prepared to adjust our capital allocation strategy as needed. CAPITAL RESOURCES As of June 30, 2026, the principal amount of our debt obligations was $1.37 billion, compared to $1.44 billion as of December 31, 2025. Our capital structure for each period was as follows: June 30, 2026 December 31, 2025 (in millions) Amount Weighted- average interest rate Amount Weighted- average interest rate Change Fixed interest rate $ 925.0 8.1 % $ 925.0 8.1 % $ — Floating interest rate 440.0 5.7 % 519.4 5.8 % (79.4) Debt principal 1,365.0 7.3 % 1,444.4 7.3 % (79.4) Shareholders’ equity 707.9 680.7 27.2 Total capital $ 2,072.9 $ 2,125.1 $ (52.2) As of June 30, 2026, total commitments under our revolving credit facility were $400.0 million, with $384.3 million available for borrowing. Detailed information regarding our outstanding debt, including our debt service obligations and debt covenants, can be found under the caption “Note 11: Debt” in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part I, Item 1 of this report. 37 In connection with the acquisition of Celero on July 31, 2026, as discussed in the Executive Overview section, we amended our credit facility agreement, which now consists of an $800.0 million term loan facility and a $400.0 million revolving credit facility. We utilized the additional capacity under the term loan facility, as well as a draw on the revolving credit facility to fund the acquisition. The amended agreement extends the maturities of both the term loan and revolving credit facilities to July 2031. Subsequent to the amendment, the term loan facility is structured to be repaid in equal quarterly installments of $15.0 million through September 2030 and $20.0 million from December 2030 through June 2031, with the remaining balance due on July 31, 2031. On July 31, 2026, we also entered into amortizing interest rate swap agreements to mitigate variability in interest payments on a portion of our variable-rate debt. The interest rate swaps, which terminate in July 2030, effectively convert, as of the inception date, $600.0 million of variable-rate debt to a fixed rate of 4.1%. While the Celero acquisition increases our debt and leverage levels in the near-term, we believe anticipated cash flows from operations, together with available capacity under our credit arrangements, will be sufficient to support our ongoing operations and service our debt obligations. We will continue to evaluate opportunities to optimize our capital structure. In October 2018, our board of directors authorized the repurchase of up to $500.0 million of our common stock. This authorization does not have an expiration date. We have not repurchased any shares under this authorization since the first quarter of 2020. As of June 30, 2026, $287.5 million remained available for repurchase. Information regarding changes in shareholders' equity can be found in the consolidated statements of shareholders' equity located in Part I, Item 1 of this report. CRITICAL ACCOUNTING ESTIMATES A description of our critical accounting estimates was provided in the MD&A section of the 2025 Form 10-K. During the first six months of 2026, there were no modifications in the assessment or determination of these estimates. New accounting pronouncements – Information regarding accounting pronouncements not yet adopted can be found under the caption “Note 2: New Accounting Pronouncements” in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part I, Item 1 of this report.