third quarter 2026
Filed Nov 4, 2026Third-quarter revenue increased 15% to a quarterly record of $158 million; net income increased 117% to $5 million; Adjusted EBITDA increased 17% to $27 million; the Company raised revenue growth and Free Cash Flow guidance.
Third-quarter revenue, gross profit, net income, Adjusted EBITDA and Free Cash Flow all increased year over year, every operating segment delivered double-digit quarterly revenue growth, and the Company raised its 2026 revenue growth and Free Cash Flow targets.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30, 2026GAAP | $158.4M | – | 14.8 % |
| Cost of goods sold, three months ended September 30, 2026GAAP | 108,105 | – | – |
| Gross profit, three months ended September 30, 2026GAAP | $50.25M | – | 22.6 % |
| Gross profit margin, three months ended September 30, 2026GAAP | 31.7 % | – | – |
| Selling, general and administrative expenses, three months ended September 30, 2026GAAP | 34,597 | – | – |
| Income from operations, three months ended September 30, 2026GAAP | $15.65M | – | 20.3 % |
| Income from operations margin, three months ended September 30, 2026GAAP | 9.9 % | – | – |
| Interest, net, three months ended September 30, 2026GAAP | (8,011) | – | – |
| Net income, three months ended September 30, 2026GAAP | $5.02M | – | 117.5 % |
| Net income margin, three months ended September 30, 2026GAAP | 3.2 % | – | – |
| Diluted earnings per share, three months ended September 30, 2026GAAP | $ 0.41 | – | – |
| Basic earnings per share, three months ended September 30, 2026GAAP | $ 0.43 | – | – |
| EBITDA, three months ended September 30, 2026non-GAAP | $21.09M | – | 13.3% |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $27.46M | – | 17.2 % |
| Adjusted EBITDA margin, three months ended September 30, 2026non-GAAP | 17.3 % | – | – |
| Cash provided by operating activities, three months ended September 30, 2026GAAP | $15.10M | – | – |
| Capital expenditures for plant, equipment and leasehold improvements, net, three months ended September 30, 2026GAAP | (5,005) | – | – |
| Free Cash Flow, three months ended September 30, 2026non-GAAP | $10.10M | – | – |
| Revenue, nine months ended September 30, 2026GAAP | $454.6M | – | 16.4 % |
| Gross profit, nine months ended September 30, 2026GAAP | $142.9M | – | 17.3% |
| Gross profit margin, nine months ended September 30, 2026GAAP | 31.4 % | – | – |
| Income from operations, nine months ended September 30, 2026GAAP | $38.51M | – | 5.4% |
| Net income, nine months ended September 30, 2026GAAP | $9.12M | – | 19.9 % |
| Diluted earnings per share, nine months ended September 30, 2026GAAP | $ 0.76 | – | – |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | $74.67M | – | 11.3 % |
| Adjusted EBITDA margin, nine months ended September 30, 2026non-GAAP | 16.4 % | – | – |
| Cash provided by operating activities, nine months ended September 30, 2026GAAP | $57.25M | – | – |
| Capital expenditures for plant, equipment and leasehold improvements, net, nine months ended September 30, 2026GAAP | (11,103) | – | – |
| Free Cash Flow, nine months ended September 30, 2026non-GAAP | $46.15M | – | – |
| Net Leverage Ratio, September 30, 2026non-GAAP | 2.6 | – | down from 3.6x in the third quarter last year |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Secure Card Solutions, three months ended September 30, 2026Driven by increased volumes of contactless cards. | $111.9M | – | 12.9 % |
| Prepaid Solutions, three months ended September 30, 2026Primarily due to increased sales of closed loop prepaid payment solutions and healthy volumes of higher-value open loop packages. | $26.86M | – | 15.1 % |
| Integrated Paytech, three months ended September 30, 2026Primarily due to contributions from the acquisition of TRISM and growth in the cloud-based Card@Once solution. | $23.45M | – | 20.3 % |
| Secure Card Solutions, nine months ended September 30, 2026Driven by increased sales of contactless cards and contributions from the acquisition of Arroweye. | $332.6M | – | 20.7 % |
| Prepaid Solutions, nine months ended September 30, 2026Primarily due to increased sales of closed loop prepaid cards, as well as the change in accounting that was implemented in the second quarter of 2025. | $71.55M | – | 3.3 % |
| Integrated Paytech, nine months ended September 30, 2026Primarily driven by contributions from TRISM. | $62.97M | – | 8.4 % |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
2026 outlook
- RevenueLow-double-digit growth
- NoteAdjusted EBITDA: low-to-mid single-digit growth
- NoteFree Cash Flow in the $50 million to $55 million range
- NoteYear-end Net Leverage Ratio toward the low-end of the 2.5x and 3.0x range
What drove it
- Third-quarter gross profit increased 23% to $50.3 million, driven primarily by sales growth and favorable segment mix.
- Secure Card Solutions segment gross profit increased 23% and gross margin increased 220 basis points, primarily driven by increased revenue.
- Prepaid Solutions segment gross profit increased 28% and gross margin increased 340 basis points to 34%, primarily driven by increased revenue and favorable sales mix.
- Integrated Paytech revenue growth reflected TRISM and growth in Card@Once.
- Nine-month gross profit margin of 31.4% increased from 31.2%, primarily due to increased revenue and approximately $4.0 million of tariff refunds in Secure Card Solutions, partially offset by approximately $1.0 million of tariff expenses in other reportable segments and increased depreciation expenses.
- First-nine-month Free Cash Flow increased with strong operating performance, significant improvements in working capital, including lower inventory purchases, and lower capital expenditures.
Concerns
- Integrated Paytech quarterly gross profit margin was 55.3 %, compared with 56.5 % in the prior-year period, while income from operations declined to $ 7,228 from $ 8,228.
- Corporate loss from operations was $(18,238) in the third quarter, compared with $(14,142) in the prior-year period.
- Prepaid Solutions nine-month gross profit decreased to $ 21,109 from $ 21,962, and gross margin decreased to 29.5 % from 31.7 %.
- Nine-month Adjusted EBITDA margin was 16.4 %, compared with 17.2 % in the prior-year period.
- The Company recorded $ 1,192 of acquisition and integration costs and $ 2,272 of restructuring and other charges in the third quarter.
What to watch
- The Company expects Integrated Paytech revenue growth to more than double in the fourth quarter compared with the third quarter.
- Execution of TRISM integration and continued Card@Once momentum.
- The year-end Net Leverage Ratio target toward the low-end of the 2.5x and 3.0x range versus 2.6 at September 30, 2026.
- Delivery against 2026 Free Cash Flow guidance of $50 million to $55 million after generating $ 46,149 through the first nine months.
- Commercial progress from Karta's second-stage pilot with a large U.S. national retailer.
Balance sheet and cash flow
- Cash and cash equivalents as of September 30, 2026: $ 15,177
- ABL Revolver as of September 30, 2026: $ 15,000
- Senior Notes as of September 30, 2026: $ 238,500
- Financing lease obligations as of September 30, 2026: $ 34,398
- Total debt as of September 30, 2026: $ 287,898
- Total net debt as of September 30, 2026: $ 272,721
- Long-term debt as of September 30, 2026: $ 251,135
- Cash provided by operating activities for the nine months ended September 30, 2026: $ 57,252
- Cash used in investing activities for the nine months ended September 30, 2026: (17,112)
- Cash used in financing activities for the nine months ended September 30, 2026: (46,663)
- Payments on debt for the nine months ended September 30, 2026: (66,500)
- Proceeds from borrowings on debt for the nine months ended September 30, 2026: 30,000
- Cash paid for acquisition, net of cash acquired for the nine months ended September 30, 2026: (6,300)
Analysis
CPI reported a record third quarter, with revenue of $ 158,357, up 14.8 % from $ 137,966. All three operating segments posted double-digit revenue growth. Secure Card Solutions, the largest segment, grew 12.9 % on higher contactless-card volumes. Prepaid Solutions grew 15.1 % on closed-loop solutions and higher-value open-loop packages, while Integrated Paytech grew 20.3 % with contributions from TRISM and Card@Once.
Profitability outpaced sales growth in the quarter. Gross profit rose 22.6 % to $ 50,252 and gross profit margin rose to 31.7 % from 29.7 %. Secure Card Solutions and Prepaid Solutions recorded gross-margin expansion, while Integrated Paytech gross profit margin was 55.3 %, compared with 56.5 % in the prior-year quarter. Income from operations increased to $ 15,655 from $ 13,018, and net income increased to $ 5,019 from $ 2,308. The release attributed the net-income increase to higher operating income, lower interest expense and a lower effective tax rate, partly offset by acquisition and integration costs primarily related to TRISM and Arroweye.
Adjusted EBITDA increased 17.2 % to $ 27,465 and the related margin improved to 17.3 % from 17.0 %. The nine-month view shows revenue of $ 454,646, up 16.4 %, and Adjusted EBITDA of $ 74,674, up 11.3 %, although nine-month Adjusted EBITDA margin declined to 16.4 % from 17.2 %. Prepaid Solutions was a relative pressure point over nine months, with gross profit declining to $ 21,109 from $ 21,962 and gross margin falling to 29.5 % from 31.7 %. Corporate operating loss also widened in the quarter to $(18,238) from $(14,142).
Cash generation was a key positive. Cash provided by operating activities reached $ 57,252 for the first nine months, compared with $ 19,911, and Free Cash Flow reached $ 46,149, compared with $ 6,134. The Company cited operating performance, working-capital improvements including lower inventory purchases, and lower capital expenditures. Total debt was $ 287,898 and total net debt was $ 272,721 as of September 30, 2026, with Net Leverage Ratio at 2.6 versus 3.1 at December 31, 2025.
Management raised 2026 revenue growth guidance to low-double-digit growth and Free Cash Flow guidance to $50 million to $55 million, while maintaining low-to-mid single-digit Adjusted EBITDA growth and a year-end Net Leverage Ratio toward the low-end of the 2.5x and 3.0x range. The fourth-quarter outlook calls for Integrated Paytech revenue growth to more than double compared with the third quarter, driven by Card@Once, TRISM instant issuance and a more favorable year-over-year comparison. The filing also notes that CPI did not sell shares or receive proceeds in the September secondary offering, while incurring approximately $1.0 million of offering-related expenses.
Management, verbatim
The third quarter marked another quarter of strong revenue, Adjusted EBITDA and Free Cash Flow growth, while we continued to invest in the business to help our customers win.
John Lowe, President and Chief Executive Officer
Double-digit growth across each of our segments, improved profitability and strong commercial wins demonstrate the progress we are making against our strategy.
John Lowe, President and Chief Executive Officer
Through the first nine months of 2026, we generated $46 million of Free Cash Flow while continuing to invest in attractive growth opportunities and reduce debt.
Terra Grantham, Chief Financial Officer
Not in the filing
stated, not guessed- Prior-quarter comparisons for revenue, gross profit, operating income, net income, EPS, Adjusted EBITDA and Free Cash Flow were not reported.
- GAAP operating cash flow, capital expenditures and Free Cash Flow guidance reconciliations for full-year 2026 were not available.
- 2026 guidance for gross margin, operating expenses and tax rate was not provided.
- Dividends and share repurchases were not reported.
- Previous-release outlook was not provided as a separate document; therefore, no actual-versus-prior-guidance comparison is included.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.