CPI Card Group Inc.

What they do

CPI produces payment cards and related digital payment solutions, serving banks, credit unions, processors, fintechs and prepaid program managers primarily in the United States. Its operations include card manufacturing and personalization through its Secure Card Solutions segment, prepaid card programs through its Prepaid Solutions segment, and instant issuance software and hardware through its Integrated Paytech (IPT) segment. The company also owns a minority investment in Karta, an Australia-based payments technology firm.

Revenue drivers

• Secure Card Solutions — The largest segment by revenue, providing credit, debit and commercial card production and personalization; drove the second quarter 2026 revenue increase.
• Prepaid Solutions — Offers prepaid card programs to retailers, program managers and other customers; described as higher-margin but experiencing uneven demand in 2026.
• Integrated Paytech (IPT) — Provides instant issuance solutions, including Card@Once cloud-based offerings for small and medium financial institutions; 2026 revenue growth guidance raised to approximately 20% after the TRISM acquisition.

Recent performance

For the quarter ended June 30, 2026, revenue increased 15% to $149.2 million, net income rose 294% to more than $2 million, and Adjusted EBITDA increased 7% to $24 million. Sequentially, revenue was $147.1 million in Q1 2026, $153.1 million in Q4 2025, and $138.0 million in Q3 2025. Full-year 2025 revenue was $543.5 million with net income of $14.9 million and diluted EPS of $1.25, while operating cash flow reached $59.5 million. The first half of 2026 produced record cash flow from operations of $42 million, and the net leverage ratio declined to 2.7x.

Strategy

CPI is pursuing growth through acquisitions and product expansion, including the acquisition of TRISM to double its addressable market in U.S. instant issuance and serve mid-to-large financial institutions, complementing its Card@Once cloud offering for SMEs. The company integrates Arroweye, a digitally-driven on-demand card provider, and is advancing a minority investment in Karta to bring SafeToBuy chip-based technology to U.S. prepaid solutions. Management raised 2026 revenue growth guidance to high-single-digit to low-double-digit and Free Cash Flow guidance to $45-$50 million, while reaffirming low-to-mid single-digit Adjusted EBITDA growth and a 2.5x-3.0x net leverage target.

Risks

• Customer concentration and retention — Failure to retain existing key customers or attract new ones could materially reduce revenue, given the consolidated and competitive payments marketplace.
• Technological obsolescence — Digital payment systems and mobile payments could make CPI's physical card products obsolete or less relevant if the company cannot develop new solutions.
• Supply chain and tariffs — Disruptions, single-source suppliers, trade restrictions and tariffs could delay deliveries and increase costs if CPI cannot pass them to customers.
• Substantial indebtedness — At June 30, 2026, total liabilities were $401.9 million against total assets of $390.4 million, leaving shareholder equity of negative $11.5 million and constraining financial flexibility.

Outlook

Management raised 2026 revenue growth guidance to high-single-digit to low-double-digit and Free Cash Flow guidance to $45-$50 million, up from $41 million in 2025. Adjusted EBITDA growth guidance remains low-to-mid single-digit, with stronger Secure Card Solutions performance and tariff refunds expected to be largely offset by continued IPT investment and uneven Prepaid Solutions demand. IPT revenue growth guidance was increased to approximately 20% following the TRISM acquisition.