Revenue Performance
CPI Card Group delivered a strong finish to 2025, with fourth-quarter revenue increasing 22% year-over-year to $153.1 million. This top-line expansion was primarily driven by the strategic acquisition of Arroweye Solutions, alongside robust organic growth in contactless debit and credit cards and double-digit expansion in SaaS-based instant issuance solutions. For the full year, revenue grew 13% to $543.5 million, reflecting steady demand across the core Secure Card Solutions and Integrated Paytech segments, which successfully offset a decline in Prepaid sales. The company anticipates continued momentum into 2026, projecting high single-digit revenue growth.
Profitability and Margins
Despite inflationary pressures, the company demonstrated solid profitability, with fourth-quarter net income rising 9% to $7.4 million and diluted earnings per share reaching $0.62. Adjusted EBITDA for the quarter surged 34% year-over-year to $29.4 million, reflecting an improved margin of 19.2%. This growth was fueled by operating leverage from higher sales volumes, which helped mitigate a decrease in gross margins caused by elevated production costs, tariffs, and an unfavorable sales mix. Conversely, full-year net income declined 23% to $15.0 million, predominantly impacted by acquisition and integration costs associated with Arroweye and a higher tax rate, though full-year Adjusted EBITDA still increased 5% to $96.5 million.
Operational Highlights and Liquidity
Operationally, 2025 was marked by significant strategic advancements, including the successful ~$46 million acquisition of Arroweye in May and the completion of a new secure card production facility in Indiana to expand capacity. The company also successfully entered the US closed-loop prepaid market and invested in the Australia-based payments technology firm Karta. From a liquidity standpoint, CPI Card Group ended the year with $21.7 million in cash and $96 million in available liquidity. Total debt stood at $321.1 million, resulting in a net leverage ratio of 3.1x. Year-to-date free cash flow improved to $41.3 million, driven by lower working capital usage.