Cimpress PLC (CMPR) Q1 FY2024 Earnings: Solid Performance with Increased Profitability
Cimpress PLC (NASDAQ:CMPR) reported an 8% growth in consolidated revenue in Q1 FY2024.
Operating income improved by $52.1 million year over year to $34.1 million.
Adjusted EBITDA grew by $43.1 million year over year to $88.7 million.
Operating cash flow and adjusted free cash flow increased significantly year over year.
On October 25, 2023, Cimpress PLC (NASDAQ:CMPR) released its Q1 FY2024 earnings report, highlighting solid results with an 8% growth in consolidated revenue on a reported basis and 4% on an organic constant-currency basis. The company's operating income improved by $52.1 million year over year to $34.1 million, and adjusted EBITDA grew by $43.1 million year over year to $88.7 million.
Financial Performance Overview
According to the earnings report, Cimpress PLC (NASDAQ:CMPR)'s profitability growth was strong, particularly in Vista. The improvements resulted from revenue growth, gross margin expansion of 100 basis points, leverage in advertising as a percent of revenue which declined by over 100 basis points, and reduced operating expenses. The company's previously communicated cost reduction expectations remain on track.
Operating cash flow and adjusted free cash flow for the quarter increased significantly year over year by $67.5 million and $63.1 million, to $42.3 million and $10.9 million, respectively. These cash flow measures increased due to higher adjusted EBITDA and significantly lower net working capital outflows compared to the year-ago period.
Segment Performance
Vista's Q1 revenue grew year over year by 7% on a reported basis and 6% on an organic constant-currency basis. Vista's EBITDA more than doubled year over year in Q1 FY2024, an increase of $43.7 million, driven by the revenue growth combined with gross margin expansion, lower advertising as a percent of revenue, and materially lower operating expenses from recent cost reductions.
The Upload & Print businesses (PrintBrothers and The Print Group) delivered strong profitability growth during Q1 FY2024 despite sequentially slower organic constant-currency revenue growth. National Pen Q1 revenue grew year over year by 7% on a reported basis and 5% on an organic constant-currency basis.
Outlook
Based on Q1 results, Cimpress PLC (NASDAQ:CMPR) is increasing its profitability guidance to an expectation for FY2024 operating income of at least $206 million and adjusted EBITDA of at least $425 million. The company expects conversion of adjusted EBITDA to adjusted free cash flow of approximately 40% and aims to reduce its net leverage to below 3.25x by the end of FY2024.
Explore the complete 8-K earnings release (here) from Cimpress PLC for further details.
This article first appeared on GuruFocus.
