CPI Card Group Inc. (Nasdaq: PMTS), a leading payments technology company, has reported its first quarter 2025 financial results and shared updates on its strategic outlook and recent acquisition. The company's net sales for the first quarter increased by 10% to $122.8 million compared to the same period in 2024, driven by robust growth in contactless debit and credit cards and prepaid card solutions. However, net income decreased by 12% to $4.8 million, or $0.40 diluted earnings per share, primarily due to lower gross profit and higher interest expense. Key Financial Metrics Net Sales: Increased 10% year-over-year to $122.8 million. Gross Profit: Decreased 2% to $40.7 million with a gross profit margin of 33.2%, down from 37.1% in the prior year. Income from Operations: Remained flat at $14.1 million. Adjusted EBITDA: Fell 8% to $21.2 million, reflecting lower gross profit. Operating Cash Flow: $5.6 million, a drop from $8.9 million in the prior year. Free Cash Flow: Reduced to $0.3 million from $7.4 million in the prior year, mainly due to higher capital expenditures for a new secure card production facility in Indiana, lower net income, and increased working capital usage. Operational Highlights Acquisition of Arroweye Solutions: On May 6, 2025, CPI announced the acquisition of Arroweye Solutions, Inc., a provider of digitally-driven on-demand payment card solutions. This move enhances CPI's capabilities, technology, and production capacity, aligning with the company's goal to diversify and grow its business. Eco-Focused Payment Cards: CPI continues to be a leader in eco-friendly card solutions, having sold over 350 million eco-focused debit, credit, and prepaid card or package solutions since launch, including more than 200 million eco-focused prepaid card solutions since 2023. Instant Issuance Solutions: The company has over 16,000 Card@Once installations across more than 2,000 financial institutions, solidifying its position in Software-as-a-Service (SaaS)-based instant issuance solutions in the U.S. Market Expansion: CPI is advancing its market and product expansion strategies, focusing on healthcare payment solutions, digital offerings such as push provisioning for mobile wallets, and enhanced payment card fraud solutions. Strategic Outlook CPI affirmed its 2025 outlook, projecting mid-to-high single-digit organic growth for both net sales and Adjusted EBITDA. This forecast is based on a stable economic environment and considers the impact of current tariffs. The outlook does not account for contributions from the Arroweye acquisition. Management is implementing cost-saving measures and supply-chain actions to mitigate tariff impacts and improve margins throughout the year. John Lowe, President and CEO, expressed satisfaction with the sales performance and emphasized the company's commitment to gaining market share and diversifying its business. CFO Jeff Hochstadt noted the balance between investing for long-term growth and managing expenses, highlighting steps taken to address tariff and sales mix challenges. Industry Insights and Evaluation Industry experts view CPI's acquisition of Arroweye as a strategic move to strengthen its on-demand and digital solutions portfolio. The integration of Arroweye's technology is expected to give CPI a competitive edge in rapidly meeting customer demands and expanding its market reach. The company's focus on eco-friendly products and SaaS solutions also aligns well with growing consumer and regulatory trends, enhancing its sustainability profile and technological offerings. CPI Card Group Inc. is a respected player in the payments technology sector, known for its comprehensive range of payment cards and digital solutions. With a history of innovation and a strong customer base, the company is well-positioned to capitalize on emerging trends in the payments industry, particularly in contactless and eco-friendly card solutions. The strategic acquisition of Arroweye and the ongoing expansion efforts underscore CPI's dedication to staying ahead in a fast-evolving market. About CPI Card Group Inc. CPI Card Group Inc. is a U.S.-based payments technology company specializing in payment cards and related digital solutions. The company serves a diverse clientele, offering a wide array of products and services, including contactless and eco-focused cards, instant issuance solutions, and fraud prevention tools. CPI's commitment to building strong relationships and delivering innovative solutions positions it as a key player in the payments industry. For more information, visit www.cpicardgroup.com.