Welcome to the SimPress Q1 FY27 earnings call. I'm Meredith Burns, Vice President of Investor Relations and Sustainability. Thank you everyone for joining us. With us today are Robert Keane, Founder, Chairman, and Chief Executive Officer, and Sean Quinn, EVP and Chief Financial Officer. We appreciate the time that you've dedicated to understand our results, commentary, and outlook. This live Q&A session will last about 45 minutes or so, and we'll answer both pre-submitted and live questions. You can submit questions live via the questions and answers box at the bottom left of the screen. Before we start, I'll note that in this session we will make statements about the future. Our actual results may differ materially from these statements due to risk factors that are outlined in detail in our SEC filings and the earnings document we published yesterday on our IR website. We've also published non-GAAP reconciliations for our financial results on our IR website. We invite you to read them. And now I will turn things over to Robert.

Thanks Meredith and thank you all for joining us today. As I noted in my letter to last night's earnings release, first quarter fiscal 27 financial results were below our expectations. That being said, we remain confident in the financial results we'll deliver for the full fiscal year because as we mentioned at the start of the fiscal year and as we reiterated at our investor day, we set our fiscal 27 public guidance below the plan we're working towards The first quarter has not changed our view that we will deliver that significant profit and cash flow growth in fiscal 27 and that the expansion will continue in fiscal 28 and beyond. That said, the world is uncertain and we are able to achieve deeper cost reductions because of the strong progress on the efficiency foundations which we have been working on for the past year. So we're accelerating cost reduction measures as an insurance plan for meeting our financial goals. Put simply, we remain confident in our fiscal 27 guidance and our board, our executives, and the leaders of our businesses and central teams are all aligned on that. And we all take seriously the guidance commitments we've made to our shareholders and debt holders. Now, let me spend some time on examples of the many areas of progress We're making and are excited about consistent with the themes we laid out in our September 30th investor day. This all gives us further confidence that we are doing the right thing to deliver amazing customer value while also driving to our financial targets. First, we are growing high value customer wallet share through elevated products. In Vistaprint in Q1, we grew variable gross profit per customer 7% year over year. and the variable gross profit from customers who generate more than $650 in annual VGP grew by 15%. Also in Q1 versus the same quarter last year, our packaging business BoxUp grew its revenues with external customers by 16% while also more than doubling its cross-Sympress fulfillment revenue to Vistaprint. Vistaprint in turn is using the BoxUp product range to grow its own high value packaging customers. These examples illustrate a fundamental transition of SimPress's per customer lifetime value which we've been speaking about for the past several years. We are successfully building on our foundational capabilities that traditionally addressed only a relatively small portion of our total addressable market. We are becoming a branding partner to our customers thanks to our expanded product range, improved site merchandising, and service tailored to high value customer needs. We are earning customer trust for a much larger portion of the small business marketing wallet, which means they become much higher lifetime value customers for SimPress. That is an important tailwind for our future of healthy growth. Although the headwinds from our legacy products and our traditional base of small low LTV customers are currently offsetting tailwinds from high value customers, the mix of our gross profit is shifting steadily towards high LTV customers. A second theme from our investor day was that our investments are widening our manufacturing and supply chain advantage. For example, in Vistaprint and the European operations, we went live with a new production line that has slashed the cost of producing beautiful full color corrugated boxes. In the US, Pixar Printing has launched and is growing fast with booklets, catalogs, magazines, and roll labels produced in its new Pennsylvania facility. And we are rapidly increasing the output of two new production facilities in Mexico that combine highly productive state-of-the-art capital equipment with low-cost operations. Third, we are developing new channels to reach customers. A great example of our new channel development is our strategic partnership with Canva, which we continue to nourish by launching in new geographic markets and especially by growing the product footprint and through our work to create a deep technology integration for the benefit of Canva customers and our production volumes. Fourth, we are gaining confidence in the benefits we are and will drive from the closer collaboration between Vistaprint, National Pen, and BuildAside. This collaboration includes anticipated OPEX savings from moving to a shared technology platform, the acceleration of our momentum in promotional products, apparel and signage, and optimization of advertising spend across the brands of these three businesses. We expect to see additional and significant financial benefits of this tighter collaboration in the coming quarters. Fifth, we are applying AI to drive growth and efficiency. We see AI becoming a significant tailwind for Sempress. By democratizing design, it is expanding the online opportunity for customized physical marketing products. We are making focused investments in LLM discoverability and agentic commerce efforts to make us faster and lower cost while expanding the top of our funnel. And AI is helping us become more efficient in all of our operations, which is enabling us to achieve and accelerate our planned cost reductions. Six, our tuck-in acquisitions are on track to deliver the value that we discussed at our investor day. Region acquisitions in our upload and print segments performed in line with our expectations and positively contributed to our reported growth rate. Print Brothers grew revenues by 28% on a reported basis, while the print group grew 13%. To close, the Q1 headline numbers reflected specific headwinds, but do not change our conviction for the fiscal year or for our long-term trajectory, which is firmly on track. We have clear plans across our teams to achieve fiscal 27 and fiscal 28 strategic and financial goals and we remain positive on our prospects for growing per share cash flows anchored by a durable scale-based and innovation forward competitive advantage in the mass customization of print. With that I'll hand it over to Sean to walk through the financial results and outlook.

Thanks Robert and thanks everyone for joining us for the call today. I'll start off with a quarter. It was a quarter that we did not meet expectations as Robert alluded to. Revenue was $934 million, up 8% on a reported basis with organic constant currency growth of 2%. That 2% was below our expectations. The difference between our reported growth and organic constant currency growth comes from the token acquisitions that we've done recently. Vistaprint's organic constant currency growth was 2% with strength in promotional products, apparel, marketing materials, and packaging. And just to note, the backlog in Vistaprint was elevated at the end of the quarter, which we do expect to help revenue in Q2. Uploaded print grew reported revenue 23% combined with organic growth of 4% combined. And our all other businesses segment grew 17% led by Build-A-Sign and the Canva Partnership, which is growing quickly but not material yet to our consolidated results. Adjusted EBITDA was $89.8 million, down 9% from a year ago. Most of that decline came from the cost of continuing to build out our North American manufacturing network, where startup costs were $5.9 million higher year over year. In addition, we absorbed $4.2 million of duties and tariffs on certain goods sold to the U.S. customers, and we had $1.8 million of higher energy-related input costs net of pricing. We also had $1.4 million of impact from the non-recurrence of a compensation benefit in the year-ago period, and then those headwinds there from a cost perspective were partly offset by seven and a half million dollars of IEPA tariff refunds that were related to prior periods. As we noted in last night's release, we expect the year over year impact of both manufacturing startup costs, but also the new Canadian tariffs to reduce in the second half of this year. And then from a segment perspective, I just wanted to point out that the new duties and tariffs, the cost there weighed primarily on Vistaprint, but the refund benefits were almost exclusively in National PIN. On cash, operating cash flow improved $3.9 million to $28.9 million for the quarter, driven by $10 million of lower network and capital outflows and also lower cash interest. And adjusted free cash flow was an outflow of $9.3 million. That was an improvement of $8.5 million versus last year, reflecting the operating cash flow improvement, but also lower capital expenditures and capitalized software. Turning to the balance sheet, net leverage at the end of the quarter was 3.2 times trailing 12 months EBITDA as calculated under our credit agreement. That's up slightly from the 2.9 times at the end of fiscal 26, and the primary reason for that increase is the SAXA print acquisition that closed the beginning of July. And I should note that that leverage calculation does not reflect the expected proceeds from the sale-leaseback of the acquired facility as part of that acquisition. we ended the quarter with 120 million dollars of cash and 35 million dollars drawn on our 250 million dollar revolver which we used to partially fund the acquisition so liquidity remains strong and as a reminder we have no material debt maturities until fiscal 2033. let me turn to the outlook now we're maintaining our fiscal 27 guidance which is reported revenue growth of at least seven percent organic constant currency growth of at least three percent adjusted EBITDA of at least $520 million and adjusted free cash flow of approximately $200 million. For fiscal 28, we continue to target 4% to 6% organic constant currency growth, at least $615 million of adjusted EBITDA and approximately 45% conversion of that EBITDA to adjusted free cash flow. In September, when we had our investor day, I had walked through a bridge. That bridge, starting with our fiscal 26 adjusted EBITDA of $459 million and walking across to the at least $520 million for fiscal 27 guidance. And that included tuck-in M&A, which is contributing $18 to $21 million. It included currency contribution of $5 to $10 million. and about $25 million of in-year cost savings. Startup costs, which as we noted, weighed on the Q1 results are a larger year over year headwind in Q1 and also in Q2. And then that will start to reduce in the second half of the year. And also at the same time, our cost savings and the benefit from recent acquisitions will be building through the remainder of the year. The organic growth piece of that bridge which was the minimum that we need to achieve our guidance is the part that we need to see improve and we're hard at work to do that which brings me to cost actions and given the first quarter results we're behind our plans and it is a dynamic operating environment we're accelerating our cost reduction plan and these actions in our in our view are an insurance policy against the risk of organic growth lagging The reason we're able to do that and go deeper there is because of the efficiency foundations that have been put in place over the last year. From a revenue growth perspective, it's important to note that in the quarterly phasing for this year, which is not part of our guidance, we didn't give quarterly revenue growth. But just in that quarterly phasing, we did plan for lower growth in our second quarter, the quarter that we're now in, the December quarter. and there are two reasons for that the first is an expected year-over-year decline in the consumer category for Vistaprint and the second one is that we've been reducing advertising spend at national pen particularly in direct mail which is the right trade-off and we continue to to see that but seasonally that has the most year-over-year impact on revenue for national pen in q2 on the balance sheet our path to delivering has not changed we continue to expect net leverage to be approximately two and a half times as we finish this year and meaningfully below 2.0 times at the end of fiscal 28 subject to capital allocation choices that we may make. And as we reach those lower leverage levels, we expect to have more flexibility in how we allocate capital, including share repurchases. The initiatives that drive that fiscal 27 and fiscal 28 profit growth, they're in motion. We expect that growth to build from Q2 through the rest of fiscal 27 and into fiscal 28. and the management team and our board are very focused on these targets. We're confident in our ability to deliver them. And so with that, let's turn to your questions. Meredith.

Great. Thanks, Sean. Thanks, Robert. As a reminder to folks, you can submit questions during this webcast via the questions and answers box at the bottom left of the screen. We did have a number of pre-submitted questions as well that we'll get started with shortly and we'll pepper the live questions in as we go. So our first question I'm going to toss to Sean. Sean, can you help explain where exactly performance was below your expectations? We note that the items you referenced in COGS in the earnings document, but it also looks like SG&A and advertising increased 21 to 22 million year over year, while gross profit only increased by about 5 million. And then I think a related question which is helpful in answering this is, Is there anything to note specifically in Vistaprint as it looks like that segment had a tough comp year over year?

Yeah, thanks, Meredith. I'm going to start with Vistaprint. That's where the largest gap was relative to our expectations, as was alluded to. And I'll go into some detail here because I think it will be helpful. First of all, you're right. The Q1 last year for Vistaprint was a strong quarter. So from that perspective, it was a tougher comp. um last year we had good growth five percent constant currency growth we had some a little bit of gross margin expansion we also had some advertising leverage so uh those were good ingredients for for a strong quarter uh and there are a few things that i will call out for mr print as to why that was not the case this quarter uh the first one was that revenue growth was was muted there's um i mentioned in my remarks there's some backlog increase that will flow through in q2 we also did have um it's mentioned in the release a revenue recognition change on the wix partnership which is it's just a presentation topic but has a little bit of impact on the growth rate so if you normalize for those the growth rate was consistent with what we had in q3 and q4 of last year for vista print which was three percent but our ambitions and our expectations are uh for higher than that um from a regional perspective uh Europe was slower and we saw that in our upload and print businesses as well and so that would be one call out just from a regional perspective on revenue and that that was one of the main gaps to expectations overall again trickling into the upload and print businesses as well and then we've seen some change in channel mix and channel performance as well and that has the most impact on on Vistaprint some of that change in Vistaprint's channel mix is from changes that we've been making and how we're allocating our performance marketing All of that's informed by incrementality studies. I think we're taking a very data-driven approach there. We have a very rigorous and continuous experimentation and iteration agenda there, which we'll use to continue to optimize. But we have changed quite a bit our channel mix in terms of where we're spending and how we're spending. So that's what we're driving. But the other part is that changes that are more structural, and that could be the role of AI overviews in Google. It could be more search traffic that's moving from organic to paid, the increasing importance of LLMs in the discovery process. And so this quarter in Q1, bookings in organic search and affiliate for Vistaprint were the weakest in terms of year-over-year performance. And that definitely was a drag on the results. we don't think that that is insurmountable you know it is a changing and evolving environment but it is a near-term headwind and especially when it comes to how we're acquiring new customers to see that in particular and you know we're evolving with that it's an evolution of course that's in its early innings i think there's a few data points that are that are interesting here that that i'll call out one is that and AI-assisted organic discovery, so all things LLMs. It's our fastest-growing channel. We're seeing that also yield high-value customers as well, which is good to see. Of course, it's smaller today, but I think that's a good early sign that we're there. We're seeing positive signs, and it's also a big area of focus for the team. We have quite a robust agenda ahead of us in that area over the next quarters, and we have focused teams that are working just on them. The other one is that we're seeing strong growth in uploads, notably from customers that are designing in LLMs and bringing those designs to Vistaprint. And again, I think that's a strong signal here of the benefit of democratized design. You know, we've mentioned that including in our Investor Day and the opportunity that that presents as we make agentic commerce easier for customers to be able to access the breadth of our product portfolio with those designs. So I think that's an interesting data point as well. the Robert talked about in his remarks the growth that we're seeing with high value customers and that's very much continued so I won't go through those examples here the gap to the expectations that we had were really coming from the lower value customers but that still is an important part of our total base particularly for new customers that we can then graduate to high value customers over time so that's that's kind of the picture on the revenue side focused primarily on on Vistaprint on the cost side Yeah, there are some material year-over-year impacts that contributed to Vistaprint's gross margin decline, and in some cases were a gap to expectations. These were called out in the release, but in Vistaprint specifically, $5 million in North American manufacturing startup costs, that was the increase year-over-year, $3 million of duties and tariff expenses, that was up over last year, and then just under $1 million of net energy-related input costs On the manufacturing startup cost and duties and tariffs, as we said in the remarks, we expect those to start to reduce in the second half of the year. And on tariffs specifically, we have mitigation steps that we're executing against. They just take some time, and that's why that impact is delayed to the second half of the year in terms of seeing those reduced. There was some reference to some other cost line items, ad spend and our kind of overall OPEX. I would say ad spend ticked up as a percentage of revenue for Vistaprint, but it was down slightly at a consolidated level. So not much to talk about there. That will move around quarter to quarter, but we did have some more aggressive experiments later in Q1 in Vistaprint in our performance marketing. And we'll manage that across our full funnel of spend as we move through the year. So not too much to call out there. and then on the OpEx side I think you know we're seeing the efficiency initiatives that we have been driving come through and as an example in Vistaprint you know OpEx is down year over year and we'll continue to see you know more of that across our businesses as we execute on the cost agenda that we have so there's a lot there but I guess in summary would be you know lower growth in Vistaprint and also generally in Europe and then the specific cost impacts primarily the ones that we called out in the release. I would say that's the focal point.

Great. Thanks, Sean. I'm going to stick with you for the next one. It's a good follow-up to that commentary. Can you help explain and break out what you view as one-time items, so startup costs, restructuring costs, versus structural items, so increased depreciation and amortization or import duties or negative net pricing? or SG&A increases.

Yeah, I'll do my best to contextualize these. I think, you know, one time is probably not necessarily the appropriate characterization for some of these because they will continue but fall off. And so anyway, let me try and help here. And so I think the items that are more one time in nature or I would say not recurring would be manufacturing startup costs and you know we've included this in the bridges that we've done in our last two investor days you know they are with us for a period of time as we are doing the startup activities as volume increases those startup costs start to fall away and again that's included in our bridge so I would say that's more you know kind of non-recurring on a steady state basis and we'll start to see that reduce in the second half of this year. For tariffs and duties, that's something that we don't know what the duration of the new Canadian tariffs will be. But as I said, we have mitigating actions that we are taking. Those just take some time to reorient the supply chain. And so we'll start to see those take hold more substantially in the second half of the year in terms of reducing that cost. And then in terms of restructuring costs, we had about $4 million of restructuring costs this quarter. Those are kind of go hand in hand with some of the efficiency initiatives that we're driving. We'll have more of that as we execute on our plans, but that's in service of a lower run rate cost base. So those are the ones that I would call it as maybe non-recurring is the right way to say that. The structural ones, I described some of the revenue growth headwinds in Q1. I think, you know, the legacy product and in some regards, some of our legacy channels like resellers, like those trends remain. We've been talking about those for, you know, for years now, but that would be part of the structural things. And then, you know, I think at the same time, we're driving growth with high value customers and I think we can't lose sight of that. We have a very clear strategy on the growth side as well. with high value customers, growing wallet share. That includes a lot of new product introduction. We've been investing against that over recent years. We continue to do so this year. And we're seeing strong signs of progress here. And again, Robert outlined that. I won't repeat that. Also the progress with new channels and tuck in M&A. So that's sort of the offset. In terms of higher energy costs, we've really across all of our businesses we saw some negative impact there in Q1. We called those out in the release. We have, in some cases, put in additional pricing offsets already there this quarter, particularly as it relates to shipping costs. And so that one I would say is a mix. Of course, we can't control those input costs. We'll continue to test on the pricing side and do what we can there. And as I said, we've already made some additional steps in Q2, but those will likely be with us for a while.

Okay, thank you. Thank you, Sean. I'm going to ask the next question of Robert. So Sean just talked about structural headwinds. So if we've got structural headwinds, how does that factor into the company's view on keeping the guidance flat or consistent with prior messaging?

Well, the headline is that we're doing more on the cost side. So I'll go a little bit more into that. But I think it is important to step back and Sean, I believe you talked about this a little bit, but even before looking at Q1 results, the phasing for year over year profit growth we planned for, and we still stand by that guidance, was weighted towards the back half of the year when M&A contribution is going to be building, currency benefits were more weighted outside of Q1. A lot of the cost savings actions will naturally bring more benefit in later quarters because they need to be implemented. or only have been recently implemented. And revenue, the drivers of that should also build as well as we continue to see the gains in high value customers as we gain that small business market or marketing wallet share. Again, elevated products like packaging, event booths, apparel, promotional products. And as that builds, we're boosting them and supporting them and many more. And finally, the relationship with Canva is ramping and we are building manufacturing gains which will help mitigate some of the gross margin compression we've seen and allow us to compete more effectively. that's all kind of before considering q1 now as of the start of this year we have certainly ground to make up as we've talked about last night in our release and Sean spoke about today our internal budget again to repeat is higher than our guidance which allows us to absorb some of the headwinds relative to our public guidance so although we have clear plans on the growth side and I don't want to leave the impression that we are not doing that. We covered a lot of that in the September 30th investor day. We do not want to be and we won't be dependent on accelerating revenue growth to hit our bottom line numbers, which is why we're taking cost oriented actions deeper and sooner than we had originally planned. So that should cover us even if our revenue were to stay Thank you, Robert. That's a super helpful answer.

I'm going to stick with you for the next one, which is about tuck-in acquisitions. Are they on track?

Yes, absolutely. The financial contribution from M&A this quarter was in line with our expectations, so on track. There's no change for expectation for the year. That is, increased revenue from acquisitions will be $165 to $175 million. and an in-year increase of EBITDA of $18 to $21 million. The Q1 revenue contribution from acquisitions was $60 million and the EBITDA net of transaction costs was $3.5 million. I do want to say those are important financial numbers. We're on track, but beyond those financial headlines, we see great operational integration happening as planned and we see synergies from these acquisitions that are certainly at least at plan and we expect those to build throughout fiscal 27 and into fiscal 28.

Thanks, Robert. I've got a related question, Sean, because those acquisitions were in our upload and print businesses. So here we go. The reported EBITDA for upload and print combined was surprising. Based on disclosures, we had estimated about 6 million of inorganic EBITDA being layered on top of the 44 million that we had last year, leading to a pro forma 50 million of EBITDA, assuming 0% organic growth. The actual value, however, was much lower at 42 million. Can you help us understand the delta?

Yep, it's a great question. There are a few main drivers. There's a number of smaller things, so I'll call out the main ones. And I should say, while my answer to the earlier question was focused on Vistaprint, which is where the largest gap was versus our expectation, as I mentioned, there was weakness generally in Europe from a revenue perspective, and that's here. impacting the upload and print businesses. And I think the question refers to 0% organic growth, so I won't cover revenue as part of that bridge to the numbers that were expected, but just wanted to call that out here. So the main drivers, first of all, on the M&A front, Robert just said we were on track for what we expected, and also we continue to be on track for what we expect to deliver for the full year. That said, the impact for Q1, is not ratable in terms of the quarterly progression throughout the year. The impact for Q1 is lower than what we expect as we get to Q3, Q4, simply because of the synergy build. There's also a little bit of seasonality there as well. So the 6 million that was referenced in the question, The contribution for Q1 was $3.5 million net of transaction costs, so that's $2.5 million of the delta there that you're trying to bridge. And then just in terms of the organic operations, other than M&A, again, I won't go through the revenue drivers because you've assumed 0% growth. There was a $2 million cost for catch-up accrual, which is something that's probability-based, based on the probability of achievement, so kind of an accounting concept. That is, I would say, a one-off, and it's not indicative of run rate operating costs, so $2 million also would feature in your bridge. I would call out the energy related input costs in terms of things that like what is the main thing that impacted gross margins or gross profit year over year that was just under a million dollars of impact across the combined group currency also for the group was unfavorable by a little under a million dollars even though on a consolidated consolidated basis it's favorable all of our hedging gets done outside of our segments and so Thank you, Sean. Okay, Robert, question for you about the macro environment. Is the ongoing unrest in France expected to have a material impact on the print group in Q2?

If so, can you please help us quantify the impact and how might this impact our ability to reach the targets that we've set for ourselves?

Well, thank you. No, I would say as of now, we would not call out the unrest in France as having a material impact on our ability to reach the targets based on everything we see today. Of course, it's a fluid situation, but we do not see that as impacting our ability to hit the bottom line. Print is an important market for us. It's our third largest country by revenue, largely between Print Group and Vistaprint. We have seen some impact during the last weeks, but it's not been very significant. And I would say if you go back to Q1, before October, it was a tough market, but I think that had more to do with the fact that we are strong there in the retailer channel. which is being disintermediated by ourselves and some others. And secondly, in the summer, there was some extreme heat and fires in Southern Europe, including France. So those are the more impactful areas.

Thanks, Robert. Let's stick with macro and let's stick with Robert for this next one. There's been an across the board deceleration across most business units over the past four to six months. What do you To what do you attribute this?

Okay, just to make sure we're talking apples to apples, I'd respond to this in our consolidated organic constant currency growth. On a segment level, when you look at it, it does include our push to do cross-interest fulfillment. So there are reasons why growth might be faster in one segment versus the other as we shift production around. So looking at the consolidated organic constant currency, yes there's been some deceleration in the last six months it's a good question if i step back our organic constant currency growth rate overall was three percent in fiscal 25. it was four percent in fiscal 26 um and it was two percent in this last quarter now for our guidance we still expect to get at least three percent for the full year and i think there are a mix of impacts that we've already commented on. But just to summarize, one, the trend in legacy products like business cards, consumer products, which is something we've talked about for the last two or three years. Secondly, legacy channels like resellers. I just mentioned that in the French context where we have business that we sell to local printers or local graphic designers who then sell to the end customers. that market tends to move toward a direct relationship to the end customer. It benefits a lot of our sin press businesses, but for the upload and print businesses, we have a few that have been historically, they have a higher percentage in the reseller and they're seeing that impact. So even print group is the most salient example of that. And then there's some more notable, Impact on Vistaprint, we mentioned, I think Sean just mentioned, some of the channel performance that he just went through, everything from how Google is switching over to AI mode and the other things, which I won't repeat. Now, we do have very clear growth initiatives. Many of them are longer lead time because we're building up production capabilities to be highly competitive in new product areas. and we have a lot of service operations moving towards high value customers but at the risk of repeating too many times we are adjusting our cost structure and we're allocating capital so we're driving efficiency in some places while also taking advantage of the assets we have and the cost advantages we have and being more selective about where we do that but still driving forward on growth while cutting costs. so most of the external growth comes from a small number of our businesses in part because of our push to do cross-interest fulfillment and I would say the increased collaboration across Vistaprint, BuildAside, National Penn is a great example of that we've decreased advertising spend in National Penn that's led to lower revenue growth and it's going to drag on their growth but it's important choice for profitability and we can redirect that capital into what I'd call our flagship brand in North America, Vistaprint. And so we're also leveraging more shared platforms, technology specifically to cut costs, be more efficient, and give a better experience. So again, all that is something we've talked about. I'm going to pause there so I don't go on too long with a specific question, but I think we do see That's across the board deceleration you're asking about as something we can handle.

Thanks, Robert. Okay, Sean. Next question. At Vistaprint, we would have expected slightly stronger growth and profitability given advertising investments remain flattish as a percentage of sales. PPAG continues to grow quickly as does VGP per customer. However, top line growth was quite muted at 2% and EBITDA came down slightly if you exclude startup costs. Suggesting that there are headwinds, are we thinking about this the right way? And if so, can you describe these headwinds? For example, is a legacy product something else?

Yeah, hopefully much of this is covered in the earlier question that I answered in terms of where there are headwinds. I should mention just a slight correction Mr. Pranad's percentage of revenue was up a little over 100 basis points from last year so it was actually up a little bit which only furthers the question here and so not too much to add to the earlier comments but maybe just a few things I would say there's no big call outs from a product perspective in terms of like a meaningful change in trend in Q1 versus you're looking at that over a trillion 12 month period. I think the channel story is probably the more notable topic. And of course, that has impact on category performance to some extent, but it wasn't like we saw any sort of meaningful or quick change in any category. In terms of first time buyers, I think between the combination of just the legacy product trends that were already in place, and then also the channel shifts. That's had the most impact on business cards and consumers, specific to first-time buyers. So maybe that's the other thing that's notable.

Great. Thank you. I'm going to stick with you. This one should be a quick one. What are the assets that are held for sale on our balance sheets?

yeah those are the um the uh it's the fair value from the um saxaprim facility that we're actively marketing for sale lease back so that's the the way that the accounting rules require you to hold that on the balance sheet at fair value uh that fair value you can if you look at on the balance sheet it's 46 a little over 46 million dollars um which you know could change a little bit we're moving through that uh marketing process and That's all net of any selling cost as well. So that process is ongoing, but that's what that is on the balance sheet.

Thank you. Okay, next question. On holiday, as we approach the ever important holiday season, is there anything that we're doing differently to ensure a very successful Q2?

Yeah, great question. Very important question this time of year. um there's a there's a there's a lot that that we're improving on for this year and yeah this is there's a a rhythm to this um uh you know every year we always do an extensive audit of you know what went well last year what uh what didn't go well and then we build that immediately into the plan for the next year and so we're very much in that cycle and now we're at the time where it's you know it's all it's all execution mode right now um but um I think one of the things that was notable last year that we did was really try to lean more into you know rather than shift a lot of our messaging and our merchandising and our you know assortment to these consumer specific products we try to lean much more into holiday solutions for small businesses and we'll take another step in that direction this year and you can see if you go onto the Vistaprint site you know you hopefully will get that sense in terms of the creative content that you see the messaging that you see the products that you see and the consumer part of holiday is really important as well but that that approach allows us to continue to build on the messaging and relevance that we have with small businesses throughout the entire year so i would say thematically you know that's probably the biggest thing to call out um and that cuts across a lot of what we do. It cuts into how we're thinking about the assortment that we need, quality improvements that we might need or changes in attributes. It goes into how we're thinking about discoverability and you might naturally think of the holiday season and consumer as holiday cards, calendars, photo products like canvas prints or photo books but we have a very relevant holiday assortment and content that we've expanded quite a bit in promotional products, in gifts, in signage and packaging for the small business use case for holiday. So I think again, if you just go onto the site, you should see that come to life. And then the other thing is that in Vistaprint, we had this a new kind of brand framework and platform called Print Your Possible. and so our holiday approach kind of fits underneath that and we're really trying to make sure that Mr. Print is positioned as the one-stop shop which you know we try and do all year round but in this case one-stop shop for everything that you need to create holiday magic this season you know as a as a small business and I think again you'll if you go into the site or you see any of our brand advertisement I think we have a really good and strong collection of creative ingredients that will bring that brand platform to life in new ways for holiday but again in a way that's very congruent with our messaging throughout the year and I think sets us apart from competitors as well so that's the main thing in our approach I focus there on Vistaprint because yeah that's the biggest the biggest area for for holiday but there's a number of our businesses notably you know Build-A-Sign and National Pen that also have a seasonally tick up and they equally are focused on the execution for the holiday season and are ready for what's ahead. Just maybe coming back to the financial part of all that, consumer has come down in our mix quite a bit over the years relative to our consolidated revenue. It's less than 10% today. It does tick up in the December quarter, but it is less in the mix than it once was. But as I also mentioned in my earlier remarks, in terms of the quarterly phasing for growth in the second quarter, we expected this year to have lower growth in the second quarter for two reasons. One is that we do expect year-over-year decline in the consumer category for Vistaprint. as we focus successfully on growing high-value small business customers. But in the consumer category specifically, we expect some year-over-year decline. And then we've also been reducing advertising spend. Robert mentioned this earlier at National Penn, particularly in direct mail. And we're seeing that that's the right tradeoff. But seasonally, that has the most year-over-year impact on revenue in Q2. So a few call-outs there.

Thank you, Sean. Robert and Sean, we have exhausted the list of both pre-submitted and live questions, so I will turn things over to Robert to wrap us up.

Thanks, Meredith. Before we go, I'd like to leave you with a couple of thoughts that I believe matter most. First of all, our long-term trajectory is on track. We have clear plans across our teams to achieve our FY27 and FY28 strategic and financial goals. We're putting in an additional insurance policy into place through added cost constraints and reductions. And we are certainly expecting the profit and cash flow benefits of our efforts to build in the back half of the year based on the timing of the revenue momentum and the planned cost reductions. And with that, thank you for joining the call. Thank you for your continuing willingness to entrust your capital with us.