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Net sales for payment card producer CPI Card Group Inc. jumped 18% in the third quarter as card issuers boosted orders for credit, debit and prepaid cards and CPI’s services offerings.
It was the second straight quarter of sales increases for Littleton, Colo.-based CPI following 7% decreases in the first quarter and 2023’s fourth quarter as issuers restrained purchases to prevent inventory buildup. Now, CPI indicates the situation has turned around.
“Sales performance in the quarter was driven by strong growth in debit and credit card sales, as well as continued growth from prepaid, instant issuance solutions and other card personalization services,” CPI said Tuesday in its latest earnings report. “Product sales increased 25% in the third quarter, led by sales of contactless cards, while services sales increased 10%. For the first nine months of the year total net sales increased 4%.”
Company president and chief executive John Lowe added in the report that the debit and credit segment saw a 19% quarterly sales increase.
The sales total for the quarter ended Sept. 30 was $124.8 million versus $105.9 million a year earlier. Product sales brought in $69.6 million compared with $55.7 million in 2023’s third quarter. Services generated $55.1 million versus $50.2 million in the year-earlier period.
CPI’s net income, however, fell 66% to $1.29 million from $3.86 million a year earlier thanks mainly to $8.8 million in debt refinancing costs. Adjusted earnings before interest, taxes, depreciation and amortization grew 18% to $25.1 million.
Key growth areas for CPI include what it calls environmentally friendly “eco-focused” contactless payment cards, of which the company says it has produced more than 100 million since their 2019 launch. Last month CPI announced it was rolling out fresh card technology that reduces the amount of first-use plastics while providing issuers new formats and shapes for their credit, debit, and prepaid cards.
Another growth focus is CPI’s Card@Once instance-issuance systems. About 2,000 U.S. financial institutions currently have 16,000 Card@Once installations. In the pipeline are push-provisioning capabilities for mobile wallets as well as other, unspecified digital services, according to the report.
