Key Highlights

• Q3 2026 Revenue reached a record $158 million, reflecting a 15% year-over-year increase across all Business segments.

• Net Income rose 117% to $5 million, while adjusted EBITDA climbed 17% to $27 million during the quarter.

• The company raised its 2026 guidance for a second consecutive quarter, now projecting low-double-digit revenue growth and free Cash Flow of $50–$55 million.

• Record cash from operations of $57 million was generated during the first nine months of 2026, with a net Leverage Ratio of 2.6x.

CPI Card Group(NASDAQ:PMTS), a payments technology company serving U.S. financial institutions, processors, fintechs, and prepaid program managers, delivered record third-quarter results for the period ended September 30, 2026. Revenue increased 15% to $158.4 million compared to the prior year period, driven by growth across all three of the company's operating segments.

Revenue Breakdown by Segment

The Secure Card Solutions segment posted revenue of $111.9 million, a 13% increase, fueled by higher volumes of contactless cards. Segment Gross Profit rose 23%, and gross Margin expanded by 220 basis points, primarily as a result of increased revenue.

Prepaid Solutions delivered revenue of $26.9 million, a 15% gain over the prior year period, with growth coming from closed-loop prepaid payment solutions and higher-value open-loop packages. Gross profit surged 28%, and gross margin widened 340 basis points to 34%, reflecting favorable sales mix and increased revenue.

The Integrated Paytech segment reported revenue of $23.5 million, up 20%, driven by contributions from the TRISM Acquisition and continued growth in the cloud-based Card@Once solution. Gross Profit Margin remained above 55%. Management indicated that Integrated Paytech revenue growth is expected to more than double in Q4 compared to Q3, supported by continued Card@Once momentum and the TRISM contribution.

Profitability and Cash Flow Performance

Net income for the quarter climbed 117% to $5 million, supported by higher operating income, lower interest expense, and a reduced effective tax rate. Adjusted EBITDA rose 17% to $27 million, driven by revenue growth and a favorable segment mix that improved profitability across the business. Gross profit increased 23%, outpacing revenue growth and delivering 200 basis points of gross margin expansion.

On the cash flow front, CPI generated record cash from Operating Activities of $57 million and free cash flow of $46 million through the first nine months of 2026. The company ended the quarter with a net leverage ratio of 2.6x.

Strategic Developments and Acquisitions

CPI completed a secondary offering that concluded Parallel49's ownership position after nearly 20 years as an investor. The transaction expanded the Shareholder base and increased CPI's public float.

The integration of Arroweye, acquired in May 2025, is nearing completion, with the business outperforming the original Investment case. CPI has secured more than 30 new customer wins since the acquisition, including a top-15 issuer that was not previously a CPI customer. Additionally, the TRISM business, acquired in June 2026, has performed in line with expectations, with early commercial wins reinforcing the investment thesis.

Progress continued with Karta, an Australia-based payments technology firm in which CPI made a minority investment in 2025. The companies are advancing a pilot with a large U.S. national retailer to bring Karta's chip-embedded payment technology to the domestic market.

Updated Full-Year Guidance

CPI raised its 2026 financial guidance for the second consecutive quarter. The company now expects low-double-digit revenue growth, up from the prior range of high-single-digit to low-double-digit growth. Free cash flow guidance was raised to $50–$55 million from the previous $45–$50 million range. CPI continues to expect low-to-mid single-digit adjusted EBITDA growth as it invests in Diversification and growth initiatives. The year-end net leverage ratio is expected toward the low end of the 2.5x to 3.0x range.

Looking Ahead

CPI Card Group's Q3 2026 results reflect double-digit growth across each segment, improved profitability, and raised guidance for the year. The company's acquisition strategy appears to be generating incremental revenue and expanding its customer base, while its digital growth initiatives, including Push Provisioning tokenization, continue to scale. With the Integrated Paytech segment expected to accelerate in Q4 and a net leverage ratio trending toward the lower end of its target range, CPI enters the final quarter of 2026 with operational momentum and a broadened portfolio.