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Here's How Cimpress Impressed the Market in Q2 2020

By Anders Bylund - Jan 30, 2020 at 9:13AM

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The customize-to-order print services operator posted strong results according to management's preferred metrics.

Vistaprint parent company Cimpress (CMPR 1.31%) reported solid second-quarter 2020 results on Wednesday evening. Top-line sales held steady while various profit metrics skyrocketed. I'll explain the quirkiest quirks below.

Cimpress' second-quarter results by the numbers


Q2 2020

Q2 2019


Analyst Consensus


$820 million

$826 million


$844 million

GAAP net income

$190 million

$69 million



GAAP earnings per share (diluted)





Data source: Cimpress. GAAP = generally accepted accounting principles.

The reported earnings include a large one-time tax benefit based on taxation reform in Switzerland. Cimpress didn't provide any non-GAAP bottom-line figures that adjusted its profits for this tax effect, so it might be better to measure the quarter's business performance by pre-tax metrics. Internally, the company optimizes its operations for maximal adjusted free cash flows per share. On that note, adjusted free cash flow landed at $6.35 per share, 31% above the $4.86 per share Cimpress delivered in the year-ago period.

Most of the company's operating groups saw second-quarter revenues holding flat year over year, landing no more than a couple of percentage points away from their year-ago results. The most obvious outlier to this trend was the PrintBrothers segment, accounting for the company's upload-and-print operations in German-speaking countries, where sales rose 9% to $127 million. That division also boosted its operating income by 41% to $16.5 million, though this contribution was overshadowed by the larger VistaPrint group's operating profits rising 36% to $132 million.

A yellow charting arrow breaks upwards through a blue brick wall.

Image source: Getty Images.

Unusual business goals

Cimpress widened its operating margins in nearly every division, mainly by closing down revenue-generating business lines that weren't pulling their weight on the bottom line. This attitude also explains Cimpress' lower top-line revenues, and all of this is happening according to management's grand operating plan. The company as a whole runs with a strict focus on long-term accumulation of adjusted free cash flows per share.

"We endeavor to make all financial decisions in service of this priority," management explains at the start of every earnings report. "As such, we often make decisions that could be considered non-optimal were they to be evaluated based on other criteria such as (but not limited to) near- and mid-term revenue, operating income, net income, EPS, adjusted EBITDA, and cash flow."

In that light, Cimpress doesn't expect to deliver revenue growth in 2020, but earnings and cash flows should rise as the company continues to optimize its operations.

Investors embraced this report with open arms. Cimpress shares closed the after-hours trading session 6% higher. That's still 19% below the 52-week highs that were set in November, and the stock is now trading at an affordable valuation of 11.4 times free cash flows.

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