Welcome to the Cimpress Q4 FY 2024 Earnings Call. I will introduce Meredith Burns, Vice President of Investor Relations and Sustainability.

Thank you, Dee, and 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 and we'll answer both presubmitted and live questions. You can submit questions via the questions-and-answers box at the bottom left of your webcast 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 documents we published yesterday on our website. We also have published non-GAAP reconciliations for our financial results on our IR website, and we invite you to read them. And now I will turn things over to Sean.

Great. Thanks a lot, Meredith, and thanks to everyone who's joined us today. Before we get into questions, I'm just going to highlight a few things from the 2 documents that we published yesterday. That first document was our earnings document that we normally publish. And then the second one is Robert's annual letter to investors. As we noted in the earnings documents, Cimpress had a strong finish to a strong year. In Q4, consolidated revenue grew 6% on both a reported basis and organic constant currency basis. For the full year, revenue grew 7% on a reported basis and a little over 5% on an organic constant currency basis. Adjusted EBITDA grew $5 million year-over-year in Q4 to $119 million, off of a tougher comp last year that had some onetime benefits and we had year-over-year currency headwinds of a little more than $3 million as expected. For the full year, adjusted EBITDA grew $129 million year-over-year to $469 million, which is 38% growth. And that growth is inclusive of year-over-year currency headwinds of $19 million, which is consistent with the expectation for currency impact that we said at the beginning of the year. Our full year adjusted EBITDA margins were up over 300 basis points to 14.2% in fiscal 2024, and that was driven by a combination of revenue growth, gross margin expansion and then also the cost reductions that we announced last March. From a segment perspective, every segment accelerated revenue growth sequentially this quarter with the exception of National Pen, where we made a choice to reduce advertising spend and that impacted the revenue growth rate, but significantly improved profitability. In Vista, we continue to see growth in per customer value, which is a trend that we've been talking about for several years now. And we…

Great. Thanks, Sean. [Operator Instructions] We have received a couple of pre-submitted questions, and then I'll add the live ones as they come in. So our first question, I'm going to have Sean answer. Can you provide an apples-to-apples breakdown of run rate EBITDA growth for Q4 FY '24 versus Q4 FY '23? I note from the release that currency lowered EBITDA by $3.1 million in FY '24, onetime items benefited FY '23 EBITDA by $3 million and that Vista advertising was up by 130 basis points in FY '24. I also note that the quarter ended on a Friday last year and on a Sunday this year, which might adversely impact this year. It would be helpful to understand how much run rate EBITDA grew in Q4 FY '24 normalizing for the unusual items.

Great. Well, thanks for the question. It's a good one. And there's a lot to dig on there. We always have some timing differences and shifts in things like timing of holidays or how many days fall in a quarter, and that can impact comparisons to last year. So to some extent, there's always some of this. But I would say this quarter in Q4, that impact was definitely more notable. And there are a few things that we called out in the release, as you noted in the question, just to go through them. The first is that, and I mentioned it in my opening remarks as well, currency was a negative year-over-year impact of just over $3 million on EBITDA. It was $19 million for the full year, $3 million for the quarter. So that's one. Two is that, as we called out in the release, there were some onetime benefits in Vista last year that didn't repeat this year. And so that's a little over $3 million as well. So between those two, you're at $6 million. And then if you look at kind of the top half of our P&L, our consolidated gross profit grew $28 million year-over-year in the quarter, which was quite strong. Advertising spend was higher by $9 million year-over-year, and that was mostly driven by Vista. And we talked about this sometimes, in our advertising spend, it's normal also to see some fluctuations in intensity quarter-by-quarter. But that was accentuated in Q4 because last year, in Vista, we were doing pretty extensive testing where we were going dark in certain channels and markets to test incrementality. And so that impacts the year-over-year comparison and is one of the reasons why advertising spend in absolute dollars year-over-year is up as much as it is. We also had a creative shoot in Vista that generates assets that we use for well more than a year. But when we do that, we expense all that upfront, that was about $1.4 million. So reported EBITDA grew $5 million. But if you add up all those things, that's another about $16 million of year-over-year impact if you compare it back to Q4 last year. I think last year, I would say, advertising spend was lower than the normal run rate given the testing that we were doing. But in any case, I think it's very fair to say that the run rate EBITDA growth in Q4 was higher than the headline number that we reported.

Great, Sean. The next question, I'm going to ask Robert to answer. Robert, can you talk a little bit more about the reseller challenges in Print Group? What gives us confidence that these are broad-based market challenges and not idiosyncratic to our businesses, that is somebody is eating our lunch?

Yes. So to your specific question, we do not see any reseller competitor "eating our lunch." First of all, we do value our reseller customers and we work hard to make them very competitive by serving them. But in the end, it is the end customer, the ultimate consumer of our products, who chooses whatever channel is most convenient for them and most competitive. And this shift that we are speaking about is part of a long-term disintermediation and a shift towards direct-to-e-com -- direct-to-customer e-commerce models continue to grow. Now we've described this reseller disintermediation in our Upload and Print space for many years even as we've continued to grow our revenues in Upload and Print very nicely. We've spoken about it again because it is continuing. But if you step back, some of our Upload and Print businesses including our largest ones today have transitioned to a point where they serve mostly end customers, and so they're not exposed to these negative side of this trend. But we do have a couple of businesses that historically and even currently primarily serve resellers. So their growth is more muted as a result. Again, this isn't new. Going back to why we spoke about it again this year, because this year, our revenue growth in Upload and Print, which is driven by our traditional, certainly our traditional products, has been coming from volume alone or primarily. Whereas in the past, there was some mix shift towards newer products and pricing improvements that we drove. This underlying reseller trend shows through our results in that environment. And now as we step way back, we continue to think and believe that there's a long runway for growth in Upload and Print. Again, most of our businesses and our largest businesses in the segment primarily serve end customers, not resellers. Now this shift is happening. I would say, more volume going direct to end customers' benefit, same price overall. And finally, I just say repeating, we do have an important business with our resellers and we certainly are continuing to fortify our value proposition for them via things like new product introductions, quantity choices, which are right for their customers, faster delivery speed and other things, again, once again, as we do for all of our customers, whoever they are.

Great. Robert, I'm going to stick with you for the next question, which is about our CapEx spend. So what makes now the time to accelerate those capital expenditures?

Right. We brought that up and singled that last night because in summary, for the past 2 fiscal years and for the coming fiscal '25, we've been really focusing on operational execution, and this capital expenditure will really fortify the manufacturing and supply chain advantages, which are fundamental to that operational capability we have and a core part of operational execution. Now again, I give you some context to this. You certainly should read for more detail about what I'm about to say in my annual letter, which we published last night. But today, in summary, we are stronger financially and importantly, operationally than we've been in many years because of the work we did to 6 years ago, the significant investment we did over those past years. And that has given us a solid foundation on which we are moving forward and building forward. And that solid foundation certainly is across many different aspects of our competitive advantage and our customer value proposition. I wrote about those in our letter last night. From a CapEx perspective, specifically, most of this is going into production operations. And it directly drives what we are really the best in the world at, which is the mass customization of print and print-related products. And we think the financial returns make a lot of sense. Some of these investments are really no-brainers as they're going to drive much greater production efficiency with relatively quick payback given our high volumes. Other investments are for new product introductions that will allow us to expand how we serve our customers and attract new customers. Others provide an improvement in quality or quality attributes that we can offer to customers. And many of them will do multiple of the things I just mentioned, they'll help efficiency, they'll help NPI and they'll help with quality attributes. So finally I'd say, we have been -- again, I spoke about this in my letter, but we are in a period that's quite exciting in terms of the equipment market where there's been a lot of competition, a lot of innovation, some of that innovation codeveloped with us and our suppliers. And across the supply chain for equipment, we see new equipment, which is very, very productive and very attractive. Finally, let's just say, as we've communicated when we increase CapEx or we increase any other aspect of our cash flow consumption, it is within the guardrail of the leverage policy statements, which we said before, which we reiterated last night in our documents.

Great, Robert. All right. I'm going to shift gears. We're going to talk about the debt side of things. I'm going to pass the next couple of questions over to Sean. So Sean, any new thinking about refinancing our 2026 bonds?

Yes. The short answer is that nothing, there's nothing new there from what I said on last quarter's call, we had a similar question. We haven't made any decisions on exactly when or how we'll refinance the bonds. But of course, it's something that we are regularly thinking about. We still have a little under 2 years to maturity. And so we can be patient, but we're kind of getting into that window now where we'll be ready to act. And so we'll be ready when it makes sense to do so. We're in regular contact with our rating agencies so that they understand the financial progress that we've made, and we'll continue to do that. This is something we regularly do. And then as I said last quarter as well, when we got this question, we do like having both secured and unsecured debt in our capital structure. We think that diversification of our capital base is a good thing for a number of reasons, keep some secured capacity, gives us some optionality over time as well as our base of profitability growth. So no change in thinking there. But we'll be ready to act when it makes sense to do so. And I think that's probably likely to be in this fiscal year.

Okay. So a question here. What are the plans for the small EUR 46 million TLB tranche ? Just as an aside for folks who are listening. If you remember, during the quarter, we did reprice our Term Loan B and that actually involved shift in the balance between U.S. dollar and euro tranches of that. So well, the question is, will it be repaid or will we hold it in until maturity?

Sure. Yes, and it made sense to do this in our repricing, we were able to get a benefit by shifting around the proportion of euro and U.S. dollar in the Term Loan B. But we still have a plan to hold that until maturity unless we do something else with the term loan overall. Yes, that can always change, but for now, plan is to hold it.

Okay. Next question. For I think, Sean, and then Robert, if you want to add anything after, please feel free. We'll start off on Sean on this one. For the 50% of organic investments in Vista that are more subjective. So this person has read our annual letter, folks. If you haven't read it yet, this is something that's out of our annual letter. For the 50% of organic investments in Vista that are more subjective, how do we increase the likelihood that these are, in fact, as attractive as we think? Put differently, a few years ago prior to the management changes at Vista, we were making investments that at the time we thought were great, but in hindsight, were value destroying. What guardrails do we have in place today to avoid recommitting the sins of the past?

Yes. Great question. But let me try and provide a little context, especially for those who may not have read Robert's annual letter yet. I definitely recommend you read it when you have a moment. But as you see there, every year, we give an estimate of our growth investments and also our steady state free cash flow. And in our growth investments that we have, most of that is invested, it's about 3/4 of our growth investment is in Vista. And what we referred to in the letter is that there's about half of that investment in Vista that we believe is easy to estimate because it's very discrete. So I'll just give you 3 examples, things like CapEx for new products or growth capacity or there's portions of our advertising spend that are very clear and discrete. And so those are easy to estimate. And then in the other half of the Vista growth investments, there's just more subjectivity or judgment, and we refer to that in the letter because there are investments like, for example, in product development, where it's less discrete. You might have a product team that's working on a mix of maintenance topics and growth topics. And so the subjectivity that's referenced in the letter is with respect to the precision by which we estimate whether those investments or those costs are needed for steady state or not. And so we make estimates of that, and we take that given the range of $30 million that we used between our low and high end of the range of estimated investments, we think that's more than sufficient to capture the range of judgment involved. So that's just some context. But I think the substance of the question is really around the past investments that we've…

No, I agree with everything you said, but I wouldn't add anything.

Well, we are actually through all of the live questions at this point. And I'm going to hand the call back over to Robert to wrap things up.

Okay. Thanks, Meredith. Thank you all, as investors, for joining the call and continuing to entrust your capital with us. As I said in my annual letter, Cimpress is financially strong, and that reflects the significant investment work that we've completed over the past 6 years. It made us stronger operationally and technologically and most importantly, stronger in terms of the value we deliver to our customers. And that strength really does bode well for our future and our ability to continue to drive increased customer value, and in doing so, grow our intrinsic value per share. We'll certainly give more details on our strategic progress and what we're doing as a business in our upcoming Virtual Investor Day, which will be held on September 10 of this year, and we hope you will join us for that as well. Thank you all.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.