Good morning, everyone. Thank you for coming to The 19th Annual Needham TMT Conference. Today I'd like to introduce Meredith Burns, the Vice President of Investor Relations and Sustainability at Cimpress, and she will give a presentation and then we will open it up to audience Q&A. Meredith, please go ahead.
Thank you very much, and thanks to Needham for hosting, and thank you for those here in the room and also to those who are joining via the webcast. I am Meredith Burns from Cimpress. Cimpress is the parent company to Vistaprint, which many people know, as well as other leading mass customization businesses for print. So I think this is my clicker. Great. Before we start, I will definitely share some information about our thoughts on the future and actual results may differ materially from the statements that I make today, and the risks that might cause those statements to differ materially from what will actually happen are outlined in our SEC filing, so we invite you to read them.
Also, there are some non-GAAP numbers in this presentation, and you can find a reconciliation between our GAAP numbers and our non-GAAP numbers on our website on ir.cimpress.com in a document called Financial and Operating Metrics. All right, so Cimpress has a very long history of profitable growth. So on this slide you see our revenue. What the blue bar represents in the stacked bar is our Vista business, or Vistaprint, which has grown organically over time. That's the company that Robert Keane, our founder, started and has had a 19% CAGR since the year before we went public in 2004 through last fiscal year. The gray bars on the stack represent the companies that we have subsequently that we have acquired over time and that we have subsequently grown to be nearly 90% larger than they were collectively when we bought them.
So a lot of growth, that's also been profitable growth. So over the course of the last 10 years, for example, we have generated over $1.8 billion in unlevered free cash flow. It's about $1.5 billion in levered free cash flow, in adjusted free cash flow. So the one thing to also think about in terms of this long track record of profitable growth is that it's really the results of a few different things coming together. One of them is our history of innovation and driving competitive advantages. One of them is some market dynamics that give us tailwinds as we disrupt the market, which I'll get into in a minute. And the other one is the long-term focus that we have as a company.
We have about a little bit less than 40% of our equity value represented between our founder and others that are on our board of directors, and that gives us a focus that is a bit longer term in nature and has, we think, been a competitive advantage for us and has helped us enable this type of growth. So moving on, our offerings. You can see on this slide some examples of the types of offerings that our businesses provide. And we serve lots of different types of customers, primarily business customers of all shapes and sizes, all the way from sole proprietors, very small businesses, up to large businesses. We also serve consumers in some of our businesses as well. The types of products that we sell range from small format marketing materials like business cards, postcards, flyers, to signage applications.
It could be lawn signs, could be really large scale signage that you see on the sides of buildings, things like that, to promotional products, apparel, and gifts. So things like logo apparel, logo drinkware, other types of tchotchkes that you might see in a trade show environment, as well as custom packaging. Those are the business applications of the products that we offer. From a consumer perspective, it's more on invitations, announcements, home decor like canvas prints, things like that, where you see that in the mix. Now, I said that we serve customers of all different shapes and sizes. In order to do that, you have to have a really broad and really deep product portfolio. So we have 23,000 unique product variants and over sorry, excuse me, 23,000 unique products and over 300 million product variants. So you can see the examples on this slide. That's enabled.
Our ability to do that is enabled by mass customization. Mass customization, I'll explain in a second, but really what that is doing is it's enabling us to sell to customers who have a need for relatively small quantities of all of the things that you see on this slide. So we're not talking about printing for consumer packaged goods where you're literally just running a press for hours on end with the exact same finished packaging application or things like that. We're really talking about customers who want 100 business cards, one T-shirt, five pens, things like that where it's much smaller scale and you have to aggregate volumes of orders that are fairly similar in order to get that to work out. All right, let's talk a second about the market.
We have a large market, $100 billion total addressable market in North America, Europe, and Australia, which are our primary markets that we serve. You can see on this slide how that splits between the business oriented product categories that I described earlier, between small format marketing materials, signage, promotional products, and packaging and labels. That market is also highly fragmented, and the online portion of the market where mass customization players like Cimpress play is still penetrating into the overall value of the market, taking share from the traditional players in that space. So I'll double click down on that concept. So these traditional players are folks that you have seen for years. Maybe you don't notice, but you will now after this presentation, I promise you, as you're driving around, there are print shops everywhere.
There are T-shirt shops, there are trophy shops, there are very small players in the market, and there are thousands of them, tens of thousands of them in the North American market, in the European market, in Australia. These are players where, like the representative pictures on this slide, you can see they tend to have a physical footprint that's relatively small. They tend to have a relatively small number of employees working for them. On the pie chart on this slide, you can see that 73% of those traditional players have fewer than 10 employees in the whole company. So what you see over time is mass customization players like Cimpress have been able to penetrate into that space with a disruptive model, and you see the number of these traditional smaller players coming down over time. It's slow.
It's decades, but it is coming down over time, and it's a share gain situation for players like Cimpress. So let's talk about mass customization. This is our economic engine, so it is an important concept to understand. So on the left side of this slide, you see a chart. We've showed this many times, so those of you who have followed us before have seen this chart, no doubt. But basically, the orange line, the curved line on the chart, represents the normal trade off that you would have between producing a number of given things and what is the unit cost of those things.
Conventional wisdom would tell you if you print or produce a lot of things, you can get a low unit cost, and if you produce something that's bespoke but only one of or a couple of, it's going to be very expensive from a unit cost perspective. What mass customization seeks to do, and what we've been able to do over the last couple of decades, is to break that curve and to really be operating in a place where you're making small quantities of custom things, but you're doing it at unit costs that approach something that a mass produced player might be able to achieve. The way that you can do that, you can't just do it, or else we'd all be doing it. The way that you can do it is you have to have these three capabilities.
On the right side of the slide, e-commerce is super helpful for this process, right? Because in order to approximate something that is mass produced but in small quantities, you actually then have to have a lot of little customers to combine volumes of those orders together, and you have to have a marketing capability around that that enables you to bring in lots of those orders. You also have to have software driven order aggregation and production systems. There's a big difference between producing a long run of a given thing and running a piece of equipment for hours on end versus running a piece of equipment, that same piece of equipment maybe adjusted, but running it for 143 different orders of business cards, for example, and then switching over what the order actually looks like every 15 minutes.
Very different sort of concepts, and it has to be driven by technology. Those are the two concepts that are needed no matter what type of customer you're serving. And then if you're also serving a customer that doesn't have its own graphic design capabilities, say if you're serving a very small business where the small business owner is also the chief marketing officer, they wear many hats, and they don't have a graphic designer on staff or don't have the resources to afford that, you also need to be able to offer democratized design. You need to be able to help them configure these products for themselves in ways that look beautiful, are very easy, very convenient from an online perspective, and also make them, when they have it in their hand, feel very proud, like this is a representation of the business that I'm running.
I'm not going to go into a lot of detail on this slide. I touched on the fact that you can't just make mass customization happen. You actually have to be good at a lot of things in order to get that to work out. This slide details the things that we think you need to be good at in order to drive this type of success.
If you are good at technology and innovation and product development and data and analytics and manufacturing and supply chain excellence and design and prepress service, and you have a high quality, low cost talent organization for things like customer service, et cetera, and you have a central procurement team that can help you get the lowest cost and really aggregate the benefits of that scale, and you're good at e-commerce marketing, and in our case, we've been good at M&A as well and sort of incorporating that and allowing those folks to get some of these benefits of being part of the whole, then you can be good at mass customization.
Then you can start to see a type of flywheel like we see where you can use these things to provide great customer value, then you can gain market share, and ultimately you can become more profitable serving more and more customers and then take some of the profits that are growing there and reinvest them in continued scale advantages. So just a couple of thoughts on our segment and geographic mix. On this slide, you see on the left side the segments that we report publicly. So you can see that our Vista segment is still our largest segment. It's just over half of our revenue in the business. That includes Vistaprint, also Vista Corporate Solutions. That operates in a little bit higher-end customers, as well as 99designs, which is a bespoke design capability that we provide to our Vistaprint customers.
You see PrintBrothers and The Print Group, which we often group together into something called Upload and Print. These are folks who are serving different customers that the Vistaprint business serves. They're serving folks who actually do have a graphic design capability on staff, or they actually are a graphic designer. And so they're a little bit larger businesses, or they're somebody who's operating on behalf of multiple end customers. And so design is not a part of that overall offering that we provide. We're acting more as a fulfiller, and they're coming with press ready files in those segments. National Pen is a business that we acquired that really operates in the promotional products, apparel, and gift space. About two thirds of their revenue is writing instruments. That's really their heritage and where they came from.
They have an amazing capability of producing custom writing instruments at very low cost and being able to offer them in quantities that are lower than you might see from some of the other players that are out there. They have recently been getting more into bags and drinkware. It's an older business. It started out as a mail order and telesales business, and it has been growing its e-commerce capability over time. That's still not a majority of its revenue, but it's getting larger, and that has been a helpful dynamic for that business. And then, all other businesses, really, there are two other businesses that are smaller. BuildASign is based in Austin, Texas, and they sell signage products and also home decor products.
Printi, which is a company that is based in Brazil, really operating like an Upload and Print business would with that type of customer value proposition. From a geographic perspective, you can see on the chart, we're pretty evenly distributed between North America and Europe, with a small sliver of 4% of revenue in other markets, which for us is Australia, India, and Brazil. All right, so this slide is to give you guys some context for our recent performance, which I think is super helpful. So if you look on the left side, you've got two charts here. The top chart is our Adjusted EBITDA, and the bottom chart is our net leverage ratio as defined by our credit agreement that we have.
So you can see over time, Cimpress has been a very profitable business, and sometimes that profitability fluctuates, and that profitability usually fluctuates with changes in the relative intensity of our organic growth investments. That also has had an effect on our net leverage ratio as well as you see here. So I'll talk a little bit about the most recent period of time that you see here in FY 2022-2023, where our profitability was lower during that period. Still very profitable, but our profitability was lower during that period.
That really coincided with a transformation journey that we kicked off in our largest business, Vista, that we wanted to do in order to help return that business to its heritage of very strong data-driven decision making and supported by great technology that allows for flexibility and ease of just adding more and more customer capabilities and value for our customers. That required us to completely replatform in that business. So Vista, that technology stack started to be built in 1999, and the prime sort of period of time where that was being developed was 1999 through the sort of 2012-ish time frame. As you can imagine, software engineering for e-commerce at that time is very different than you would do things today.
Today we have a lot of companies that offer third party SaaS tools that enable you to really drive best in class things that might not be your competitive advantage, but you still need in order to run a great e-commerce business. Things like analytics, warehouses or data lakes, things like the tooling that you use in order to make advertising decisions, things like shopping carts, things like reviews, all of these types of things that you know are standard in an e-commerce experience today were things that when we were building Vistaprint's technology stack starting in 1999, nothing was standard, and everything was proprietary. So that technology stack had gotten to the point where it had aged. It was harder to add new capabilities. It was expensive to add new capabilities, and so we made the decision to replatform in that business.
That was an investment of opportunity cost because everybody in the business was focused on getting to the other side. But really what we were doing was replicating capabilities we already have and customers love in a new technology architecture so that by the time you come out the other side of the replatforming, which is done, by the way, it was done in 2022, when you come out the other side, you now have the ability to move faster. It's not as expensive to make changes in the customer experience. In fact, you can actually really increase the velocity of those changes by getting back to a mode where you're experimenting a lot. You're rolling out the winners and really sort of able to prioritize a lot more than we were able to do in the old technology stack.
The other thing that we invested in at that point in time was the talent density in the Vista business in order to support both the technology replatforming, but also what comes next. So there was a lot of talent density investments and internal marketing people and customer experience folks that could then, once the replatforming is done, really take that and run with it and start to make the changes that we wanted to get back to being able to make quickly. So we went through that process. We also did have in late 2022 and 2023 some inflationary pressure on our input costs. Those also weighed on our profitability during that time.
Obviously, we can look today at the trailing 12-month number here, which is higher than any of the other bars that you see on this chart: $463 million in trailing 12-month EBITDA. What's in that number? Well, once we finished our replatforming and as we saw the cost of our capital increasing with the interest rates going up, we took an opportunity and needed to take an opportunity to narrow our focus a bit, reduce our costs. There are some things that we can do differently and more efficiently today that we couldn't do before we finished the replatforming. We took out about $100 million of costs.
Obviously, this is growing more than $100 million here, and really what that is is taking out $100 million of costs, also input costs coming down, and also revenue growth because we were growing revenue through this period as well. That increase in our EBITDA on a trailing 12-month basis has also enabled us to reduce our leverage down to today, 3x trailing 12-month EBITDA, and I'll talk about our leverage target in a moment. All right, so I'm just going to pause for a second. I talked a little bit about why we wanted to do this transformation journey in the Vista business.
I think it's also important to take a pause and say it's working really well, and Vista is so much stronger today as a result of the investments that we made in that business, of the replatforming that we did, and it has showed up in multiple areas across the business, and I really think that we're just getting started there.
So one of the things that I think is most important for investors to understand is when we went through this transformation journey in the Vista business, one of the things that we did was we recognized that Vistaprint, a beloved brand by millions of customers that we were serving every year, we had sort of painted ourselves into a high discount, highly promotional corner whereby we were actually serving a decent number of customers that we weren't making money at in order the idea be able to grow that over time. But there were some decisions that were being made right before we started this transformation that were leading to outcomes that were not economically rational. And so we did during this period pull back on our advertising spend. We changed some of the promotionality of just the promotionality of the business.
We reduced our discounting, and all of those things combined led to a situation where our per customer value in the Vista business was growing rapidly, but we also shrunk the number of customers that we were serving. It took us a while to sort of get to the point where we found a new base from a customer perspective. It's about 11 million customers annually in the Vista business, down from a high of 16 million, and now are growing that customer base again. That's a really important piece of this puzzle because Vista's revenue growth over the course of the last several years until recently, Vista's revenue growth was coming purely through per customer value increases. Today, I'm very happy to report that it is coming from both per customer value increases as well as an increase in the number of customers.
Now, neither one of those things in and of itself is necessarily the goal, but improving the overall cohort value of each cohort that we bring in, making that higher, improving our ability to retain those customers, and then making the repeat revenue and profits over time higher from those customers that we are acquiring obviously is the goal in terms of what we're doing there. And so that flywheel in the Vista business is moving again in ways that I think we're really excited about. And again, just because we're on the other side of the technology migration doesn't mean that we're done. That's really a beginning of improving customer value and stacking up lots and lots of small wins in ways that not just help our customers, but also from a shareholder value perspective, are super helpful. All right, a couple more slides real quick.
This is our outlook commentary that is in our earnings document as well. I'll go over it relatively quickly. I will say that as of May 1st, which was our last earnings date, so two weeks ago from today, we didn't update our FY 2024 guidance. We have one quarter left in the year. It's clear to us that we are going to meet or exceed the prior guidance. That's outlined here in terms of our revenue growth and EBITDA and adjusted free cash flow, as well as some of the drivers there. We've also, those of you who are following us know that we have, as we've brought our leverage down and we continue to really focus on that, we think that that's very important.
We have been kicking off some excess free cash flow as our profitability has improved, and we have reinvested some of that into both debt repurchases as well as share repurchases. The share repurchases more recently, we have been very clear that we expect to exit this year even with any share repurchases that we do exit the year with leverage of net leverage at 3x trailing 12-month EBITDA or below. We did in this last earnings announcement then shift to multi-year guidance commentary. Over the course of the last, say, five, six quarters, we had a lot of change in our financial results. As you saw, the profitability coming up pretty dramatically, and we were giving near-term guidance as a result of that.
We think that that was appropriate and necessary, frankly, in order to help investors come along with us on that journey because I'm not really sure that anybody would believe that we would have been able to grow the profitability that quickly. But of course, we did. And we did. And so now that we are more in a mode where our profitability levels are sort of where we at a good base level, looking forward, we expect revenue growth plus efficiency gains and share gains to sort of be the thing that's really driving our financial results. And so we're moving to this multi-year commentary. And what that is is over the next sort of few years, FY25 and beyond, foreseeable future, organic constant currency revenue growth at mid single digit rates or possibly a little bit higher, Adjusted EBITDA that grows slightly faster than revenue.
So we would be improving our margins, and adjusted free cash flow conversion from EBITDA to free cash flow approximately 45%-50% with fluctuations in that range. And that can depend on things like working capital timing or the relative intensity of capital expenditures. One more. So along with this multi-year guidance commentary that we provided, we also launched a new leverage policy. And I think that this is an important piece of the puzzle as you think about modeling out our future to know where our guardrails are in terms of how we're going to think about capital allocation, how we're going to think about operating the business.
The leverage policy is that we're going to target net leverage at approximately 2.5x trailing 12-month EBITDA or lower, and that we may from time to time take that up to as high as 3x for investments that we think will have a good return as long as there's a clear path to deliver to that target of approximately 2.5x or below. That's it. That's the leverage policy. It's simpler than past leverage policies that you've heard from Cimpress, but we think it was important for us to make sure that we understood where we were going to operate. Then once we made that choice to share that externally, we did make some commentary then about what will FY 2025 look like because we're sitting here today at 3x.
So we want to continue to delever, obviously. The target is 2.5 x. We think that we can get there operationally in FY25, which is the fiscal year that starts on July 1st. And if we continue to have opportunity for share repurchases at prices that we think are very attractive, we might do that, but we'll continue to ratchet down from a leverage perspective. And we would say, hey, if we have those opportunities for share repurchases, it's going to be 2.75 x or below by the end of FY25. From other capital allocation opportunities, from an OpEx perspective on growth investments, we expect it to be roughly similar to where we've been operating.
So if you follow us, we do an annual letter where we estimate the amount of growth investment that we're making, both in terms of what is the impact to our EBITDA, but also what is the impact to free cash flow. In that impact to EBITDA number, what we're saying there is that that would be relatively similar to where we've been operating. We do see some opportunities for some additional CapEx in places where we can drive production efficiency gains or new product introduction. We see growing the amount of CapEx in FY25 after a few years here where we have been operating in a pretty lean way from a CapEx perspective. We don't expect to deploy significant capital to M&A for the foreseeable future. Call that 1 year +. From a repurchase perspective, I already talked about shares.
We also will consider repurchasing debt as well, obviously subject to the leverage target that I talked about. So with that, I'm happy to take any questions that you have.
I can see that there's some increased spend. Billions of dollars to see this design print market that's going to be expected to save that money. I guess how do you work for the investors to go print all digitals throughout the year? I mean, is it the same business as Canva?
So let me repeat the question for folks that are on the webcast. So I'm being asked about Canva as a competitor having invested in design tools for folks, digital design tools for folks. And those are pretty broad, right? Those can be for somebody that wants to do a presentation, but it could also be for somebody who wants to make a business card or a poster or something like that. And so is there overlap there, and how do we think about how do we think about competing with them, et cetera?
Will you expand into their presentation digital only stuff?
Will we expand into their presentation digital only stuff? Okay, great question. Let me take a step back and say Canva has been doing great things from a design perspective. Their tools are really slick, really easy to use. We see with our customers in the Vista business, some of those customers do use Canva's design tools for their social media campaigns or for presentation design, things like that. Canva is making some inroads into the idea of providing a link between designing for a print product and then actually saying, hey, here, we'll ship you that print product. That is through partnerships with third parties from a fulfillment perspective. We have a little bit of visibility to that through our upload and print businesses. I would say that the range of products there is still relatively small compared to our range of product offering.
Now, you asked specifically, are we doing more in design in order to compete there? And I would say yes, in order to serve Vistaprint customers better. So we're not trying to be a design tool to any company that's out there or any consumer that's out there. We want to add value to small businesses who have a need to market their business. We think we do it better than anybody else in the world. We serve millions and millions of customers in that space. And so to the extent that they have digital needs, we want to be there for them with products and services that help them out. Now, in our case for the Vista business, what does that look like? We did do an acquisition of a company that had a tool called Crello, which enables the design of social media campaigns as well.
Of course, you know that we already have our design capability for print products in the Vista print business as well. So increasingly, we have this ability to help people with their social media campaigns. We also have a partnership with Wix on the Website Plus, I would call it Website Plus side of things where we used to have our own website offering and email marketing. It was very simple. Some customers, frankly, outgrew it. Partnering with Wix provides us with a much more robust set of capabilities that really allows us, we think, to delight our customers today and then as they grow, continue to meet their growing needs as well.
But ultimately, the creator of the Vistaprint social media tool, like moving that creator from gradually to what you want to come to do. I'm still needing to talk to people, just serving existing customers. But really, your existing customers are changing over time, who they are, what they do, et cetera. And I think that owning that mindshare would be very important to you.
Yeah. So the follow-up is owning the design creation tools, something that is very important to our future and ability to serve our customers well. I think the answer is yes, and we also need to be great at look, we make our money by producing these products, right? And so for Vistaprint, the design aspect of the do-it-yourself design tools and increasingly the do it for you or do it with help, that is a means to selling more print products. And we need to keep that strong, and we need to make sure that we're meeting our customers' needs or even exceeding our customers' needs on that front. It's very important. It is an acquisition tool to be able to get those folks in the door. Where we make our money is on printing the products.
If you look at our Upload and Print businesses that are growing fast and very, very profitable, they are completely agnostic about what was the thing that actually designed this in the first place. They really are here to say, we're going to fulfill that for you. And so even in the Vista business, I think it's important that, yes, they can be a one stop shop for customers that want to configure something themselves or get help from a designer or professional designer. And they also need to be good at just taking a press ready file and fulfilling it in ways that delight those customers.