Hello, and welcome to Cimpress's 2025 Investor Day. My name is Meredith Burns, Vice President of Investor Relations and Sustainability. I'm so happy that you're here with us to learn about the progress we're making across Cimpress. Today, we will hear from executives representing Cimpress, Vista, Upload & Print, and BuildASign. It's a great lineup. There are management bios available in the Speaker Bio tab of the webcast viewer. All right, so let's talk about how we will spend the next roughly three hours together. Robert will start with some perspective on our advantages and how the businesses across Cimpress are leveraging each other's strengths. Next, Florian will demonstrate the progress we're making in Vista. Then Paolo will discuss how we are bringing our Upload & Print model to North America. Then Sean will review our financials, capital allocation, and outlook.
At that point, we'll all take a short break and then come back for three panel discussions on elevated products and manufacturing and supply chain excellence, design enablement, and technology and AI. Finally, we'll finish with a Q&A session to cover any other questions beyond our panel discussion topics. In terms of what to expect today, we will cover both pre-submitted and live questions in the event. You can submit questions anytime using the Q&A chat button, and we will take as many as we can in the Q&A session at the end of the event. A replay and supporting content will be available on our website after the event. Some of the numbers that we will show or discuss today are non-GAAP, and you can find reconciliations to GAAP measures posted on ir.cimpress.com or in the download section of the live webcast viewer.
Finally, you can expect that we will be sharing our thoughts on the future. This is a great time to note that our actual results may differ materially from these statements about the future due to risk factors that are outlined in detail in our SEC filings and also here on this slide. We invite you to read them. Now, with that, I'd like to turn the presentation over to Robert Keane. Robert?
Hey, thank you, Meredith. And good morning, everyone. Welcome. Today's Investor Day complements the annual letter that we published on July 29th. So today, we're going to illustrate how we're serving customers and driving per-share value by showing you additional data and examples beyond what we shared in that letter. Today, we're going to show you three important aspects of Cimpress. First, elevated products are driving a step function improvement of our per-customer lifetime value. Second, our past and ongoing investments in MCP and manufacturing capabilities are reducing both our cost of goods and our OpEx, while they are also increasing the velocity for new product introductions and user experience improvements. Artificial intelligence is actually supercharging these impacts, and you will hear, especially in the roundtable, how we are already successfully implementing AI applications in many different parts of Cimpress.
Third, as Sean is going to walk you through, we have a strong financial future ahead of us with a clear path to fiscal 2028 EBITDA of at least $600 million, with significant deleveraging along the way. For those reasons, and as I stated in the very first paragraph of my annual letter, we believe that our shares are fundamentally undervalued at this time, and we really trust that today's event is going to help convince investors of why that is the case. So let's jump straight into today's presentation, starting with what Cimpress does for our customers. We help millions of businesses build their brands, stand out, and grow via custom print and promotional products. We are already best in class at this mission, and we are proving every quarter that we have great growth opportunities by expanding our product range to serve customers with everything they need.
Customers love what Cimpress does because we help them build their brand. We get them their products fast. We offer a very broad selection. We have highly competitive prices. We have great quality. We combine all that with the convenience of e-commerce, and we let our customers order in the quantity which is right for their business, even low quantities. We deliver that very strong customer value thanks to our mastery of web-to-print mass customization. That means producing custom products with the reliability, quality, and the affordability of mass production. We invented this business model, and we excel at it. Web-to-print customization is not easy to do. Cimpress is able to be the best in the world at this discipline because of our high-quality talent, our focus, and because we have advantages of scale across our value chain.
That makes the Cimpress system very hard to build and very hard to replicate. We have a focused, deep, experienced, and talented team across Cimpress who every day serve our customers and our shareholders. That talent pool is simply unmatched by anyone else in the web-to-print industry, and our leaders are unified in our commitment to attract and to retain excellent first-rate team members across the board. We value entrepreneurial thinking, continuous improvement, and most importantly, customer focus. Our learning and our development programs reinforce these cultural traits. Some of our best leaders joined when they were young, and they've grown up on the front lines of Cimpress over the past two or more decades. We complement that internally developed talent with great additional talent that we regularly recruit from the outside.
For example, in the past few years, we've recently attracted top talent from the leading companies whose logos you can see at the bottom of this slide. This combination of homegrown and recruited talent strengthens our culture and our capabilities across all aspects of our business. Our customer value, our business model, and our team member talent have worked together to build a long history of growth and profitability. These two charts show revenue and EBITDA for the 20 years since our IPO. We have consistently taken market share in our large addressable market, and Cimpress has remained both EBITDA profitable and cash flow positive, even under pressures like the major pandemic-driven revenue declines we faced, the post-pandemic supply chain inflation and supply chain disruption, and the recent U.S. tariffs.
The right-hand chart shows our EBITDA history, as well as our FY26 EBITDA guidance, and the last column to the right shows the minimum EBITDA we believe we will deliver in fiscal 28 that I just mentioned a few moments ago of at least $600 million. In today's presentation, including a specific discussion of that financial perspective that Sean is going to walk you through, we believe we will show you why this is a realistic and very achievable minimum objective. The charts on this page illustrate a clear opportunity for us to continue to gain wallet share and market share for years to come. The left-hand chart is from third-party research, and it shows that there is a strong web-to-print penetration in business identification products. The largest subcategory of that is business cards, which has been Vistaprint's largest and most profitable legacy product.
Although it's not shown in this particular study, the same type of deep market penetration of web-to-print is true for most of our other legacy products, for example, holiday cards, canvas prints, photo mugs, and return address labels. And furthermore, societal shifts are reducing total market demand, and by that, I mean the total of online and offline demand for legacy categories like business cards, holiday cards, and return address labels, which just are not used as often as they were in the past. On the other hand, the left-hand chart also shows that web-to-print penetration for other product categories remains very low, and in many cases, macro demand for these categories continues to grow.
If you look to the right-hand side of this slide, that chart shows that Cimpress plays in a $100 billion total addressable market for products like signage, multi-page, small format, promotional products, apparel, packaging, and labels. We refer to these types of products as being elevated because customers value them more highly than our legacy products in terms of being a core media on which they can convey their brand and other messages. Elevated products greatly expand our addressable market and our wallet share opportunity. Elevated products are a key reason why our Upload & Print average lifetime gross profit has always been higher than Vistaprint, and our Upload & Print businesses have shown the rest of Cimpress the growth opportunity we have in elevated products, especially at Vista.
That is also why we've been investing to bring those Upload & Print elevated products and new categories like promotional products and apparel to our business. We are most focused on growing elevated products at Vistaprint because we know that accelerating revenue growth in Vista would be transformative for Cimpress, including enhancing our enterprise value multiple. This slide shows Cimpress-wide revenue growth by product category. Over the past five to seven years, we have had headwinds from high gross margin legacy products that have been flat or falling in terms of revenues, and that has been offset by tailwinds from high lifetime value elevated products that we've been successfully growing.
The headwinds have diluted our near-term growth rates and diluted our gross profit percentage margins, but the tailwinds are starting to overcome the headwinds, which will lead to a future of ongoing growth of per-customer lifetime value, gross profit dollars, and EBITDA. We are expanding our manufacturing capabilities to better serve high-value customers through elevated products and faster delivery. Again, we want to provide everything our customers need in this area. We've invested in new capabilities for a wide range of paper bags, corrugated boxes, paper cups, flexible packaging, sophisticated signage, roll labels and stickers, as well as multi-page, small format products like booklets, books, catalogs, and magazines. We're introducing next-day delivery for certain products, and we've engineered a massive expansion of apparel products through an inventory- light, just-in-time management supply chain model.
This slide provides a case study based on a real customer of how Cimpress synergies related to elevated products are driving significant wallet share gains in our flagship brand, Vistaprint. Our Upload & Print teams at Print Brothers established Cimpress' first capabilities for printed paper cups when WIRmachenDRUCK acquired a small startup in this area five years ago. Print Brothers then subsequently introduced custom printed paper cups to its own customer base, and after that, via Cross-Cimpress fulfillment to Vistaprint in Europe. Last fiscal year, fiscal 2025, through a collaboration between Print Brothers, BuildASign, and BoxUp, we established a focused production hub for paper cups in North America. Now, this is still a small proof-of-concept U.S. production operation, but it's already very competitive, and we have clear investment plans to drive down costs further and to expand this product range.
That Cimpress-wide collaboration continued when the custom paper cup team went on to work with Vistaprint to launch that product on the Vistaprint U.S. and Canadian sites. One of the early customers was a small maple syrup farm who had been a Vistaprint customer for about five years. Their average annual purchases from fiscal year 2020 to 2024 were about $250 each year, and this was for products like labels, business cards, and signs. Then, in Q4 of fiscal 2025, so less than six months ago, the customer placed a test order or several test orders for our new paper cups. This increased their fiscal 2025 revenues with Vistaprint to $451. But the real impact came very recently.
In this current quarter, Q1 of fiscal 2026, this customer placed repeat orders for over $4,000 in paper cups, and doing so, those repeat orders of paper cups multiplied this customer's lifetime variable gross profit by more than five times. In other words, five times more than the entire gross profit we had generated in the prior six years of this particular customer's life. Now, this is a real-life example, and it clearly demonstrates how expanding our products through elevated products, which we can do both directly within a business and through cross-Cimpress fulfillment, as well as our focused production hubs, are helping us drive growth at Vista by capturing a much larger share of the customer's wallet for print and promotional products. The same thing can be said to be true across all of our businesses. Now, please note, this is a small family-owned maple syrup farm.
This is not a big business, and that's important because it illustrates how our wallet share gains in small and medium businesses represent an enormous opportunity for Cimpress. High-value customers who are predominantly high-value because of elevated products now drive our growth, and that's a very big change from the traditional Cimpress of six to ten years ago. That transformation has been most profound at Vista, so I will use the Vista data in this slide to illustrate what we're achieving across Cimpress. Florian, in the next presentation, is going to speak in a lot more detail about the Vista-specific success that we've been achieving. So the left-hand chart on this slide shows the total variable gross profit, or VGP, for each of the past four fiscal years, and we've grouped them into three subsets of Vista's customers.
The cluster of columns at the far left are the top two deciles. In other words, the top 20% of customers in terms of their variable gross profit generated per each fiscal year. Last fiscal year, that top two decile group generated about $750 million in VGP and accounted for more than 100% of recent VGP growth. The cluster of columns at the right of the left-hand chart represent the top two percentiles, our top 2% of Vista customers, who generated over $300 million in VGP. The middle cluster of columns, again on the left-hand chart, are the eight bottom deciles, and you can see that the top 2% of customers contribute just about as much total VGP as the bottom 80% combined.
Now, the chart to the right is a different perspective on this, and it shows the same customer groups but with per-customer average values, and you can see that the top 2% of customers have VGP per customer of over $1,400. That small family-owned maple syrup farm, which I just described in the last case study, is a new member of this group of very high-value customers. This illustrates the fundamental transition of Cimpress' per-customer lifetime value. For the past six to 10 years, we've been successfully building on our foundational capabilities that traditionally addressed only a relatively small portion of the print and promotional product market via our legacy products.
Thanks to investments which have introduced many new elevated products and our investments to improve the customer experience, we are earning customer trust for a much larger portion of their wallet, which means they become higher lifetime value customers for Cimpress. Let's turn to the significant growth investments we've been making to successfully drive these wallet share gains. First, our mass customization platform, or MCP, is a technological backbone that enables everything else, including the technology migrations in Cimpress businesses. Next, manufacturing supply chain excellence ensures that we have the best-in-world production capabilities for web-to-print mass customization. Design enablement is crucial as customers increasingly want to be involved in the design process, but they still really value customer assistance from Cimpress, and finally, advertising, which positions our brands for high-value customers and attracts those high-value customers.
I'll spend time on each one of these in the coming slides, so let's start with MCP. Because about half of our revenues come from businesses which we've acquired, we have been operating on different tech stacks across Cimpress, and this meant we typically had both decentralized costs and central costs. It also meant that we had varying levels of technology functionality and only limited interoperability of our supply chain activities, which also remained very decentralized. MCP is how we are changing that paradigm. Over the past six years, we've migrated Vistaprint, National Pen, and several of our Upload & Print businesses to the MCP-based technology stack, and there are more migrations currently underway, and we are upgrading MCP every year. That investment is now unlocking major opportunities to improve functionality, OpEx, and new product introductions, and our cost of goods.
In terms of improved functionality, MCP leverages Cimpress' scale to amortize an unrivaled suite of web-to-print mass customization microservices, and those are across the domains you see on the left-hand side of this chart. Because the marginal cost of an additional tenant on the software services is close to zero, all of Cimpress' businesses can then deploy these services to get best-in-class capabilities for a fraction of the cost they would take to develop them independently. Next, MCP is enabling OpEx efficiency by eliminating duplicative software development. For example, Vistaprint's prior migration to MCP-based software infrastructure led to a material portion of the more than $100 million of OpEx reductions we did in the fiscal years 2023 and 2024, thanks to the elimination of duplicative software development combined with the improved functionality of the MCP-based Vistaprint technology stack.
An example that we're working on right now is to build shared MCP services in the order management, and again, we are going to use that shared service across multiple Cimpress businesses to eliminate duplicative software development while improving functionality. In terms of accelerated new product introduction and lowered cost goods, I'm going to wait until I get to the next several slides where I'll provide some very tangible examples of how MCP-enabled cross-Cimpress fulfillment, or XCF, underpins these opportunities. Looking ahead, we are confident that MCP and MCP-based technology migrations in our businesses have unlocked, in concert with the investments we've been making in focused production hubs and artificial intelligence applications, great opportunities in terms of both customer value and shareholder value.
These investments are already powering improved customer experience, revenue growth, very significant savings to our cost of goods, and significant operating expense savings, and that's why, as we described in my annual letter at the end of July, we believe the savings alone will provide an annual run-rate-adjusted EBITDA improvement of $70-$80 million by the end of fiscal year 2027. The second area of growth investment beyond MCP is our long-standing focus on manufacturing excellence. Cimpress is the world's largest web-to-print company with deep expertise in manufacturing innovation, in quality, and efficiency. Our manufacturing leaders and team members achieve production efficiencies that have literally rewritten the rules of the printing industry. We do a lot to achieve that, but one of the ways we do it is we work in unusually close collaboration with our suppliers of capital equipment, our printing press, and other CapEx suppliers.
So for a moment, I'd like to go to a video and hear from one of those suppliers, HP.
For more than 20 years, HP and Cimpress have built partnerships that go well beyond business. It's became a real engine for innovation and impact, one that has helped shape where our industry is heading. Cimpress brings unmatched scale and a bold vision, combined with HP cutting-edge technology and innovation. It's a rare and powerful mix, and it allows us to collaborate in ways that move the needle, turning bold ideas into breakthroughs. You can see it clearly with our fifth-generation B2 platform, the HP Indigo 120K, which was designed in close collaboration with the Vista team and is embedded with many of their specific features. Today, this platform is successfully running across many Cimpress sites. At Pixartprinting , the results speak for themselves.
An innovative joint performance enhancement program has driven overall equipment effectiveness and performance level unmatched in the industry. These aren't just success stories. They are proof when HP and Cimpress work together, innovation turned into progress for both the companies and the customers that we serve. We are very proud of this key partnership, and I personally can't wait to see where we will take it in the next coming years. Thank you.
As you've just heard, our collaboration with partners like HP is a real testament to Cimpress' industry-leading innovation, scale, efficiency, and cost leadership, and we are going to be showing you some other videos from other equipment suppliers which further underscore this really unique manufacturing leadership that we have and why it's such a major competitive advantage. Now, let's go to Cross-Cimpress Fulfillment, or XCF.
This is when our businesses procure from each other or fulfill for each other, and XCF directly supports our manufacturing and supply chain excellence by accelerating new product introductions and lowering cost of goods sold. This is because we can route to the location within Cimpress that is most competitive for a given customer's order at a given time in any given location, and that consolidates volume into what we call focused production hubs, where we have equipment and processes which we tailor to a specific product category. In fiscal year 2025 alone, XCF drove over $15 million in incremental gross profit from cost of goods savings and much more when factoring in the gross profit from incremental revenue. While XCF currently represents a relatively small portion of our total cost of goods, we expect significant growth in the coming years as we continue to optimize our production network.
This slide here highlights the significant success of the cross-Cimpress fulfillment collaboration between National Pen and Vistaprint for promotional products. In fiscal year 2025, this MCP-enabled collaboration led to impressive synergies. We had a 25% increase in product stock-keeping units, or SKUs, that National Pen fulfills for Vista. We drove a 28% increase in Vista revenues for products fulfilled by National Pen, and the average variable gross profit, or VGP, per order at Vista is far above the Vista average. Because of the cost competitiveness of the National Pen fulfillment, the Vista revenue growth from these XCF products is coming with a very significantly reduced cost of goods compared to previous fulfillment sources, and that illustrates why we believe we can, over time, increase gross margins on elevated products just as we did in the past for our legacy products. Let's look at four examples.
For pens, Vista saw a 35% cost reduction, a 27% bookings growth, and an average variable gross profit per order of $141 for the products which they bought through XCF for the first time from National Pen. For tote bags, Vista realized an 18% cost of goods reduction, a 32% increase in bookings, and an average VGP per order of $209. For water bottles, Vista achieved a 23% reduction in COGS alongside a 30% growth in bookings and an average VGP of $240. Keychains also saw strong performance with a 34% COGS reduction, 37% bookings growth, and an average VGP per order of $190. These figures clearly illustrate how leveraging National Pen's manufacturing capabilities expands Vista's product range to drive growth while also driving considerable cost savings for these popular promotional products.
Later today, we're going to host a panel discussion on elevated products and manufacturing supply chain excellence, where our leaders can describe in more detail additional XCF success that ranges from roll labels to large format, paper bags, corrugated boxes, and how various Cimpress businesses are leveraging the fulfillment capabilities of other Cimpress businesses across our MCP platform. Each of these represents a successful collaboration that has driven value for our customers and efficiency and cost savings within our operations. Design is a fundamental element of the products we sell, so the next area we're investing in is what we call design enablement. Customers often have a greater need for help with elevated products which are more complex to design and used in more brand-critical applications.
Every year, design becomes easier due to this proliferation we all see of great design tools coupled with a digital-first approach of the younger generation. Artificial intelligence is only accelerating that trend, and Cimpress is uniquely poised to benefit from this. As design becomes further democratized, we believe it's going to drive even higher demand for the physical products we sell. Meanwhile, we continue to offer comprehensive design support services because many of our customers still find design to be the most challenging part of their order. We're actively integrating AI into our processes to help our designers and our customers be more efficient today, and we anticipate even greater efficiencies in the future.
So it's important to note that while we are sure that AI will and actually is already enhancing our design capabilities, we don't expect it to fully replace Cimpress' or even to replace at all our core customer value proposition and our business model, which again is to help businesses build brands and grow via the broadest selection of physical products at great prices with high quality and fast delivery. So our strength lies in being the physical backend in this rapidly evolving world of graphic design. Advertising is the fourth area where we've been investing and where we've seen significant evolution and efficiency gains.
Over time, advertising as a percentage of Cimpress revenues has decreased from 17% to 13% as a result of a combination of factors: our evolving business mix, our growing emphasis on higher value products and customers with higher LTV, technology and data-driven efficiency gains on how we run our campaigns. Even as we've strategically invested in brand marketing for Vistaprint to reposition Vista as a leading destination for small business custom print needs, we've achieved greater effectiveness per dollar spent. And looking ahead, we see even more room for economic gains as we continue to cultivate deeper loyalty from our higher value customers.
Their lifetime value increases should make our advertising investments even more impactful, and as we drive more unit cost improvements through focused production hubs and XCF, this will give us more choices about how to best advertise our advertising spend in service of the highest LTV to cost of customer acquisition opportunities. The four investment categories I've just reviewed (MCP, manufacturing excellence, design enablement, and advertising) form the foundation of Cimpress' ability to rapidly expand our portfolio into elevated products and, in turn, create high-value customers by increasing our wallet share. That, in turn, drives Cimpress towards our mission to help millions of businesses build brands, stand out, and grow with print and promotional products, and when we fulfill that mission, we drive growth and financial success.
So I will close my portion of today's presentations by showing the same slide I started with to summarize what we will be showing you today. First, elevated products are driving a step function improvement in our per customer lifetime value. Second, our past and ongoing investments in MCP and manufacturing are reducing both our cost of goods and our OpEx while also increasing the velocity of new product introductions and user experiences, and the Artificial Intelligence wave is supercharging these impacts. We already have successfully implemented AI applications in many different parts of Cimpress. Third, as Sean's going to walk you through, we have a strong financial future with a clear path to fiscal 2028 EBITDA of at least $600 million and significant deleveraging. So before I turn it over to Florian, the CEO of Vista, let's hear from another one of our print equipment suppliers, Heidelberg.
Cimpress and Heidelberg have a long-standing history together. Our partnership has developed for over a decade, supporting Cimpress to achieve their leading position as a global web-to-print provider with a top line of EUR 3 billion. In the business environment Cimpress is operating, it is important to have fast, efficient, and automated workflows, delivering highest throughput and lowest lead times. With Heidelberg technology and hardware and software together, we have achieved highest performance in the industry by joint operating agreements such as pay-per-use models with OEE commitments. As I was personally involved in Exaprint, Pixartprinting, and Windsor regarding the achievements Cimpress and Heidelberg have made together, I believe we can say that Cimpress is dedicated in pushing processes to the limit, including new ways of doing business together.
We wish Robert Keane and his team all the best in further developing their business, and I hope we will continue to be their peak performance technology provider.
Awesome. Good morning, everyone. I'm Florian, the CEO of Vista. We've made significant progress over the last years, and we're seeing the results of that work shine through in how we serve our customers and also in key performance metrics. So I'm excited to share the progress with you today on behalf of the entire Vista team. I'll start the presentation today by taking a step back to remind you all of our strategy and provide some context on the evolution of our performance over time before focusing on the specific levers that will continue to deliver meaningful value to our customers and to our investors. But first, at Vista, we really, really like to put our customers first.
They are at the heart of everything we do, and I would therefore like to kick off our presentation today by highlighting the incredible small business owners that we have the privilege of serving every day. Let's play the video roll, please. Yeah, as you can see, customers inspire our amazing hardworking team every day, and they're truly at the heart of everything we do here at Vista. Now, luckily, that feeling seems to be mutual. You can see here from our global Trustpilot scores as well as our Net Promoter Score, which is at around 60, that time and again, customers feel that they can rely on us. They love our product quality.
They love our customer service, the delivery experience, the breadth of assortment, the design support, and we see that come through in both their reviews and also in how they are starting to grow their wallet share with us, which I'll discuss in detail shortly. Let's first jump in by taking a look at our strategy and how our performance has evolved at a high level over the last several years. Our strategic ambition is actually very simple. We want to be the leading destination for small business custom print needs. In many markets, we are already the leading destination as measured by our size and scale and brand recognition, but this ambition refers to the idea that we want to be our customer's sole print provider, where they spend their entire custom print budget across all categories and never leave.
The second statement on this chart describes our purpose, why we exist as a company. We bring their ideas to life, win their hearts, earn their trust, and make them fans for life. And I think we all just saw some evidence of that in the video that we played. What sets us apart is the combination of the four differentiators that you see before you on this chart. So number one, we are truly a one-stop shop. Our growing breadth of assortment allows us to serve the diverse needs of all types of small business customers with different promotional and marketing goals, and we make it really easy for customers to find exactly what they're looking for all in one place.
The second key differentiator here is on the chart that you can see is we empower our customers to design any way that works best for them, whether they prefer to design themselves using a powerful suite of design tools, find a human designer to work with, or simply upload a print-ready file, they can do it all with ease on Vistaprint. We also offer assurance and advice no matter where our customers are in their journey, and whether that's through our world-class customer service or the numerous self-help tools and resources that we make available to them, and finally, we invest in and harness the power of the Cimpress manufacturing and supply chain network that Robert described earlier already to ensure we're unmatched in assortment, quality, speed, and cost. Let's take a look at our evolution over the past decade.
We've built a great foundation, and so before diving into our recent results, I would love to anchor ourselves just in how the situation today is different from what it was 10 years ago across a number of important dimensions. I know there's a lot of data on this chart, so let me just highlight three key takeaways here. The first takeaway is that revenue and VGP, variable gross profit, were 64% or 57% higher, respectively, in FY25 than they were in 2015. But importantly, that growth hasn't been coming from business cards and other products that were the source of our success in the decade before. Secondly, the foundations of how we operate the business today and what we are known for have fundamentally changed.
We now have a modern tech stack and moved away from being known for discounted business cards, and that's enabled a dramatic shift in our execution focus on the differentiators that I just mentioned before. Third, as a part of that shift in focus, we're now serving fewer customers. We intentionally shed unprofitable customers and instead focused on increasing the share of wallet and serving high-value customers, and that's clearly visible in our per customer economics. VGP per Vistaprint customer increased nearly two times. The number of Vistaprint customers with more than $100 in variable gross profit per year is now 50% higher, and the number of customers with over $1,000 in variable gross profit per year is actually now more than four times higher than what it was in 2015.
Let's delve into these very high-value customers a little more because I think they're very important to understand our value creation potential and our direction of travel. So let me first orient everyone on this chart. What we're looking at here is our top two customer centiles by VGP, and as Robert noted earlier, these top 2% of customers at the top of Vista's value pyramid in FY25 contributed about the same amount of variable gross profit as the bottom 80% of our customers. So that's roughly 215,000 customers with an average of $1,400 in gross profit. Now, as you can see, both the absolute dollar variable gross profit, left-hand side, and the VGP per customer chart in the middle have been growing by almost 10% annually in the last three years.
What's really interesting and important to note, these customers shop across our entire product assortment, as the pie chart on the right-hand side of the charts demonstrates. We think of these customers as representative of our direction of travel and what we can achieve with our value proposition because as we have expanded our range of elevated products, built out our capabilities to serve a broader set of customer needs, and taken the friction out of our customer experience, we've demonstrated our ability to grow and attract these more profitable customers. Again, that's markedly different from a decade ago when Vista was perceived first and foremost as serving a high volume of very low LTV customers with high churn rates and advertising-led growth.
Before we continue, I wanted to acknowledge that we often get the question, "Hey, what metrics are we looking at to evaluate our progress?" And there are four broad sets of metrics that we're using to assess the business, and I will touch upon a subset of our KPIs as I walk you through the presentation today. And those four broad sets are firstly on the left, per customer economics, and I already just shared some important proof points with you. Then category growth, particularly the growth in categories with a higher concentration of elevated products. Metrics reflecting the trust our customers put in us time and again. I briefly mentioned our Net Promoter Score. And then, of course, there's a host of cost efficiency metrics, some of which we'll review today as part of this presentation.
Improvements across all of these metrics will drive shareholder value, which brings me to our next section, our key value creation levers, and I'll be covering three drivers in this section. First, how we're growing wallet share and driving variable gross profit through growth in elevated products. Secondly, how we're growing and retaining high-value customers, and then third, how we're driving cost efficiency across the P&L, so let's dive in and start with how we're growing the wallet share and variable gross profit of our customers via elevated products, and to kick us off, I first want to make it very clear that it's important for you all to note it's elevated products that have become the source of our growth, both for bookings shown here, but also for VGP variable gross profit. We're looking at absolute booking dollar year-over-year changes, by the way, here on this chart.
The solid growth of these categories with a higher concentration of elevated products is showing through, particularly in PPAG, signage, packaging, and labels, and marketing materials, which have a higher concentration of these products. But it's actually true in consumer products as well, although the new products we're launching there are mostly offsetting the decline in holiday cards. Now, if you could stay on the chart, please, for a second. Thank you. Now, the one thing obviously that stands out here is the bar on the very left-hand side, business cards. And so let me just spend a minute here to explain why that is pointing downwards or why that has been pointing downwards in the last year. So business cards remain very important to our business today. And in FY25, as you can see here, business cards underperformed, declining 6% year-over-year. Now, why is that?
First of all, business cards are shrinking as a category, both for Vistaprint and the market overall, but that wasn't the only reason. In addition, we had made intentional changes to our performance marketing spend based on extensive incrementality testing, and we also faced some challenges in organic search in the first half of last fiscal year. We're protecting our business cards category, of course, and so we've turned around organic search performance, and we've also launched several campaigns, among them a Try Vistaprint campaign that makes it really easy to try us at everyday fair prices, particularly for business cards, and we're also increasing speed to customer for these products. Nevertheless, in FY26, we continue to expect the bookings and variable gross profit impact from business cards to be negative, though less so than in FY25.
And just to give you the most recent numbers there, quarter to date in Q1, business cards are down only 2%, which is in line with our expectations. Our future, however, please make no mistake there, is not to be the number one destination for business cards. It's to be the number one destination for all custom print needs that small businesses have. Let's dive a little bit more into these categories with a high share of elevated products. What you can see here clearly is the categories where we are focused on introducing elevated products show solid year-over-year growth in percentage terms, left-hand side of the chart, and these elevated products really help us grow the wallet share of our existing customers, not just because they serve a broader set of needs, but they also offer higher average order values, which you can see on the right-hand side.
In fact, in categories with a higher concentration of elevated products, we also see higher repeat rates. For instance, in packaging, the repeat rate is about 25% higher than the average repeat rate, and despite our double-digit growth in a number of these categories, we are just getting started. Our market share in these categories remains low, owing largely to the fragmentation of these market segments, and that creates ample room for us to grow, and already, we're seeing promising new customer growth in these categories. For instance, 29% year-over-year growth in new customers for packaging, 7% for signage, and 3% for PPAG promotional products on a year-over-year basis. Let's zoom out now. Let's zoom out and look at our customer base overall. We see that we're capturing more spend and therefore more wallet share for both new and repeat customers.
Variable gross profit from new customers placing their first order is up 4.6% year-on-year, and variable gross profit per repeat customer is up as well by 6% year-over-year. And as I mentioned earlier, what you see here is our strategy at work. We've deliberately shifted our focus from a high volume of low-value customers to growing the share of wallet of high-value customers. Taking it all together, we had yet another year in which we increased the cumulative per customer value of our cohorts. And with the introduction of more elevated products, we're seeing this foundational shift in our product mix towards categories with a higher average order value and variable gross profit per customer than business cards, which are declining in our product mix. With that, let's move on to our second value creation driver, acquiring and growing high-value customers. So again, a few key facts.
We have a solid track record of increasing the value of our most valuable customers. As you can see on the chart, since FY21, the total estimated variable gross profit from our top two customer deciles by VGP has been growing at a 5.4% CAGR, and variable gross profit per customer for our top two deciles has been growing at an 8.2% CAGR. These customers represent 71% of our variable gross profit and 105% of our variable gross profit year-over-year growth. I mentioned earlier that business cards are shrinking as a % of bookings, and I know that a natural concern may arise from this about Vistaprint's perceived dependence on business cards, including on the importance of business cards for customer acquisition, and historically, that was true, but societal trends have slowed the use of business cards and holiday cards, and both already have a high penetration of online providers.
Therefore, in 2019, we stopped chasing those customers who were often unprofitable, especially after advertising costs. Instead, we have been and will continue to transform Vistaprint to be the preferred print provider for a broad set of customer needs, especially those of high-value customers, and the data on this chart, again, shows that our strategy is working. So what are we looking at here? Here we are looking at our new customer VGP deciles, even the centiles on the very right-hand side, and we're asking the question, on what category was a customer in this decile first acquired, and what you can see is that only a small share of new customer VGP, 23% for our top two deciles and 17% for our top two centiles, comes from business cards as an acquisition category.
These top deciles and centiles are, in fact, acquired on a much broader set of products, including across categories with a higher portion of elevated products. For your reference, we've also put at the top of these column charts the numbers that are already referenced earlier that speak to the incredible profound importance of the top two deciles and even the top two centiles in terms of our total VGP composition. What I'd like to do in the following now is to go into a few specific examples just to illustrate the work that's going on to help grow and retain our high-value customers. I'm going to start with a topic that probably doesn't come as a surprise, and that's assortment expansion. We've made significant improvements in our ability to introduce new products at a fast throughput.
And that's obviously extremely important because it is those product categories with a high concentration of elevated products that help us serve a broader set of needs, and therefore the capability to quickly launch assortment is extremely important. We can do this fast and at scale, thanks to our Cimpress-wide fulfillment network that Robert already talked about, our ability to leverage third-party manufacturers seamlessly, and our own scaled manufacturing plants. We're also delivering a continuous stream of customer experience improvements that make shopping more seamless and straightforward. One example is personalization and CRM, customer relationship management, and we see significant opportunity here to continue improving the experience going forward. One example from the recent past, we launched a Brand Shop, which allows our customers to browse our catalog with their brand already applied to thousands of printed products, as you can see on the right-hand side of the screen.
And when a customer gives us access to key elements of their brand, we call that a brand kit. We see these customers go on to generate about three times the variable gross profit of customers who don't. A few minutes ago, we already talked about how the acquisition of high-value customers is already happening. And of course, none of this would be possible if we didn't do everything every day to win and maintain our customers' trust, because a happy customer is one who comes back time and again. And our customer support plays a key role in that. Our customer support is personal, and we made it even more accessible throughout the customer journey. For high-value customers specifically, we even started a program, which internally we call the Vista Advisor Program.
What we do there is proactive personalized outreach to high-value customers to check in with them, post order, follow up on abandoned carts, and even follow up on significant events the customer was shopping for, such as a trade show. As Robert already alluded to, the world of design is changing very rapidly, and our response really has always been and will continue to be to offer customers a number of flexible and easy design paths, including some AI tooling, partnering with a human designer, or doing it yourself on our site. A few specific examples there, we've evolved our packaging design capabilities in particular. What it means, customers can now create a pattern from a prompt using GenAI. These patterns are intricate. Customers can choose from over 20 style options, such as vintage, geometric, or watercolor.
They can also adjust the scale and position of the pattern once it's generated. They could also simply upload their logo, and we will turn it into a pattern for them, printed all over a mailer box, and the customer can then make adjustments on their template all the while seeing a live 3D animation that ensures they will love how it looks. We also by now have the largest library of patterns and templates for packaging in the industry, with over 6,300 unique options. And that's just packaging. There are more examples like this, just mentioning it real quick. In PPAG promotional products, we launched a Design Assistant where customers can use prompts or a combination of prompts and their own logos to create a complete product design.
Now let's move on to cost efficiency, where I will be covering four areas: advertising efficiency, cross-Cimpress fulfillment, manufacturing efficiency, and AI-enabled simplification and automation. I'm going to kick it off with advertising efficiency, very much in line with what Robert already shared with you in his presentation. At Vista, advertising spend as a % of revenue is down for the third year in a row. We're building a much healthier funnel to create demand, attract the right prospects, onboard them effectively, and nurture them through ongoing engagement to turn them into fans for life. Our key external marketing media spend investments have been brand media across different platforms, such as TV, CTV, and paid social. We've also done significant mix optimization, as part of which we've shifted our spend toward upper funnel brand spend with an eye toward AI discoverability.
Despite the reduction in our advertising spend as a percent of revenue, our focused investments have allowed us to maintain, and more recently even to strengthen, our brand awareness for custom print. As you can see here, we're the number one in print awareness among small businesses in the U.S., France, and the U.K., comfortably ahead of the competitive set, which includes custom print providers on and offline, as well as design platforms. Speaking of recent progress, we've just started to be known for a much wider product assortment beyond business cards. For example, awareness for promotional products has been growing and is now at 39% for prompted awareness in the U.S., up from 32% as recently as fiscal Q2. Cross-Cimpress Fulfillment, or XCF, accelerated in FY25, both with Vista as a fulfiller and as a merchant.
And let me use bags as an example to illustrate what we mean by that. So when we say Vista as a fulfiller, and you take the example of bags, in Europe, what we've done is we've launched a highly competitive production line for paper bags that are growing very fast in volume, thanks to volume from both Vistaprint and Cimpress's upload and print businesses. And the fact that we can share this production line drives higher scale-based advantages that we could not achieve alone. The higher utilization means we can financially justify to invest in equipment that drastically lowers the per unit cost of production, which benefits multiple Cimpress businesses and our customers. For Vista as a merchant, the example that I'm going to use here is National Pen.
National Pen has very strong manufacturing and supply chain capabilities for promotional products, and we have been rapidly leveraging that capability to support our own PPAG growth. For example, in FY25, Vistaprint revenue from the cloth bags that you see here on the right-hand side, which we source from National Pen, grew 43% year over year. Speaking briefly about manufacturing, cost efficiency projects delivered about $12 million in cost savings in FY25, and they included a very broad set of initiatives from insourcing products across multiple categories in both Europe and North America to procurement cost reductions, productivity projects, software optimizations, for example, in our ganging software, and shipping cost reductions. I want to now briefly talk about AI-enabled simplification and automation. We have rolled out a holistic program for AI-enabled simplification and automation across the entire organization.
While this is already leading to some cost efficiencies, it's also helping us enhance the customer experience, and it's leading to the upskilling of our workforce as a whole. For example, we've curated nearly 50 AI courses available company-wide. More and more team members are using Gemini in their daily work, and we have plans to shortly launch further AI-focused upskilling programs, including dedicated time for team members to allow them to deep dive into AI learning. Some examples of recent productivity wins include, again, examples from across the board. For example, in merchandising, we saw a 39% year-over-year increase in our photo retouching throughput through automation. Again, when you want to launch new assortment really, really quickly, that's, of course, coming in very handy.
In customer care, we saw a 19% reduction in our cost per chat contact through real-time language localization and automated reply recommendations based on GenAI, and in marketing, specifically campaign creation, we've been able to unlock a 53% reduction in creative cycle time for certain marketing campaign types using AI tools and creative atom libraries. We'll dive deeper into these AI-enabled simplification and automation efforts shortly in our panel discussions, so let me summarize. We have a robust strategy with a clear set of differentiators that set us apart in the marketplace. As we've demonstrated through the data shared today, we've been making clear progress behind our strategy and in winning with higher value customers, and that has been an intentional multi-year journey enabled by the investments we had made in our technology modernization, improved customer experience, expanded design offerings, and product assortment.
We have deep conviction that there is a significant opportunity ahead as we continue to execute on this strategy and expand our relationship with our customers in FY26 and beyond, and before I turn things over to Paolo from the Print Group, let's watch a short video from another of our equipment suppliers, Canon. Thank you all.
Canon Production Printing is a subsidiary of the global Canon Group with research and development and manufacturing sites in the Netherlands and in Germany. Canon Production Printing's core strategy is to maintain and accelerate our technological leadership in production inkjet solutions, the next generation technology set to transform the global printing and communications industry. The strategic partnership between Canon and Cimpress began in Italy with Pixartprinting in 2018. The two companies share business values of world-class engineering and innovation, and both partners quickly reaped the benefits of this collaboration.
Since then, together we have adapted Canon's solution to meet specific production optimization and automation needs in multiple Cimpress businesses. Through our open and transparent cooperation, we have learned a great deal about the needs and requirements of the global leader in online print production. We at Canon are proud that our solutions help Cimpress to automate manufacturing, reduce time to customers, and improve profitability using Canon inkjet technology.
As you just heard from Peter Wolff, our collaboration with Canon has deep roots that began at Pixartprinting in Italy and today extends across Cimpress. Hello everyone. I'm Paolo Roatta, CEO of Pixartprinting and the Print Group. Today, I'm excited to share a significant strategic move for Cimpress, bringing our successful upload-and-print model to North America. In past Investor Day presentations, I have highlighted the great progress we're making across all of Cimpress' upload-and-print businesses.
Importantly, this portfolio of businesses has delivered a decade of growth, profitability, and innovation. The cumulative unleveraged free cash flow has eclipsed the acquisition costs, and these businesses have taught Cimpress about elevated products and high-value customers. Each of the businesses you see on this slide continues to work toward their goals and have accelerated progress in key areas, including growing product assortment, improving manufacturing efficiencies, growing cross-Cimpress Fulfillment in Europe with each other and with Vistaprint and National Pen, improving our design capabilities, and using data and AI tooling to drive better customer care and CRM outcomes. But today, I want to share one particular story from fiscal year 25, and that is about bringing the upload-and-print model to the North American market via Pixartprinting. Pixartprinting means product know-how, manufacturing excellence, and innovation.
Now from Europe, we've brought it all to North America with our new plant in Warrendale, Pennsylvania. Our first US product category is multi-page. That includes magazines, catalogs, books, journals, yearbooks, photo books, comics, and zines, cookbooks, art books, and more. Finished your way, saddle-stitched, perfect-bound, or Wire-O bound, paperback or hardcover, this is just the beginning. The future starts here. Why Pixartprinting? Pixartprinting brings a rich history of innovation and manufacturing excellence. We serve a broad range of businesses, and our product expertise is highly complementary to other Cimpress businesses already operating in North America. It is important to note that books, catalogs, and magazines, or multi-page products, are a significant category for Pixartprinting in Europe, representing about 25% of our revenue. They allow our customers to communicate, tell a story, illustrate their products, or talk about their identity.
As you saw in the video, there are many options for size, cover type, binding type, and embellishments that enable us to serve a wide variety of needs. These products drive higher per customer value in terms of revenue and gross profit, and ad spend as a percentage of revenue becomes more efficient as a result. A typical Pixartprinting customer for multi-page products generates more than two times the first-year bookings and nearly three times the first-year variable gross profit compared to customers for more traditional products. And labels, another product we will manufacture in Warrendale, generates more than 50% more first-year revenue and nearly twice the first-year variable gross profit compared to customers for more traditional products. And advertising is very efficient. So why now?
The adoption of Cimpress's mass customization platform, MCP, has truly unlocked the connection between Cimpress businesses as well as our ability to launch a new e-commerce site in North America. Cross-Cimpress Fulfillment matters because we can now scale more quickly than we could on our own, and that alone changes the economics of making an investment like this. Additionally, our e-commerce platform based on MCP microservices is flexible. That has allowed us to more easily launch a website to the North American market that is tailor-made for our approach, which is quite different from the approach we have in our established markets in Europe today. The market opportunity is very large and very real in the North American market. This market is large and fragmented like the European one, but there are fewer web-to-print competitors compared to Europe.
Critically, Pixartprinting's capabilities and economics in multi-page printing and labels are truly unmatched in this market. This gives us a significant competitive advantage from the outset. Now, let's look at how we are scaling operations efficiently. Being part of Cimpress enables us to drive greater value faster than we could on our own. Collaborating with Cimpress teams in procurement, real estate, finance, and tax helped us identify and build out our production facility quickly. We are leveraging complementary Cross-Cimpress Fulfillment between Pixartprinting North America, Vista, BuildASign, and National Pen. To start, Pixartprinting will be fulfilling multi-page booklets with plans to add more products in fiscal year 2026. In turn, Vista, BuildASign, and National Pen will be fulfilling various marketing materials, signage, and promotional products for Pixartprinting in North America. We are also fulfilling for another market participant, which adds to our production volumes.
By leveraging established Cimpress-wide supplier relationships in North America for shipping and other key inputs, we can achieve greater scale advantages and profitability faster than if we try to do everything on our own. This also drives significant cost savings for Vista. We've seen initial unit cost savings of more than 10% on average relative to the former third-party fulfillers, with concrete plans to increase this with additional equipment in the future. Launching our brand in the North, as we launch the Pixartprinting brand into the North American market, the fulfillment volumes from other Cimpress businesses and partners allow us to achieve great unit cost from the very beginning. Meanwhile, we are actively developing our customer value proposition and branding for our direct customers.
While direct customers will be a minority of our orders in the near term, we expect to grow and take share in this large market opportunity over time, complementing the other Cimpress businesses in the North American market. Looking ahead to fiscal year 2026, our focus areas include installing new production lines for additional products and higher volume orders, executing our marketing plans, and most importantly, driving returns on the fiscal year 2025 and fiscal year 2026 investment into this launch, which totals $23 million in free cash flow investment. We expect to have startup costs through fiscal year 2026, though less than in fiscal year 2025, as production volumes ramp up, with the goal of becoming EBITDA positive in fiscal year 2027. This type of investment does have a longer payback period than CapEx or capabilities investments in our scaled businesses in established markets.
But leveraging Pixartprinting's manufacturing capabilities that are the best in the world for products like the wide variety of multi-page products and labels, and leveraging the strength of the Cimpress network, allows us to expand a new opportunity and drive a new product introduction for Cimpress's largest brand, Vista, in their largest market, with relatively little startup investment. Before closing, I'd like to zoom out and remind everyone of the broader upload-and-print segment, of which Pixartprinting is a key part. Upload-and-print has been a consistent growth engine for Cimpress in Europe, combining product innovation, cross-Cimpress Fulfillment, and strong customer value creation. What we share today is just one vector of that proven success, now extended into North America. Thank you. And before I hand it over to our CFO, Sean, let's first hear from one of our key equipment partners, Ricoh.
Good day, my name is Koji Miyao, President of Ricoh Graphic Communications and Senior Corporate Officer. We are proud of our long-standing relationship with Cimpress. Over the years, we've built a relationship grounded in trust, shared goals, and a commitment to excellence. Cimpress's impressive scale, unique business model, and influential position in the printing industry have made them a key partner for Ricoh in shaping the future of print. Ricoh and Cimpress have co-developed solutions that boost efficiency, raise quality, and deliver lasting value for both organizations and our customers. Our partnership proves how collaboration, when rooted in shared vision and innovation, can lead to industry-leading solutions. As we have collectively demonstrated with our Pro VC80000 inkjet platform, our Pro C9500 toner presses, and more to come within the Cimpress group across the world.
Good morning, everyone, and I'm excited to be with you all today to cover a few topics in this session. First, we'll take a brief look back at our fiscal 25 financial performance. Then we'll cover our capital allocation, as we always do. Including this year, I want to go into a bit more detail on our CapEx, given the focus there. And then finally, we'll cover our outlook and guidance for fiscal 26, including as part of that, an update on how we're progressing in Q1. And then also discuss, as Robert referred to, our commitments through fiscal 28, which will be new for you all. As you've heard in the prior sessions, and I think you'll hear more tangible examples of this coming up in our panel discussions, we have a lot to be excited about.
This past fiscal year, we described as disappointing from a financial perspective, and it was, including some one-off items through the year, especially in Q2. We have a strong foundation on which we can continue to grow our profitability and cash flow, fueled by our strategic objectives and our extensive competitive advantages, like those outlined earlier by Robert, Florian, and just now by Paolo. You'll see how that impacts our expectations for the years ahead. Let's get started. First, I want to reiterate our commitment to maximizing free cash flow per share over time, which is what we consistently state as our financial focus. We strongly believe that we can continue our track record of growing multi-year cash flows, net of year-to-year volatility, and also reducing our share count, which we'll talk more about later.
Turning to this next slide, you'll see here a summary of our P&L results, and I'll add some context, but I'll keep this brief because this is all looking backwards. Revenue grew 3% on an organic and constant currency basis in fiscal 2025. That was fueled by growth in all segments of our business, but primarily driven by our elevated product categories and also progress with higher-value customers that you've already heard about in some detail today. There were some headwinds during the year, like the Canadian postal strike and overall sluggish peak season during the December quarter, and also challenges in the organic search channel following changes to the Google algorithm in Q2. We've made good progress to address that specific topic, and I'm actually happy to report that organic traffic so far this quarter has been very strong year over year.
Adjusted EBITDA decreased $35.5 million in fiscal 25. That was driven by our performance in the first half of the year. There were quite a few material one-off expenses or the non-recurrence of prior year benefits that totaled about $17 million of that total decrease. Turning to our cash flow here on this slide, you can see our cash flow from operations, adjusted free cash flow, and cash interest expense in the middle there so that you can get back to our unlevered free cash flow. Then on the right, our CapEx and capitalized software over the past five years. Our annual adjusted free cash flow decreased year over year, and that was coming off of a quite strong cash-generative FY24, including the sale of a building and also significant inflows from working capital.
Free cash flow during fiscal 2025 was impacted by lower cash from operations, including working capital outflow, but also significantly higher CapEx and capitalized software, as you can see on the right, and we view that FY25 level of CapEx and Capitalized Software to be higher than normal as we continue to invest in capabilities and efficiency-driving enhancements, particularly in manufacturing. Again, I'll cover CapEx in more detail later. On the next slide is a five-year look at the components of our net debt and our net leverage ratio. Just looking there at the left, you'll note that net debt has moved down over the last two years due to free cash flow generation, less the capital that we've allocated to share repurchases, and that, combined with significant EBITDA expansion from fiscal 2023 to fiscal 2024, has brought our net leverage down as well.
We have plans for further significant delevering that I'll cover at the end of the presentation. I should mention quickly here that our Term Loan B has a 2028 maturity and our bonds have a 2032 maturity. And so we have no near-term maturities that we need to deal with. Turning to the next slide, here you can see our financial results by segment for the past five years. I think this is just a helpful reference, even just visually. We go into further detail in our earnings documents on all this stuff, so I won't go into it in detail here. But again, I think just visually, you can get a quick picture of the trajectory of each of our segments, but also the relative contribution of each.
The next slide here, and this is new information, shows a breakdown of our segment P&Ls as a percentage of revenue. For the first time in our 10-K in August, we provided a three-year breakdown of this with dollar amounts. And that's something that we'll provide going forward as well. It's a new required disclosure, actually. And given it's new, I thought I'd just include it here because we often get questions about the P&L structure of each of our various businesses, and I think this helps with that. I think the other thing here is you can see some of the structural differences between our cost of goods sold and advertising as a percentage of revenue in particular for each of our segments. And that results from differences in business models.
But as we've modernized our technology and also as our operating model has matured, I think the slide also gives a sense for where some of the opportunities are to drive cost efficiencies as we better leverage our capabilities across the group. Turning to capital allocation, I'm just going to give an overview of our recent capital allocation. And Robert touched on this in his annual letter to investors. The midpoint estimate of our organic growth investments has fluctuated over time. But in the past year, you can see that it has decreased on a cash flow basis, including our capitalized software and CapEx. And it's decreased actually even more so on an EBITDA basis, which you don't see on this slide.
High probability, high-return organic investment is our priority for our capital allocation, but the hurdle rates there do change based on other opportunities, most notably where we're at in terms of share repurchase opportunities relative to the share price, but organic investment will continue to be our priority first and foremost, where there are high-return, high-probability investments we can make. Share repurchases have and will continue to feature in our capital allocation, especially when we believe our shares are undervalued, and while M&A and equity investments have been a significant use of capital over the last roughly decade, in the last couple of years, we've only pursued tuck-in M&A in line with the guidance that we've provided over the last few years.
We believe that there are a number of attractive opportunities to continue with a small number of tuck-ins each year at pro forma multiples of profitability and cash flow that are highly attractive and also directly support our strategic initiatives. I would expect that to be the case in fiscal 2026 as well. The return and payback profiles for those types of smaller tuck-in M&A are oftentimes more like CapEx investments. Finally, debt repurchases have also featured at times during the past five years. We don't see this as a priority when we're thinking about near-term capital allocation, also informed by where our debt is currently trading. To double-click on the organic investments we're making that, in our judgment, aren't necessary to maintain a steady state. This is something we publish each year in Robert's annual letter.
This information has already been disclosed at the end of July. But here you can see the impact on the left of our growth investments on our EBITDA, and on the right, the impact of our growth investments on our unlevered free cash flow. If you just pan back a little bit to try and see what's happening here, I think there's two things that really stand out, which have been true for the last few years. One is that outside of Vista and MCP, our growth investments are not that significant, especially on an EBITDA basis. The second one is that you'll note that our organic growth investments have continued to come down meaningfully since fiscal 2022. That's mostly as a result of the refocusing connected to the cost reduction exercise that we undertook back in March of 2023.
Our organic investments, of course, do remain significant. We expect that the impact of organic investments on our unlevered free cash flow will increase during fiscal 26 because we have high-probability, high-return CapEx investments that directly support our strategy and our financial objectives. Given the significance of capital expenditures, both in fiscal 25, but also as part of our fiscal 26 guidance, I wanted to put that into context. This slide shows our capital expenditures and new finance leases, which we need to take account of here as well as a percentage of revenue. What you can see here is that CapEx has fluctuated over time. Although it's been in this range of 2%-3% of revenue for the last eight years, it was higher than that previously. If you go back even more so, it's even higher at times.
FY26 will be a more intensive year at approximately $100 million, and that's about 3% of revenue. I would characterize fiscal 25 and fiscal 26 as high years of CapEx, and that doesn't need to be a constant every year going forward. We've actually held the bar, I think, quite high for what we were going to approve for CapEx in fiscal 26, same in fiscal 25, and even despite that, these higher levels to us make sense because we're confident in the returns that this CapEx will produce. The other factor here is that a significant portion of our fiscal 26 CapEx is what we would consider to be replacement CapEx. Actually, more than half of that $100 million is replacement CapEx or maintenance CapEx. That too goes in waves.
In fiscal 2025, and as I said, in fiscal 2026, those happen to be years of higher intensity of maintenance or replacement CapEx. And just to make that tangible, as there's a few examples, we're replacing one of our original offset presses in Windsor in fiscal 2026. We're replacing a significant part of our direct garment fleet in North America that's end of life. Those things don't happen each year. So there will be some waves to this. And fiscal 2026 is on the higher end of that and actually probably above the range that I would expect going forward. As we do that, though, we're not replacing like for like because we're adopting new machinery that improves our capacity. It improves our unit costs. It improves quality and other attributes as well.
And so there are a lot of benefits to this, even though it is a significant amount of maintenance CapEx. I do expect going forward, so beyond FY26, that you should be able to think about maintenance CapEx typically to be 1%-1.5% of revenue. So fiscal 26 is above that range. I think a fair question that one might ask is, why are you spending $100 million in CapEx when your constant currency revenue growth outlook is for 2%-3% growth in fiscal 26? I think it's a fair question. That answer is twofold. The first one, we have significant replacement CapEx in fiscal 26. I've just talked about that.
The second one is that our growth CapEx is delivering efficiency and unlocking opportunities for elevated product growth, mostly after FY26, but including FY26, by making the investments to be able to really fundamentally break the cost curves and drastically decrease the marginal unit cost of production. You heard about some of the examples of that from Robert, from Florian, from Paolo. And I think even if you look back to one of the charts that Florian showed of the evolution of Vistaprint from 2015 to 2025, you'll see that there's significant growth in the non-business card and non-holiday piece. And of course, that is driven by some portion of the CapEx investment that we've been making here. Each year, we'll consider how much growth investment we want to pursue. And each year, that's a choice. As I said, the feedback loops, importantly for CapEx, are very tight.
So our future plans can be informed by the results that we're seeing over the next year from these fiscal 2025 and fiscal 2026 CapEx investments. But I just want to make sure it's clear that this doesn't need to be a new level of required intensity. These are choices we'll make every year. And those feedback loops are very tight, not only for us, but frankly, for all of you as well. On the next slide, I thought it might be helpful just to provide some specific examples of CapEx to make it more tangible because I realize that from an external perspective, it's difficult for all of you to have a view on the returns on this spend and also, frankly, the wisdom of this higher CapEx. And so I've just picked three examples here.
These are not cherry-picked to be the best ones, but I think they're representative of a few different archetypes of this CapEx just to give you more sort of tangible examples of what that looks like. The first example is replacement CapEx. And this is for equipment that was end of life. It's for a growing category. And that CapEx investment here improves on our old capabilities, increases output efficiency, and also results in COGS savings. It's maintenance CapEx, but it gives us very clear benefits. The payback period for that set of equipment is 17 months, has a three-year return of 45%. So it's a very obvious decision and a $1.9 million investment. The second example in the middle there is for a new product line in one of our European facilities. The new product line is going to be leveraged by multiple Cimpress businesses.
We'll deliver new revenue and profit streams that are highly aligned to our strategic focus areas with higher-value customers. This will serve as a production hub for our European businesses for that product. That leads to COGS efficiencies. It also speeds up the time to payback and attractive returns. That's just over a $2 million investment payback period, just over two years. That has a three-year return of 36%. Again, no brainer. Those two examples are not outliers. I didn't pick the best ones. There are plenty of other examples like that with payback periods and returns that are similar. Let me contrast that with a third example. That's an approximately $6 million investment in another focused production hub for a key elevated product line in Europe that is very innovative, but it's a very CapEx-heavy process to achieve breakthrough unit cost of production.
This is something that's been in an R&D phase, I would say, for a little bit of time and is now being executed. The payback and the return profile for that looks different. The payback period's longer. It's about three years, maybe just beyond that. And it will take the growth expected beyond three years to see the strong returns that we expect for this one, which are over 25%, but it's a longer time to achieve those returns. This one requires, of course, a belief in delivering the volumes that are required, but we're confident in that. And that confidence is increased because those volumes are coming from many of our European businesses, not just one. If it was just one business that was looking to invest in this CapEx, we most likely would not have been able to justify the case.
Of course, there's also the U.S. plant that Paolo just went through and other plant expansion in fiscal 26. Those are also things that have longer time to payback, sometimes have near-term EBITDA losses, but very strong returns on invested capital as volume ramps. Those are truly foundational capabilities. Anyway, hopefully that paints sort of the picture of the range of the type of CapEx here, but also why we feel confident pursuing that. Turning to the next slide, you'll see our history of M&A returns. About half of Cimpress's fiscal 25 revenue and a substantial portion of our EBITDA was from businesses that we've acquired and that we've subsequently grown. Our upload and print businesses, National Pen and BuildASign, of the larger businesses there. All three groups have demonstrated their ability to leverage Cimpress's strategic capabilities to help drive improved financial results.
You'll see here the trailing 12- month revenue and EBITDA at the time of acquisition for each of these, and then that's compared to the fiscal 25 revenue and EBITDA, and also we see here the cumulative free cash flow generated by these businesses or groups since the time of ownership, and that number as a percentage of the total consideration paid for each group or business. Under Cimpress ownership, and we've talked about this for the last years, our upload and print businesses have generated cumulative cash flows that now exceed the total capital that we've invested and we believe still have quite strong prospects for future growth. The unlevered free cash flow in fiscal 25 alone represented 16% of the total consideration that was paid for those businesses, and the combined upload and print revenue for the first time in fiscal 25 eclipsed $1 billion last fiscal year.
So very strong returns for what was collectively our largest investment from an M&A perspective over the last decade. As for BuildASign and National Pen, the estimated return on capital approximates our cost of capital. So those are not winning investments today. We believe that we can improve those outcomes and are working to do just that over time, especially as a significant focus of each of those businesses is supporting Vista's gross profit growth through fulfillment. And a portion of that value is represented in the Vista results, not in their standalone results. So keep that in mind. With the benefit of time, I think, and Robert mentions this in his annual letter, the patterns of successes and failures from an M&A perspective have become much clearer to us. And that will inform any future capital allocation to M&A. We continue to evaluate small tuck-in opportunities.
I talked about that before. And we don't have plans for individually material near-term M&A, although we do believe that we're the consolidator of choice in a large fragmented market. And so we do believe that remains a viable long-term avenue for capital deployment with high returns if we wanted to pursue that. Next, share repurchases. It's been a large use of capital for us. Cimpress all-time share repurchases represent $1.7 billion in capital allocation and a reduction of 28 million shares outstanding. That represents an average price per share of $60. We've clearly had learnings over the years, particularly on how to buy and specifically the need to match the intensity of repurchases to the price-to-value gap as we see it.
The period just prior to the start of the pandemic was, of course, ill-timed for repurchases, but the main learning there was on the intensity relative to the value gap. We take these learnings forward, and that will guide both the pace of repurchases that we do, but also the importance of preserving the value of balance sheet flexibility. We expect share repurchases to continue to feature in our capital allocation, and given the free cash flow that we generate, we believe we have significant opportunity to continue to reduce our share count while also delivering, and I'm going to go through that momentarily. Next on leverage, nothing new on this slide. Just wanted to reiterate our leverage policy. As I mentioned earlier, we remain committed to our leverage target of 2.5 times trailing twelve months EBITDA as defined by our credit agreement.
From time to time, we may increase our leverage to as high as 3.0 times for investments that we see have a good return and a clear path to deliver back to two and a half times. So nothing new there. Of course, we've been operating higher than that stated policy. I'll talk in a moment about how we get back down. Next, I just want to reiterate our fiscal 2026 guidance. This is all set out in our Q4 earnings document. The first is that reported revenue growth we expect to be 5%-6% or 2%-3% organic constant currency revenue growth.
Net income we expect to be at least $72 million and adjusted EBITDA of at least $450 million when taking into account the impact of additional startup losses at Pixartprinting U.S., which Paolo talked about, and also other manufacturing projects connected with our higher expected capital expenditures in fiscal 2026 that we believe will drive material benefit in fiscal 2027 and beyond, as I'll talk about in a moment. We'll also have about $14 million of annualized savings from cost reduction actions that we implemented in the back half of fiscal 2025, so that will help to reduce our operating expense growth in fiscal 2026. We expect operating cash flow of $310 million, adjusted free cash flow of approximately $140 million, and we expect the year-over-year impact of currency on our EBITDA to be slightly favorable in fiscal 2026.
From a CapEx perspective, I mentioned a number of times we expect that to be approximately $100 million. We expect capitalized software to be approximately $70 million, and we expect cash taxes to increase in fiscal 2026 to $55 million-$60 million as we received tax refunds last year that won't repeat, and that's obviously also impacted by the impact of profit growth, and then in fiscal 2026, we expect leverage to slightly decrease from where we ended last year when considering fiscal 2026 plan investments and CapEx and so on, and also leaving room for share repurchases if our share price continues to remain attractive from that perspective, so that's all reiteration of what we outlined in our Q4 release. Let me update you now on sort of how we're progressing against that FY2026 outlook so far in Q1. There's only two weeks left in Q1.
And so I wanted to share a brief update. Quarter to date, organic constant currency revenue growth is tracking at about 5%. That's organic constant currency revenue growth. So the reported growth would be higher. So we're tracking about 5%. That's, of course, ahead of the annual constant currency growth guidance of 2%-3% that I just outlined. Importantly, and as Florian referenced earlier, business cards in Vista are down to about 2% versus last year. That's an improved trend from the minus 6% in fiscal 2025. And that's been driven by the specific improvement initiatives we've had in place. I referenced earlier the progress that we've made from an organic search perspective, and we're seeing good traffic flow and year-over-year growth there in Q1. So that's important in terms of product mix.
Based on the results to date, we remain confident in the delivery of our full-year Adjusted EBITDA of at least $450 million. We didn't give quarterly Adjusted EBITDA guidance, but what I can say is that we're tracking slightly ahead of our internal plan for Q1, and our annual plan is not surprisingly higher than our guidance, so so far, so good in Q1, and we'll give you an update at the end of October on how the quarter finished. Okay, so let's get into some wholly new things here, and as we look beyond fiscal 2026, we're planning for significant Adjusted EBITDA and cash flow expansion, and that's supported by our recent organic investments, including the significant CapEx investments that I talked about earlier. I think it's really important for shareholders to understand how this all comes together over the next three years.
And so we're providing a framework today for how we will achieve at least $600 million of Adjusted EBITDA, $270 million of free cash flow, and achieve a significant decrease to our net leverage. So let me walk through this. And then I'm going to go through a more specific bridge of Adjusted EBITDA on the next slide. So in FY28, we expect constant currency revenue growth to be 4%-6% as we continue to drive growth in new and elevated products as we capitalize on our investments in the upload and print US expansion and other planned CapEx projects like the ones I mentioned earlier. All of this while assuming continued declines in business cards. So 4%-6% constant currency revenue growth.
We expect Adjusted EBITDA will be at least $600 million as we grow gross profit dollars, as we gain advertising leverage, as the startup costs for new plants that are burdening fiscal 2026 rolls off, and we see some benefit of tuck-in M&A along with some other drivers I'll go through in a moment in the bridge. As we disclosed in Robert's annual letter to investors, and he referred to this earlier, one of the important drivers of this is our expectation of achieving $70 million-$80 million of annual run rate improvement by the end of fiscal 2027 through cost savings. Now, on this range, we believe that we've provided sufficient margin of safety relative to our own plans.
We'll give updates along the way so you can track our progress, which we expect will start to have a more material impact in fiscal 2027 along the way to the full run rate as we exit fiscal 2027. When we've had similar cost improvement plans in the past, I would note that we have delivered on that commitment or more. And so I expect the same here. And again, we'll update along the way as we make that progress. And finally, we expect adjusted free cash flow conversion will be roughly 45% from adjusted EBITDA expansion, moderated levels of CapEx and Cap software, and also structural working capital inflows. And that'll be partially offset by higher cash taxes. There, of course, can be some variability in cash flow timing, but we think that's a good expectation.
With at least $600 million, that would mean at least approximately $200 million of free cash flow. Just to recap what's on this slide, that would mean constant currency organic revenue growth improved to 4%-6%. It would mean consolidated Adjusted EBITDA margins go from less than 13% in fiscal 2025 to 15% in fiscal 2028. And it would mean free cash flow generation of at least $270 million. Let's now go through a bridge of this framework for the Adjusted EBITDA component of this at least $600 million. And I need to emphasize here that this is a framework for achieving a minimum of $600 million. I want to demonstrate why we believe that that's a high-probability commitment.
And if we just walk this from the left to the right, if we start with our fiscal 25 reported results and then we start to bridge to the fiscal 26 guidance of at least $450 million, that's all information that's already been provided. So from there, the first bar is the midpoint of the $70 million-$80 million of cost savings that I spoke about on the prior slide. And we'll see the first full-year benefit of that in fiscal 28. So to reiterate, we believe we've included sufficient margin of safety in that estimate. We'll update you on our progress. That's the midpoint of that range. Next, we have $15 million of plant startup costs that are burdening our fiscal 26 outlook. Those will roll off as operations ramp. And so that will be a benefit to Adjusted EBITDA.
We have benefits from tucking M&A, and we feel confident there based on the current pipeline. So we wanted to represent that. And then we expect $10 million of favorable currency impact. We wouldn't normally include this, but we're already partially hedged for our fiscal 2028 exposures for the euro and the pound because for those two, we average in over a two-year period. And so we have good visibility to that. That leaves us confident to include that there. Contracted rates in that period are quite a bit higher. Mathematically, we then need to deliver at least $40 million of net contribution from organic growth beyond these other items. That is not our target. It's what is mathematically required to get to at least $600 million. We expect our incremental margins to be higher than what would be implied by the $40 million.
So needless to say, we have goals and aspirations to walk an even better path over this time period. And we will be working tirelessly to do so. Finally, the Adjusted EBITDA expansion through fiscal 2028 that I just went through and the resultant cash flow will provide for significant delevering. We expect to be meaningfully below 2.0 times net leverage ending this three-year period, subject to capital allocation choices such as share repurchases. And that math is quite straightforward based on the numbers that I just outlined. Along that path, because we're not really talking too much about fiscal 2027, so I just wanted to say along this path, we expect to end fiscal 2027 at approximately the two and a half times net leverage expressed in our policy, which still allows for ample room for share repurchases. Again, that math is quite straightforward.
Other capital allocation, if we wanted to pursue it, but included in that math of delevering, including for fiscal 2027, is an expectation of meaningful Adjusted EBITDA expansion in FY 2027 as well along the way to at least $600 million in fiscal 2028. With that, thank you very much for your time. Meredith, I'll turn it back to you.
Great. Thank you, Sean. We are going to be taking a 10-minute break before we come back for our panel discussions and Q&A session. There's going to be a handy timer on the screen of the webcast. We will see you at 9:57 A.M. Come back, everyone. I hope you're enjoying the event. I'd like to note that the PDF of slides that we have just presented is now available in the webcast viewer for download. All right. Next up, we are going to have three panel discussions. Let's roll the video for the first one, and then Robert is going to moderate that first discussion.
Hey, everyone. So I'm really happy today to have the people you see on the screen here joining me. These are really the frontline leaders for a lot of our success in elevated products and in manufacturing supply chain excellence. So what I'd like to do is ask three, if we have time, four questions. I'm going to start out by saying I'll ask maybe Michael, Bryan, and Paolo, if you could, in your own words, describe why you see elevated products as so important. And then provide maybe one specific example of something that you or your teams have been working on in elevated products. So Michael, maybe I'll start with you.
Yes. Hello, everybody. Elevated products are so important for Cimpress because they are really the next wave of web-to-print mass customization. Those products are complex. They have not been in reach of manufacturing technology in the past, and now they get accessible. We implement them. We have the scale as a company to implement really industrial-sized solutions, and by pooling all the demand that we can drive with all our different business units, we can, on the one hand, drive volumes that make industrial solutions viable, and on the other hand, use many different routes of market access to get to our customers and leverage the large customer base that we have across all the Cimpress businesses, and thus, we are able to provide those products with really new and highly important features for our customers. They can be faster.
We can provide delivery within days, where today you might see weeks of delivery. We can provide small quantities. We can provide on-demand ordering and manufacturing instead of warehousing. And we can also help design those products to make them really accessible to a broad range of customers.
Great. Do you want to give one specific example? I think you've talked about.
Yeah. For example, speaking about paper bags, we have implemented a fully industrial paper bag manufacturing solution that is driven by digital print capabilities. We have multiple bag sizes. We are able to fully print and fully individualize different kinds of paper bags, very fast delivery, between three to five days delivery. We can offer 25 as a starting quantity, and we intend to go even lower on that.
Since we've introduced that, we've tripled the volume within the current year that we are selling to our customers. What is even more interesting, seeing that from a Vistaprint lens, roughly half of the volume that we produce in the Vistaprint side is actually coming from other Cimpress business units across Europe. We are really creating a focused production hub for that product and leverage the volume and the market access that all the other Cimpress business units have.
Great. Well, thank you, Michael. Hey, Bryan, why don't I turn to you about what you see as both the importance of elevated products, but also any example you want to talk about?
Yeah, sure. I think the quintessential example of an elevated product is anything surrounding custom printed packaging overall because it really takes a very functional and necessary product for so many businesses and turns it into something much more special and a means to turn really a transactional moment for one of our customers into a selling moment for their customers. Robert, you touched on paper cups. I think earlier, that's a great example. I'll touch on corrugated boxes. At its core, the functional use of a corrugated box is to protect the product. But thanks to the creation of a breakthrough mass customization production process, we have figured out how to offer small quantities of custom printed boxes at an extremely affordable price.
Our customers have quickly realized how much real estate a box provides them for a fantastic marketing opportunity to further build a relationship with their customers, especially due to the fact that we offer the ability to print on both the inside and outside of the box. It's great when you walk out to the production floor and you can just see some of the uses that our customers have realized for custom printed boxes. They've used them to further develop their brand, educate their customers on the product itself. Many of them have QR codes with additional information about the product and even entertain their customers through some very funny and creative designs, so overall, I think our customers have realized the power of custom packaging, and we've seen tremendous growth in North America.
We're actually actively partnering with the Vista Europe team to collaborate on the next iteration of a game-changing production process for corrugated boxes, which we'll launch later this year to serve the European market. So all this is to say that custom packaging is. These are all the reasons why it's so important to Cimpress and our customers.
Thanks, Bryan. Paolo, I'm going to turn it over to you. Same question. What's important about these products and any examples you want to talk about?
Sure. Why are elevated products important? For two reasons. They bring growth and they bring margin, higher margin. And also, customers of elevated products tend to have a higher lifetime value. And also because the revenues are higher per customer, normally the ad spend is very efficient, as explained also in my previous input. The reason why they generate higher margin is very simple.
It's barriers to entry. If we look at booklets or multi-page products, for example, these are elevated products, and these are more complex to produce. There's a wide variety of finishing, different type of binding. The cover can be hardcover, can be softcover. All this multitude of features require not only production capabilities, but also investment, and this is a barrier to entry, and also the fact that we have the size that allows us to invest and to grow the volumes gives us economies of scale, and also our relationship with the technology vendors that we call partners allows us to get technology that is stretched to the level that allows us to bring value to the customers.
Thanks, Paolo. Let me switch gears a little bit. It's related. Cross-Cimpress fulfillment has been really growing rapidly. And each of you guys just mentioned examples where we're selling between different parts of Cimpress and different businesses from one to another. But maybe, Maarten , I can turn to you. You've been the real key leader in this, driving what we can do, including MCP. So why, in your own words, are we putting more of an emphasis on cross-Cimpress fulfillment in the relatively recent past? And why didn't we do it before? How's it going to benefit Cimpress and its businesses? So over to you, Maarten .
Yeah, thanks. I mean, first of all, I'm super happy that everybody here is presenting so much about MCP. All my colleagues, it's everywhere now. And it just clearly shows that we have reached critical MCP adoption across the businesses. And it's being used with most of the businesses more and more, and it's really starting to bear its fruit.
The businesses can just transact much easier with each other than they could in the past when we were still building it, and it's mostly because we've been removing hurdles. We've been dismantling financial hurdles where the incentives might not be aligned to actually sell with each other or buy from each other, technical hurdles on the MCP side, or they could enlarge quicker over MCP than just do it themselves, but now that is really starting to bear its fruit, and we see just an explosion of cross-Cimpress fulfillment, which is very exciting. We're starting to focus really on cost transparency within MCP and the entire supply chain, so we're building systems to compare the cost across Cimpress.
More importantly, actually create a culture where digging into those numbers and exposing them to each other is really something that helps accelerate even just the beginning of this, which will lead to just smarter supply chain choices across all of Cimpress so that for any given product, we can now weigh, do we do this in-house, or do we work with one of our amazing third-party fulfillers that we have? We have a tremendous network of third-party fulfillers. In some cases, aggregating volume from a bunch of our businesses to one of these fulfillers gives us great negotiation power. In other cases, we see that we really have a center of excellence within the Cimpress network itself, and there then we aggregate our Cimpress volume too. Yeah, the Cimp ress systems are really getting into place.
We're getting the right culture for it, and I think we're just at the beginning of this optimization.
Great. Hey, Michael, Bryan, Paolo, let me come back to you, and maybe you could also give some specific examples of what Maarten just described. So, speaking specifically to Cross-Cimpress fulfillment as opposed to just elevated products. And for that, I'm going to maybe suggest two products which I know have been successful. Let's start with roll labels in Europe as the first example with Michael and Paolo. One of you, Michael, you were leading Vistaprint on the merchant side buying the roll labels in a wholesale intercompany transaction from Pixartprinting, and Paolo, your team was supplying. So Michael, maybe you can start from your perspective, what's been behind that roll label success in Europe?
From the Vistaprint perspective, it's great that we can leverage the capabilities and knowledge that our colleagues at Pixartprinting have built over the years to really have a massively wide assortment of roll labels available in all delivery speeds, substrates, everything that you need in the market. We can easily leverage that assortment by using MCP and just plugging in the fulfillment capabilities from Pixartprinting into the Vistaprint fulfillment network. With the focus we have on cross-Cimpress fulfillment, we've also adapted the way we interact economically, which makes the whole thing really attractive for Vistaprint. Over the last years, we were able to massively drive growth as a merchant with this product, customer growth of 90%, new customer growth even beyond 100%. What we really like about roll labels is that it's really high-value customers with even high first-order values, high repeat values.
So they have a higher probability to repeat than other customers. So it's a really high-value customer group. And on the manufacturing side, we get the full service from the colleagues in Pixartprinting, and that's great.
Thanks, Michael. Hey, Paolo, as the fulfiller in that relationship, do you have any thoughts?
Yes, many thoughts. Many thoughts of gratitude to Michael. Actually, the collaboration has been great. On one hand, we were able to provide Vistaprint with a higher variety of products and more different types of qualities and finishing and substrates. And this enabled Michael to deliver a richer product to their customers. At the same time, the vast reach that Vistaprint has in Europe and also across the globe allowed us to get more volume into our production.
And that helped us improve efficiency because efficiency comes with scale and all sorts of benefits coming from being able to deliver more product to the customers. Also working with our vendors, the moment you have a larger size of the revenues, you also have more control. That means efficiency, lower cost. All this is a winner for the end customer, for whom we deliver more quality at a lower cost, and also for us because we make more profit. Therefore, this is the essence of the cross-fulfillment where we're able to put together our strengths and deliver a win-win situation for the company and for the customer.
Great. Hey, Bryan, let's come back to this side of the Atlantic. And you and Michael, maybe you also can represent Vistaprint in this next question. Over the past roughly year, a little bit more than that, we've moved the vast majority of the U.S. volume for large format from the Vistaprint production facility to a BuildASign production facility, which had higher volumes and more product variety for that. So can you describe, from your perspective, again, maybe Bryan first and Michael as the merchant, the whole signage opportunity in the U.S.?
Yeah. So overall, in the U.S., we're able to generate significant savings in cost of goods by, as you touched on, consolidating the Vista and BuildASign volumes into our very cost-competitive signage-focused production hub. From a fulfiller perspective, one of the huge benefits of this rapid growth in Cross-Cimpress fulfillment was realized when the same product was going to be produced by two different businesses, whether it be a short period of time or even a longer period of time.
We realized that it was prudent to align our product specifications and production processes across those two businesses. And this happened to varying degrees depending on the product, but I think two great examples were for feather flags and standing banners, two products that BuildASign began to fulfill for Vista over the past year. These are two products that have been produced by both businesses for over 10 years, each generating tens of millions of dollars in revenue, but just had slightly different product specifications and therefore utilized slightly different raw materials. I'd also add that these are products that tend to be a little more relatively expensive from a raw materials perspective due to the feather flag stand and the cartridge required for the standing banner.
But we knew as a team to truly unlock the total potential for production efficiencies and cost savings, we should standardize on one product design across the businesses. So we collectively reviewed our cost data and customer feedback from both businesses and collaborated on actually a brand new product design that combined the best attributes of the BuildASign product and the Vistaprint product. With each business moving to the same raw materials, we were able to drive lower costs from our suppliers due to the increased buying power and overall purchase of higher volumes. And in the process, we also leveraged the feedback and reviews from our collective customers to design an even better and higher quality product. So overall, Cimpress and our customers benefited from cross-Cimpress fulfillment.
Hey, Michael, we're getting a little short on time, but from your perspective, from the Vista side, what were the advantages of that particular U.S. large format Cross-Cimpress fulfillment project?
So as Bryan already explained, certainly that gave us the opportunity to get to better margins because we put volumes together in one place and were able to optimize the overall setup. The second axis was being able to add new products to our North American offering. There were products that had big impact on our growth ability in Vistaprint North America that had not been previously offered by Vistaprint, like step and repeat banners, real estate signs, parking signs. All those products were available in the BuildASign assortment, and we were able to also sell them via the broad Vistaprint website and customer base. So that was a huge win for us.
Well, thank you. Hey, we're down to our last four or five minutes on my clock. So I'm going to just throw one more question. I know there's a lot of questions that come in from shareholders and investors about capital expenditures, and Sean spoke a little bit about that. They're increasing in FY25. We've said they'll grow again in FY26. And I realize that there's two big categories of CapEx. This is not the exclusive totality of CapEx, but one is where we're replacing old equipment and therefore driving lower cost, higher quality by bringing in the latest generation equipment. And the second aspect is where we're driving innovation by working closely with partnerships with machine companies to break through to new areas. Let's take those one at a time and start with the first category of just driving lower cost by bringing in latest generation equipment.
Paolo and Michael, could you speak about some of the economics and the efficiencies that you've seen? Maybe let's use examples of the four CEOs from the various print equipment companies who provided videos today. So Paolo, maybe we can start with you for your thoughts.
Sure. As Peter Wolff said in the video that was shown, we started our collaboration in 2018, so that is over seven years ago. And we brought together the inkjet web fed high-speed inkjet on the market of commercial printing that was not used before. So this was opening the market for them for this kind of technology for our kind of products. And that meant that we put our best engineers of R&D together with their engineers.
After several months of cooperation, we were able to co-develop a solution that allowed us at the end to deliver a product comparable to the product we were doing before at a fraction of the cost. The actual cost reduction, thanks to the new technology, faster speed, the inline integration that we did with the finishing, allowed us to reach up to 40% lower printing costs. That means, of course, higher margins for us. That is value for the shareholders and also quicker delivery of the product because from the moment the file would hit the internet site and through automatic processes go to our printers, in a matter of minutes, less than 10 minutes, the finished product was ready. That means quicker delivery to the customers. That means also value for them. That's an example from Canon.
David Schmedd ing from Heidelberg also talked about the work we did together in some of our plants within the print group. I'm thinking of the Exaprint plant in Montpellier, France, where the work we did together, again, our engineers and their engineers, allowed us to achieve the highest overall efficiency for the equipment, the OEE, the efficiency of production, the highest in the market. When you're efficient, it means your cost goes down. That is a benefit for our margins.
Thanks. Just for this year, I know we are, for both those Canon and Heidelberg equipment, we are deploying those in other parts of the print group and/or Cimpress. Hey, Michael, maybe your thoughts on HP and Ricoh, again, using that as an illustration of some of our CapEx to reduce costs or in existing areas?
The story is very similar to what Paolo just explained. We have a very close relationship with HP and Ricoh. We share engineering insights. We share our pain points. We jointly work on solutions. We are always testing the newest equipment, our test sites for the newest equipment. And the overall engineering focus that we have in our print manufacturing and the engineering knowledge we have in the way we run our plants is outstanding in the industry. And that's, I think, very helpful for our suppliers to really have the right thought partners in developing best-in-class equipment. And we, as first users, are then able to profit from the newest equipment with higher throughput, better efficiency of shop floor use, and so on.
Great. Well, in closing, let's briefly touch on another very important area for CapEx, which also for our engineering resources is the innovation and new product categories. And you've touched on a few of them. But Michael, maybe over to you. How do you think about the innovation aspect of CapEx?
We have already spoken about elevated products. And elevated products basically means we open our mass customization world and enable new product groups. And the way to do that is to create industrial manufacturing setups that are able to do very short runs and to be very flexible to our customer needs. If you want to do that right, you need a substantial initial investment that shows up as CapEx in the beginning, but then provides you with very short throughput times with very low variable cost and good versatility of the setup so that then you can really provide for a game-changing setup that we can sell to our customers.
It kind of comes with our scale and our access that we need to make those big investments to get to a market-leading position in new technology.
Well, thanks. I do see Vista specifically doing exactly what you just said, Michael, in terms of paper bags, corrugated boxes, next generation for that, as well as a lot of the sortation equipment. Hey, Paolo, let's close with your thoughts on what you've been doing to break through in different areas. Maybe you can speak about whatever subject you want as an example of what we've done in the past or present.
Yeah, sure. Innovation is one of the core values of Pixartprinting. Innovation, especially in the area of technology, manufacturing technology, is where we focus a lot. I can say that out of the 100 different types of technologies we have in our production plant on the shop floor, none of them is, almost none of them is off the shelf. So they've all been co-developed, and we brought innovation at every level. We talked about booklets and books and multipage. We are bringing this innovation to North America. We talked about labels, the examples we shared with Michael earlier. I can talk about packaging, one of the other areas of elevated product that Bryan referred to. In terms of packaging, we developed with an Italian provider of technology a special solution for cutting and folding in a digital way. So every single sheet that enters a machine can be a different recipe without having the recipe encoded but read by the barcode that is taking the information from the order of the customer.
This allows us to get to a very low quantity, minimum order quantity for packaging with customized formats.
That's great. Thank you. We are short on time, so I'm going to pass the microphone back to you, Meredith, as we go to the next panel discussion.
Excellent. Thank you, Robert. Thank you, everyone, for that great panel. We're going to move on to our next one, which is going to be on design enablement, and we'll introduce it with a video. All right. I like that video because I think it helps you visualize some of the things that we will be talking about on this panel right now. As Robert mentioned in his presentation, design is a fundamental element of the products that we sell, and it's a continually evolving area.
Joining me on this panel today are Christina Wick from Vista, Paolo Roatta from the Print Group, and Maarten Wensveen from Cimpress technology. All right, guys, let's get started. First question, why is it that design enablement is so critical to our customer experience, and what are you doing in your part of Cimpress to ensure we get this right? Let's start with Christina in Vista, please.
Thanks, Meredith. I mean, design is at the heart of every product that we sell. And for many of our customers, it's the hardest part. Like most small businesses, they don't have design and print expertise. And even when they come to us with their full upload to go upload and print, a third of those files maybe are truly print-ready and do some adjustments around the tweaking of the size or rotation.
More than half of them, they still do more to that design, such as add text or shapes or objects or QR codes. That gap creates frustration between the design expertise because it really holds customers back from realizing their ideas. I was designing some packaging, college care packaging for my daughter this past weekend, and designing for print can be really intimidating, right? It's our job to close that gap. We do this by embedding the right touch points for assurance, offering clear on-ramps to advice and design services, and really making design simpler and more intuitive across the journey. For us, for example, we're using Deductive Design and AI and tools like our Logo Maker and Design Assistant to really be able to help customers speed up creation.
And we're also helping small businesses stay on brand, extracting logos, colors, and fonts so they can easily build brand kits and visualize their identity across all their products. All of these steps increase customer confidence and success.
Thanks, Christina. Paolo, I'm going to throw it over to you because your customers are a little bit different. They're a bit more comfortable with the concept of design, but you're still investing in design capabilities as well, so.
Absolutely. As you say, our customers have more designer skills in general because these are professionals. But we have seen that by providing them with tools that enable them to get quicker to the final design or that assist them in making sure the product they are ordering is correct, even before going to the whole system of our pre-press office that checks the files, is a big advantage for them.
First of all, it enhances their confidence that the product they're ordering is correct. And very often, our orders are very large, and having this confidence enables them to place the orders. So we see that not only it increases satisfaction, but also it increases conversion to a purchase. One of the projects we've been working on in the course of the past year is what we call Upload and Chill that allows our customers in the most sophisticated product, which is multipage, to see the whole spread of the booklet on one screen. And this allows them to correct those possible errors that they have inadvertently loaded up into our system. And by correcting that before it gets into our system, and then the file could be rejected or could be corrected by our own guys, this is done by the customer.
This means they're able to fix the issue even before it hits our systems. That means a quicker process for us to go to do the throughput and therefore a quicker delivery to their homes.
I can certainly attest and relate to multipage booklets being difficult to design, having done them in my personal life as well. Because in MCP, we have capabilities that many of our businesses have adopted for the purpose of design enablement.
Yeah, absolutely. Yeah. You see most of the businesses, they bring it all together to what is really relevant for their customer. What we in MCP have been investing, and I spoke about it in previous investor days, but even going forward, there's continuous components that we're making that just make it easier for customers to design something.
A couple of examples that just recently been used by Vistaprint, but also now launched by National Pen and more businesses is what seems to be very little things, but really make it much easier for customers to get through the design process. For instance, they upload their logo, and the first fonts and text boxes that we give as an option to that customer are already in the primary colors of their logo. Or instead of you have to drag a text box above a logo or below and have to fiddle with it, we automatically give you layout recommendations on like, "This is the optimum spacing for it." We help with the design approval process, right, where finally this upload is done, and then customers, we make maybe some adjustments.
How do we get automated as much as possible to get to the final proof that the customer says, "This is perfect"? And so all these components in the backend that the businesses stitch together to optimize for their customer are very often powered by MCP. Small little components. They're very small in its size, but very mighty in its outcome across the Cimpress universe.
Excellent. Thank you, Maarten . All right. The next question that I've got for you all is, how does design enablement support growth of elevated products and the higher-value customers who trust Cimpress businesses with thousands of dollars of annual purchases? Maarten , we'll start with you on this one.
Well, I mean, look, and I think some other people will also talk about this, obviously, but for instance, packaging is one of the things that I think we have had a tremendous amount of success with.
I want to make sure there's credit in all kinds of businesses that actually brought all of those expertise. In fact, the flexible packaging sizing and all kinds of other methodologies just deployed way quicker across the network. We're sort of then the intermediator, but I want to make sure that MCP is not always the originator of these things. We help just make Cimpress stronger.
Thanks, Maarten . Christina, do you want to share stories from Vista's perspective on this?
Yeah, high-value customers. They like to move fluidly between the different design methods as they shop. We're investing to support them wherever they are in that journey, right? Whether they're uploading their full design or they're starting from a template on our site or maybe even using our AI tools that we're providing. I think I mentioned Design Assistant before.
We've expanded that to over 750 products, and we see that 40% of customers that are using it are high-value customers. That's double the rate of the average customer, and then packaging, we're leveraging a lot of those capabilities that Maarten was talking about. We've enabled pattern generation from uploaded logos and images, and now with generative AI on Vista, customers can instantly create custom patterns for the packaging lines. And finally, we offer professional design services, especially in categories where customers are more likely to seek expert designers. So this balance of intuitive tools and the professional support really gives our high-value customers confidence to adopt elevated products. It deepens their relationship with us, and they really entrust us with more of their spend.
Thanks, Christina. And Paolo?
Same as Christina just said. The products that are more, the elevated products are more complex and therefore require more expertise and more support from our people. Also in the area of design, we do use the tools that Maarten and the team has developed in MCP that allow us for the most complex products to provide a better service to our customers in terms of visualizing the final product on the screen. Typically, this is in the case of packaging where a 3D product on a screen is difficult to understand unless you're able to provide a 3D view of all the angles. As Christina just mentioned, we also use human design services, as we call them, to allow our customers to get into those products that are most difficult.
All of this we've seen increases the satisfaction of our customers and the purchase of our products and, normally, the average order value of our revenues.
Thanks, Paolo. All right, one more question on this panel before we move on to the technology and AI panel. And this question is a good segue because we can't talk about design without talking about AI. So design is rapidly changing, and it's a big part of our offering. It is a fundamental part of what the value is that we provide to our customers. So how are we embracing and preparing for this rapidly changing future? I'll go with Maarten first.
Well, I mean, especially with AI, again, if you've been following the previous investor days, I've been talking about that until now. But I think there's a special new kid on the block, obviously, with LLMs being all over, and they are tremendously powerful. It's awesome. It's an exciting time. And so we're starting to implement that everywhere. Before I go there, we've always been using multiple types of AIs to enhance our images, to correct images that go into line and just make it easier for customers and also really control the cost on reprints and what we do on the other side and how much time we spend on design, right? Finding that right mix. And so we've been using that.
But with all of the new generative AI, there's really interesting things that are starting to happen, like what we see with Vista Logo Maker or the generative patterns for packaging that Florian was showing and so happening with Adam and Christina and their team is like very, very exciting times in it. So we're embracing it just in full and implementing it wherever it immediately makes sense.
Thanks, Maarten . So let's talk about where it immediately makes sense within Vista.
Well, I was just going to say, we've talked about a lot of these things, and AI is transforming design, right? And we do see it as a huge enabler both for our customers, but also for our teams, right? And so heard me talk about places Maarten just mentioned, like Logo Maker 2 and the generative AI features that we have in packaging.
But at the same time, we're putting it into the hands of our own designers and our support agents as well. And this allows them to serve customers faster at lower costs and with even higher quality products. And we're using it also to enhance our design engine that not only powers our design experience on the website, but it's also leveraged by our template designers. So they can use AI to expand and enrich our content library, giving customers that really fresh inspiration across our assortment more efficiently. The space will keep evolving quickly, and we're building the capabilities we need to stay ahead, supporting customers however they want to design while making our own teams more efficient, productive, and powerful as well.
Fantastic. Thank you so much to Maarten and Christina and Paolo. I am going to play a video next, and we're going to go into the third panel discussion, which Sean will be moderating.
Excellent. Let's get into our last panel. I'm excited to also introduce you to a few new folks as well that you haven't heard from yet. So we'll get right into it. Hopefully, it's clear both in the elevated products panel, but also in the last one here on design enablement, that the role of technology modernization and also the role of AI, as we just ended the last session, is having a big impact in so many places. But here in this panel, I really want to focus in on technology and really specifically AI and the progress that we're making. There's a lot to cover here.
So why don't we jump right in and start with an area which I think, as I talk to people and you just even hear in sort of the news stream, I think customer care is one of the most prevalent areas for early adoption that we hear about in terms of GenAI capabilities, whether that be chatbots or other ways to facilitate interactions. We're making a lot of progress there, and so let's start with that, and Adam, can I kick it over to you, and let's just start on the business side, just give an overview of where we're making progress and also how we're seeing that impact customers and also our results.
Yeah, absolutely. Thanks, Sean. Hey, everyone, so I thought I'd hit on a few key areas from some early investments on the care side just to show some of the progress we've made.
First is we're doing something called case summarization. So imagine taking a transcript from a call, automatically summarizing that transcript, putting that back into the CRM automatically, creating lots of efficiencies in our care team. Reply recommendations is another capability that we've launched. So imagine the ability to automatically understand context, reply to customers more effectively, just make that whole interaction much more effective for customers. We're doing a lot around real-time language translation. So imagine as a care agent being able to support any customer in any language in real time. That gives us a ton of scale and a ton of efficiency in the process. And right now, overall, what we're seeing is about 19-ish% reduction of cost per chat contact in care through all of these GenAI capabilities. So really just the tip of the iceberg.
It's one of the earlier areas where we've made a lot of innovation and certainly a lot more to come in this space for us.
Great. Exciting stuff, Adam. Thank you. And Paolo, maybe let's step outside of the Vista example and I'll kick it over to you for your businesses. Can you just do the same and touch on kind of where you've made progress and what impact you're seeing?
Absolutely. We've been using AI in many areas in the company. In the area of customer care, we use it to assist our agents so that they are supported and they can respond faster and more consistently. We use it for the language translation. So automatic translations across all of European many languages are done through AI. We use generative AI to respond to customers with a chatbot.
And this allows us to have a 24/7 coverage that we were not able to offer before that. And also, it allows our in-person agents to be dedicated to higher-value tasks. As a result of all these introductions, we have today 40% of the chat sessions are fully managed by AI, and we have now 82% lower cost when a call is managed by AI versus a person. The rate of missed chats is dropped by over 80%. Our first contact-based solution has more than doubled, and we have positive feedback from our customers. So not only were we able to achieve a good cost-efficiency result by using AI, but also we are faster, more customer-centric. Agents can focus more on design help, cross-sell, and business growth. This delivers more margin at the end of the story. And so AI enables us to drive higher sales and deeper customer relationship.
Great. Thanks, Paolo. I mean, that's a great area to start because it's so tangible what we're doing there. So thank you both. Let's move now to personalization of the customer experience. I personally believe that this is a huge opportunity. We're only just scratching the surface of making experience easier for all of our customers. So Christina, maybe again, I'll start with you on the Vista side, and maybe you could just talk about kind of where we've had some recent examples of progress. Obviously, this is a big area of investment for us, but specifically as it relates to personalization, including personalization that's enabled by AI. So I'll kick it to you.
Yeah. Look, I mean, personalization is not optional. Customers today expect it. And when we get it right, it pays off.
On Vista, for example, customers who engage with personalized or model-driven features like our site recommendations, they shop 10% more frequently and buy 40% more subcategories than the average customer. In the past year, we've done things like improved our logged-in visitor rate by 13% year over year, which means we can really better understand our customers and tailor their experiences. We've launched more personalized product recommendations that are driving meaningful revenue. We've introduced features that let customers see their own logos and company name across our templates. Now we rank those templates based on how each customer interacts with the designs of the templates in our gallery and the features that we have in gallery.
Thanks. Important stuff. And I think one of the things that sometimes in conversations with shareholders, I try and get across is that what we can see internally is that I think the pace of our progress there in terms of customer impact is really starting to pick up. And we had a number of years in our recent history here where I would say we were more focused on foundational things, which weren't necessarily having customer impact. So can you just talk a little bit about that, given you're overseeing a big part of this team, just where we're able to start moving faster on this journey here in terms of customer impact and maybe just a few things in terms of what's on the near-term roadmap from that standpoint?
Yeah. I mean, what's exciting is that after years of moving off of our monolith and modernizing our technical architecture, we're really at that point where we can accelerate, right? We've done that foundational work, and it's enabling us now to go deeper on personalization, and we could not have done that before on the previous monolith architecture, so looking ahead, we'll expand trait-based recommendations. We will adapt our experiences, and we'll have personalized design assistance across the entire shopping journey, and importantly, we'll carry that personalization across our channels so that context that a customer builds in marketing flows will seamlessly flow into their site experience as well.
Well, thanks, Christina. Yeah, huge opportunity there, in my opinion. All right. We covered care. We covered customer experience. Let's now go to advertising. Obviously, a significant line item for us.
To put it in perspective, we spent nearly $450 million across the Cimpress Group last year in advertising. Most of that's in Vista. And so why don't we drop into Vista, and let me turn it to you, Florian. And let's just start with maybe you could give a sense of, from an AI perspective, what AI capabilities we're using in advertising today. And then also, a common question we get is, how do we see this evolving as we utilize AI and LLMs to drive traffic to our websites, but also to make sure we're winning traffic in AI-based search?
Yeah, sure. So first of all, of course, we are using AI to automate parts of our paid search and social media advertising. In the future, this is a place where we will personalize product placement and offers using our own data, but also using data from third-party providers. As to, I think, the second part of your question, I mean, that's, of course, the multi-billion-dollar question out there. Let me just say that, of course, in terms of how advertising will evolve, I think it's absolutely imperative that we ensure GenAI-enabled chatbots and browsers and whatever else there might be in the future will prioritize Vistaprint in their responses. That means we have to do great at the inputs that their underlying LLMs will use for learning, will use for accessing information on the internet, etc.
And personally, I'm a very strong believer that what it comes down to is delivering an amazing customer experience because that will then be reflected in our reviews and comments or even just sentiment on certain platforms that these LLMs and chatbots will use as inputs. So we'll stay focused on the customer experience. I think that's going to be a major input to the recipe that we'll be using.
Yeah, agreed. Agreed. So that's on the advertising spend piece of it. Again, huge number for us. And then just on the marketing side more broadly, could you just talk about a few areas where AI is being leveraged? I think, like most functions, there's a lot of progress that has been made there. And so maybe just talk a little bit about examples of those.
Yeah, it's true. It's removing roadblocks or things that used to be roadblocks prior in so many places. So for example, this year's holiday photography will be completely generated using GenAI backgrounds. We're also using AI-powered machine translation in our new product introductions to reach all markets much more quickly. It's helping our next best action models. It's helping from a CRM perspective to drive personalization and relevance, leveraging customer data and traits that are indicative of high-value customers. And all of that, really, I have to say, we're really just getting started with, as Christina was describing, now that we're past sort of the foundational developments in our underlying tech stack.
Excellent. Another exciting area. Thank you, Florian. So let's move to manufacturing now. And Maarten , in your team, one of the largest areas of your team is built around manufacturing information systems, obviously a critical part of our competitive advantage. Can you speak to just the capabilities that we're adding there or that we're changing, augmenting in manufacturing software, especially as it relates to AI?
Yeah, good point. We're actually modernizing a bunch of that. We're modernizing our software, sort of modernizing our MES, Manufacturing Execution System with the latest capabilities, especially around end-to-end simulation. That is what you need before you get into the full-blown AI capabilities, which include forecasting demands, modeling labor and machine and work cell configurations, and then providing visibility into the current, recent, and the projected performance, and that basically gives us a little bit of what is now called a digital twin, right? A virtual version of a manufacturing base where you can simulate all kinds of things and really apply things that one or a group of humans can't come to that conclusion except when you apply these kinds of techniques.
Great. Yeah, those simulation capabilities would be huge. And then kind of adjacent to manufacturing, obviously, should we spend a lot of money on shipping, outbound shipping? And it's also an area that's highly data intensive. So can you just, again, give a flavor of kind of what we're doing to leverage AI in that domain?
Yeah, I think especially on the shipping side, we already have pretty modern technology for that. But I would say it was a little bit isolated away from the MIS systems. And so we're making sure that these live much closer together in terms of their data structures. And then, like I mentioned before, we're going to have much better bird's-eye view of an entire manufacturing plant and do all of these simulations.
By more businesses using it, it actually starts applying on the whole supply chain of Cimpress at large, which is just very exciting how close we are to that reality. It requires all those layers to come together, which we are right now getting at the early start of that phase, which is exciting. Lots of work in the past where we're now finally starting to bear the fruits from. Yeah, precisely.
Yeah. Okay. Thanks a lot, Maarten . I'm trying to sort of give everyone in the audience a flavor of how these impact throughout the P&L. So let's turn to OpEx now. Yeah, I think there's a significant opportunity for efficiency there, but also greater productivity. We've provided guidance, of course, that incorporates some of those efficiencies over the next few years.
So let's do just a little bit of a rapid fire around the horn here. And I'm going to ask maybe Florian to start with you if you can just highlight some of the efficiencies that you're seeing from an OpEx perspective and just where we're focused there right now in Vista.
Right. So let me just, first of all, in fact, say that or repeat myself. As part of our FY26 objectives at Vista, we've launched a company-wide program to drive simplification and automation using GenAI, which touches all areas of the company, from pricing to creative to merchandising to advertising to customer care, etc. And importantly, this isn't just about OpEx reductions, but also about improving the customer experience and upskilling our workforce.
Yeah, I think that's a critical piece. Obviously, that's where a lot of the value will come, improving the customer experience and getting more from what we already have as an installed base. Adam, from an engineering perspective, obviously a hot topic as it relates to AI capabilities and improving productivity. Can you just touch on what we're doing in terms of engineering productivity?
Yeah, absolutely. Software engineering is obviously changing at a very, very rapid pace. So we have a few initiatives and also just a little bit of, I guess, forward-looking thought. Obviously, right now, our focus is on tool enablement. So we've launched, obviously, a bunch of AI-augmented code tools for all the engineers across the organization. We're also building infrastructure internally that allows more democratization of model access. So innovation is happening at very different speeds for Anthropic versus OpenAI.
We want to make sure engineers can use the right model for the right job. So we actually have a lot of tooling that we've built to allow us to use the right technology for the purpose that they're trying to solve. I think looking forward, the way we're really kind of evolving is this idea of asynchronous software development. So imagine you've got these agents running in the background, addressing security issues or addressing accessibility issues or fixing bugs, and they're just kind of always running and allowing engineers to review code. That's really going to be our next big investment in this area. And we think that's also going to be the next really big paradigm shift for how software engineering gets done. So that's kind of where we're focusing on from an innovation standpoint.
Well, thanks, Adam. And then I'll just add from a G&A perspective, generally, I think there's a lot of opportunities here, whether it be in some of the financial topics like conversational analytics and from a legal perspective, contract reviews, but also things like how we use data to identify procurement opportunities. And a lot of those things are in flight. So G&A also an opportunity there. So before we round out here, I just maybe want to step outside of these specific topics and talk about a really, really important topic, which is that in order to excel in all of this and also to move with speed, we, of course, need to make sure our team members are evolving their mindset and learning new skills and constantly challenging status quo, which is not easy. And we obviously need to continue to attract great talent. Robert talked about that in his session.
Louise, can I turn it over to you and just ask you to highlight some of the things that we're focused on from a people perspective in our Vista business that are relevant to all the stuff that we're talking about so far in this session?
Yes, absolutely. Thank you, Sean. Yeah, so we have a significant people agenda for how we're integrating AI into every aspect of our operations and our employee lifecycle. So the core philosophy is quite simple. AI is a partner that's empowering every team member. And so our approach is about getting our people excited and curious about AI to start learning and practicing, adopting, and integrating it into their daily work. And so this approach is distinctively people-first and hands-on. And we're starting with a comprehensive learning agenda to develop these kind of future-ready skills across the entire company. So this starts with upskilling.
We're investing heavily in upskilling team members, both on the technical hard skills with AI, like prompt engineering, but also the essential human soft skills like emotional intelligence, communication, leadership. We're also focused on practical application. We've built an AI learning hub with curated resources for different skill levels. We have workshops that are practical and real-world AI use cases that help lead to improved workflows and practices in each organization. Another important aspect that we think is really fundamental is our community and leadership engagement. We have created a strong community of engagement through Slack channels and team events where we're really encouraging peer-to-peer learning and experimentation. Our leaders are role-modeling this by encouraging and showcasing what they're learning and how they're kind of adapting this in their roles. We've also identified AI champions in each organization.
We have this peer-led approach for applying AI in the most relevant ways for each team. Finally, commitment. Commitment's really key. To show our organization that we're serious and committed to AI and that we're making the time for people to learn their new skills, we have a dedicated AI Invest in Yourself Day coming up end of September, where each organization in Vista will focus on how they're applying AI to improve their work. Let me just kind of add with perhaps the most important element of all this is how AI is deeply impacting our culture. We already have a very strong entrepreneurial foundation, and we're intentionally strengthening that to align with this AI-driven future.
And what this means is how we focus on AI unlocking velocity and efficiency for our teams and how intentional org design can really help increase speed, remove layers, and get team members closer to customers to solve their problems. And we see also innovation and learning being further unlocked with our culture in AI as teams will have more time and capacity to innovate and embrace this kind of always-on growth mindset. So overall, we're excited and ready to start this next chapter and see the benefits for our people.
Thanks so much, Louise. Obviously, we can't be successful without that. So thanks for all your leadership there. And thanks, everyone, for the time of the panel. I think my hope is that it's clear to everyone that this is a significant area of opportunity, which may already be obvious, but also that, importantly, we're making a lot of tangible progress really across all the value chain, and we look forward to updating on progress as we continue to go there. So with that, back to you, Meredith.
Great. Thank you, Sean. Thank you, everybody, on the panel discussions. Really great to hear all of the conversation between you all. We have had a number of live questions during the entire event, and so we're going to go through them now. It does mean that we're going to go into the 11 o'clock hour, but we are committed to answering these questions. So let's get started. So the first one is a question on tariffs. Sean, I'm going to throw this one to you. F uzzy as to where the company stands regarding tariffs. So if you could please address that at the present time.
Absolutely. And hopefully, fuzzy, just because time has passed and not because of our lack of disclosure. But let me just remind everyone where we stand. And I think if you go back to our Q3 release from last year, that's where we had first provided a lot of detail. And in that, we talked about kind of the base cost that was relevant for potential impact from tariffs in terms of U.S. orders that were fulfilled from Canada or Mexico. And we said that was about $230 million. And so that's still a helpful baseline to be thinking about if you're trying to refresh yourself. And then we said that we have two main sources of exclusion or exemption.
The first one is that there's this exclusion for informational products that is statutorily included in IEEPA. IEEPA is basically the statute that's being used to provide for the presidential authority for most of these tariffs. And then we also have a vast amount of our products that are USMCA compliant. So when you take those two things together, it's about 90% coverage on that cost for U.S. orders fulfilled from outside of the U.S. So that's still a good framework to use as a starting point. I think in terms of what's changed recently, the main thing is that, and this is actually since our last earnings, is that the de minimis exemption went away at the end of August. And so that's been a change that we've experienced.
We haven't had any operational issues, I'm happy to report, as a result of that, just in terms of on-time delivery to customers, and just from there, there's all sorts of compliance stuff there. We feel comfortable that we've been able to pivot there. The team's done a great job. Financially, we haven't seen any notable impact from the de minimis going away, so that's maybe the most important kind of update. Overall, we're on track to continue with our mitigation plans. There's still some work being done in terms of evolving sourcing and where we do experience cost increases. We will seek to address that through pricing where applicable. I think that as the tariff environment sort of settles in, which it's still obviously dynamic, I do expect that we'll hear from some of our suppliers about increased cost or proposed increased cost.
That'll be an ongoing discussion and one where we're going to bring our scale and procurement capabilities, but also our contracts to bear there. There's nothing material to note there to date. There may be some more of that. Then maybe just specifically from a financial perspective, in Q4, we had said there was $3 million of net negative impact primarily from National Pen. That was during the month of May when the tariff rates on Chinese source goods accelerated to 145%. In Vista, we were able to, we think, cover the increased cost through pricing.
Based on everything that we know today, we do expect, and we've included in our outlook that there is some additional net cost that we'll experience for the full year, recognizing that we only really had to live with that for part of Q4 of last year. So for the full year, we do expect that year over year, there will be some net impact. I would put that in sort of roughly $5 million range year over year. Again, that's included in our fiscal 2026 outlook. And so in summary, still very relevant topic. Obviously, we're very focused on it. It feels more like sort of almost business as usual in terms of day-to-day operations as opposed to having a lot of senior-level attention on this on a day-by-day basis.
The exemptions and inclusions that I talked about under USMCA and informational materials, those still provide very broad coverage for us. And there's still impact, but most of that is addressed through pricing. So not too material from a P&L perspective.
Thank you, Sean. Robert, I'm going to ask you a question now, an important one. Can you please talk about how you're thinking about share repurchases as you execute your plan to grow profits in delever?
Sure. Absolutely. I would say, first of all, we recognize and we are very committed to reduce our net leverage. And I'll come to share repurchases in a moment, but leverage and share repurchases are tightly related.
So because we have said and we will deliver end of 2026 reduction in a year over year versus where we were at the end of fiscal 2025, just today, Sean pointed out that we will, by the end of FY 2027, plan to be in line with our policy of 2.5 times leverage. That does create some constraints. In the next 21 months or so through June, when we get down to that 2.5 low, or let me say it a different way, until we're at that level, we plan to limit buybacks to what we can achieve while still hitting those leverage targets. Second, I'd say, as mentioned in my presentations and many of our letters, we do think that the share price is very attractive and that we are undervalued.
When we're in that type of situation, we do want to try to do share repurchases subject to that leverage target. Third, I'd say that share repurchases are very important to us because we, as Sean said in his presentation opening, look very much at free cash flow per share. We've used our strong profits and our strong cash flow over the years and over the decades to take our weighted average diluted share count from about 43 million shares at our IPO, 43 million shares at our IPO, down to the current 26 million. At that same time, Sean pointed out, we've grown our three-year trailing free cash flow from zero to $432 million. The cash flow per share was much higher because we had reduced our share count by 40% over the years.
So long term, I think we are going to remain in the game of share purchases, but we will, as again, Sean pointed out, ensure that it's subject to more rigor as to the pace of those repurchases to ensuring we hold dry powder for the times when we have very obvious price-to-value gaps and when we can remain within our leverage policy that we've set up and we want to get to. So last thing I'll say is, Sean pointed out that by the end of FY 2028, in the absence of capital allocation to share repurchases or any other large capital allocation, we would be meaningfully, excuse me, below 2.0 net leverage. And so that certainly gives us opportunity over the mid and long term.
Thank you, Robert. Okay. Got a question for Paolo. Paolo, how big is the market opportunity you think you're unlocking with Pixartprinting in the U.S.? How much of that 2028 4%-6% guide is predicated on the success of this new revenue segment? And how do margins here compare with Vista's?
Well, the market is very big. Just as an example, in Europe, Cimpress upload and print is significantly larger than Vistaprint. Also, the category of booklet is a very relevant category for Pixartprinting as the number one product, while in the U.S., it's underrepresented. As to profit margins, Sean showed a slide where the print group EBITDA margins are on average 19%, similarly to those of Vista. And between now and fiscal year 2028, the revenue contribution that Pixartprinting will have in the U.S. market, considering the relative size of Pixartprinting versus the total Cimpress revenue we have in the market, is not going to be that visible.
I think what you will see is that these investments we do in upload and print in the U.S. will allow us to fulfill for Vista. So Vista will be able to grow fast by offering these elevated products to their customers. And by fiscal year 2028, this will be a growing profitable business, which gives us a runway for future growth beyond fiscal year 2028.
That's great. Thanks so much, Paolo. All right, Sean, what are the key components of the $70 million-$80 million in annual cost savings baked into the FY 2028 guide?
Yeah, I expected this one. When you say you're not going to provide the components or the breakdown, then the first question is, what's the breakdown?
But I certainly understand that this is a really important, obviously, as I said in the bridge, this is a really important part of the path to the at least 600 million. So certainly understand it. I am not going to go through the details of it today. There's certain reasons for that. We can't get ahead of ourselves. As I said in my presentation, on this range here, the 70-80 million, we believe that we provide a sufficient margin of safety relative to our plans. We'll give updates along the way so you can track our progress. And as I said, we do expect there to start to be more material impact in fiscal 2027. Maybe just a little bit of additional detail because I realize how important of a topic it is.
I think just to frame where these costs come from, especially relative to, for example, the cost savings that we executed back in 2023, we do expect that a material portion of the savings will come from our cost of goods sold. And I would say that would have more weight in this range, like from a percentage perspective than, for example, we had in the 2023 savings. And of course, we're making a lot of CapEx investment, right? So that's connected to those savings. So maybe that's one thing to note. And then from an OpEx perspective, that would be the other main component. And hopefully, it's clear from the last panel that I just led that there's a lot of opportunities there. But I think there's not just even from an efficiency perspective.
I think there's a lot of opportunity to continue to drive focus, to continue to drive simplification. And then you've heard examples throughout today of how our technology has been modernized. That has allowed us to do new things. Our operating model has matured. That's allowed us to do new things. And so I think making sure that we're reassessing how our resources are allocated as well and challenging that everywhere, there are new opportunities now for us to do that. When we've had, I said this before too, when we've had similar cost improvement plans in the past, we delivered on those commitments. I expect the same here. And just to put it in sort of the broader context, and I say this sometimes when we get questions on this topic, our revenue last year was about $3.4 billion. We had a little over $430 million of Adjusted EBITDA.
That means there's $3 billion of cost between revenue and adjusted EBITDA. And so this is just over 2% savings. That's what you need to believe. And again, we're committed to this and we'll update you along the way. We know it's importan t and we're committed to making sure that we deliver against that range.
Thank you, Sean. All right. Next question is for Robert. A question about your recent and planned CapEx. Aren't your competitors buying the same kinds of new equipment as you are? And if so, won't all or most of the benefit of those investments go to customers, not shareholders?
It's a good question. I would say, first of all, very strongly, we believe that returns will come to shareholders. That is not exclusive of the fact that it's going to drive a lot of customer value because the way to drive the best shareholder returns is for us to keep growing, keep building our customer loyalty. I'm going to step way back to 20 years ago or more when we had this idea of buying offset presses for multiple millions of dollars each and cutting equipment and plate-making equipment for millions of dollars that previously was only being used in high-volume applications. Think of fast-moving consumer goods printing for pharmaceutical boxes or label production. We applied that very expensive, but still relatively off-the-shelf capital equipment that anyone could buy to business cards. We also applied them to flyers and postcards. If you don't have the volume, this model doesn't work. That model remains exactly the same thing today.
We're just applying it to different products. So the CapEx we're buying is usually designed at its core for very high-volume traditional printing applications. Again, still today, think of long runs of labels, of packaging, of catalogs in the large format space. Think of huge volumes of point-of-purchase displays that are used by the biggest retailers in the world or the biggest fast-moving consumer goods companies in the world. And you may have noticed that most of the suppliers today mentioned the unprecedented Cimpress scale compared to our competitors. And this scale is, first of all, big, even compared to traditional long-run printers. But at Cimpress, it's a scale that's composed of millions of customers per quarter, whereas traditional long-run competitors sell to dozens or maybe a hundred customers per quarter.
Cimpress's concentration of this massive volume of small orders into focused production hubs is even increasing further. That scale. And we're doing it on a product line by product line basis. So that scale, besides having the equipment and the production operations, requires total automation of every step of the value chain from design uploads or design creation through to shipping and delivery. It also requires a mastery of web-to-print online experience of e-commerce direct marketing of branding. It has to have fully automated workflows that go not only into the printing operations, but to the graphic service teams we have in places like India and Tunisia. It requires follow-the-sun 24/7 customer service operations, which we have in low-cost countries around the world.
Finally, because we are almost always either the top one or two customers or potential customers of our print equipment partners, as well as the most cutting-edge customer who works with their engineers to drive their capabilities forward, we're almost always able to negotiate best-in-market favorable pricing for the equipment. So yes, anyone can buy these machines, probably at a higher price without the deep engineer-to-engineering co-development that we do. But a machine alone is only one of the many parts of the Cimpress value chain. That was true when we first started using $4 million production lines to make business cards. It's true today.
Thanks, Robert. Great answer. I'll stick with you, Robert, for the next question. Can you give an example of using a third-party fulfiller to provide a product to your customers instead of using Cimpress to fulfill?
Absolutely. One that comes to mind is the area of promotional products and apparel. Customers love these products because you put your logo on it. It really helps you brand your business. You stand out. You grow. It's a core part of our value chain and our value proposition. From a business model perspective, it's a tough business because inventory takes a lot of capital. There can be obsolescence of inventory. There can be mismatches of inventory versus demand, and if you think about this, every single product has many SKUs. So take the example of a wind jacket or a rain jacket. It comes in five sizes and six colors, men's and women's, and so five times six times two, that's 60 stock- keeping units for one rain jacket product. So we partner with third-party fulfillers for this.
There's some really excellent apparel and promotional product suppliers who hold that inventory, who will do the decoration in many cases, especially for higher volume orders. Then I mentioned in my presentation that we've engineered a massive expansion of apparel products through an inventory- light just-in-time management supply chain model for apparel. That is a perfect example of that. Sometimes we'll pull it in in real time. We'll be digitally connected to the inventory systems of our suppliers, and we may just pull it in and decorate it ourselves. Many times we'll have them decorate it. That's a perfect example. Even though someone like National Pen is very good in high-volume orders of a limited set of those promotional products, we find our third-party fulfiller partners to be a critical part of our value chain.
Thank you, Robert. Informative. All right. Next up is a question for Florian. So Florian, there's a Vista slide from our presentation today on brand awareness that referenced five competitors. Who are the competitors?
Yeah, I'm afraid I'll have to disappoint you there, Meredith, and whoever asked the question. I'm not going to disclose the names of those five competitors, but let me add some background on the survey. And hopefully, that also helps just put what I said, make sure you have the context there. So we are obviously not running these surveys ourselves. We have a market research company, in this case, Kantar, who twice a year run a big branding study for us in various markets, among them the markets that I've shown to you. And of course, the competitive set that we use there is much larger than just five companies.
It's actually more than 10 that we use in every geography and that we carefully select based on local market conditions. And as I said earlier, this competitive set doesn't just include online print providers. It does include where they exist. And you've seen even in the earlier charts that Robert showed how still very fragmented the market is. It includes online and offline providers. And also the competitive set does include design software platforms. Let me maybe add a little bit here because maybe that's also where the question is coming from. Speaking of these design software platforms, I will be very explicit. We're getting a lot of orders from customers who use one or sometimes even more of these design software platforms. So net, this is great because they're helping democratize design.
As I explained earlier, our commitment to customers is we want to make it very, very easy for them to port their designs to us and then bring those designs to life through custom-printed products. That's really our commitment. And so we really want to make that as easy as we can. So coming back to the brand differentiation part for printing specifically, we remain comfortably ahead. Of course, we do see some competitors, including these design platforms, growing in awareness. And so that means we have to continue to invest behind our print-specific capabilities, our print-specific brand attributes, and ensure that we stay differentiated and ensure that our customers can create fantastic custom-print products through our website, have a great print experience, and create an emotional connection with our brand.
Excellent. Thank you, Florian. All right. Next question is for Paolo. Similar question, asking for clarification on something in a presentation. Paolo, who is Pixartprinting's North American partner that they're fulfilling for?
Yes. We are under non-disclosure agreement, so I won't be able to say the name, but I can say a few things. It is one of the biggest players in the market, in the U.S. market, for multi-page products. Having said that, it is much smaller than the production of multi-page products for the upload and print in Cimpress in Europe. But this is a real win-win partnership that is already delivering value to both companies, them and us.
Thank you, Paolo. Okay. Next question for Sean. Quick one. Why not disclose aggregated growth rates and gross profit, EBITDA, or EBIT margins for your elevated products and legacy products?
Yeah. It's a fair question, and I wish it was that easy, but maybe start with what we did disclose. So in the appendix to Robert's annual letter that was published at the end of July, if you look at, I think it's on page 20, there's a table that shows a breakdown that gets almost to what you're talking about, but not quite fully there. And the reason that we chose to disclose it in that way versus just elevated versus legacy is that while it would be easier if that was if we could do that, the world is simply just not that binary. And most categories have examples of each. So we sort of talk about it in a way that might, from the outside, feel binary. It's either this or it's that. But these categories actually have examples of each.
Take your roll labels was used in the elevated products panel. In the labels category, you have roll labels. You also have return address labels, which was one of the earliest legacy products. In signage, there's basic rectangular vinyl banners, which are a legacy product. There's lawn signs, very simple products. There's also beautiful pop-up tents or step-and-repeat banners that are very much elevated products. On consumer, there's the basic invitations and announcements. There's drinkware and apparel for consumer applications. PPAG, there's basic white T-shirts, which are legacy products. There's all the other products more recently launched. Robert talked a little bit about that. That's why it's not so simple to say, "Here's legacy. Here's elevated." It just is not that binary. We'll try and pull that apart and make it clear for folks, but that's why. That's my perspective.
I don't know if anyone else wants to jump in on this because it should be good.
Yeah, Sean, I'd love to jump in and just I see the question asked about EBITDA and EBIT margin. I think that is particularly difficult because the way we make those closer to the bottom line numbers is to maximize the cash flow per customer through serving them with all these additional elevated products and better service. So the gross margins we can talk about, but when you get to what it does to EBITDA and EBIT, really we amortize our software development and our advertising and marketing development across multiple products. So it's not an increasing gross profit by X dollars doesn't translate directly down to EBIT.
Often it's accretive, but it's not a simple process or even a feasible process to get to that profit level at the bottom line by category.
Thank you both. I will just add one thing to round that out, which is to say that just because a product is a legacy product, something that's been in the market for a very long time, doesn't mean that it is automatically in decline. We have, Sean mentioned, a bunch of products like banners, lawn signs, basic white T-shirts that are growing at Cimpress. And so it is, as Sean mentioned, it's not black and white. It's not binary. There's a spectrum here. And it doesn't automatically mean if something is categorized as a legacy product that it's in decline. All right. That is all of the live questions that we got from investors for the call. And I am going to turn it back to you, Robert, to close us out.
Okay. Well, thank you, Meredith. And most of all, thank you to all of you for the time you've invested today to learn more about Cimpress. I really hope that you'll take away the three core messages that I outlined in my opening presentation. Again, those were that elevated products are driving a step function improvement in Cimpress's per customer lifetime value. Second, our past and ongoing investments in MCP and in manufacturing capabilities are reducing our cost of goods sold and our OpEx while they're also increasing the velocity of new product introductions and user experience improvements. As part of that, artificial intelligence is supercharging those impacts, and we're already successfully implementing AI applications in many different parts of Cimpress.
Finally, as Sean showed in his presentation, we have a strong financial future with a very clear path to FY28 EBITDA of at least $600 million with very significant deleveraging. Thank you for your time and have a great day, everyone.